2017 Annual Report
OPERATIONAL HIGHLIGHTS
FOR THE YEARS ENDED MARCH 31
(in thousands of Canadian dollars, except per share amounts)
SALES AND EARNINGS
Net sales
EBITA
Adjusted earnings *
FINANCIAL POSITION
Working capital
Total assets
Shareholders' equity
PER SHARE
Net earnings per Class A Share - basic and diluted
DIVIDENDS
Class A Shares, non-voting
Class B Shares, voting
MARKET VALUE
Class A - HIGH
Class A - LOW
Class B - HIGH
Class B - LOW
ANALYTICAL INFORMATION
Return on average shareholders' equity
Return on average capital employed
Ratio of current assets to current liabilities
2017
$ 342,606
45,137
23,599
2016
$ 334,263
40,916
20,322
78,825
327,478
177,317
0.64
0.1632
0.1420
13.00
8.38
13.00
8.67
15.7%
14.1%
2.0:1
71,665
308,309
157,736
0.46
0.1500
0.1304
10.17
5.14
11.33
6.65
12.6%
13.2%
1.9:1
*Adjusted earnings is defined as net earnings excluding restructuring costs, gains (losses) on derivative financial instruments, other
expenses (income), non-recurring, non-operating (gains) and losses and the related income tax effect.
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| ANDREW PELLER LIMITED 2017
CONTENTS
OPERATIONAL HIGHLIGHTS…………………….……………………….………………………..…2
REPORT TO SHAREHOLDERS………………………………………………………………………...5
THE YEAR’S TOP AWARDS – ONTARIO AND BC.………………………………….……………...8
MANAGEMENT’S DISCUSSION & ANALYSIS……………………………………………………..10
INDEPENDENT AUDITOR’S REPORT………………………………………………………….…....25
CONSOLIDATED FINANCIAL STATEMENTS…………………………………………………..….26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS………………………….…….....31
.
TEN-YEAR SUMMARY………………………………………………………………………….….…60
DIRECTORS & OFFICERS…………………………………………………………………………......62
SHAREHOLDER INFORMATION…………………………………….………………………………63
THE WINE SHOP RETAIL STORES…………………………………………………………………..64
EXCLUSIVE WINE OFFER FOR SHAREHOLDERS.……………………………….……………….66
ANDREW PELLER LIMITED 2017 | 3
Overview
The Company is a leading producer and marketer of quality wines in Canada. With wineries in British
Columbia, Ontario, and Nova Scotia, the Company markets wines produced from grapes grown in Ontario’s
Niagara Peninsula, British Columbia’s Okanagan and Similkameen Valleys, and from vineyards around the
world. The Company’s award-winning premium and ultra-premium Vintners’ Quality Alliance (“VQA”) brands
include Peller Estates, Trius, Thirty Bench, Wayne Gretzky, Sandhill, Conviction and Red Rooster.
Complementing these premium brands are a number of popularly priced varietal brands including Peller Estates
French Cross in Eastern Canada, Peller Estates Proprietors Reserve in Western Canada, Copper Moon, Black
Cellar and XOXO. Hochtaler, Domaine D’Or, Schloss Laderheim, Royal, and Sommet are our key value priced
brands. The Company imports wines from major wine regions around the world to blend with domestic wine to
craft these popularly priced and value priced brands. The Company also produces wine based liqueurs and
cocktails under the brand Panama Jack and a new craft cider called No Boats on Sunday. In October 2016, the
Company also launched its new Wayne Gretzky No. 99 Red Cask Canadian Whisky in certain markets across
Canada and will be continuing to launch new offerings from the Wayne Gretzky Estate Winery and Craft
Distillery in the coming year. With a focus on serving the needs 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 170
Winexpert authorized retailers and more than 600 independent retailers across Canada, the United States, the
United Kingdom, New Zealand, Australia, and China. GVI’s award-winning premium and ultra-premium
winemaking brands include Selection, Vintners Reserve, Island Mist, KenRidge, Cheeky Monkey, Traditional
Vintage, and Cellar Craft. 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 Winemaker’s Collection Inc., importers
and marketing agents for premium wines from around the world.
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| ANDREW PELLER LIMITED 2017
Report to Shareholders
Another Record Year
Fiscal 2017 was another record year for the Company as a strong, broad-based increase in revenues and further
strengthening in our gross margins drove a significant increase in our net income.
For the year ended March 31, 2017, sales rose to $342.6 million, up 2.5% from the prior year, driven by solid
performance across the majority of our well-established trade channels. Our business with provincial liquor stores,
our network of company-owned retail stores in Ontario, our award-winning estate wineries, our sales to licensed
restaurants and clubs, our export business, our two wine importing and marketing agencies, and our personal
winemaking business all continue to perform well. The introduction of new wine brands over the last year, and our
entry into new beverage alcohol market segments have also expanded our distribution channels and customer base.
Our gross margins continued to strengthen in fiscal 2017, rising to 38.3% of sales from 36.8% in the prior year. Our
focus remains on cost control and production efficiency in such key areas as distribution, operating expenses and
packaging. We will to continue to look across the company for gains in profitability going forward.
As a result of our solid sales growth and continuing improvement in gross margins, our adjusted net earnings, not
including net unrealized gains and losses on derivative financial instruments, other expenses or income, non-
recurring, non-operating gains or losses and the related income tax effect rose 16.1% to $23.6 million. Net earnings
for the year were $26.4 million or $0.64 per Class A Share, up 37.2% from $19.2 million or $0.46 per Class A Share
in fiscal 2016.
The Company’s balance sheet and financial position remained strong at year-end with an increase in working capital
to $78.8 million and an increase in shareholders’ equity to $177.3 million or $4.16 per common share. Despite the
increase in overall bank debt arising from our investments during the year in our recently-opened Wayne Gretzky
Estate Winery and Craft Distillery, our debt to equity ratio strengthened to 0.49:1 from 0.55:1 at the end of the prior
year.
Enhancing Shareholder Value
We were very pleased to announce another increase in common share dividends in June 2017 with cash dividends
rising a significant 10.3% effective with the July 2017 payment. This was our fifth dividend increase in the last five
years, a reflection of our continuing strong growth, our record performance, and our confidence in the future. The
Company has paid dividends every year since 1979, a remarkable track record of delivering value to shareholders,
and we look for this momentum to continue going forward.
ANDREW PELLER LIMITED 2017 | 5
Our Dividend Reinvestment Plan (DRIP), introduced in August 2016, continues to provide a cost-effective method
for Class A shareholders to increase their investment in the Company without the commissions incurred in open
market share purchases. Under the DRIP, registered Class A shareholders can elect to have 100% of their dividends
reinvested to purchase additional shares.
New Milestones for the Company
In early June 2017 we were proud to celebrate a key milestone in the Company’s history with the official opening of
the Wayne Gretzky Estate Winery and Craft Distillery at a gala celebration in Niagara-on-the Lake. This brand new,
15,000 square foot state-of-the-art facility includes a winery, craft distillery, barrel aging cellars, tasting rooms, retail
and hospitality facilities, all surrounded by beautiful landscaping and vineyards. We are confident the new winery
and distillery will become another very popular destination and a real complement to our other estate wineries. We
look forward to welcoming you to the new Gretzky Winery, and all our other locations in the Niagara wine region
and British Columbia’s Okanagan Valley, including Peller Estates, Trius, Thirty Bench, Sandhill and Red Rooster.
We established our strategic alliance with the Gretzky family and the Wayne Gretzky Estate Winery in 2011, and
have generated significant growth across the country in all of their fine wines. The extension of the Gretzky brand
with the launch of our Wayne Gretzky No.99 ‘Red Cask’ Canadian Whisky in October 2016 is a perfect complement
to their top-performing wines, which are also performing very well. We are confident the new estate winery, and the
Gretzky brand, will continue to grow and build value for shareholders in the years to come.
The Board of Directors was also pleased to announce the appointment of Randy A. Powell as President of the
Company in November 2016. Randy is an experienced and proven senior executive with a successful track record in
both public and privately-held companies in the consumer packaged goods and hospitality sectors. He has been a
member of the Company’s Board of Directors since 2010 and its’ former Chairman. He knows the Company, its
people and its operations very well, and we are confident that Randy will make a significant and lasting contribution
to our operational performance going forward.
Looking Ahead
The last decade has seen significant growth and strong financial performance for our company. Sales have risen
primarily due to strong and successful marketing programs and the introduction of new products and product
categories. With this growth, profitability has improved, and a focus on increasing shareholder value has led to five
dividend increases in the last five years and two three-for-one common share splits. Today the Company is one of
Canada’s most successful wine producers with a reputation for quality and value, an industry-leading distribution
network, well-established and popular brands, and proven programs that continue to build brand awareness and
growing sales.
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| ANDREW PELLER LIMITED 2017
However, this track record of success does not mean we have become complacent. We continue to focus on a number
of initiatives aimed ultimately at growing our business and enhancing value for our shareholders.
Operating profitability has strengthened considerably over the last few years, and we will continue to invest in our
operating capacity and production efficiency through technological advancements that ensure we continue to
generate solid and improving gross margins. We have a strong operations and supply chain team, and we believe
there are further opportunities to drive additional efficiencies going forward.
We will also be increasing our investment in our brands. We possess a strong portfolio of powerful national and
regional brands, and going forward we will build on this enviable market presence through innovative investments
that drive growth. A recent example is the launch of our Wayne Gretzky Red Cask Canadian Whisky and the opening
of the new Wayne Gretzky Estate Winery and Craft Distillery. The Gretzky brand has proven very successful to date,
and we are anticipating meaningful growth as we move forward.
Another focus of our investments is building brand awareness by concentrating on innovative programs that underpin
what our brands represent to ensure consumers are well aware of the many features and benefits that they will
experience from buying our products. The events and festivals at our estate wineries, our social media and marketing
programs, and numerous other initiatives continue to attract wine lovers to our products and build brand loyalty.
In addition to these investments to drive organic growth, we are always looking for accretive acquisition
opportunities to augment the strength of our brand portfolio. We will continue to evaluate potential opportunities in
the Canadian market, building on the success we have generated with the fourteen accretive acquisitions we have
completed and successfully integrated since 1995.
In summary, all of these initiatives and programs are targeted at growing our business and increasing profits with the
ultimate goal of enhancing value for our shareholders. The Company has a successful track record of growth and
strong operating performance for more than 40 years, and we look forward to building on this success in the years
ahead.
Finally, we would like to thank our employees for all their contributions that have enabled our success. We have an
incredible team of hard working and passionate employees who are focused on winning in our market and are the
best in the industry!
John E. Peller
Chairman & CEO
Randy A. Powell
President
ANDREW PELLER LIMITED 2017 | 7
This Year’s Top Awards
PELLER ESTATES
NIAGARA-ON-THE-LAKE
Tasters Guild – Michigan, USA
Double Gold – 2014 Family Series Baco Noir
Los Angeles Int’l Wine Competition – USA
Gold – ‘Best in Class’ (92 pts.)
2013 APSS Riesling Icewine
Gold – 90 pts. – 2014 APSS Vidal Icewine
Gold – 90 pts. – 2013 APSS Cabernet Franc Icewine
WineAlign – National Wine Awards of Canada
Gold – 2014 Private Reserve Cabernet Franc
Lieutenant Governor’s Award
for Excellence in Ontario Wines
2012 Peller AP Signature Series Cabernet Franc
Intervin – Vines magazine – Canada
Gold – 2014 APSS Sauvignon Blanc
International Wine & Spirit Competition – UK
Gold – 2014 Peller Private Reserve Vidal Icewine
Gold – 2013 Peller Signature Series Riesling Icewine
International Wine Challenge – UK
Gold – 2014 Peller AP Signature Series Sauvignon Blanc
OKANAGAN VALLEY
Los Angeles Int’l Wine Competition 2016
Gold – ‘Best of Class’ (92 pts.)
2015 Family Series Pinot Gris
Okanagan Spring Wine Festival
Best of Varietals 2016
Gold – 2014 Family Series Pinot Blanc
BLACK CELLAR
Tasters Guild – Michigan, USA
Gold – Sauvignon Blanc Blend 12
Gold – Shiraz Cabernet Blend 19
TRIUS
Los Angeles Int’l Wine Competition – USA
Gold – (90 pts.) – 2013 Showcase Riesling Icewine
All Canadian Wine Championships
Gold – Trius Brut Rosé
Ontario Wine Awards
Craig McDonald – ‘Winemaker of the Year’
Gold Medal – 2014 Showcase Riesling Ghost Creek Vineyard
Gold Medal – 2012 Showcase RHS Merlot
WineAlign – National Wine Awards of Canada
Gold – Trius Brut
Gold – Trius Brut Rosé
Lieutenant Governor’s Award
for Excellence in Ontario Wines
2014 Trius Showcase Riesling Ghost Creek Vineyard
Intervin – Vines magazine – Canada
Ontario Winery of the Year
Gold – Trius Brut Rosé
Gold – 2014 Showcase Clean Slate Sauvignon Blanc
Gold – 2014 Showcase Vidal Icewine
International Wine & Spirit Competition – UK
Gold – 2014 Trius Vidal Icewine
The Global Chardonnay Masters – UK
Gold – 2014 Trius Showcase Chardonnay
Wild Ferment Oliveira Vineyard
Six Nations Wine Challenge – Australia
Gold – 2013 Trius Showcase Chardonnay
Wild Ferment Oliveira Vineyard
Craig McDonald
‘Winemaker of the Year’
Ontario Wine Awards
353 Awards
Nationally
WAYNE GRETZKY ESTATES
SANDHILL
NIAGARA-ON-THE-LAKE
International Wine Challenge – UK
Gold – 2013 Wayne Gretzky Estates Vidal Icewine
The Global Chardonnay Masters – UK
Gold – 2014 Wayne Gretzky Estate Series Chardonnay
OKANAGAN VALLEY
All Canadian Wine Championships 2016
Gold – 2014 SS Pinot Noir
Los Angeles Int’l Wine Competition 2016
Gold – (91 pts.) – 2014 Cabernet Sauvignon Syrah
Gold – (90 pts.) – 2014 The Great Red
British Columbia Wine Awards 2016
Gold – 2015 Signature Series Riesling
Gold – 2014 Signature Series Shiraz
Pacific Rim Wine Competition - USA
Gold – 2015 Pinot Gris Hidden Terrace Vineyard
Gold – 2013 Small Lot Three Sandhill Estate Vineyard
Gold – 2015 Rosé Sandhill Estate Vineyard
All Canadian Wine Championships 2016
Gold – 2014 Gamay Noir SEV
Intervin International Wine Awards 2016
Gold – 2014 SL Syrah Phantom Creek Vineyard
Gold – 2013 Soon Series Red Phantom Creek Vineyard
WineAlign National Wine Awards
of Canada 2016
Gold – 2013 Small Lots TWO Sandhill Estate Vineyard
Okanagan Spring Wine Festival
Best of Varietals 2016
Best of Varietal – Single Red Varietal Category
2013 Small Lots Barbera Sandhill Estate Vineyard
Gold – 2014 Gamay Noir Sandhill Estate Vineyard
THIRTY BENCH WINE MAKERS
RED ROOSTER
Los Angeles Int’l Wine Competition – USA
Gold – (91 pts.) – 2013 Thirty Bench SL Cabernet Franc
All Canadian Wine Championships
Gold – 2014 SL Riesling Triangle Vineyard
(Riesling Dry category)
Ontario Wine Awards
Gold Medal – 2014 SL Riesling Wood Post
WineAlign – National Wine Awards of Canada
No.2 – Top 10 Best Performing Small Wineries
No.2 – Top 10 Ontario Wineries
Gold – 2015 Winemaker’s Blend Riesling
Gold – 2014 Small Lot Riesling Wood Post Vineyard
Gold – 2014 Small Lot Riesling Steel Post Vineyard
Gold – Sparkling Riesling
Intervin – Vines magazine – Canada
Top Scoring White Wine of Show
2014 SL Riesling Steel Post Vineyard
Gold – 2014 SL Riesling Steel Post Vineyard
Gold – 2012 Benchmark Red
All Canadian Wine Championships 2016
Gold – 2015 Reserve Viognier
Gold – 2015 Reserve Pinot Gris
2016 Dan Berger’s Int’l Wine Competition
Gold – 2015 Pinot Gris
Gold – 2015 Reserve Gewürztraminer
Gold – 2015 Reserve Pinot Gris
Los Angeles Int’l Wine Competition 2016
Gold – ‘Best in Class’ (93 pts.) – 2015 Riesling
British Columbia Wine Awards 2016
Platinum – 2015 Riesling
Lieutenant Governor’s Awards
for Excellence in British Columbia Wines
2012 Red Rooster Reserve Merlot
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE THREE MONTHS AND YEAR ENDED MARCH 31, 2017
The following management’s 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, 2017 in comparison
with those for the three months and year ended March 31, 2016 for Andrew Peller Limited (the “Company” or
“APL”). This discussion is prepared as of June 7, 2017 and should be read in conjunction with the audited
annual consolidated financial statements and accompanying notes contained therein for the years ended March
31, 2017 and 2016. Additional information relating to the Company, including the audited annual consolidated
financial statements, MD&A and Annual Information Form for the years ended March 31, 2017 and March 31,
2016, is available on www.sedar.com. The financial years ending March 31, 2018, March 31, 2017, March 31,
2016 and March 31, 2015 are referred to as “fiscal 2018”, “fiscal 2017”, “fiscal 2016” and “fiscal 2015”,
respectively. 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 (Ontario) with respect to APL and
its subsidiaries. Such statements include, but are not limited to, statements about the growth of the business in
light of the Company’s acquisitions; its launch of new premium wines and spirits; sales trends in foreign
markets; its supply of domestically grown grapes; and current economic conditions. 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 future 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 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 its ability to obtain other raw materials; fluctuations in the
U.S./Canadian dollar, Euro/Canadian dollar, and Australian/Canadian dollar exchange rates; its ability to market
products successfully to its anticipated customers; the trade balance within the domestic Canadian wine market;
market trends; reliance on key personnel; protection of its intellectual property rights; the economic
environment; the regulatory requirements regarding producing, marketing, advertising, and labeling 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 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 www.sedar.com. Forward-looking
statements are not guarantees of future performance and involve risks, uncertainties, and assumptions 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 Company’s forward-looking 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’s mission is to build sales volumes of its blended, premium, and ultra-premium brands by
delivering to its customers and consumers the highest quality wines and spirits at the best possible value. To
meet this goal, the Company invests in improvements in the quality of grapes, wines and spirits raw materials,
its winemaking and distillation capabilities, sales and marketing initiatives, and its quality management
programs. Furthermore, the Company’s wine portfolio covers the complete spectrum of price levels within the
Canadian wine market. Over the long term the Company believes premium wine sales will continue to grow in
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| ANDREW PELLER LIMITED 2017
Canada and these products generate higher prices and increased profitability compared to lower-priced table
wines.
