OPERATIONAL HIGHLIGHTS
FOR THE YEARS ENDED MARCH 31
(in thousands of Canadian dollars, except per share amounts)
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
2021
$ 393,036
63,046
26,986
2020
$ 382,306
61,501
27,575
170,684
542,521
265,574
0.65
0.218
0.190
11.68
7.02
14.68
7.40
10.9%
10.1%
4.13:1
83,654
513,919
245,523
0.55
0.215
0.187
14.84
6.00
14.75
6.01
9.8%
10.7%
1.64:1
*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.
CONTENTS
REPORT TO SHAREHOLDERS
THE YEAR’S TOP AWARDS
MANAGEMENT’S DISCUSSION & ANALYSIS
INDEPENDENT AUDITOR’S REPORT
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
TEN-YEAR SUMMARY
DIRECTORS & OFFICERS
SHAREHOLDER INFORMATION
THE WINE SHOP RETAIL STORES
EXCLUSIVE WINE OFFER FOR SHAREHOLDERS
1
3
7
21
25
30
63
65
66
67
69
Report to Shareholders
Despite operating under the COVID-19 pandemic for the full fiscal year, the extraordinary effort and contribution from our
people, combined with the strength and resilience of our trade channels, we generated solid sales growth and an 18%
increase in net earnings for the year. As our premium trade channels, hospitality and export markets re-open and all our
businesses return to more normal conditions, we are confident our track record of growth in sales and net earnings will
continue.
An Extraordinary Year
I am writing this letter to shareholders shortly after a meeting of our senior management team, the first in-person gathering
we have held in over fifteen months. And while we have spent more time together than ever before due to the significant
challenges presented by the COVID-19 pandemic, it was highly gratifying to move from our “virtual” meetings to
celebrating together the accomplishments we achieved over the last year.
With the onset of the pandemic in March 2020, we immediately took steps to ensure the safety and well-being of all our
employees. Approximately 80% of our more than 1,600 people across the country continued to work throughout this
challenging year, and it is their extraordinary effort and commitment that delivered such positive results for the year,
ensuring we will emerge from the pandemic stronger than ever before.
We were fortunate that the beverage alcohol category was deemed essential by the federal government during the pandemic,
and as a result provincial liquor stores, our largest customers, remained open across the country. Our production facilities
continued to operate, our stand-alone and grocery and estate winery retail outlets were open for business. However, our nine
estate wineries, hospitality and export trade channels were closed, impacting our growth for the year.
The pandemic also affected our sales product mix as consumers gravitated toward more value-priced segments. The
resulting significant increase in sales of our lower margin products, combined with the closure of trade channels focused on
our higher-margin premium and ultra-premium products, negatively impacted our overall gross margin for the year.
Additionally, we took steps to reduce our overhead costs to reflect the pandemic operating environment, including staff
reductions and reduced sales and marketing expenses. Through the fourth quarter we began to return to more normal selling
and administrative staffing and marketing costs in anticipation of a gradual return to more normal business conditions.
Fiscal 2021 was another year of significant investment in the Company. Over the last three years we have invested more in
our operations, our vineyards, and our estate wine group than ever before. We have also invested in a new and highly
scalable Enterprise Resource Planning (ERP) system and platform that will have a profound and positive impact on our
logistics, production and delivery programs going forward. The new system went live in February 2021, and we are already
seeing the benefits of its implementation. Our recent and successful entry into e-commerce sales was a specific beneficiary,
and we look to grow our on-line presence and sales in the years to come.
Another Strong Year
Despite the significant challenges in our markets and operations due to the pandemic, sales rose almost 3% for the year to
$393 million as we performed well through our new e-commerce platform, at provincial liquor stores and other retail
channels that remained open. Gross margin was impacted by higher imported wine costs, increased consumption of lower-
margin products, and reduced sales of our premium and ultra-premium products. Selling and administrative expenses were
lower due to planned efforts to conserve cash resources during the pandemic. However, despite these challenges, we
generated an 18% increase in net earnings to $27.8 million or $0.65 per Class A share for the year ended March 31, 2021, up
from $23.5 million or $0.55 per share in the prior year.