The 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 through provincial liquor boards, the Ontario independent
retail locations under The Wine Shop, Wine Country Vintners, and Wine Country Merchants store names, estate
wineries, restaurants, and other licensed establishments. This distribution network 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.
Recent Events
On June 7, 2017, the Company’s Board of Directors approved a 10.3% increase in common share dividends for
shareholders of record on June 30, 2017 payable on July 7, 2017. The annual dividend on Class A Shares was
increased to $0.1800 per share from $0.1632 per share and the dividend on Class B Shares was increased to
$0.1565 per share from $0.1420 per share. The Company has consistently paid common share dividends since
1979 and has increased dividends every year for the past five years. APL currently designates all dividends paid
as “eligible dividends” for purposes of the Income Tax Act (Canada), unless indicated otherwise.
On June 7, 2017, the Company officially opened its new Wayne Gretzky Estate Winery and Craft Distillery in
Niagara-on-the-Lake, Ontario. Located on land adjacent to the Company’s Trius Winery, the 15,000 square foot
facility includes a winery, craft distillery, barrel aging cellars, tasting rooms, retail and hospitality facilities, all
surrounded by landscaping and vineyards. The Company established its strategic alliance with the Wayne
Gretzky Estate Winery in 2011, and has generated significant growth in their brands to where their wines are
now among the top-ten VQA best sellers across Canada.
On November 17, 2016, the Company’s Board of Directors announced that Mr. Randy A. Powell had been
appointed President of the Company effective November 28, 2016. With his appointment, Mr. Powell resigned
from the Company’s Board of Directors and its Committees. The Board of Directors also announced that,
effective November 17, 2016, Mr. John Peller was appointed the new Board Chair and has retained his position
as Chief Executive Officer of the Company.
At the Annual and Special Meeting of Shareholders held on September 9, 2016, the Company’s Class B
shareholders approved a three-for-one share split for both the Company’s Class A and Class B common shares.
The additional shares were issued on October 14, 2016 to shareholders of record on September 23, 2016. The
Company recorded the effect of the share split retroactively to all disclosures of share capital and per share
amounts in accordance with International Financial Reporting Standards (“IFRS”).
On June 2, 2016, the Company’s Board of Directors approved a Dividend Reinvestment Plan (DRIP) for Class
A shares. The DRIP was effective as of September 9, 2016. Under the DRIP, registered Class A shareholders
can elect to have 100% of their dividends reinvested to purchase additional Class A common shares. The Board
of Directors believes the DRIP provides Class A shareholders with a cost-effective method to increase their
investment in the Company.
In February 2016, the Government of Ontario’s Premier Advisory Council completed its review of the wine
retailing and distribution system in Ontario. The recommendations will result in issuance of 150 new wine
licenses over the next ten years to allow for the sale of both imported and domestic wine in grocery stores. The
Company has committed to move some of its 101 independent retail locations to inside the main aisles of the
grocery store during 2017. In March 2017, the Company relocated its first independent retail location and
several more stores will be relocated during fiscal 2018. These retail spaces will be co-located next to beer and
will also feature other Ontario VQA wines. The Company is not required to move its remaining independent
retail locations and wine licenses will not be granted to grocery stores where the Company already has a winery
ANDREW PELLER LIMITED 2017 | 11
retail store. This project is still in its early stages and at this point the Company does not anticipate a material
impact on earnings as the increase in sales due to being located in the stores is expected to compensate for
potential lost sales due to providing shelf space to other wineries and higher tax rates imposed on these
locations.
The Canadian Wine Market
The Canadian wine market continues to grow due to increased consumption by young consumers who have
more recently adopted wine as their beverage of choice, the reported health benefits of moderate wine
consumption, and a movement towards an increased consumption of wine made by an aging population who
favour the more sophisticated experience that wine offers.
For the year ended March 31, 2017 consumption of wine in Canada (excluding Quebec, where the Company
does not participate, and excluding the refreshment wine category) rose by 1.8% after increasing by 4.8% in
fiscal 2016. Imported wines accounted for 62.2% of total volume in fiscal 2017 down from 62.8% in fiscal
2016. Market share of Canadian-made wines remained flat in fiscal 2017 compared to fiscal 2016 at 37.8%. The
Company’s share of the total Canadian market in fiscal 2017 was 14.6% compared to 14.4% in 2016.
The VQA, established in 1989, has become recognized throughout the world as the appellation system for
Canadian wines that meet strict standards of excellence. In fiscal 2017, the Company decreased its share of BC
VQA wines from 11.6% to 10.5% but increased its share of Ontario VQA wines from 12.3% to 13.2%.
Red table wines continued to grow in popularity with total Canadian volume sales rising 1.1% in fiscal 2017
compared to 4.0% in 2016. Volume sales of the Company’s red wine portfolio increased 3.1% in fiscal 2017
after increasing by 8.1% in fiscal 2016. Volume sales of white table wines in Canada rose 1.7% in fiscal 2017
versus 5.0% in fiscal 2016 while the Company’s sales of white table wines were up 2.6% in fiscal 2017
compared to 6.2% in fiscal 2016.
Results of Operations
For the years ended March 31,
(in $000, except per share amounts)
Sales
Gross margin
Gross margin (% of sales)
Selling and administrative expenses
EBITA
Net unrealized (gain) loss on derivative financial instruments
Other expenses (income)
Adjusted earnings
Net earnings
Earnings per share – basic and diluted - Class A
Earnings per share – basic and diluted - Class B
Dividend per share – Class A (annual)
Dividend per share – Class B (annual)
2017
2016
2015 1
$ 342,606
$ 334,263
$ 315,697
131,155
122,964
114,869
38.3%
86,018
45,137
(2,232)
120
23,599
26,350
$0.64
$0.55
36.8%
82,048
40,916
1,558
(40)
20,322
19,199
$0.46
$0.40
36.4%
79,685
35,184
572
(301)
15,425
15,224
$0.36
$0.32
$0.1632
$0.1500
$0.1400
$0.1420
$0.1304
$0.1217
1.
Restated to reflect the early adoption of the amendments to IAS 16 and IAS 41.
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| ANDREW PELLER LIMITED 2017
Sales in fiscal 2017 increased 2.5% compared to fiscal 2016 due to strong organic growth as well as the
introduction of new products and categories. Sales growth was broad based across the majority of the
Company’s products and trade channels, including its network of retail outlets in Ontario, its two wine import
and marketing agencies, provincial liquor control boards across the country, and in its personal winemaking
business. Sales in fiscal 2016 included approximately $1.5 million relating to a co-packing agreement that was
discontinued in fiscal 2017.
The Company defines gross margin as gross profit excluding amortization. Gross margin as a percentage of
sales improved to 38.3% for the year ended March 31, 2017 compared to 36.8% in the prior year. Gross margin
in fiscal 2017 benefited from the positive impact of the Company’s cost control initiatives to improve
productivity and raw material cost savings, which offset the negative impact of the weak Canadian dollar
compared to the prior year. Furthermore, in fiscal 2016, the Company’s gross margin was reduced as a result of
a one-time $1.7 million charge to cost of sales relating to quality issues in certain imported wines. Management
is focused on efforts to further enhance production efficiency and productivity.
Selling and administrative expenses for the year ended March 31, 2017 were higher than the prior year.
Included in selling and administrative expenses in fiscal 2017 was approximately $1.1 million in one-time
professional services fees related to a strategic acquisition that was not completed as well as approximately $2.0
million in one-time costs relating to post-retirement benefits for certain retiring executive employees and
restructuring costs. The Company is focused on ensuring selling and administrative expenses are tightly
controlled.
Earnings before interest, amortization, net unrealized gains and losses on derivative financial instruments, other
(income) expenses, and income taxes (“EBITA”) were $45.1 million for the year ended March 31, 2017, an
increase of 10.3% compared to $40.9 million last year. The increase in EBITA is primarily the result of the
higher sales and improved gross margin in fiscal 2017, partially offset by the one-time costs outlined above.
Interest expense decreased for the year ended fiscal 2017 compared to the prior year due to lower interest rates
charged on short-term bank indebtedness and lower average long-term debt levels.
The Company recorded a net unrealized non-cash gain in fiscal 2017 and a net unrealized loss in fiscal 2016
related to mark-to-market adjustments on interest rate swaps and foreign exchange contracts. The Company has
elected not to apply hedge accounting and accordingly the change in fair value of these financial instruments is
reflected in the Company’s consolidated statement of earnings each reporting period. These instruments are
considered to be effective economic hedges and have enabled management to mitigate the short-term volatility
of changing foreign exchange and interest rates.
Other expenses in fiscal 2017 relate to the costs of maintaining the idle Port Moody property, partially offset by
income from the temporary expropriation of the property. The property is temporarily being used as a staging
area for the construction of a rapid transit project. Payments amounting to $2.0 million for the use of the
property were received in advance and were recorded as deferred income and are being recognized as other
income over the five-year term of the expropriation which began on July 1, 2012.
Adjusted earnings, defined as net earnings not including net unrealized gains and losses on derivative financial
instruments, other (income) expenses, non-recurring, non-operating (gains) and losses and the related income
tax effect, were $23.6 million for the year ended March 31, 2017 compared to $20.3 million in the prior year.
Net earnings for fiscal 2017 were $26.4 million or $0.64 per Class A Share compared to $19.2 million or $0.46
per Class A Share in the prior year. During the third quarter of fiscal 2017 the Company received a tax refund of
approximately $1.2 million relating to the acceptance of a prior-year’s tax filing by the Canada Revenue
Agency. This has resulted in a lower effective tax rate than noted for prior years.
ANDREW PELLER LIMITED 2017 | 13
The Company believes that sales will continue to grow going forward due to the strong positioning of key
brands, the continued launch of new and innovative products in the Canadian wine, cider and spirits markets,
and continued growth in new wine-related markets. The continuing higher average cost of U.S. dollar currency
purchases may have a negative impact on gross margins over the near term, although management believes this
will be largely offset by the Company’s continued ability to leverage scale and successful cost control initiatives
to reduce distribution, operating and packaging expenses and raw material cost savings.
The Company uses foreign exchange forward contracts to protect against changes in foreign currency rates and,
as at March 31, 2017, had locked in $18.2 million in U.S. dollar contracts at rates averaging $1.33 Canadian,
€1.2 million in Euro cont racts at rates averaging $1.44 Canadian and $4.2 million in Australian dollar contracts
at rates averaging $0.99 Canadian. These contracts expire at various dates through December 31, 2017.
Quarterly Performance
The following table outlines key quarterly highlights.
(in $000,
Q4 17
Q3 17
Q2 17
Q1 17
Q4 16
Q3 16
Q2 16
Q1 16
except per share amounts)
Sales
Gross margin
$72,295
$94,048
$88,357
$87,906
$74,170
$91,775
$85,200
$83,118
28,326
35,042
33,644
34,143
25,160
33,277
32,716
31,811
Gross margin (% of sales)
39.2%
37.3%
38.1%
38.8%
33.9%
36.3%
38.4%
38.3%
EBITA
5,865
11,886
12,583
14,803
3,614
12,445
12,011
12,846
Net unrealized (gain) loss on
financial instruments
(189)
(868)
(1,128)
(47)
2,479
(525)
(711)
Other expenses (income)
(15)
52
56
27
21
68
(68)
315
(61)
Adjusted earnings
Net earnings (loss)
1,859
6,345
6,837
8,558
191
6,807
6,447
6,877
2,010
8,137
7,630
8,573
(1,659)
7,146
7,023
6,689
E.P.S. – Class A basic & diluted
$0.05
$0.20
$0.18
$0.21
$(0.04)
$0.17
$0.17
$0.16
E.P.S. – Class B basic & diluted
$0.04
$0.17
$0.16
$0.18
$(0.04)
$0.15
$0.15
$0.14
The third quarter is historically the strongest in each fiscal year due to increased consumer purchasing of the
Company’s products during the holiday season.
Sales in the fourth quarter of fiscal 2017 declined 2.5% compared to the same quarter of fiscal 2016 due
primarily to seasonal factors such as the timing of the Easter holiday and reduced inventory in key customers. In
addition, sales in the fourth quarter of fiscal 2016 included approximately $0.3 million related to a co-packing
agreement that was discontinued in fiscal 2017. Gross margin for the three months ended March 31, 2017
improved to 39.2% of sales from 33.9% in the fourth quarter of fiscal 2016 due primarily to the one-time charge
to cost of sales in prior year due to quality issues in certain imported wines. Selling and administrative expenses
increased in the fourth quarter of fiscal 2017 due primarily to approximately $0.6 million in one-time costs
related to restructuring costs. EBITA was $5.9 million for the three months ended March 31, 2017, an increase
from $3.6 million in the same quarter in fiscal 2016 due to primarily the one-time charges described above. The
Company generated adjusted earnings for the three months ended March 31, 2017 of $1.9 million compared to
adjusted earnings of $0.2 million in the same prior year period. Net earnings were $2.0 million for the three
months ended March 31, 2017 compared to a net loss of $1.7 million in the fourth quarter of fiscal 2016. During
the third quarter of fiscal 2017 the Company received a tax refund of approximately $1.2 million relating to the
acceptance of a prior-year’s tax filing by the Canada Revenue Agency. This has resulted in a lower effective tax
rate than noted for prior periods.
14
| ANDREW PELLER LIMITED 2017
Liquidity and Capital Resources
As at
(in $000)
Current assets
Property, plant, and equipment
Intangibles
Goodwill
Total assets
Current liabilities
Long-term debt
Long-term derivative financial instruments
Post-employment benefit obligations
Deferred income
Deferred income tax
Shareholders’ equity
March 31,
2017
$ 160,567
118,838
10,600
37,473
$ 327,478
$ 81,742
46,678
642
5,279
-
15,820
177,317
March 31,
2016
$ 150,867
108,929
11,040
37,473
March 31,
2015 1
$ 146,764
104,951
12,331
37,473
$ 308,309
$ 301,519
$ 79,202
48,202
1,529
5,947
102
15,591
157,736
$ 77,782
52,269
1,447
6,165
506
15,975
147,375
Total liabilities and shareholders’ equity
$ 327,478
$ 308,309
$ 301,519
1.
Restated to reflect the early adoption of the amendments to IAS 16 and IAS 41.
Inventory increased at March 31, 2017 compared to March 31, 2016 due primarily to the launch of the new
Wayne Gretzky No. 99 Red Cask Canadian Whisky beginning in October 2016 and a larger grape harvest in
fiscal 2017 than in the prior year. The Company continues to benefit from improved information technology
systems introduced to monitor and control the Company’s supply chain. These systems include improvements
to the Company’s ability to manage supply shortages and excesses. Inventory is dependent on the increase of
domestically grown grapes that are used in the sale of premium and ultra-premium wines that are held for a
longer period than imported wine. These grapes 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 was lower at March 31, 2017 compared to March 31, 2016 due to the softer fourth quarter.
Accounts receivable are predominantly with provincial liquor boards and, to a lesser extent, licensed
establishments and independent retailers of consumer made wine products. The Company had $14.1 million of
accounts receivable with provincial liquor boards at March 31, 2017, all of which is expected to be collectible.
The balance represents amounts due from licensees, export customers, and independent retailers of consumer
made wine products. The amount of accounts receivable that was 30 days past due was $0.9 million at March
31, 2017, compared to $1.4 million at March 31, 2016. Against these amounts an allowance for doubtful
accounts of $0.1 million has been provided which the Company has determined represents a reasonable estimate
of amounts that may not be collectible.
Overall bank debt increased to $87.7 million as at March 31, 2017 compared to $86.0 million at March 31,
2016. In December 2016, the Company borrowed $3.0 million under its capital facility due to the timing of
capital investments in the development of the new Wayne Gretzky Estate Winery and Craft Distillery and
operational improvements at the Company’s two major production facilities. The increase in bank debt was
partially offset by the strong earnings in fiscal 2017, the positive impact of working capital management, and
regularly scheduled debt repayments. Despite the increase in overall bank debt in the third quarter, the
Company’s debt to equity ratio strengthened to 0.49:1 at March 31, 2017 compared to 0.55:1 at March 31,
2016. At March 31, 2017, the Company had unutilized debt capacity in the amount of approximately $53.4
million on its operating loan facility.
ANDREW PELLER LIMITED 2017 | 15
On December 30, 2016, the Company amended its debt facilities to extend the maturity date to July 31, 2021,
revise certain financial covenants and update the applicable margin based on the Company’s leverage, as
defined by the amended credit agreement. As at March 31, 2017 and 2016, the applicable margin was 1.25%.
The Company believes these amendments will provide the ability to accelerate production efficiencies and
continued investment in expansion of its core business.