Our balance sheet and liquidity position remained strong and stable at year end. During the year we amended and restated
our debt facilities, combining our prior credit lines into one facility, with an increased borrowing capacity of $350 million.
ANDREW PELLER LIMITED 2021 | 1
With this change, we recorded a net gain on debt modification of $2.3 million in fiscal 2021. Working capital was strong at
$170.7 million at year end, while shareholders’ equity rose to $265.6 million or $6.08 per common share.
Increase in Common Share Dividends
In June 2021, the Company’s Board of Directors approved a 10% increase in common share dividends, reflecting our
positive performance during the pandemic, our outlook on our future, and our commitment to enhancing long-term value for
our shareholders. The annual dividend on Class A Shares was increased to $0.246 per share and the dividend on Class B
Shares was increased to $0.214. The Company has consistently paid common share dividends since 1979.
Acquisition of The Riverbend Inn and Vineyard
On February 26, 2021, we completed the acquisition of the assets and properties of The Riverbend Inn and Vineyard in
Niagara-on-the-Lake, Ontario for $10.0 million. This historic and well-located property, containing 17 acres of prime
vineyards and a 21-room hotel and restaurant, is situated directly adjacent to our Peller Estates Winery. Opened in 2004, this
Georgian-style inn has a successful and profitable track record as a destination of choice for visitors to the Niagara Region.
The Inn is a natural extension of our success in delivering a premium wine tourism experience, and we look forward to
welcoming you on your next visit to Niagara-on-the-Lake.
Looking Ahead
As the vaccine rollout accelerates in Canada, and all our markets and trade channels slowly return to more normal activity as
the pandemic eases, we look forward to another strong year in fiscal 2022.
We are already seeing significant demand for visits to our estate wineries and anticipate growth in our premium and ultra-
premium sales, as well as from the re-opening of our hospitality business, restaurants, tours and export sales, augmented by
the recently acquired Riverside Inn and Vineyard. We also expect to see increased momentum through our new e-commerce
portals as we enhance our on-line consumer experience and drive efficiencies in our delivery costs.
Our recent entry into new markets and product categories will make a positive contribution going forward. We have made
significant progress in our recent entry into the ready-to-drink segment with strong brand recognition and growth in seltzers
and our popular No Boats on Sunday ciders, while the introduction of new wine spritzers and cocktails holds real promise.
Likewise, our entry into the spirits category is performing very well, including craft and cream whiskey under our Wayne
Gretzky and Panama Jack brands.
In closing, on behalf of the Board of Directors and all shareholders, I want to thank everyone at the Company for their
extraordinary contribution in what was an extraordinary year for the Company. It is our decades of experience and our
proven culture of innovation and performance that enabled us to successfully work through the pandemic, and we are
confident we will emerge stronger than ever before as we return to more normal business conditions. We also thank our
customers and consumers for their patience and loyalty. We remain committed to what we do best – providing the best
products at the best price. This commitment has driven our growth and success for over forty years and will continue to
build value for our shareholders in the years ahead.
John E. Peller, O.C.