The following table outlines the Company’s contractual obligations:
As at March 31, 2017
(in $000)
< 1
year
2 - 3
years
4 - 5
years
> 5
years
Total
Long-term debt
Leases and royalties
Pension obligations
Grape and bulk wine purchase contracts
Packaging purchase contracts
Bulk whiskey purchase contracts
Interest rate swap
Foreign exchange forwards
$ 4,406
5,050
520
73,758
34,827
1,007
119,568
1,585
30,183
$ 8,812
6,112
958
77,726
3,338
390
97,336
2,639
-
$ 38,359
3,273
581
54,082
-
-
96,295
361
-
$ -
6,462
1,173
203,155
-
-
210,790
$ 51,577
20,897
3,232
408,721
38,165
1,397
523,989
-
-
4,585
30,183
Total contractual obligations
$ 151,336
$ 99,975
$ 96,656
$ 210,790
$ 558,757
The Company has entered into grape purchase contracts with certain suppliers to purchase their crops at the
time of harvest for prices set by the market. The amount of the commitment will change based on the total
tonnes harvested or the prices set by the market for specific grapes. The amounts included in the table above
represent our best estimate of the Company’s commitment over the periods noted.
The Company also has contractual commitments of $2.9 million to purchase property, plant and equipment and
expects to fund these commitments primarily through its cash flows from operations.
Management expects to generate sufficient cash flow from operations to meet its debt servicing, principal
payment, and working capital requirements over both the short and the long-term through increased profitability
and strong management of working capital and capital expenditures. The Company continually reviews all of
its assets to ensure appropriate returns on investment are being achieved and that they fit with the Company’s
long-term strategic objectives.
For the year ended March 31, 2017, the Company generated cash from operating activities, after changes in
non-cash working capital items, of $25.6 million compared to $21.8 million in the prior year. Investing
activities of $20.5 million were made in fiscal 2017 compared to $10.4 million in the prior year. Capital
expenditures in fiscal 2017 consist of normal expenditures to sustain operations and the replanting of certain of
the Company’s vineyards, as well as costs incurred related to the development of the new Wayne Gretzky
Estate Winery and Craft Distillery, which officially opened on June 7, 2017.
Working capital as at March 31, 2017 increased to $78.8 million compared to $71.7 million at March 31, 2016.
Accounts receivable were lower due to the softer fourth quarter while inventory increased due to the launch of
the new Wayne Gretzky No. 99 Red Cask Canadian Whisky and a larger grape harvest than the prior year.
Accounts payable and accrued liabilities decreased by $0.5 million compared to prior year due to the timing of
inventory receipts and payments compared to March 31, 2016. Shareholders’ equity as at March 31, 2017 was
$177.3 million or $4.16 per common share compared to $157.7 million or $3.70 per common share as at March
16
| ANDREW PELLER LIMITED 2017
31, 2016. The increase in shareholders’ equity is due to the increase in net earnings, partially offset by the
payment of dividends and net actuarial losses on post-employment benefit plans.
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 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.
At the Annual and Special Meeting of Shareholders held on September 9, 2016, the Company’s Class B
shareholders approved a three-for-one share split for both the Company’s Class A and Class B common shares.
The additional shares were issued on October 14, 2016 to shareholders of record on September 23, 2016. The
Company recorded the effect of the share split retroactively to all disclosures of share capital and per share
amounts in accordance with IFRS. As a result, as at March 31, 2017, the following shares were issued and
outstanding:
Shares outstanding
Class A Shares
Class B Shares
Total
March 31, 2017 March 31, 2016 March 31, 2015
33,881,487
33,581,487
33,581,487
9,012,123
42,593,610
9,012,123
42,593,610
9,012,123
42,893,610
In February 2016, the Company repurchased and cancelled 300,000 Class A Shares from Jalger Limited, a
related party. The repurchase price was calculated by reference to the average closing market price of the Class
A Shares for a period of 20 business days preceding the repurchase date. The repurchase price of $2.3 million
was first allocated to capital stock based on the average per share carrying amount of the Class A Shares. The
remaining amount was allocated to retained earnings.
Strategic Outlook and 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 our consumers and customers. The Company has also recently entered
the spirits category, through its strategic alliance with Wayne Gretzky, and has introduced cider through its own
brand labels.
The market for wine in Canada continues to grow due to a movement toward the consumption of wine by young
consumers who have adopted wine as their beverage of choice, an aging population that favours the more
sophisticated experience that wine offers, and the reported health benefits of moderate wine consumption. The
Company has recorded strong growth in sales through provincial liquor boards and export and agency trade
channels. The Company has focused its product development and sales and marketing initiatives by capitalizing
on the trend of increased wine consumption and expects to see continued sales growth. The Company will
continue to closely monitor its costs and will react quickly to changes to risks and opportunities in the
marketplace.
The Company will continue to launch wine brands in the future and increase its use of differentiated package
formats. The Company will also expand product offerings outside the traditional table wine segment, into other
alcoholic beverages, where it is able to leverage its detailed knowledge of growth opportunities 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
coordination between the Company’s business-to-consumer trade channels to provide customers with a more
intimate awareness of its broad product portfolio. New product launches and directed focus to support key
brands through all of the Company’s distribution channels will continue to receive increased marketing and
sales support in fiscal 2018.
ANDREW PELLER LIMITED 2017 | 17
The Company expects to maximize the efficiency of its existing assets while also making additional
investments in capital expenditures to increase capacity, to support its ongoing commitment to producing the
highest-quality wines and spirits, and to improve productivity. Improvements to enhance the coordination
throughout its supply chain have been implemented recently and benefits have begun to accrue. Investments
made over the past few years are expected to continue to result in increased sales and improved profitability.
From time to time the Company evaluates investment opportunities, including acquisitions, which support its
strategic direction.
The Company plans to dedicate further resources towards rectifying unfair trade practices and taxes by
continuing to work closely with other members of the Canadian wine industry and the Canadian and provincial
governments.
The Company anticipates it will continue to generate increased sales going forward while gross margin dollars
are expected to remain stable. The higher costs of U.S. dollar currency purchases may have a continued
negative impact on gross margin percentage which is expected to be largely offset by product pricing as well as
raw material cost savings and production efficiencies.
The Company’s product portfolio covers the complete spectrum of price levels within the Canadian wine
market. While there may be an increase in purchases of ultra-premium wine, this is expected to be offset by a
slight decrease in sales of blended varietal wine. In addition, the Company will be accelerating its efforts to
generate production efficiencies and reduce overhead costs to enhance its overall profitability.
Risks and Uncertainties
The Company’s sales of wine and spirits are affected by general economic conditions such as changes in
discretionary consumer spending and consumer confidence, future economic conditions, tax laws, and the prices
of its products. A steep and sustained decline in economic growth may cause a lower demand for the
Company’s products. Such general economic conditions could impact the Company’s sales through the
Company’s estate wineries and restaurants, direct sales through licensed establishments, and export sales
through duty free shops. The Company believes that these effects would likely be temporary and would not
have a significant impact on financial performance.
The Canadian wine market continues to be the target of low-priced imported wines from regions and countries
that subsidize wine production and grape growing as well as providing sizeable export 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 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 decline in beverage alcohol consumption, or the decision of retailers or consumers to purchase
competitive products instead of the Company’s products. Retailer and consumer purchasing decisions are
influenced by, among other things, the perceived absolute or relative overall value of the Company’s products
including their quality or pricing compared 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 Company’s products. APL
could also experience higher 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 the sales of its premium wines in Canada principally through the sale of VQA wines,
and as a result, is dependent on the quality and supply of domestically grown premium quality grapes. If any of
the Company’s vineyards or the vineyards of our grape suppliers experience certain weather variations, natural
18
| ANDREW PELLER LIMITED 2017
disasters, pestilence, other severe environmental problems, or other occurrences, APL may not be able to 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. In the past where there has been a significant reduction in
domestically sourced grapes, the Government of Ontario, in conjunction with the Ontario Grape Growers
Marketing Board, have agreed to temporarily increase the blending of imported wines which would enable the
Company to continue to supply products to the market. The inability to secure premium quality grapes could
impair the ability of the Company to supply certain wines to its customers. APL has developed programs to
ensure it has 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 Ontario 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. The Company’s strategy is to hedge approximately 50% - 80% of
its foreign exchange requirements throughout the fiscal year and to regularly review its on-going requirements.
APL has entered into a series of foreign exchange contracts as a hedge against movements in U.S. dollar, Euro
and Australian dollar exchange rates. The Company does not enter into foreign exchange contracts for trading
or speculative purposes. These contracts are reviewed periodically. Based on the Company’s forecasts for
foreign currency purchases and the amount of foreign exchange forward contracts outstanding at March 31,
2017, each one percent change in the value of the U.S. dollar or Australian dollar would impact the Company’s
net earnings by an estimated $0.2 million and $0.1 million respectively. Each one percent change in the
exchange rate of the Euro would not have a material impact on the Company’s net earnings.
The Company purchases glass, bag in box, tetra paks, and other components used in the bottling and packaging
of wine and spirits. The largest component in the packaging of wine and spirits 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 APL’s specifications. Any interruption in supply could have an adverse impact on the
Company’s ability to supply its markets. 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.
The Company operates in a highly regulated industry with requirements regarding the production, distribution,
marketing, advertising, and labelling of wine and spirits. These regulatory requirements may inhibit or restrict
the Company’s ability to maintain or increase strong consumer support for and recognition of its brands and
may adversely affect APL’s business 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 remains a risk to the Company through its impact on the Company’s retail operations.
The wine industry and the domestic and international market 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 participants may affect the Company’s pricing strategies and create
margin pressures resulting in potentially lower revenues. Competition also exerts pressure on existing customer
relationships which may affect APL’s ability to retain existing customers and increase the number of new
customers. The Company has worked to improve production efficiencies, selectively increase pricing to
increase gross margin, and implement a higher level of promotion and advertising activity to remain
competitive. APL and other wine industry participants also generally compete with other alcoholic beverages
like beer and spirits 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 products
which have been subject to change. Significant increases in excise and other taxes on beverage alcohol products
could materially and adversely affect the Company’s financial condition or results of operations. Federal and
provincial governmental agencies extensively regulate the beverage alcohol products industry concerning such
matters as licensing, trade practices, permitted and required labelling, advertising, and relations with consumers
ANDREW PELLER LIMITED 2017 | 19
and retailers. Certain federal and provincial regulations also require warning labels and signage. New or revised
regulations, increased licensing fees, requirements, taxes or mark-ups could also have a material adverse effect
on the Company’s financial condition or results of operations.
The Company’s 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 systems and manage the Company’s significant
relationships with its suppliers and customers. The Company is also dependent upon the performance of its key
senior management personnel. The Company’s success is linked to its ability to identify, hire, train, motivate,
promote, and retain highly qualified management. 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 rate used to measure the liability to pay future benefits and the market
performance of the plan assets set aside to pay these benefits. A pension committee reviews the performance of
plan assets on a regular basis and has a policy to hold diversified investments. Nevertheless, a decline in long-
term interest rates or in asset values could increase the Company’s 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 Kingdom. 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 of this to
APL.
The Company considers its trademarks, 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. There 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 third parties, 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 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 Company’s reputation.
The success of the Company’s brands depends upon the positive image that consumers have of those brands.
Contamination of APL’s products, whether arising accidentally or through deliberate third-party action, or other
events that harm the integrity or consumer support for those brands could adversely affect their sales.
Contaminants in raw materials purchased from third parties and used in the production of the Company’s
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 or all of the
Company’s brands.
20
| ANDREW PELLER LIMITED 2017
Non-IFRS Measures
The Company utilizes EBITA (defined as earnings before interest, amortization, net unrealized gains and losses
on derivative financial instruments, other (income) expenses, and 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 expenditures, and income taxes.
For the three months and years ended March 31,
(in $000)
Net earnings (loss)
Add: Interest
Provision for (recovery of) income taxes
Amortization of plant and equipment used in production
Amortization of equipment and intangibles used in selling and
administration
Net unrealized (gain) loss on derivative financial instruments
Other expenses (income)
EBITA
Three months
Year
2017
2016
2017
2016
$ 2,010
$ (1,659)
$ 26,350
$ 19,199
813
597
1,763
886
(189)
(15)
786
(569)
1,544
1,012
2,479
21
3,078
7,895
6,549
3,377
(2,232)
120
3,575
6,916
6,069
3,639
1,558
(40)
$ 5,865
$ 3,614
$ 45,137
$ 40,916
Readers are cautioned that EBITA should not be construed as an alternative to net earnings determined in
accordance with IFRS as an indicator of the Company’s performance or to cash flows from operating, investing,
and financing activities as a measure of liquidity and cash flows.
The Company also utilizes gross margin (defined as sales less cost of goods sold, excluding amortization) as
calculated below.
For the three months and years ended March 31,
(in $000)
Sales
Three months
2017
2016
Year
2017
2016
$ 72,295
$ 74,170
$ 342,606
$ 334,263
Less: Cost of goods sold, excluding amortization
43,969
49,010
211,451
211,299
Gross margin
Gross margin (% of sales)
$ 28,326
$ 25,160
$ 131,155
$ 122,964
39.2%
33.9%
38.3%
36.8%
The Company calculates adjusted earnings as follows.
For the three months and years ended March 31,
(in $000)
Net earnings (loss)
Net unrealized (gain) loss on derivative financial instruments
Other expenses (income)
Income tax effect of the above
Tax refund relating to acceptance of a prior year’s tax filing
Adjusted earnings
Three months
Year
2017
2016
2017
2016
$ 2,010
$ (1,659)
$ 26,350
$ 19,199
(189)
(15)
53
-
2,479
21
(650)
(2,232)
120
549
-
(1,188)
1,558
(40)
(395)
-
$ 1,859
$ 191
$ 23,599
$ 20,322
ANDREW PELLER LIMITED 2017 | 21
The Company’s method of calculating EBITA, gross margin, and adjusted earnings 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 is controlled by Jalger Limited, which owns 66.5% of the Company’s Class B voting shares. No
individual has sole voting power or control in respect of the shares of the Company owned by Jalger Limited. In
February 2016, the Company repurchased and cancelled 300,000 Class A Shares from Jalger Limited, a related
party. This transaction was approved by the Company’s Board of Directors.
The compensation expense recorded for directors and members of the Executive Management Team of the
Company is shown below:
Compensation and short-term benefits
Post-employment benefits
Payments to a share purchase plan
2017
$ 6,951
302
381
2016
$ 4,939
248
409
$ 7,634
$ 5,596
The compensation and benefits expense consists of amounts that will primarily be settled within twelve months.
Financial Statements and Accounting Policies
The Company’s consolidated financial statements have been prepared in accordance with IFRS, as issued by the
International Accounting Standards Board (“IASB”).
Critical Accounting Estimates
During the year management is required to make estimates and assumptions that are inherently uncertain. These
estimates can vary with respect to the level of judgment involved and ultimately the impact that these estimates
may have on the Company's financial statements. Estimates are deemed to be critical when a different estimate
could reasonably be used or where changes are reasonably likely to occur which could materially affect the
Company’s financial position or financial performance. The Company’s significant accounting policies are
discussed in the notes to the consolidated financial statements for the years ended March 31, 2017 and March
31, 2016. Critical estimates inherent in these accounting policies are set out below:
Impairment of goodwill
Testing goodwill for impairment at least annually involves estimating the recoverable amount of the Cash
Generating Units to which goodwill is allocated. This requires making assumptions about future cash flows,
growth rates, market conditions and discount rates, which are inherently uncertain. Actual amounts may vary
from these assumptions and cause significant adjustments. Management has concluded that a 10% change in
any key assumption in the goodwill impairment test would not result in an impairment of goodwill as at March
31, 2017 and March 31, 2016.
Post-employment benefits
Measuring the liability for post-employment benefits uses assumptions for the discount rates, increases in
compensation, increases in medical costs and timing of the payment of benefits. Actual amounts may vary from
these assumptions and cause significant adjustments.
Fair value of grapes at the point of harvest
Where possible, the fair value of grapes at the point of harvest is determined by reference to local market prices
for grapes of a similar quality and same varietal. For grapes for which local market prices are not readily
22
| ANDREW PELLER LIMITED 2017
available, the average price of similar grapes is used. Actual amounts may vary from these assumptions and
cause significant adjustments.
Recently Adopted Accounting Pronouncements
During December 2014, the IASB issued amendments to IAS 1 – Presentation of Financial Statements which
clarifies the concept of materiality as it applies to information disclosed in the financial statements. The
amendments also provide guidance on the presentation of subtotals, the structure of the notes to the financial
statements, and the disclosure of significant accounting policies. The new requirements were adopted effective
April 1, 2016. The adoption of these amendments did not have a significant impact on the consolidated financial
statements.
Recently Issued Accounting Pronouncements
In January 2016, the IASB issued an amendment to IAS 7 – Statement of Cash Flows, introducing additional
disclosure that will enable users of financial statements to evaluate changes in liabilities arising from financing
activities. The amendments are effective for annual periods beginning on or after January 1, 2017. The adoption
of these amendments is not expected to have a significant impact on the consolidated financial statements.
In January 2016, the IASB issued amendments to IAS 12 – Income Taxes to clarify the requirements for
recognising deferred tax assets on unrealised losses. The amendments clarify the accounting for deferred tax
where an asset is measured at fair value and that fair value is below the asset’s tax base. They also clarify
certain other aspects of accounting for deferred tax assets. The amendments are effective for annual periods
beginning on or after January 1, 2017. The adoption of these amendments is not expected to have a significant
impact on the consolidated financial statements.
During July 2014, the IASB issued the complete version of IFRS 9 – Financial Instruments: Classification and
Measurement of Financial Assets and Financial Liabilities. IFRS 9 will replace IAS 39 – Financial Instruments:
Recognition and Measurement. In addition, IFRS 7 – Financial Instruments: Disclosures was amended to
include additional disclosure requirements on transition to IFRS 9. The mandatory effective date of applying
these standards is for annual periods beginning on or after January 1, 2018. The standard uses a single approach
to determine whether a financial asset is measured at amortized cost or fair value. The approach is based on how
an entity manages its financial instruments (its business model) and the contractual cash flow characteristics of
the financial assets. The new standard also requires a single impairment method to be used. The standard
requires that for financial liabilities measured at fair value, any changes in an entity’s own credit risk are
generally to be presented in other comprehensive income instead of net earnings. A new hedge accounting
model is included in the standard, as well as increased disclosure requirements about risk management activities
for entities that apply hedge accounting. The Company is currently evaluating the potential impact of this
standard, however, it is not expected to have a significant impact on the consolidated financial statements.
During May 2014, the IASB issued IFRS 15 – Revenue from Contracts with Customers which supersedes IAS
18 – Revenue and IAS 11 – Construction Contracts. The standard details a revised model for the recognition of
revenue from contracts with customers. In April 2016, the IASB has amended IFRS 15 to clarify the guidance
on identifying performance obligations, licenses of intellectual property and principal versus agent. The
amendments also provide additional practical expedients on transition. The standard is effective for first interim
periods within annual periods beginning on or after January 1, 2018. We are currently in the process of
evaluating the potential impact this new guidance will have on the Company’s financial statements. We have
not completed this evaluation and therefore, cannot conclude whether the guidance will have a significant
impact on our financial statements at this time. However, based on preliminary work completed, we are
considering the implications that the new standard may have on our agency wine businesses, presentation of
certain customer related trade spending, as well as the timing of recognition of certain promotional discounts,
which are areas that could potentially be impacted by the adoption of the new guidance.
ANDREW PELLER LIMITED 2017 | 23
In January 2016, the IASB issued IFRS 16 – Leases, which will replace IAS 17 – Leases and related
Interpretations. The new standard will be effective for fiscal years beginning on or after January 1, 2019, with
early adoption permitted provided the Company has adopted IFRS 15 – Revenue from Contracts with
Customers. The new standard requires lessees to recognize a lease liability reflecting future lease payments and
a “right-of-use asset” for virtually all leases contracts, and record it on the statement of financial position,
except with respect to lease contracts that meet limited exception criteria. Given that the Company has
significant contractual obligations in the form of operating leases under IAS 17, there will be a material increase
to both assets and liabilities upon adoption of IFRS 16, and material changes to the timing of recognition of
expenses associated with the lease arrangements. The Company is analyzing the new standard to determine the
impact of adopting this standard.
Evaluation of Disclosure Controls and Procedures and Internal Control over 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 time periods specified. This information is gathered
and reported to the Company’s management, including the Chief Executive Office (“CEO”) and Chief Financial
Officer (“CFO”) on a timely basis so that decisions can be made regarding the Company’s disclosures to the
public.
The Company’s management, under the supervision of, and with the participation of the CEO and CFO, have
designed and maintained the Company’s disclosure controls and procedures as required in Canada by “National
Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings”.
Internal Controls over Financial Reporting
Internal controls over financial reporting are procedures designed 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, assurance with respect to reliability of financial reporting and
financial statement presentation.
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 supervision of
senior management and effected by the Board of Directors to provide reasonable assurance regarding the
reliability of financial reporting and preparation of the Company’s financial statements in accordance with
IFRS.
For the year ended March 31, 2017, there have been no material changes in the Company’s internal controls
over financial reporting or changes to disclosure controls and procedures that materially affected or were likely
to affect, the Company’s internal control systems. As at June 7, 2017, the CEO and CFO of the Company have
evaluated the effectiveness of the Company’s internal controls over financial reporting. Based on these
evaluations, the CEO and CFO have concluded that the controls and procedures were operating effectively.
24
| ANDREW PELLER LIMITED 2017
INDEPENDENT AUDITOR’S REPORT
June 7, 2017
To the Shareholders of Andrew Peller Limited
We have audited the accompanying consolidated financial statements of Andrew Peller Limited, which comprise the
consolidated balance sheets as at March 31, 2017 and 2016 and the consolidated statements of earnings,
comprehensive income, changes in equity and cash flows for the years then ended, and the related notes, which
comprise a summary of significant accounting policies and other explanatory information.
Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with International Financial Reporting Standards, 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.
Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We
conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and
fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
Andrew Peller Limited as at March 31, 2017 and 2016 and its financial performance and its cash flows for the years
then ended in accordance with International Financial Reporting Standards.
Chartered Professional Accountants, Licensed Public Accountants
ANDREW PELLER LIMITED 2017 | 25
Consolidated Balance Sheets
As at March 31, 2017 and 2016
(in thousands of Canadian dollars)
Assets
Current assets
Accounts receivable (note 20)
Inventories (note 4)
Biological assets (note 6)
Prepaid expenses and other assets
Property, plant and equipment (note 5)
Intangible assets (note 7)
Goodwill (note 8)
Liabilities
Current liabilities
Bank indebtedness (note 9)
Accounts payable and accrued liabilities (note 10)
Dividends payable
Income taxes payable (note 14)
Current portion of derivative financial instruments (note 20)
Current portion of long-term debt (note 11)
Long-term debt (note 11)
Long-term derivative financial instruments (note 20)
Post-employment benefit obligations (note 12)
Deferred income (note 13)
Deferred income taxes (note 14)
Shareholders’ Equity
Capital stock (note 15)
Retained earnings
Accumulated other comprehensive loss
$
$
$
2017
2016
$
$
$
26,973
129,088
1,400
3,106
160,567
118,838
10,600
37,473
327,478
36,620
36,260
1,690
2,348
418
4,406
81,742
46,678
642
5,279
-
15,820
150,161
6,967
174,193
(3,843)
177,317
28,223
119,666
1,196
1,782
150,867
108,929
11,040
37,473
308,309
33,701
36,772
1,553
2,425
645
4,106
79,202
48,202
1,529
5,947
102
15,591
150,573
6,967
154,605
(3,836)
157,736
$
327,478
$
308,309
Director
Director
The accompanying notes are an integral part of these consolidated financial statements.
26
| ANDREW PELLER LIMITED 2017
Consolidated Statements of Earnings
For the years ended March 31, 2017 and March 31, 2016
(in thousands of Canadian dollars, except per share amounts)
2017
2016
Sales
Cost of goods sold, excluding amortization (note 16)
Amortization of plant and equipment used in production
$
$
342,606
211,451
6,549
Gross profit
Selling and administration (note 16)
Amortization of equipment and intangible assets used in selling and
administration
Interest
Net unrealized (gain) loss on derivative financial instruments (note 20)
Other expense (income) (note 16)
124,606
86,018
3,377
3,078
(2,232)
120
334,263
211,299
6,069
116,895
82,048
3,639
3,575
1,558
(40)
Earnings before income taxes
34,245
26,115
Provision for (recovery of) income taxes (note 14)
Current
Deferred
Net earnings for the year
Net earnings per share (notes 15 and 17)
Basic and diluted
Class A shares
Class B shares
7,664
231
7,895
26,350
0.64
0.55
$
$
$
7,181
(265)
6,916
19,199
0.46
0.40
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
ANDREW PELLER LIMITED 2017 | 27
Consolidated Statements of Comprehensive Income
For the years ended March 31, 2017 and March 2016
(in thousands of Canadian dollars)
2017
2016
Net earnings for the year
$
26,350
$
19,199
Items that are never reclassified to net earnings
Net actuarial losses on post-employment benefit plans (note 12)
Deferred income taxes (note 14)
Other comprehensive loss for the year
(9)
2
(7)
(457)
119
(338)
Net comprehensive income for the year
$
26,343
$
18,861
The accompanying notes are an integral part of these consolidated financial statements.
28
| ANDREW PELLER LIMITED 2017
Consolidated Statements of Changes in Equity
For the years ended March 31, 2017 and March 31, 2016
(in thousands of Canadian dollars)
Capital stock
Retained
earnings
Accumulated
other
comprehensive
loss
Total
shareholders’
equity
Balance at April 1, 2015
$
7,026 $
143,847 $
(3,498)
$
147,375
19,199
-
19,199
Net earnings for the year
Net actuarial losses (net of $119
deferred tax recovery)
(note 12)
Net comprehensive income for the
year
Issue price of repurchased shares
(note 15)
Excess of repurchase price over
average per share issue price
(note 15)
Dividends (Class A $0.150 per
share, Class B $0.130 per
share)
Balance at March 31, 2016
Balance at April 1, 2016
Net earnings for the year
Net actuarial losses (net of $2
deferred tax recovery)
(note 12)
Net comprehensive income for the
year
Dividends (Class A $0.163 per
share, Class B $0.142 per
share)
-
-
-
-
19,199
(59)
-
-
-
(2,195)
(6,246)
(338)
(338)
-
-
-
$
$
6,967 $
154,605 $
6,967 $
154,605 $
(3,836)
(3,836)
$
$
-
-
-
-
26,350
-
26,350
(6,762)
-
(7)
(7)
-
(338)
18,861
(59)
(2,195)
(6,246)
157,736
157,736
26,350
(7)
26,343
(6,762)
Balance at March 31, 2017
$
6,967 $
174,193 $
(3,843)
$
177,317
The accompanying notes are an integral part of these consolidated financial statements.
ANDREW PELLER LIMITED 2017 | 29
Consolidated Statements of Cash Flows
For the years ended March 31, 2017 and March 31, 2016
(in thousands of Canadian dollars)
Cash provided by (used in)
Operating activities
Net earnings for the year
Adjustments for
(Gain) loss on disposal of property, plant and equipment
Amortization of plant, equipment and intangible assets
Interest expense
Provision for income taxes
Net unrealized (gain) loss on derivative financial instruments
Post-employment benefits
Deferred income
Interest paid
Income taxes paid
Change in non-cash working capital items related to operations (note 19)
Investing activities
Proceeds from disposal of property, plant and equipment
Purchase of property, plant and equipment
Purchase of intangible assets
Financing activities
Increase in bank indebtedness
Drawings of long-term debt
Repayment of long-term debt
Deferred financing costs
Dividends paid
Repurchase of Class A shares (note 15)
Cash - Beginning and end of year
2017
2016
$
26,350
$
19,199
(174)
9,926
3,078
7,895
(2,232)
(677)
(102)
(3,101)
(7,741)
33,222
(7,658)
397
9,708
3,575
6,916
1,558
(675)
(404)
(3,524)
(6,658)
30,092
(8,299)
25,564
21,793
175
(19,836)
(822)
20
(10,401)
-
(20,483)
(10,381)
2,919
3,000
(4,181)
(194)
(6,625)
-
1,179
-
(4,088)
(96)
(6,153)
(2,254)
(5,081)
(11,412)
$
-
$
-
Supplementary information
Property, plant and equipment and intangible assets acquired that were unpaid in
cash and included in accounts payable and accrued liabilities
1,196
2,458
The accompanying notes are an integral part of these consolidated financial statements.
30
| ANDREW PELLER LIMITED 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017 and March 31, 2016
(in thousands of Canadian dollars, except per share amounts)
1 Nature of operations
Andrew Peller Limited (the Company) produces and markets wine and wine related products. The Company’s
products are produced and sold predominantly in Canada. The Company is incorporated under the Canada
Business Corporations Act and is domiciled in Canada. The address of its head office is 697 South Service
Road, Grimsby, Ontario, L3M 4E8.
2
Summary of significant accounting policies
Basis of presentation
These consolidated financial statements have been prepared in compliance with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
These consolidated financial statements were approved by the Board of Directors for issue on June 7, 2017.
Basis of measurement
The consolidated financial statements have been prepared under the historical cost convention, except for
derivatives, which are measured at fair value, and biological assets, which are measured at fair value less costs
to sell.
Basis of consolidation
These consolidated financial statements include the accounts of the Company and all subsidiary companies.
Subsidiaries are those entities the Company controls by having the power to govern their financial and operating
policies. Subsidiaries are fully consolidated from the date on which control is obtained by the Company and are
de-consolidated from the date control ceases. Intercompany transactions, balances, income and expenses, and
profits and losses are eliminated.
Foreign currency translation
The consolidated financial statements are presented in Canadian dollars, which is the Company’s functional
currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign
currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in currencies other than the Company’s functional currency are recognized in the consolidated
statements of earnings.
ANDREW PELLER LIMITED 2017 | 31
Revenue
The Company records a sale when: it has transferred the risks and rewards of ownership of the goods to the
buyer; the Company has no continuing managerial involvement over the goods; it is probable the consideration
will be received by the Company; and the amount of revenue and costs related to the transaction can be
measured reliably. For transactions with provincial liquor boards, licensee retail stores and wine kit retailers, the
Company’s terms are primarily “FOB shipping point”. Accordingly, sales are recorded when the product is
shipped from the Company’s distribution facilities. Sales to consumers through retail stores, winery restaurants,
and estate wineries are recorded when the product is purchased.
Excise taxes collected on behalf of the federal government, licensing fees, and levies paid on wine sold through
the Company’s independent retail stores in Ontario, product returns, breakage, promotional and advertising
allowances, and discounts provided to customers are deducted from gross revenue to arrive at sales.
Cost of goods sold
Cost of goods sold includes the cost of finished goods inventories sold during the year, inventory writedowns
and revaluations of agricultural produce to fair value less costs to sell at the point of harvest.
Inventories
Inventories are valued at the lower of cost and net realizable value. Cost is determined on an average cost basis.
The Company utilizes a weighted average cost calculation to determine the value of ending inventory (bulk
wine and finished goods). Average cost is determined separately for import wine and domestic wine and is
calculated by varietal and vintage year.
Grapes produced from vineyards controlled by the Company that are part of inventories are measured at their
fair value less costs to sell at the point of harvest.
The Company includes borrowing costs in the cost of certain wine inventories that require a substantial period
of time to become ready for sale.
Property, plant and equipment
Property, plant and equipment are carried at cost less accumulated amortization. Cost includes borrowing costs
for assets that require a substantial period of time to become ready for use. Amortization of buildings, vines and
vineyard infrastructure and machinery and equipment is calculated on the straight-line basis in amounts
sufficient to amortize the cost of buildings, vines and vineyard infrastructure and machinery and equipment over
their estimated useful lives as follows:
Buildings
Vines and vineyard infrastructure
Machinery and equipment
Land is carried at cost and is not amortized.
40 years
20 years
5 to 20 years
Vines and vineyard infrastructure amortization commences in the year the vineyard yields a crop that
approximates 50% of expected annual production.
32
| ANDREW PELLER LIMITED 2017
Biological assets
The Company measures biological assets, consisting of grapes grown on vineyards controlled by the Company,
at cost, which approximates fair value as there has been minimal biological transformation since the initial cost
incurred. The initial costs incurred are comprised of direct expenditures required to enable the biological
transformation of agricultural produce.
At the point of harvest, the fair value of biological assets is determined by reference to local market prices for
grapes of a similar quality and the same varietal. At this point, agricultural produce is measured at fair value less
cost to sell, which becomes the basis for the cost of inventories after harvest.
Gains or losses arising from a change in fair value less costs to sell are included in the consolidated statements
of earnings in the period in which they arise.
Intangible assets
Intangible assets include brands, customer contracts, customer lists, contract co-packaging arrangements,
software and customer-based relationships. These intangible assets are recorded at their estimated fair value on
the date of acquisition or at cost for regular way purchases.
Brands
Customers
Contract packaging
Software
Other
Amortization
method
n/a
straight-line
straight-line
straight-line
straight-line
Useful life
indefinite
10 - 20 years
10 years
5 years
5 years
Remaining
useful life
Indefinite
3 - 11 years
2 years
3 - 5 years
1 year
Brands have been assessed as having an indefinite life because the expected usage, period of control and other
factors do not limit the life of these assets. Intangible assets with an indefinite life are not amortized but are
tested for impairment at least annually or more frequently if events or circumstances indicate the asset might be
impaired. To test for impairment the Company primarily compares a cash generating unit’s (CGU) value in use,
determined based on expected future discounted cash flows, to its carrying value. If necessary, a CGU’s fair
value is also considered. An impairment charge is recorded to the extent the carrying value of a CGU exceeds
the greater of the CGU’s fair value and its value in use. Management has determined there was no impairment
in intangible assets for the years ended March 31, 2017 and March 31, 2016.
Goodwill
Goodwill represents the cost of a business combination in excess of the fair values of the net tangible and
identifiable intangible assets acquired. Goodwill is not amortized but is tested for impairment on an annual
basis, or more frequently if circumstances indicate goodwill may be impaired. The Company assigns goodwill
combined with other assets to a CGU based on certain regions and product lines, which is the lowest level at
which the combined assets generate independent cash inflows. To test for impairment the Company primarily
compares a CGU’s value in use, determined based on expected future discounted cash flows, to its carrying
value. If necessary, a CGU’s fair value is also considered. An impairment charge is recorded to the extent the
carrying value of a CGU exceeds the greater of the CGU’s fair value and its value in use. An impairment loss in
respect of goodwill cannot be reversed. Management has determined there is no impairment in goodwill for the
years ended March 31, 2017 and 2016.
ANDREW PELLER LIMITED 2017 | 33
Post-employment benefits
The Company sponsors defined contribution pension plans, defined benefit pension plans, post-employment
medical benefit plans, and other post-employment benefit plans for certain employees. Contributions to the
defined contribution pension plans are recognized as an expense as services are rendered by employees. The
costs of the defined benefit plans, the post-employment medical benefit plans, and other post-employment
benefit plans are actuarially determined and include management’s best estimate of expected plan investment
performance, the interest rate on the plan obligation, salary escalation, expected retirement ages, and medical
cost escalation. The liability recognized in the consolidated balance sheets in respect of these plans is the
present value of the defined benefit obligation at the end of the reporting period as determined by the
Company’s actuary less the fair value of plan assets adjusted for the unamortized portion of negative past
service credits. The current service cost, amortization of past service credits, and the interest cost net of the
expected return on plan assets are recognized in earnings in the period they arise. Adjustments arising from
actuarially determined gains or losses are recognized in other comprehensive loss in the period in which they
arise. The corresponding change in shareholders’ equity is adjusted to retained earnings for the year.
Deferred income
Advance payments received for use of the Company’s assets are initially recorded in deferred income. The
income is recognized on a straight-line basis in net earnings over the period of use.
Financial instruments and hedge accounting
The Company classifies its financial instruments into the following categories: loans and receivables, liabilities
at amortized cost, and financial assets and liabilities at fair value through profit or loss.
The Company has chosen to not apply hedge accounting to any of its derivative financial instruments. As a
result of this policy choice, these derivative instruments are recorded initially and subsequently at fair value and
the change in the fair value is recorded directly in the consolidated statements of earnings.