President and Chief Executive Officer
2
| ANDREW PELLER LIMITED 2021
2020 TOP AWARDS
Peller Estates Winery
(Niagara-on-the-Lake, ON)
International East Meets West – Eastern Division
• Best of Show Red Wine – Best of Class – Gold Medal –
91 points – 2018 Family Vineyards VQA Cabernet Franc
• Double Gold Medal – 97 points – 2018 Family
Vineyards VQA Cabernet Merlot
• Gold Medal – 93 points – 2018 Family
Vineyards VQA Sauvignon Blanc
• Gold Medal – 90 points – 2018 Family Vineyards VQA Riesling
• Silver Medal – 2018 Family Vineyards VQA Chardonnay
• Silver Medal – 2018 Family Vineyards VQA Baco Noir
• Silver Medal – 2018 Family Vineyards VQA Merlot
• Silver Medal – 2018 Family Vineyards
VQA Cabernet Sauvignon
Global Riesling Masters – UK
• Master – 2017 Andrew Peller Signature
Series Riesling Icewine
• Silver Medal – 2018 Private Reserve Riesling
• Silver Medal – 2018 Andrew Peller Signature Series Riesling
The Global Riesling Masters – UK 2020
• Master – 95 points – 2018 Andrew Peller
Signature Series Riesling Icewine
Experience Rosé, California USA
• Gold Medal – 91 points – 2019 Peller Private Reserve Rose
Finger Lakes International Wine Competition
• Silver Medal – 2018 Family Vineyards VQA Sauvignon Blanc
• Silver Medal – 2018 Family Vineyards VQA Baco Noir
• Bronze Medal – 2018 Family Vineyards VQA Chardonnay
• Bronze Medal – 2018 Family Vineyards VQA Cabernet Franc
• Bronze Medal – 2018 Family Vineyards
VQA Cabernet Sauvignon
• Bronze Medal – 2018 Family Vineyards VQA Cabernet Merlot
International Wine & Spirit Competition – UK
• Trophy - Sweet Wine Producer of the Year
• Gold Medal – 95 points – 2018 AP Signature
Series Vidal Blanc Icewine
• Gold Medal – 95 points – 2018 AP
Signature Series Riesling Icewine
• Silver Medal – 94 points – 2018 AP Signature
Series Oak Aged Vidal Blanc Icewine
• Silver Medal – 90 points – 2017 AP Signature
Series Cabernet Franc Icewine
• Bronze Medal – 87 points – 2017 AP
Signature Series Cabernet Franc
• Bronze Medal – 86 points – 2018 AP Signature Series Riesling
Decanter World Wine Awards – UK
• Platinum – 97 points – 2018 Andrew Peller
Signature Series Oak Aged Vidal Blanc Icewine
• Silver Medal – 94 points – 2018 Andrew Peller
Signature Series Vidal Blanc Icewine
• Silver Medal – 94 points – 2018 Andrew Peller
Signature Series Riesling Icewine
• Silver Medal – 91 points – 2017 Andrew Peller
Signature Series Cabernet Franc
• Silver Medal – 91 points – 2017 Andrew Peller
Signature Series Cabernet Franc Icewine
• Bronze Medal – 89 points – 2018 Andrew
Peller Signature Series Riesling
• Bronze Medal – 89 points – 2017 Andrew Peller
Signature Series Cabernet Sauvignon
Women’s Wine & Spirits Awards, UK (2021)
• Double Gold Medal – Ice Cuvee Classic
• Double Gold Medal – Ice Cuvee Rose
• Gold Medal – 2017 Andrew Peller Signature
Series Cabernet Franc Icewine
• Silver Medal – 2018 Andrew Peller Signature
Series Vidal Blanc Icewine
• Bronze Medal – 2018 Andrew Peller
Signature Series Riesling Icewine
International Wine Challenge – UK
• Silver Medal – 93 points – 2018 Andrew Peller
Signature Series Vidal Blanc Icewine
• Silver Medal – 92 points – 2018 Andrew Peller
Signature Series Oak Aged Vidal Blanc Icewine
• Bronze Medal – 89 points – 2018 Andrew Peller
Signature Series Riesling Icewine
• Bronze Medal – 87 points – 2018 Andrew
Peller Signature Series Riesling
• Bronze Medal – 85 points – 2017 Andrew Peller
Signature Series Cabernet Franc Icewine
WineAlign – Guide to Canada’s Best Wines
• 93 points – 2018 Peller Estates Andrew Peller Signature
Series Oak Aged Vidal Blanc Icewine TOP 10
• 90 points – 2018 Peller Estates Andrew Peller
Signature Series Riesling Icewine
• 88 points – 2019 Peller Private Reserve Rose
• 90 points – 2017 Peller Estates Andrew Peller
Signature Series Cabernet Sauvignon
• 88 points – 2018 Peller Estates Private Reserve Gamay Noir
• 91 points – 2018 Peller Estates Andrew Peller
Signature Series Sauvignon Blanc TOP 10
• 89 points – 2019 Peller Estates Private
Reserve Sauvignon Blanc
• 92 points – 2017 Peller Estates Andrew Peller
Signature Series Cabernet Franc TOP 10
• 90 points – 2018 Peller Estates Private
Reserve Cabernet Franc
• 90 points – 2018 Peller Estates Andrew Peller
Signature Series Chardonnay Sur Lie
• 89 points – 2018 Peller Estates Andrew
Peller Signature Series Riesling
• 89 points – Peller Estates Ice Cuvee Classic
• 89 points – Peller Estates Ice Cuvee Rose
Selections Mondiales des Vin Canada, Quebec City
• Silver Medal – 2019 Family Vineyards VQA Riesling
Thirty Bench Wine Makers
(Niagara-on-the-Lake, ON)
Global Riesling Masters – UK
• Silver Medal – 2017 Small Lot Riesling Wild Cask
• Silver Medal – 2017 Small Lot Riesling Triangle Vineyard
• Bronze Medal – 2018 Winemakers Blend Riesling
The Global Riesling Masters – UK 2020
• Gold Medal – 93 points – Sparkling Riesling
• Silver Medal – 91 points – 2017 Small Lot Riesling Wild Cask
• Silver Medal – 89 points – 2017 Small
Lot Riesling Triangle Vineyard
Experience Rosé, California USA
• Silver Medal – 2019 Thirty Bench Rose
International Wine & Spirit Competition – UK
• Silver Medal – 90 points – 2017 Small Lot Riesling Wild Cask
• Silver Medal – 91 points – 2017 Small Lot Cabernet Sauvignon
• Bronze Medal – 89 points – 2018 Winemakers Blend Riesling
• Bronze Medal – 89 points – Sparkling Riesling
• Bronze Medal – 87 points – 2017 Small
Lot Riesling Triangle Vineyard
Decanter World Wine Awards – UK
• Silver Medal – 93 points – 2017 Small Lot Riesling Wild Cask
• Silver Medal – 92 points – 2018 Winemakers Blend Riesling
• Silver Medal – 92 points – 2017 Small Lot
Riesling Steel Post Vineyard
• Silver Medal – 92 points – 2017 Small Lot Cabernet Sauvignon
• Silver Medal – 91 points – 2016 Small Lot Cabernet Franc
• Silver Medal – 91 points – 2017 Small
Lot Riesling Triangle Vineyard
• Bronze Medal – 89 points – Sparkling Riesling
International Wine Challenge – UK
• Silver Medal – 90 points – 2017 Small Lot Riesling Wild Cask
• Bronze Medal – 88 points – 2017 Small
Lot Riesling Steel Post Vineyard
• Bronze Medal – 85 points – 2017 Small
Lot Riesling Triangle Vineyard
WineAlign – Guide to Canada’s Best Wines
• 90 points – 2018 Thirty Bench Winemaker’s Blend Red
• 91 points – 2017 Thirty Bench Small Lot Pinot Noir
• 91 points – 2019 Thirty Bench Rose TOP
10 and #1 Top Scoring Rose
• 92 points – 2019 Thirty Bench Small
Lot Gewurztraminer TOP 10
• 91 points – 2017 Thirty Bench Small Lot
Cabernet Sauvignon TOP 10
• 94 points – 2017 Thirty Bench Small Lot Cabernet
Franc TOP 10 and #1 Top Scoring Cabernet Franc
• 91 points – 2018 Thirty Bench Small Lot Chardonnay
• 92 points – 2017 Thirty Bench Small
Lot Riesling Wild Cask TOP 10
• 92 points – 2017 Thirty Bench Small Lot
Riesling Triangle Vineyard TOP 10
• 91 points – Thirty Bench Sparkling Riesling TOP 10
ONTARIO & N.S.