The Company classifies accounts payable and accrued liabilities, dividends payable, bank indebtedness, and
long-term debt as liabilities at amortized cost. Accounts payable and accrued liabilities and dividends payable
are initially measured at the amount to be paid, which approximates fair value because of the short-term nature
of these liabilities. Subsequently, they are measured at amortized cost. Bank indebtedness and long-term debt
are measured initially at fair value, net of transaction costs incurred and subsequently at amortized cost using
the effective interest method.
Accounts receivable are classified as loans and receivables. Accounts receivable are primarily amounts due
from customers from the sale of goods or the rendering of services. The Company maintains an allowance for
doubtful accounts to record an estimate of credit losses. When no recovery of an amount owing is possible, the
account receivable is reduced directly.
Transaction costs related to long-term debt are netted against the carrying value of the liability and are then
amortized over the expected life of the instrument using the effective interest method. The Company recognizes
financial instruments when it becomes a party to the terms of the instrument and has elected to use “trade date”
accounting for regular way purchases and sales of financial assets.
Embedded derivatives (elements of contracts whose cash flows move independently from the host contract
similar to a stand-alone derivative) are required to be separated and measured at fair value if certain criteria are
met. Management reviewed its contracts and determined the Company does not currently have any embedded
derivatives in these contracts that require separate accounting and disclosure.
34
| ANDREW PELLER LIMITED 2017
Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases are charged to the consolidated statements
of earnings on a straight-line basis over the period the asset is used under the lease. Leases under which the
Company has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases
are capitalized at the inception of the lease at the lower of the fair value of the leased property and the present
value of the minimum lease payments. Payments on finance leases are allocated to the liability and expense so
as to recognize a constant rate of interest on the remaining balance of the liability. Assets acquired under finance
leases are amortized over their useful lives.
Impairment of non-financial assets
The Company reviews long-lived assets and definite life intangible assets for impairment when events or
circumstances indicate an asset may be impaired. Assets are assigned to a CGU based on the lowest level at
which they generate independent cash inflows. When there is an indication of impairment, an impairment
charge is recorded to the extent the carrying value of a CGU exceeds the greater of the CGU’s fair value less
costs to dispose and its value in use, determined by discounting expected cash flows (recoverable amount). An
impairment loss is reversed if a CGU’s recoverable amount increases to the extent that the related assets’
carrying amounts are no larger than the amount that would have been determined, net of amortization, had no
impairment loss been recorded.
Net earnings per share
Basic net earnings per share have been calculated using the weighted average number of Class A and Class B
shares outstanding during the year. Diluted net earnings per share have been calculated by considering the
impact of any potential ordinary shares that are dilutive on the two classes of shares when considered together.
Dividends
Dividends on Class A and Class B shares are recognized in the period in which they are formally declared by
the Board of Directors.
Segmented information
The Company produces and markets wine and spirits products in Canada. A significant portion of the
Company’s sales are made to the liquor control boards in each province in which the Company transacts
business. Management has concluded that the chief operating decision maker allocates resources and assesses
performance of the Company on a consolidated basis. Furthermore, based on the type of products sold and the
fact that its customers are similar in nature, the Company operates in a single operating segment. In addition, a
substantial portion of the Company’s sales are made in Canada. As a result, management has concluded the
Company operates in one geographic segment.
ANDREW PELLER LIMITED 2017 | 35
Income taxes
Current income tax is the expected amount of tax payable or recoverable on taxable income or loss during the
period. Current income tax may also include adjustments to taxes payable or recoverable in respect of previous
periods.
The Company accounts for deferred income taxes based on temporary differences, which are the differences
between the carrying amount of an asset or liability and its tax base. Deferred income taxes are provided for all
temporary differences between the carrying amount and tax bases of assets and liabilities, except for those
arising from the initial recognition of goodwill or for those arising from the initial recognition of an asset or
liability in a transaction that is not a business combination and has no impact on earnings or taxable income or
loss. Deferred income tax assets and liabilities are measured using the enacted or substantively enacted tax rates
expected to apply to taxable income in the years in which temporary differences are expected to be recovered or
settled. The deferred income tax provision (recovery) recorded in net earnings and other comprehensive loss
represents the change during the year in deferred income tax assets and deferred income tax liabilities.
Contingencies
In the ordinary course of business activities, the Company may be contingently liable for litigation and claims.
Management believes adequate provisions have been recorded in the accounts where required. Although it is not
possible to accurately estimate the extent of potential claims, if any, management believes the ultimate
resolution of such contingencies would not have a material adverse effect on the financial position of the
Company.
Comprehensive income
Comprehensive income is comprised of net earnings and other comprehensive loss. Other comprehensive loss
represents the change in equity for a period that arises from transactions that are required to be or are elected to
be recognized outside of net earnings. The Company has chosen to record actuarial gains and losses on defined
benefit pension plans and other post-employment benefit plans in other comprehensive loss in the period
incurred.
Equity
The Company separately presents changes in equity related to capital stock, retained earnings and accumulated
other comprehensive loss in the consolidated statements of changes in equity.
Recently adopted accounting pronouncements
During December 2014, the IASB issued amendments to IAS 1, Presentation of Financial Statements which
clarifies the concept of materiality as it applies to information disclosed in the financial statements. The
amendments also provide guidance on the presentation of subtotals, the structure of the notes to the financial
statements, and the disclosure of significant accounting policies. The new requirements were adopted effective
April 1, 2016. The adoption of these amendments did not have a significant impact on the consolidated financial
statements.
36
| ANDREW PELLER LIMITED 2017
Recently issued accounting pronouncements
In January 2016, the IASB issued an amendment to IAS 7, Statement of Cash Flows, introducing additional
disclosure that will enable users of financial statements to evaluate changes in liabilities arising from financing
activities. The amendments are effective for annual periods beginning on or after January 1, 2017. The adoption
of these amendments are not expected to have a significant impact on the consolidated financial statements.
In January 2016, the IASB issued amendments to IAS 12, Income Taxes, to clarify the requirements for
recognizing deferred tax assets on unrealized losses. The amendments clarify the accounting for deferred tax
where an asset is measured at fair value and that fair value is below the asset’s tax base. They also clarify
certain other aspects of accounting for deferred tax assets. The amendments are effective for annual periods
beginning on or after January 1, 2017. The adoption of these amendments are not expected to have a significant
impact on the consolidated financial statements.
During July 2014, the IASB issued the complete version of IFRS 9, Financial Instruments - Classification and
Measurement of Financial Assets and Financial Liabilities. IFRS 9 will replace IAS 39, Financial Instruments -
Recognition and Measurement. In addition, IFRS 7, Financial Instruments - Disclosures was amended to include
additional disclosure requirements on transition to IFRS 9. The mandatory effective date of applying these
standards is for annual periods beginning on or after January 1, 2018. The standard uses a single approach to
determine whether a financial asset is measured at amortized cost or fair value. The approach is based on how
an entity manages its financial instruments (its business model) and the contractual cash flow characteristics of
the financial assets. The new standard also requires a single impairment method to be used. The standard
requires that for financial liabilities measured at fair value, any changes in an entity’s own credit risk are
generally to be presented in other comprehensive income instead of net earnings. A new hedge accounting
model is included in the standard, as well as increased disclosure requirements about risk management activities
for entities that apply hedge accounting. The Company is currently evaluating the potential impact of this
standard, however, it is not expected to have a significant impact on the consolidated financial statements.
During May 2014, the IASB issued IFRS 15, Revenue from Contracts with Customers, which supersedes
IAS 18, Revenue, and IAS 11, Construction Contracts. The standard details a revised model for the recognition
of revenue from contracts with customers. In April 2016, the IASB has amended IFRS 15 to clarify the
guidance on identifying performance obligations, licences of intellectual property and principal versus agent.
The amendments also provide additional practical expedients on transition. The standard is effective for first
interim periods within annual periods beginning on or after January 1, 2018. The Company is currently in the
process of evaluating the potential impact this new guidance will have on the Company’s consolidated financial
statements. The Company has not completed this evaluation and therefore, cannot conclude whether the
guidance will have a significant impact on the consolidated financial statements at this time. However, based on
preliminary work completed, the Company is considering the implications the new standard may have on its
agency wine businesses, presentation of certain customer related trade spending, as well as the timing of
recognition of certain promotional discounts, which are areas that could potentially be impacted by the adoption
of the new guidance.
In January 2016, the IASB issued IFRS 16, Leases, which will replace IAS 17, Leases and related
Interpretations. The new standard will be effective for fiscal years beginning on or after January 1, 2019, with
early adoption permitted provided the Company has adopted IFRS 15, Revenue from Contracts with Customers.
The new standard requires lessees to recognize a lease liability reflecting future lease payments and a “right-of-
use asset” for virtually all leases contracts, and record it on the statement of financial position, except with
respect to lease contracts that meet limited exception criteria. Given that the Company has significant
contractual obligations in the form of operating leases under IAS 17, there will be a material increase to both
assets and liabilities on adoption of IFRS 16, and material changes to the timing of recognition of expenses
associated with the lease arrangements. The Company is analyzing the new standard to determine the impact of
adopting this standard.
ANDREW PELLER LIMITED 2017 | 37
3 Critical accounting estimates and judgments
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 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 are not limited to:
Impairment of goodwill
Testing goodwill for impairment at least annually involves estimating the recoverable amount of the CGUs to
which goodwill is allocated. This requires making assumptions about future cash flows, growth rates, market
conditions and discount rates, which are inherently uncertain. Actual amounts may vary from these assumptions
and cause significant adjustments. Management has concluded that a 10% change in any key assumption in the
goodwill impairment test would not result in an impairment of goodwill as at March 31, 2017 and March 31,
2016.
Post-employment benefits
Measuring the liability for post-employment benefits uses 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 adjustments.
Fair value of grapes at the point of harvest
Where possible, the fair value of grapes at the point of harvest is determined by reference to local market prices
for grapes of a similar quality and same varietal. For grapes for which local market prices are not readily
available, the average price of similar grapes is used. Actual amounts may vary from these assumptions and
cause significant adjustments.
4
Inventories
Packaging materials and supplies
Bulk wine and spirits
Finished goods
Interest included in the cost of inventories
2017
9,627
70,806
48,655
129,088
566
$
$
$
2016
9,307
64,697
45,662
119,666
635
$
$
$
Inventory writedowns recognized as an expense amounted to $1,906 (2016 - $3,286).
The cost of inventories recognized as an expense and included in cost of goods sold, excluding amortization,
was $209,545 (2016 - $208,013).
38
| ANDREW PELLER LIMITED 2017
5
Property, plant and equipment
At March 31, 2015
Cost
Accumulated amortization
Net carrying amount
Year ended March 31, 2016
Additions
Disposals
Amortization
Closing net carrying amount
At March 31, 2016
Cost
Accumulated amortization
Net carrying amount
Year ended March 31, 2017
Additions
Disposals
Amortization
Closing net carrying amount
At March 31, 2017
Cost
Accumulated amortization
Net carrying amount
$
$
$
$
$
$
Vines,
vineyard
land and
infrastructure
Buildings
Machinery and
equipment
Total
40,461 $
(6,790)
43,480 $
(16,909)
107,632 $
(67,739)
196,389
(91,438)
33,671
26,571
39,893
104,951
359
(377)
(1,348)
1,882
(3)
(1,173)
10,571
(37)
(5,896)
12,812
(417)
(8,417)
Land
4,816 $
-
4,816
-
-
-
4,816 $
32,305 $
27,277 $
44,531 $
108,929
4,816 $
-
4,816
-
-
-
40,374 $
(8,069)
45,343 $
(18,066)
116,585 $
(72,054)
207,118
(98,189)
32,305
27,277
44,531
108,929
573
-
(1,329)
9,777
-
(1,227)
8,213
(1)
(6,097)
18,563
(1)
(8,653)
4,816 $
31,549 $
35,827 $
46,646 $
118,838
4,816 $
-
4,816 $
40,947 $
(9,398)
55,120 $
(19,293)
122,325 $
(75,679)
223,208
(104,370)
31,549 $
35,827 $
46,646 $
118,838
Included in buildings and machinery and equipment are assets amounting to $12,378 (2016 - $4,507) that are
under development and are not being amortized.
Contractual commitments to purchase property, plant and equipment were $2,890 as at March 31, 2017 (2016 -
$10,687).
Included in machinery and equipment are assets with a net carrying amount of $66 (2016 - $124) that were
purchased under a finance lease.
ANDREW PELLER LIMITED 2017 | 39
6 Biological assets
Biological assets consist of grapes prior to harvest that are controlled by the Company. The Company owns and
leases land in Ontario and British Columbia to grow grapes in order to secure a supply of quality grapes for the
making of wine.
During the year ended March 31, 2017, the Company harvested grapes valued at $6,238 (2016 - $6,479).
2016
1,129
6,546
(6,479)
67
The changes in the carrying amount of biological assets are as follows:
Carrying amount - Beginning of year
$
1,196
$
2017
Net increase in fair value less costs to sell due to biological
transformation
Transferred to inventory on harvest
Net gain
Biological assets
6,442
(6,238)
204
$
1,400
$
1,196
The Company is exposed to financial risk because of the long period of time between the cash outflow required
to plant grape vines, cultivate vineyards, and harvest grapes and the cash inflow from selling wine and related
products from the harvested grapes.
Substantially all of the grapes from owned and leased vineyards are used in the Company’s winemaking
processes. Owned and leased vineyards, in combination with supply contracts with grape growers, are used to
secure a supply of domestic grapes. These strategies reduce the financial risks associated with changes in grape
prices.
40
| ANDREW PELLER LIMITED 2017
7
Intangible assets
Brands -
indefinite
life
Customers
Contract
packaging
Software
Other
Total
At March 31, 2015
Cost
Accumulated amortization and
impairment
Net carrying amount
Year ended March 31, 2016
Additions
Amortization
$
4,175 $
11,147 $
1,100 $
2,133
$
1,917
$ 20,472
(200)
3,975
-
-
(5,156)
5,991
-
(665)
(753)
(513)
(1,519)
(8,141)
347
1,620
398
12,331
-
(110)
-
(384)
-
(132)
-
(1,291)
Closing net carrying amount
$
3,975 $
5,326 $
237 $
1,236
At March 31, 2016
Cost
Accumulated amortization and
impairment
Net carrying amount
Year ended March 31, 2017
Additions
Amortization
$
4,175 $
11,147 $
1,100 $
2,133
(200)
3,975
-
-
(5,821)
5,326
-
(647)
(863)
(897)
(1,651)
(9,432)
237
1,236
266
11,040
-
(110)
833
(384)
-
(132)
833
(1,273)
$
$
266
$ 11,040
1,917
$ 20,472
Closing net carrying amount
$
3,975 $
4,679 $
127 $
1,685
At March 31, 2017
Cost
Accumulated amortization and
impairment
Net carrying amount
$
$
4,175 $
11,147 $
1,100 $
2,966
(200)
(6,468)
(973)
(1,281)
3,975 $
4,679 $
127 $
1,685
$
$
$
134
$ 10,600
1,917
$ 21,305
(1,783)
(10,705)
134
$ 10,600
8 Goodwill
In order to test goodwill for impairment, the Company allocates the carrying value of goodwill to CGUs based
on the lowest level that goodwill is monitored for internal management purposes. The aggregate carrying
amount of goodwill allocated to each unit is as follows:
Ontario and eastern Canadian wine
Western Canadian wine
Personal winemaking products
2017
3,134
10,530
23,809
37,473
$
$
2016
3,134
10,530
23,809
37,473
$
$
ANDREW PELLER LIMITED 2017 | 41
The Company determined the recoverable amount of the related CGUs by estimating their value in use. Key
assumptions used are:
Pre-tax discount rate
Period of projected cash flows
Growth rate beyond period of projected cash flows
2017
11%
5 years
3%
2016
11%
5 years
4%
The Company uses past experience and current expectations about future performance in projecting cash flows,
which are based on financial budgets for five years. For the period after five years, the Company projects cash
flows using an assumed growth rate, which is based on expectations about long-term economic growth in
Canada and any known industry specific factors that may influence long-term growth in the Canadian wine
industry. The discount rate is estimated by referring to external sources of information about the cost of capital
and the leverage of companies that operate in a similar industry to the Company and that are of similar size. The
rate determined is then adjusted to a pre-tax basis.
9 Bank indebtedness
Significant terms of the Company’s operating loan facility are summarized below. The floating rates are stated
in relation to the one to six-month Canadian Dealer Offered Rate (CDOR).
Bank indebtedness
Significant terms
Committed until
Borrowing limit
Interest rate
Unused amount
10 Accounts payable and accrued liabilities
Trade payables
Accrued liabilities
Deferred revenue - gift cards
Foreign exchange forward contracts liability (note 20)
Deferred income (note 13)
2017
2016
$
36,620
$
33,701
July 31, 2021
$90,000
CDOR + 1.25%
$53,380
July 31, 2020
$90,000
CDOR + 1.25%
$56,299
2017
23,725 $
12,045
380
8
102
36,260 $
$
$
2016
25,201
9,703
338
1,126
404
36,772
42
| ANDREW PELLER LIMITED 2017
11 Long-term debt
Term loan - Operating facility
Term loan - Capital facility
Other
Less: Financing costs
Less: Current portion
$
$
2017
48,333
2,925
319
51,577
493
51,084
4,406
$
46,678
$
2016
52,333
-
425
52,758
450
52,308
4,106
48,202
On April 28, 2014, the Company amended its debt facilities including the term loan. The terms of the debt
facilities require monthly principal repayments on the operating facility of the term loan until maturity of $333.
Interest is based on the one to six-month CDOR rates plus an applicable margin based on the Company’s
leverage. The Company has two interest rate swaps in place to fix the interest rate on the amount outstanding on
the operating facility of the term loan. From September 1, 2015 to April 26, 2019, the interest rate is fixed at
2.16%, plus the applicable margin. From April 30, 2019 to July 31, 2020, the interest rate is fixed at 1.65%, plus
the applicable margin.
The Company also has a $15,000 term facility, which is available until July 31, 2021 and can be drawn on for
the purpose of making capital expenditures. On December 30, 2016, $3,000 was drawn on this facility, which
requires monthly principal repayments until maturity of $25. Interest is based on the one to six-month CDOR
rates plus an applicable margin based on the Company’s leverage.
On December 30, 2016, the Company amended its debt facilities to extend the maturity date to July 31, 2021, to
revise certain financial covenants and to update the applicable margin based on the Company’s leverage, as
defined by the amended credit agreement. As at March 31, 2017 and 2016, the applicable margin was 1.25%.
The Company and its subsidiaries have provided their assets as security for these loans.
Interest expense on long-term debt during the year was $1,858 (2016 - $2,297).
12 Post-employment benefits
Defined contribution plans
The total expenses for the defined contribution savings plans were $1,519 (2016 - $1,432).
ANDREW PELLER LIMITED 2017 | 43
Defined benefit plans
The Company has funded defined benefit pension plans. The Company also has an unfunded post-retirement
medical benefits plan for certain employees and provides a monthly wine allowance to retired employees, which
are collectively referred to as other post-employment benefits.
Nature
The Company’s defined benefit pension plans pay benefits based on a percentage of final average salary. There
are two defined benefit pension plans in British Columbia with members who continue to accrue benefits. New
employees are no longer entitled to accrue benefits under these defined benefit pension plans. There is one
defined benefit pension plan in Ontario and no further benefits accrue to the members of this plan. All members
of the defined benefit pension plan in Ontario have retired. The Company is responsible for administering these
pension plans and determining investment policies. A committee of the Company’s Board of Directors is
responsible for overseeing the Company’s defined benefit pension plans.
Regulatory information
The defined benefit pension plans are governed by the Pension Benefits Standards Act in British Columbia and
the Pension Benefits Act in Ontario. An appointed actuary prepares a valuation at least every three years for
each of the plans. These valuations determine the Company’s minimum contributions. The minimum
contributions are primarily based on the normal going concern cost, the funding deficit amortized over 15 years,
and the solvency deficit amortized over five years. The solvency deficit is calculated assuming the plan is
wound up on the effective date of the valuation. Contributions could be reduced in certain instances via a
funding holiday if requirements of the relevant regulations are met, which normally requires the plan to have a
surplus above certain threshold levels.
Risks
The defined benefit plan’s assets are invested in mutual funds. The investment mix for each plan is chosen with
the objective that sufficient assets will be available to pay benefits as they come due and to achieve a reasonable
return at an acceptable level of risk to stakeholders. The defined benefit plans subject the Company to market,
interest rate, currency, price, credit, liquidity and longevity risks, which are typical of such plans. The most
significant of these risks is that the expense and cash contributions related to these plans depend on the discount
rate used to measure the liability to pay future benefits and the market performance of the plan’s assets set aside
to pay these benefits. A decline in long-term interest rates or in asset values could increase the Company’s costs
related to funding the deficit in these plans.
44
| ANDREW PELLER LIMITED 2017
Amounts pertaining to defined benefit plans are as follows:
Plan assets
Fair value - Beginning of year
Return on plan assets excluding amounts in
interest income
Interest income
Company’s contributions
Benefits paid
Fair value - End of year
Plan obligations
Accrued benefit obligations - Beginning of year
Total current service cost
Interest cost
Benefits paid
Remeasurements
Experience loss (gain)
Loss from change in financial assumptions
Accrued benefit obligations - End of year
Post-employment benefit obligations
Benefit plan expense
Current service cost
Net interest cost on defined benefit liability
Net benefit plan expense
Amount recognized in other comprehensive loss
Net actuarial (loss) gain
Expected contributions for the year ending March 31,
2018
Weighted average duration of the defined benefit
obligations in years
$
$
$
$
$
$
$
$
Pension
benefits
Other post-
employment
benefits
$
20,966 $
- $
177
804
1,397
(1,024)
-
-
109
(109)
22,320 $
- $
24,084 $
520
916
(1,024)
76
317
2,829 $
88
109
(109)
(231)
24
2017
Total
20,966
177
804
1,506
(1,133)
22,320
26,913
608
1,025
(1,133)
(155)
341
24,889 $
2,710 $
27,599
2,569 $
2,710 $
5,279
Pension
benefits
Other post-
employment
benefits
520 $
112
632 $
88 $
109
197 $
(216) $
207 $
2017
Total
608
221
829
(9)
1,357 $
122 $
1,479
14.7
11.1
12.7
ANDREW PELLER LIMITED 2017 | 45
Pension
benefits
Other post-
employment
benefits
21,030 $
- $
(1,044)
761
1,471
(1,252)
-
-
111
(111)
20,966 $
- $
24,341 $
600
875
(1,252)
(496)
16
2,854 $
89
104
(111)
-
(107)
2016
Total
21,030
(1,044)
761
1,582
(1,363)
20,966
27,195
689
979
(1,363)
(496)
(91)
24,084 $
2,829 $
26,913
3,118 $
2,829 $
5,947
Pension
benefits
Other post-
employment
benefits
600 $
114
714 $
89 $
104
193 $
2016
Total
689
218
907
(564) $
107 $
(457)
1,443 $
122 $
1,565
12.8
12.2
12.7
$
$
$
$
$
$
$
$
$
Plan assets
Fair value - Beginning of year
Return on plan assets excluding amounts in
interest income
Interest income
Company’s contributions
Benefits paid
Fair value - End of year
Plan obligations
Accrued benefit obligations - Beginning of year
Total current service cost
Interest cost
Benefits paid
Remeasurements
Experience gain
Loss (gain) from change in financial
assumptions
Accrued benefit obligations - End of year
Post-employment benefit obligations
Benefit plan expense
Current service cost
Net interest cost on defined benefit liability
Net benefit plan expense
Amount recognized in other comprehensive loss
Net actuarial (loss) gain
Expected contributions for the year ending March 31,
2017
Weighted average duration of the defined benefit
obligations in years
46
| ANDREW PELLER LIMITED 2017
The significant actuarial assumptions adopted in measuring the Company’s accrued benefit obligations and
benefits costs are as follows:
Discount rate for expenses
Discount rate for obligations
Rate of compensation increase
Rate of medical cost increases
Retirement age
Inflation rate
Mortality tables
2017
2016
3.8%
3.6%
2.5%
5%
60 - 65 years
2.0%
CPM-B 2014
Private table
3.6%
3.8%
2.5%
5%
60 - 65 years
2.0%
CPM-B 2014
Private table
The following table outlines the impact of a reasonable change in significant assumptions assuming all other
assumptions are held constant. Changes in numerous assumptions may occur at the same time, which could
increase or decrease the impact. With respect to a 1% increase or decrease in the inflation rate, the analysis
excludes any impact this would have on the discount rate, medical cost trend rates and the rate of compensation
increase.
2017
2016
Pension
benefits
Other post-
employment
benefits
Pension
benefits
Other post-
employment
benefits
Increase (decrease) in the post-employment
benefit obligations
1% increase in the discount rate $
1% decrease in the discount rate
1% increase in the rate of
compensation increase
1% decrease in the rate of
compensation increase
1% increase in the inflation rate
1% decrease in the inflation rate
(3,301)
4,023
$
(263) $
339
(2,721) $
3,440
952
(840)
365
(329)
10
(9)
-
-
832
(717)
372
(335)
(277)
414
12
(11)
-
-
At March 31, 2017, the accumulated actuarial losses recognized in other comprehensive loss were $5,192
(2016 - $5,183).
Plan assets
The plan assets consist of the following:
Mutual funds
Fixed income
Equity
$
$
16,094
6,226
22,320
2017
72%
28%
100%
$
$
15,127
5,839
20,966
2016
72%
28%
100%
ANDREW PELLER LIMITED 2017 | 47
13 Deferred income
During the year ended March 31, 2013, the Company received an expropriation notice that its idle facility in
Port Moody, British Columbia will be used, on a temporary basis, while construction of a rapid transit project
takes place. Advance payments amounting to $2,021 were received for the temporary use of the property. The
amount received was initially recorded in deferred income and is being reported as other income over the five-
year term of the expropriation.
Deferred income
Less: Current portion
14 Income taxes
Current tax on earnings for the year
Adjustments in respect of prior years
Provision for current income taxes
Change in temporary differences
Impact of change in tax rate
Other
Provision for (recovery of) deferred income taxes
Total provision for income taxes
The Company’s income tax expense consists of the following:
Provision for income taxes at blended statutory rate of
25.98% (2016 - 25.90%)
Permanent differences and non-deductible items
Future income tax rate changes
Refunds relating to prior years
Other
$
$
$
2017
102
(102)
-
2017
9,220
(1,556)
7,664
72
14
145
231
2016
506
404
102
2016
7,210
(29)
7,181
(243)
(22)
-
(265)
7,895
$
6,916
2017
2016
$
8,897
346
14
(1,357)
(5)
7,895
$
6,764
222
(22)
-
(48)
6,916
$
$
$
$
$
$
48
| ANDREW PELLER LIMITED 2017
The movement of the deferred income tax account is as follows:
At beginning of year
Provision for (recovery of) deferred income taxes in net
earnings
Recovery of deferred income taxes in other comprehensive loss
At end of year
2017
2016
15,591
$
15,975
231
(2)
(265)
(119)
15,820
$
15,591
$
$
The significant temporary differences giving rise to the deferred income tax liability are comprised of the
following:
Deferred income tax liability
Accelerated
tax
depreciation
and
deductions
on property,
plant and
equipment
Accelerated
tax
deductions
on
intangible
assets
Tax
deductions
on
goodwill
12,803 $
(122)
12,681
(27)
2,570 $
(283)
2,287
(375)
3,093 $
78
3,171
-
Total
18,466
(327)
18,139
(402)
12,654 $
1,912 $
3,171 $
17,737
March 31, 2015
(Recovery) provision in net earnings
March 31, 2016
Recovery in net earnings
March 31, 2017
Deferred income tax asset
$
$
Fair value
change on
derivatives
Post-
employment
benefits
March 31, 2015
(Recovery) provision in net earnings
Recovery in other comprehensive loss
$
March 31, 2016
(Recovery) provision in net earnings
Recovery in other comprehensive loss
(455) $
(407)
-
(862)
583
-
(1,610) $
175
(119)
(1,554)
175
(2)
Other
Total
(426) $
294
-
(132)
(125)
-
(2,491)
62
(119)
(2,548)
633
(2)
March 31, 2017
$
(279) $
(1,381) $
(257) $
(1,917)
ANDREW PELLER LIMITED 2017 | 49
15 Capital stock
Authorized
Unlimited Class A shares, non-voting
Unlimited Class B shares, voting
Issued
Number
of shares
2017
Amount
Number
of shares
Class A shares, non-voting
Class B shares, voting
33,581,487
$
9,012,123
6,567
400
33,581,487
$
9,012,123
42,593,610
$
6,967
42,593,610
$
All of the issued Class A and Class B shares are fully paid and have no par value.
2016
Amount
6,567
400
6,967
Class A shares are non-voting and are entitled to 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.
At the Annual and Special Meeting of Shareholders held on September 9, 2016, the Company’s Class B
shareholders approved a three-for-one share split for both the Company’s Class A and Class B common shares.
The additional shares were issued on October 14, 2016 to shareholders of record on September 23, 2016. The
Company recorded the effect of the share split retroactively to all disclosures of share capital and per share
amounts.
In February 2016, the Company repurchased and cancelled 300,000 Class A non-voting shares from Jalger
Limited, a related party. This transaction was approved by the Company’s Board of Directors. The repurchase
price was calculated by reference to the average closing market price of the Class A shares for a period of 20
business days preceding the repurchase date. The repurchase price of $2,254 was first allocated to capital stock
based on the average per share carrying amount of the Class A shares. The remaining amount was allocated to
retained earnings.
Quarterly dividends of $0.0408 (previously $0.0375) per Class A share and $0.0355 (previously $0.0326) per
Class B share were approved by the Board of Directors on June 2, 2016 and are formally declared in each
quarter.
The authorized share capital of the Company also consists of an unlimited number of preference shares, issuable
in one or more series, of which 33,315 are designated as preference shares, Series A. As at March 31, 2017 and
2016, there were no preference shares issued or outstanding.
50
| ANDREW PELLER LIMITED 2017
Stock purchase plan
The Company’s full-time salaried, certain hourly employees and directors participate in a Company sponsored
stock purchase plan. Under the terms of the plan, employees can purchase a certain number of Class A shares on
an annual basis. Employees are required to pay 67% of the market price per Class A share. Directors can
purchase 750 Class A shares and are required to pay 50% of the cost. The Company is responsible for the
remainder of the cost and, during 2017, expensed $268 (2016 - $227) related to the employee program and $68
(2016 - $43) relating to the directors program. Officers of the Company also participate in an Equity Incentive
Program, where Class A shares of the Company are purchased on their behalf from the open market. During
2017, the Company expensed $313 (2016 - $366) under this incentive program.
16 Nature of expenses
The nature of the expenses included in selling and administration and cost of goods sold, excluding amortization
are as follows:
Raw materials and consumables
Employee compensation and benefits
Advertising, promotion and distribution
Occupancy
Repairs and maintenance
Other external charges
Other expenses (income) are as follows:
Ongoing maintenance costs related to Port Moody winery
facility (a)
Income related to Port Moody winery facility (b)
$
$
2017
173,225
63,412
24,025
11,169
6,803
18,835
2016
171,168
58,548
28,013
10,913
6,575
18,130
$
297,469
$
293,347
2017
2016
$
$
524
(404)
120
$
$
364
(404)
(40)
a) During fiscal 2006, the Company closed its Port Moody winery facility and transferred production to its
winery operations in Kelowna, British Columbia. Effective July 1, 2012, the property was expropriated for
a five-year period. The cost of maintaining this idle facility and costs associated with its expropriation
amounted to $524 in 2017 (2016 - $364).
b)
Income amounting to $404 (2016 - $404) was recorded related to the Company’s idle Port Moody property
related to expropriation notices received by the Company.
ANDREW PELLER LIMITED 2017 | 51
17 Net earnings per share
Net earnings attributed for the year - basic and
diluted
Weighted average number of shares outstanding
- basic and diluted
Net earnings per share - basic and diluted
Net earnings attributed for the year - basic and
diluted
Weighted average number of shares outstanding
- basic and diluted
Net earnings per share - basic and diluted
18 Commitments
Class A
Class B
2017
Total
21,363
$
4,987
$
26,350
33,581,487
9,012,123
0.64
$
0.55
Class A
Class B
2016
Total
15,590
$
3,609
$
19,199
33,851,076
9,012,123
0.46
$
0.40
$
$
$
$
In certain instances, the Company leases land for the purpose of operating vineyards. The terms of the land
leases are 30 and 32 years, which expire in 2036 and 2029, respectively. Under the terms of one land lease, the
Company has the option to agree in advance to purchase any grapes grown on the property at fair value for five
or more years after the termination of the lease. The Company also has a right of first refusal to purchase the
land under both land leases. The terms of such a purchase would be negotiated based on market conditions
existing at the time of the purchase.
The Company leases various storage facilities, offices, and retail locations. The remaining terms of these leases
range between one and ten years. The Company also leases various equipment and vehicles with remaining
lease terms between one and five years. In many cases, the Company has renewal options for fair market rental
prices at the time of renewal.
The Company’s minimum lease payments as at March 31, 2017 under long-term non-cancellable leases are
outlined in note 20 along with its other contractual obligations.
In 2017, minimum lease payments of $5,289 (2016 - $5,149) were recognized as an expense.
52
| ANDREW PELLER LIMITED 2017
19 Non-cash working capital items
The change in non-cash working capital items related to operations is comprised of the change in the following
items:
Accounts receivable
Inventories and current portion of biological assets
Prepaid expenses and other assets
Accounts payable and accrued liabilities
20 Financial instruments
Classification of financial instruments
2017
1,250
(9,626)
(1,324)
2,042
$
(7,658)
$
2016
(2,607)
(1,921)
(272)
(3,499)
(8,299)
$
$
The classification and measurement of the financial assets and liabilities, as well as their carrying amounts and
fair values are as follows:
Assets/liabilities
Category
Measurement
Carrying
amount
Loans and
receivables Amortized cost
Amortized cost
Other liabilities
$
26,973
36,620
$
Accounts receivable
Bank indebtedness
Accounts payable and
accrued liabilities
Dividends payable
Long-term debt
Interest rate swap liability
Foreign exchange forward
contracts liability
Other liabilities
Other liabilities
Other liabilities
Derivatives
Amortized cost
Amortized cost
Amortized cost
Fair value
Derivatives
Fair value
Assets/liabilities
Category
Measurement
Accounts receivable
Bank indebtedness
Accounts payable and
accrued liabilities
Dividends payable
Long-term debt
Interest rate swap liability
Foreign exchange forward
contracts liability
Loans and
receivables Amortized cost
Amortized cost
Other liabilities
$
28,223
33,701
$
Other liabilities
Other liabilities
Other liabilities
Derivatives
Amortized cost
Amortized cost
Amortized cost
Fair value
Derivatives
Fair value
35,646
1,553
52,308
2,174
1,126
36,252
1,690
51,084
1,060
8
Carrying
amount
2017
Fair
value
26,973
36,620
36,252
1,690
51,084
1,060
8
2016
Fair
value
28,223
33,701
35,646
1,553
52,308
2,174
1,126
ANDREW PELLER LIMITED 2017 | 53
The Company’s interest rate swaps and foreign exchange contracts are derivatives and are recorded at fair value.
As a result, unrealized gains and losses are included each period through earnings, which reflect changes in fair
value.
Fair value
The fair value of accounts receivable, accounts payable and accrued liabilities and dividends payable
approximates their carrying value because of the short-term maturity of these instruments.
The fair value of bank indebtedness and long-term debt is equivalent to its carrying value because the variable
interest rate is comparable to market rates. The fair value of the interest rate swaps used to fix the interest rate
on long-term debt is included in the current and long-term derivative financial instruments in the consolidated
balance sheets.
The fair value of foreign exchange forward contracts is determined based on the difference between the contract
rate and the forward rate at the date of the valuation.
The fair value of the interest rate swaps is determined based on the difference between the fixed interest rate in
the contract that will be paid by the Company and the forward curve of the floating interest rates that are
expected to be paid by the counterparty. The fair value of foreign exchange forward contracts and the interest
rate swaps are adjusted to reflect any changes in the Company’s or the counterparty’s credit risk.
Fair value estimates are made at a specific point in time, using available information about the instrument.
These estimates are subjective in nature and often cannot be determined with precision.
The net unrealized loss on derivative financial instruments is comprised of:
Unrealized (gains) losses on foreign exchange forward contracts
Unrealized gains on the interest rate swaps
2017
(1,118)
(1,114)
(2,232)
$
$
$
$
2016
1,823
(265)
1,558
The fair value measurements of the Company’s financial instruments are classified in the hierarchy below
according to the significance of the inputs used in making the fair value measurements.
54
| ANDREW PELLER LIMITED 2017
Asset/liability
Quoted prices in
active markets
for
identical assets
(Level 1)
Significant
observable
inputs
other than
quoted prices
(Level 2)
Interest rate swap liability
Foreign exchange forward contracts liability
$
- $
-
1,060 $
8
Asset/liability
Quoted prices in
active markets
for
identical assets
(Level 1)
Significant
observable
inputs
other than
quoted prices
(Level 2)
2017
Significant
unobservable
inputs
(Level 3)
-
-
2016
Significant
unobservable
inputs
(Level 3)
Interest rate swap liability
Foreign exchange forward contracts liability
$
- $
-
2,174 $
1,126
-
-
Objectives and policy relating to financial risk management
Interest rate risk
The Company is exposed to interest rate risk as a result of cash balances, floating rate debt, and interest rate
swaps. Of these risks, the Company’s principal exposure is that increases in the floating interest rates on its
debt, if unmitigated, could lead to decreases in cash flow and earnings. The Company’s objective in managing
interest rate risk is to achieve a balance between minimizing borrowing costs over the long term, ensuring it
meets borrowing covenants, and ensuring it meets other expectations and requirements of investors. To meet
these objectives, the Company’s policy is to effectively fix the rates on long-term debt to match the duration of
investments in long-lived assets and to use floating rate funding for short-term borrowing.
The Company has effectively fixed its interest rate on its long-term debt until July 2020 by entering into interest
rate swaps. The interest rate swaps are measured at fair value. An unrealized gain of $1,114 (2016 - $265) was
recognized on the interest rate swaps, which is classified as a component of the net unrealized gain on derivative
financial instruments in the consolidated statements of earnings.
The Company’s short-term borrowings are funded using a floating interest rate and as such are sensitive to
interest rate movements. As at March 31, 2017, with other variables unchanged, a 100 basis point change in
interest rates would impact the Company’s net earnings by approximately $271 (2016 - $249), exclusive of the
mark-to-market adjustments on the interest rate swaps.
ANDREW PELLER LIMITED 2017 | 55
Credit risk
Credit risk arises from cash, derivative financial instruments and accounts receivable. The Company places its
cash and cash equivalents with major Canadian financial institutions. Counterparties to derivative contracts are
also major financial institutions.
Credit risk for trade receivables is monitored through established credit monitoring activities. Over 50% of the
Company’s accounts receivable balance relates to amounts owing from Canadian provincial liquor boards.
Excluding accounts receivable from Canadian provincial liquor boards, the Company does not have a significant
concentration of credit risk with any single counterparty or group of counterparties. Amounts owing from
Canadian provincial liquor boards represent $14,115 (2016 - $14,896) of the total accounts receivable for which
no allowance has been provided. Of the remaining non-provincial liquor board balances, $948 (2016 - $1,413)
was over thirty days past due as at March 31, 2017. An allowance for doubtful accounts of $127 (2016 - $124)
has been provided against these accounts receivable amounts, which the Company has determined represents a
reasonable estimate of amounts that may be uncollectible.
Sales to its largest customer, a provincial Crown corporation, were $60,415 (2016 - $56,340) during the year
ended March 31, 2017. Sales to its second largest customer, a branch of a provincial government, were $41,304
(2016 - $41,770) during the year.
An analysis of accounts receivable is as follows:
Liquor boards
Non-liquor boards
Current
Past due 0 - 30 days, due on delivery accounts
Past due 0 - 30 days
Past due 31 - 60 days
Past due > 60 days
Allowance for doubtful accounts
The change in the allowance for doubtful accounts was as follows:
Balance - Beginning of year
Provision for current year
Bad debts
Balance - End of year
Liquidity risk
2017
$
14,115
$
10,709
534
794
332
616
(127)
26,973
$
2017
124
141
(138)
127
$
$
$
$
$
2016
14,896
10,114
603
1,321
605
808
(124)
28,223
2016
99
89
(64)
124
The Company incurs obligations to deliver cash or other financial assets on future dates. Liquidity risk
inherently arises from these obligations, which include requirements to repay debt, purchase grape inventory
and make operating lease payments.
The Company manages liquidity risk by maintaining adequate cash and cash equivalent balances and by
appropriately utilizing its operating line of credit. Company management continuously monitors and reviews
both actual and forecasted cash flows and matches the maturity profile of financial assets and financial
liabilities. Accounts payable and accrued liabilities are generally due within 30 days.
56
| ANDREW PELLER LIMITED 2017
The following table outlines the Company’s contractual undiscounted obligations. The Company analyzes
contractual obligations for financial liabilities in conjunction with other commitments in managing liquidity
risk. Contractual obligations include long-term debt, the expected payments under swap agreements that fix the
Company’s interest rate on long-term debt, operating leases and commitments on short-term forward foreign
exchange contracts used to mitigate the currency risk on purchases denominated in foreign currencies as at
March 31, 2017:
Long-term debt
Leases and royalties
Pension obligations
Grape and bulk wine purchase
contracts
Packaging purchase contracts
Bulk whiskey purchase contracts
Interest rate swap
Foreign exchange forwards
< 1
year
2 - 3
years
4 - 5
years
> 5
years
$
4,406 $
5,050
520
8,812 $
6,112
958
38,359 $
3,273
581
- $
6,462
1,173
73,758
34,827
1,007
119,568
1,585
30,183
77,726
3,338
390
97,336
2,639
-
54,082
-
-
96,295
361
-
203,155
-
-
210,790
-
-
Total
51,577
20,897
3,232
408,721
38,165
1,397
523,989
4,585
30,183
Total contractual obligations
$
151,336 $
99,975 $
96,656 $ 210,790 $
558,757
The Company’s 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.
The Company has entered into grape purchase contracts with certain suppliers to purchase their crops at the time
of harvest for prices set by the market. The amount of the commitment will change based on the total tonnes
harvested or the prices set by the market for specific grapes and the amount included in the table above
represents management's best estimate of the Company's commitment over the periods noted.
Foreign exchange risk
Certain of the Company’s purchases are denominated in US dollars (US$), euro (EUR) or Australian dollars
(AU$). Any increases or decreases to the foreign exchange rates could increase or decrease the Company’s
earnings. To mitigate the exposure to foreign exchange risk, the Company has entered into forward foreign
currency contracts.
The Company’s foreign exchange risk arises on the purchase of bulk wine and concentrate, which are priced in
US dollars, euro and Australian dollars. The Company’s strategy is to hedge approximately 50% to 80% of its
annual foreign exchange requirements prior to or during the beginning of each fiscal quarter. As at March 31,
2017, the Company has forward foreign currency contracts to buy US$18,200 at rates ranging between $1.32
and $1.35, EUR1,225 at rates ranging between $1.43 and $1.44 and AU$4,225 at rates averaging $0.99. These
contracts mature at various dates to December 2017. After considering the offsetting impact of these forward
contracts, a 1% increase or decrease to the exchange rate of the US dollar, the euro or the Australian dollar
would impact the Company’s net earnings by approximately $162 (2016 - $87), $27 (2016 - $23) or $98 (2016 -
$109), respectively. The Company has elected to not use hedge accounting and as a result, has recognized
unrealized foreign exchange gains of $1,118 (2016 – unrealized foreign exchange losses of $1,823) in the
consolidated statements of earnings as a component of the net unrealized gain on derivative financial
instruments and has recorded the fair value of $8 in accounts payable and accrued liabilities (2016 - $1,126) in
the consolidated balance sheets.
ANDREW PELLER LIMITED 2017 | 57
21 Capital disclosures
The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going
concern, to provide an adequate return to shareholders and to meet external capital requirements on debt and
credit facilities.
The Company’s capital consists of cash, bank indebtedness, long-term debt and shareholders’ equity. The
primary uses of capital are to make increases to non-cash working capital, fund maintenance and growth related
capital expenditures, pay dividends and finance acquisitions. In order to meet the Company’s objectives in
managing capital, the Company prepares annual budgets of cash, earnings and capital expenditures that are
updated during the year as necessary. The annual budget is approved by the Board of Directors.
As part of the existing debt agreement, the Company is subject to financial covenants, which consist of the
following:
�
funded debt to a rolling twelve-month EBITDA, which is defined as consolidated earnings before interest,
amortization and taxes excluding unusual and non-recurring items that are agreed to by the Company and the
lender; and
�
fixed charge coverage ratio.
Capital expenditures are limited to $20,000 on an annual basis. The unspent portion may be carried over to the
next fiscal year.
Compliance with these covenants and the capital expenditure limit is monitored by management on a quarterly
basis. As at March 31, 2017 and March 31, 2016, the Company was in compliance with these covenants and the
capital expenditure limit.
22 Related parties and management compensation
The Company is controlled by Jalger Limited, which owns 66.5% of the Company’s Class B voting shares. No
individual has sole voting power or control in respect of the shares of the Company owned by Jalger Limited.
Compensation of directors and executives
The compensation expense recorded for directors and members of the Executive Management Team of the
Company is shown below:
Compensation and short-term benefits
Post-employment benefits
Payments to a share purchase plan
2017
6,951
302
381
7,634
$
$
2016
4,939
248
409
5,596
$
$
The compensation and benefits expense consists of amounts that will primarily be settled within twelve months.
58
| ANDREW PELLER LIMITED 2017
23 Segmented information
During the year, export sales were $12,177 (2016 - $13,873), primarily in the United States. The remainder of
sales occurred in Canada. All of the Company’s assets are located in Canada.
24 Events after the reporting period
On June 7, 2017, the Company’s Board of Directors approved a 10% increase in the quarterly dividend for
holders of its Class A and Class B shares, from $0.0408 per Class A share and $0.0355 per Class B share to
$0.0450 per Class A share and $0.0391 per Class B share. This increased quarterly dividend will be paid on
July 7, 2017 to shareholders of record at the close of business on June 30, 2017.
ANDREW PELLER LIMITED 2017 | 59
TEN-YEAR SUMMARY
(in thousands of Canadian dollars,
except per share amounts)
Sales and earnings
Net sales
EBITA
Net earnings (loss)
Financial position
Working capital
Total assets
Shareholders’ equity
Per share (10)
Net earnings (loss) (10)
Basic & diluted Class A
Basic & diluted Class B
Dividends (10)
Class A Shares, non-voting
Class B Shares, voting
Number of shares outstanding
(in thousands of shares) (10)
Class A Shares, non-voting
Class B Shares, voting
Other information
Return on average
shareholders’ equity (8)
Return on average
capital employed (9)
2017
2016
2015
Restated (7)
2014
342,606
45,137
26,350
78,825
327,478
177,317
0.64
0.55
0.163
0.142
33,581
9,012
42,593
15.7%
14.1%
334,263
40,916
19,199
71,665
308,309
157,736
0.46
0.40
0.150
0.130
33,581
9,012
42,593
12.6%
13.2%
$ 315,697
35,184 (7)
15,224 (7)
$ 297,824
33,729
14,021
68,982
301,519 (7)
147,375 (7)
44,564
301,015
138,003
0.36 (7)
0.32 (7)
0.140
0.122
33,882
9,012
42,894
10.6% (7)
11.0% (7)
0.34
0.29
0.133
0.116
33,882
9,012
42,894
10.5%
10.8%
(1) Excludes the net impact of discontinued operations.
(2) Excludes the after-tax impact of mark-to-market adjustments on an interest rate swap.
(3) Includes an after-tax gain of $11.9 million for the sale of Granville Island Brewing Company Ltd. and Mainland
(4) Excludes an after-tax gain of $11.9 million for the sale of Granville Island Brewing Company Ltd. and Mainland
Beverage Distribution Ltd.
Beverage Distribution Ltd.
60
| ANDREW PELLER LIMITED 2017
2013
Restated (6)
2012
2011
Restated (5)
2010
2009
Restated (1)
2008
Restated (1)
$ 289,143
33,489 (6)
14,519 (6)
$ 276,883
32,651
13,001
$ 265,420
31,544 (5)
11,223 (5)
$ 263,151 (3)
27,354 (3)
21,661 (3)
$ 251,136(1)
23,359(1)
(125)
$ 228,056(1)
28,109(1)
11,381
41,670
296,519
129,701 (6)
34,869
285,552
120,552
27,643 (5)
267,996 (5)
114,297 (5)
29,357
263,716
113,665
29,203
293,507
96,791
25,413
259,744
102,680
0.35 (6)
0.30 (6)
0.120
0.105
33,882
9,012
42,894
11.6%(6)
11.1%(6)
0.31
0.27
0.120
0.105
33,882
9,012
42,894
11.1%
11.5%
0.26 (5)
0.22 (5)
0.110
0.096
0.50 (3)
0.43 (3)
0.110
0.096
33,882
9,012
42,894
35,664
9,012
44,676
9.8% (5)
6.8% (2,4)
11.6% (5)
9.1% (2,4)
($0.00)
($0.00)
0.110
0.096
35,664
9,012
44,676
6.0% (2)
7.9% (2)
0.26
0.23
0.100
0.087
35,664
9,012
44,676
11.5%
10.7%
(5) March 31, 2012 and subsequent periods have been prepared in accordance with International Financial Reporting
Standards ("IFRS"). The March 31, 2011 period was restated in accordance with IFRS. Amounts for March 31,
2010 and prior have not been prepared in accordance with IFRS. They have been presented in accordance with
Canadian GAAP prior to IFRS transition and may not be comparable to subsequent periods.
(6) Restated to reflect the adoption of the amendments to IAS 19.
(7) Restated to reflect the adoption of the amendments to IAS 16 and IAS 41.
(8) Return on average shareholders' equity is calculated as net earnings divided by average shareholders’ equity.
(9) To determine return on average capital employed, return is calculated as EBITA less amortization. Capital
employed is calculated as total assets less non-interest bearing liabilities. For 2008 and prior periods certain non-
interest-bearing debt was included in capital employed and may not be comparable to subsequent periods.
(10) Restated to reflect the three-for-one stock split completed in October of 2016.
ANDREW PELLER LIMITED 2017 | 61
DIRECTORS & OFFICERS
Directors
DINO J. BIANCO
Mississauga, Ontario
Corporate Director
MARK W. COSENS
Burlington, Ontario
Managing Director
Kilbride Capital Partners
LORI C. COVERT
Halifax, Nova Scotia
Corporate Director
RICHARD D. HOSSACK, PhD
Toronto, Ontario
Corporate Director
Honorary Directors
C. WILLIAM DANIEL, O.C.
Toronto, Ontario
BRIAN J. SHORT
Hamilton, Ontario
JOHN F. PETCH OC
Toronto, Ontario
Officers
JOHN E. PELLER
Chairman & Chief Executive Officer
RANDY A. POWELL
President
MICHELLE E. MALLETT (DI EMANUELE)
President & CEO
Trillium Health Partners
Toronto, Ontario
BRIAN D. ATHAIDE
Chief Financial Officer and
Executive Vice-President
Human Resources & Information Technology
PERRY J. MIELE
Burlington, Ontario
Chairman and Partner
Beringer Capital
A. ANGUS PELLER M.D.
Toronto, Ontario
Senior Medical Consultant
Medcan Health Management Inc.
JOHN E. PELLER
Burlington, Ontario
Chairman & CEO
Andrew Peller Limited
BRENDAN P. WALL
Executive Vice-President, Operations
ERIN L. ROONEY
Executive Vice-President, Sales
GREGORY J. BERTI
Vice-President, Government Relations and Export
COLIN M. CAMPBELL
Vice-President, Sales, Western Canada
JAMES H. COLE
Vice-President, Retail and Estate Wine Group
GAVIN J. HAWTHORNE
Vice-President, Sales & Marketing GVI
CRAIG D. MCDONALD
Vice-President, Winemaking
62
| ANDREW PELLER LIMITED 2017
SHAREHOLDER INFORMATION
Head Office
ANDREW PELLER LIMITED
697 South Service Road
Grimsby, Ontario L3M 4E8
Tel: (905) 643-4131
Fax: (905) 643-4944
Stock Exchange
TORONTO
Symbols: ADW.A/ADW.B
Shareholder Inquiries
Computershare
Inc. operates
Investor Services
services for inquiries regarding changes of address,
stock transfers, registered shareholdings, dividends
and lost certificates.
Phone:
Fax:
1-800-564-6253 toll free North America
(International 514-982-7555)
1-866-249-7775 toll free North America
(International 416-263-9524)
Rgistrar and Transfer Agent
COMPUTERSHARE INVESTOR SERVICES INC.
Internet:
Auditors
PRICEWATERHOUSECOOPERS LLP
Bankers
BANK OF MONTREAL
NATIONAL BANK
ROYAL BANK OF CANADA
TORONTO DOMINION BANK
www.computershare.com
The Investors section offers enrolment
for self-service account management for
registered shareholders through Investor
Centre.
Mail:
Computershare Investor Services
100 University Avenue, 9th Floor
Toronto, Ontario M5J 2Y1
Investor Relations
For additional information regarding the Company’s
activities, please contact:
BRIAN D. ATHAIDE
Chief Financial Officer and Executive Vice President,
Human Resources & Information Technology at the
Head Office address or by email at:
brian.athaide@andrewpeller.com
2017 Annual and Special Shareholders’
Meeting
The 2017 Annual
Shareholders’ will be held at:
Trius Winery
Niagara-on-the-Lake, Ontario
on Wednesday, September 13, 2017 at 3:00 p.m.
and Special Meeting of
ANDREW PELLER LIMITED 2017 | 63
AJAX
955 WESTNEY ROAD S.
L1S 3K7 (905) 6831705
#102 WITHIN: SOBEYS
260 KINGSTON ROAD W.
L1T 4E4 (905) 4286500
#165 WITHIN: SOBEYS
30 KINGSTON ROAD W.
L1T 4K8 (905) 4287829
#170 WITHIN: RCSS
ANCASTER
977 GOLF LINKS ROAD
L9G 3T9 (905) 6481465
#124 WITHIN: SOBEYS
54 WILSON STREET
L9G 3T8 (905) 3040094
#213 WITHIN: FORTINOS
BARRIE
11 BRYNE DRIVE
L4N 8V8 (705) 7258121
#139 WITHIN: ZEHRS
555 ESSA ROAD UNIT#5
L4N 6A9 (705) 7971480
#216 WITHIN: BARRIE ESSA
CENTRE
BOLTON
487 QUEEN STREET S.
L7E 2B4 (905) 8574166
#145 WITHIN: ZEHRS
BRAMALEA
25 PEEL CENTRE DRIVE
L6T 3R5 (905) 7934246
#28 WITHIN: METRO
BRAMPTON
227 VODDEN STREET
L6V 1N3 (905) 4592386
#35 WITHIN: FOOD BASICS
930 NORTH PARK DRIVE
L6S 3Y5 (905) 7939071
#52 WITHIN: SOBEYS
10970 AIRPORT ROAD
L6R 0E1 (905) 7939531
#191 WITHIN: SOBEYS
BROCKVILLE
1972 PARKEDALE AVE.
K6V 7N4 (613) 3428477
#184 WITHIN: RCSS
BURLINGTON
2025 GUELPH LINE
L7P 4M8 (905) 3363849
#112 WITHIN: FORTINO'S
4025 NEW STREET
L7L 1S7 (905) 6328580
#114 WITHIN: MARILU'S MARKET
GUELPH
297 ERAMOSA ROAD
NIH 1G7 (519) 8247922
#88 WITHIN: ZEHRS
MISSISSAUGA
4099 ERIN MILLS PKWY.
L5L 3P9 (905) 6076246
#148 WITHIN: MICHAEL
ANGELO'S
1250 BRANT STREET
L7P 1X8 (905) 3198670
#131 WITHIN: SOBEYS
3505 UPPER MIDDLE ROAD
L7M 4C6 (905) 3369101
#312 WITHIN: WALKERS PLACE
5353 LAKESHORE ROAD
L7L 1C8 (905) 6818282
#329 WITHIN: LAKESIDE
VILLAGE
CAMBRIDGE
180 HOLIDAY INN DRIVE
N3C 3Z4 (519) 6511145
#86 WITHIN: ZEHRS
400 CONESTOGA BLVD.
N1R 7L7 (519) 6241103
#151 WITHIN: ZEHRS
980 FRANKLIN BLVD
N1R 8R3 (519) 6222552
#212 WITHIN: NO FRILLS
COLLINGWOOD
12 HURONTARIO STREET
L9Y 2L6 (705) 4462237
#113 WITHIN; LOBLAW GREAT
FOOD
640 FIRST STREET EXTENSION
L9Y 4Y7 (705) 4441730
#153 WITHIN: METRO
EAST YORK
1015 BROADVIEW AVE.
M4K 2S2 (416) 4677760
#99 WITHIN: SOBEYS
ETOBICOKE
380 THE EAST MALL
M9B 6L5 (416) 6959567
#152 WITHIN: LOBLAW
GREAT FOOD
FERGUS
800 TOWER STREET S.
N1M 2R3 (519) 7877721
#149 WITHIN: ZEHRS
GEORGETOWN
171 GUELPH STREET
L7G 4A1 (905) 8771815
#179 WITHIN: RCSS
GRIMSBY
361 SOUTH SERVICE ROAD
L3M 4E8 (905) 9459982
#181 WITHIN: RCSS
160 KORTRIGHT ROAD, W.
N1G 4W2 (519) 8379293
#105 WITHIN: ZEHRS
5602 10th LINE W.
L5M 7L9 (905) 8580123
#166 WITHIN: SOBEYS
167 SILVERCREEK PARKWAY
N1H 3T2 (519) 8370540
#197 WITHIN: NO FRILLS
HAMILTON
50 DUNDURN STREET S.
L8P 4J9 (905) 5284003
#76 WITHIN: FORTINO'S
75 CENTENNIAL PARKWAY N.
L8E 2P2 (905) 5614504
#79 WITHIN: FORTINO'S
1579 MAIN STREET W.
L8S 1E6 (905) 5228882
#175 WITHIN: FORTINOS
KESWICK
24018 WOODBINE AVE.
L4P 3E9 (905) 4768544
#134 WITHIN: ZEHRS
KINGSTON
1048 MIDLAND AVE.
K7M 7H4 (613) 3896139
#122 WITHIN: LOBLAWS
KITCHENER
750 OTTAWA STREET S.
N2E 1B6 (519) 7452183
#164 WITHIN: ZEHRS
39 875 HIGHLAND ROAD W.
N2N 2Y2 (519) 7425844
#324 WITHIN: HIGHLAND
HILLS MALL
LONDON
1030 ADELAIDE STREET N.
N5Y 2M9 (519) 6793717
#62 WITHIN: METRO
395 WELLINGTON STREET S.
N6C 4P9 (519) 6497180
#94 WITHIN: METRO
3040 WONDERLAND STREET
N6L 1A6 (519) 6682224
#161 WITHIN: LOBLAWS
MILTON
1079 MAPLE AVE
L9T 0A5 (905) 6938850
#199 WITHIN: LONGOS
228 LAKESHORE ROAD W.
L5H 1G6 (905) 2718686
#207 WITHIN: CREDIT LANDING
SHOPPING CENTRE
2150 BURNHAMTHORPE ROAD W.
L5L 3A2 (905) 8209958
#332 WITHIN: SOUTH COMMON
CENTRE
NEWMARKET
1111 DAVIS DRIVE
L3Y 8X2 (905) 8530401
#127 WITHIN: METRO
18120 YONGE STREET N.
L3Y 4V8 (905) 8952412
#138 WITHIN: RCSS
16640 YONGE STREET
L3X 1V6 (905) 8303448
#159 WITHIN: METRO
NIAGARA ON THE LAKE
300 TAYLOR ROAD
L0S 1J0 (905)7040550
#203 WITHIN: NIAGARA OUTLET
COLLECTION
27 QUEEN STREET
L0S 1J0 (905) 4681881
#204 WITHIN:
WINE COUNTRY VINTNERS
NORTH YORK
3501 YONGE STREET
M4N 2N5 (416) 4817699
#123 WITHIN: LOBLAW
GREAT FOOD
OAKVILLE
511 MAPLE GROVE DRIVE
L6J 4W3 (905) 3383042
#63 WITHIN: SOBEYS
469 CORNWALL ROAD
L6J 4A7 (905) 3380880
#202 WITHIN: LONGO’S
1500 UPPER MIDDLE ROAD W.
L6M 3G3 (905) 8472944
#120 WITHIN: SOBEYS
64
| ANDREW PELLER LIMITED 2017
ORANGEVILLE
50 4TH AVE.
L9W 4P1 (519) 9428752
#90 WITHIN: ZEHRS
OSHAWA
285 TAUNTON ROAD E.
L1G 3V2 (905) 5716167
#78 WITHIN: METRO
1385 HARMONY ROAD N.
L1H 7K5 (905) 4381800
#178 WITHIN: RCSS
1300 KING STREET E.
L1H 8J4 (905) 7283767
#350 WITHIN: NO FRILLS
OTTAWA
2515 BANK STREET
K1V 8R9 (613) 5235837
#343 WITHIN: SOUTHGATE
187 METCALFE STREET
K2P 1P5 (613) 5655062
#211 WITHIN: SOBEYS
(Ottawa) GLOUCESTER
671 RIVER ROAD
K1V 2G2 (613) 8223080
#186 WITHIN: YIG
(Ottawa) NEPEAN
59 ROBERTSON ROAD
K2H 5Y9 (613) 8207219
#129 WITHIN: LOBLAWS
1460 MERIVALE ROAD
K2E 5P2 (613) 7235507
#351 WITHIN: LOBLAWS
(Ottawa) STITTSVILLE
1251 MAIN STREET
K2S 2E5 (613) 8313837
#188 WITHIN: YIG
(Ottawa) VANIER
100 MCARTHUR ROAD
K1L 6P9 (613) 7499618
#347 WITHIN: LOBLAWS
OWEN SOUND
1150 SIXTEENTH STREET E.
N4K 1Z3 (519) 3718664
#140 WITHIN: ZEHRS
ST. THOMAS
1063 TALBOT STREET
N5R 2S6 (519) 6336343
#111 WITHIN: RCSS
2273 BLOOR STREET W.
M6S 1N9 (416) 7668654
#309 WITHIN: BLOOR WEST
VILLAGE
PETERBOROUGH
769 BORDEN AVE.
K9J 0B6 (705) 7402513
#190 WITHIN: RCSS
PICKERING
1900 DIXIE ROAD
L1V 6M4 (905) 8316705
#210 WITHIN: YIG
SCARBOROUGH
3221 EGLINTON AVE. E.
M1J 2H7 (416) 2672795
#128 WITHIN: METRO
SIMCOE
470 NORFOLK STREET S.
N3Y 2W8 (519) 4261033
#110 WITHIN: SOBEYS
ST. CATHARINES
318 ONTARIO STREET
L2R 5L8 (905) 6858898
#43 WITHIN: FRESCHCO
221 GLENDALE AVE.
L2T 2K9 (905) 6884767
#117 WITHIN: ZEHRS
285 GENEVA STREET
L2N 2G1 (905) 6467363
#137 WITHIN: ZEHRS
411 LOUTH STREET
L2S 4A2 (905) 6859779
#172 WITHIN: RCSS
400 SCOTT STREET
L2M 3W4 (905) 9340981
#201 WITHIN: GRANTHAM
PLAZA
33 LAKESHORE ROAD
L2N 7B3 (905) 9375093
#214 WITHIN: LAKESHORE
SQUARE PLAZA
TORONTO
656 EGLINTON AVE. E.
M4P 1P1 (416) 4850093
#143 WITHIN: METRO
50 MUSGRAVE STREET
M4E 3W2 (416) 6936336
#156 WITHIN: LOBLAWS
93 LAIRD DRIVE
M4G 3T7 (416) 4241362
#200 WITHIN: LONGO’S
3671 DUNDAS STREET W.
M6S 2T3 (416) 7628635
#147 WITHIN: LOBLAWS
228 QUEENS QUAY W.
M5J 1B5 (416) 5988880
#167 WITHIN: QUEENS QUAY
125 THE QUEENSWAY
M8Y1H6 (416) 2018221
#171 WITHIN: SOBEYS
87 AVENUE ROAD
M5R 3R9 (416) 9236336
#176 WITHIN: YORKVILLE
VILLAGE
93 FRONT STREET E.
M5E 1C4 (416) 3641811
#189 WITHIN: WINE
COUNTRY MERCHANTS
22 FORT YORK BLVD.
M5V 3Z2 (416) 6230793
#192 WITHIN: SOBEYS
650 DUPONT STREET
M6G 4B1 (416) 5338484
#208 WITHIN: LOBLAWS
1230 QUEEN STREET WEST
M6J 3K6 (416) 5339180
#217 WITHIN:METRO
UXBRIDGE
323 TORONTO STREET S.
L9P 1N2 (905) 8525008
#133 WITHIN: ZEHRS
WATERLOO
450 ERB STREET W.
N2T 1H4 (519) 7475897
#40 WITHIN: ZEHRS
315 LINCOLN ROAD
N2J 4H7 (519) 7467226
#162 WITHIN: ZEHRS
WATERDOWN
255 DUNDAS ST REET E.
UNIT 3A
L0R 2H6 (905) 6893420
#215 WITHIN: WATERDOWN
SHOPPING CENTRE
WELLAND
821 NIAGARA STREET
L3C 1M4 (905) 7149521
#144 WITHIN: ZEHRS
WHITBY
1615 DUNDAS STREET E.
L1N 2L1 (905) 7284118
#177 WITHIN: SOBEYS
200 TAUNTON ROAD
L1R 3H8 (905)6687568
#317 WITHIN RCSS
3050 GARDEN STREET
L1R 2G7 (905) 4305314
#205 WITHIN: WHITBY
TOWN SQUARE
817 DUNDAS WEST UNIT B
L1N 2N6 (905)4304698
#209 WITHIN: WHITBY
WEST SIDE PLAZA
WOODBRIDGE
9200 WESTON ROAD
L4H 2P8 (905) 3033055
#206 WITHIN: LONGO’S
ANDREW PELLER LIMITED 2017 | 65
Exclusive Wine Offer for Shareholders
We are pleased to offer exceptional VQA wines from our wineries in Niagara and the Okanagan
Valley. These exclusive Collections are available at a 15% savings. As a Shareholder, we are also
offering you complimentary delivery within Ontario and British Columbia.
Delivered right to your door, these Collections give you the opportunity to enjoy a variety of wines
from Andrew Peller Limited’s award-winning wineries. Stock up for get-togethers and surprise the
wine lovers in your life with a delicious bottle (or two).
Don’t forget, our wine club memberships are also available! Peller Estates, Trius and Thirty Bench
No.30 memberships are available in Ontario, Sandhill and Red Rooster memberships are available in
British Columbia. Please call us for more information.
You can call us at 1.866.440.4383 to place your order or email wineorders@peller.com. We
are available Monday to Friday, 9 am - 7 pm EST. Offer ends Friday, September 29, 2017.
Ontario VQA Wine Collections
Collections #1- 4 can be delivered to Ontario, British Columbia, Manitoba, Saskatchewan and Nova
Scotia. Free delivery within Ontario and a special delivery charge of only $25 to other provinces.
Ontario collection prices include $0.10 bottle deposit
Collection #1: Best of VQA Niagara Collection
Peller Estates Family Series Riesling
Peller Estates Private Reserve Pinot Noir
Trius Sauvignon Blanc
Trius Cabernet Franc
Thirty Bench Winemaker’s Riesling
Wayne Gretzky Estates Shiraz Cabernet
6 Bottle Collection - $101.09 (reg. $118.70)
12 Bottle Collection - $202.18 (reg. $237.40)
Collection #2: Peller Estates Collection
Peller Estates Signature Series Ice Cuvée Rosé
Peller Estates Family Series Chardonnay
Peller Estates Private Reserve Gamay Noir
Peller Estates Signature Series Sauvignon Blanc
Peller Estates Signature Series Merlot
Peller Estates Private Reserve Late Harvest Vidal (375 ml)
6 Bottle Collection - $148.67 (reg. $174.70)
12 Bottle Collection - $297.35 (reg. $349.40)
Collection #3: Trius Collection
Trius Brut
Trius Divine White
Trius Showcase Late Harvest Vidal
Trius Merlot
Trius Gamay Noir
Trius Red
6 Bottle Collection - $115.52 (reg. $135.70)
12 Bottle Collection - $231.05 (reg. $271.40)
Collection #4: Wayne Gretzky Estates No.99 Collection
Wayne Gretzky Estates No.99 Riesling
Wayne Gretzky Estates No.99 Pinot Grigio
Wayne Gretzky Estates No.99 Chardonnay
Wayne Gretzky Estates No.99 Merlot
Wayne Gretzky Estates ‘Estate Series’ Cabernet Merlot
Wayne Gretzky Estates ‘Estate Series’ Shiraz Cabernet
6 Bottle Collection - $102.78 (reg. $120.70)
12 Bottle Collection - $205.56 (reg. $241.40)
British Columbia VQA Wine Collections
Collections #5-7 can be delivered to British Columbia, Manitoba, Saskatchewan and Nova Scotia.
Free delivery within British Columbia and a special delivery charge of only $25 to other provinces.
Collection #5: Best of VQA Okanagan Collection
Peller Estates Family Series Pinot Gris
Peller Estates Family Series Cabernet Merlot
Sandhill Rosé
Sandhill Small Lots Sangiovese
Sandhill Chardonnay
Wayne Gretzky Founders Merlot
6 Bottle Collection - $98.55 (reg. $115.84)
12 Bottle Collection - $197.11 (reg. $231.68)
Prices do not include $0.10 bottle deposit and applicable taxes.
Collection #6: Red Rooster Collection
Red Rooster Riesling
Red Rooster Chardonnay
Red Rooster Pinot Blanc
Red Rooster Reserve Syrah
Red Rooster Reserve Merlot
Red Rooster Reserve Meritage
6 Bottle Collection - $119.60 (reg. $140.60)
12 Bottle Collection - $239.20 (reg. $281.20)
Prices do not include $0.10 bottle deposit and applicable taxes.
Collection #7: Sandhill Collection
Sandhill Pinot Gris
Sandhill Estate Sauvignon Blanc
Sandhill Syrah
Sandhill Estate Merlot
Sandhill Small Lots Viognier
Sandhill Small Lots One
6 Bottle Collection - $125.55 (reg. $147.60)
12 Bottle Collection - $251.10 (reg. $295.20)
Prices do not include $0.10 bottle deposit and applicable taxes.
Call us at 1.866.440.4383 to order
or email wineorders@peller.com
We’re here Monday to Friday, 9 am - 7 pm EST
Offer Ends Friday, September 29, 2017
Delivery Information:
You can expect your order within 5-10 business days based on delivery location. Wine will be
delivered in a sturdy corrugated box. Please ensure someone of legal drinking age is available to sign
for the package.
Notes
Notes