Trius Winery
(Niagara-on-the-Lake, ON)
Wayne Gretzky Estates & Distillery
(Niagara-on-the-Lake, ON)
Decanter World Wine Awards
Global Riesling Masters – UK
• Silver Medal – 2018 Showcase Riesling Ghost Creek Vineyard
• Bronze Medal – 2018 Dry Riesling
• Bronze Medal – 2018 Late Autumn Off Dry Riesling
Experience Rosé, California USA
• Silver Medal – 2019 Trius Rose
International Wine & Spirit Competition – UK
• Silver Medal – 90 points – Brut Rose
• Bronze Medal – 89 points – 2018 Showcase Vidal Icewine
• Bronze Medal – 86 points – Trius Brut
Decanter World Wine Awards – UK
• Gold Medal – 95 points – 2018 Showcase Vidal Icewine
• Silver Medal – 90 points – 2017 Showcase
Red Shale Cabernet Franc
• Silver Medal – 90 points – 2017 Showcase
East Block Cabernet Sauvignon
• Bronze Medal – 89 points – Trius Brut
• Bronze Medal – 88 points – Trius Brut Rose
• Bronze Medal – 88 points – 2017 Red The Icon
International Wine Challenge – UK
• Silver Medal – 92 points – 2018 Showcase
Riesling Ghost Creek Vineyard
• Silver Medal – 92 points – 2018 Showcase Vidal Icewine
WineAlign – Guide to Canada’s Best Wines
• 91 points – 2018 Trius Red The Icon
• 91 points – 2018 Trius Showcase Pinot Noir Clark Farm
• 89 points – 2018 Trius Showcase Outlier Gewurztraminer
• 91 points – 2017 Trius Showcase East
Block Cabernet Sauvignon TOP 10
• 90 points – 2018 Trius Showcase Clean Slate
Sauvignon Blanc Wild Ferment TOP 10
• 92 points – 2017 Trius Showcase Red
Shale Cabernet Franc TOP 10
• 91 points – 2018 Trius Showcase Chardonnay
Wild Ferment Watching Tree Vineyard
• 93 points – 2018 Trius Showcase Riesling
Ghost Creek Vineyard TOP 10
• 90 points – Trius Brut Rose
• 89 points – Trius Brut
Canadian Whisky Awards – Victoria, BC
• Best Mixed Mash Whisky – Wayne Gretzky
No. 99 Ninety Nine Proof Small Batch
• Gold Medal – Wayne Gretzky No.99
Ninety Nine Proof Small Batch
• Silver Medal – Wayne Gretzky No. 99 Red Cask Whisky
• Silver Medal – Wayne Gretzky No. 99 Ice Cask Whisky
• Silver Medal – Wayne Gretzky No. 99 Cream Whisky
International East Meets West – Eastern Division
• Best of Class – Double Gold Medal – 98
points – 2018 Whisky Oak Aged Red
• Gold Medal – 90 points – 2018 Whisky Oak Aged Chardonnay
• Silver Medal – 2018 Merlot
San Francisco World Spirits Competition
• Best Cream / Dairy Liqueur – Double
Gold – No.99 Canadian Cream
• Silver Medal – No.99 Ninety Nine Proof Whisky
• Silver Medal – No.99 Red Cask Whisky
• Silver Medal – No.99 Ice Cask Whisky
Experience Rosé, California USA
• Silver Medal – 2019 Wayne Gretzky Rose
Alberta Beverage Awards
• Best in Class – Wayne Gretzky No.99 Red Cask Whisky
International Wine & Spirit Competition – UK
• Silver Medal – 90 points – 2018 No.99 Vidal Icewine
Decanter World Wine Awards – UK
• Silver Medal – 91 points – 2018 No.99 Vidal Icewine
Women’s Wine & Spirits Awards, UK (2021)
• Double Gold Medal – 2018 No.99 Vidal Icewine
International Wine Challenge – UK
• Gold Medal – 95 points – 2018 Vidal Icewine
WineAlign – Guide to Canada’s Best Wines
• 89 points – 2017 Wayne Gretzky Shiraz Cabernet
• 88 points – 2017 Wayne Gretzky Cabernet Merlot
• 92 points – 2017 Wayne Gretzky
Cabernet Franc Icewine TOP 10
• 91 points – 2018 Wayne Gretzky Vidal Icewine
Selections Mondiales des Vin Canada, Quebec City
• Silver Medal – 2019 Founders Series Riesling
PLATINUM
97 POINTS
Peller Estates Winery
2019 Signature Series Riesling
+290
AWARDS NATIONALLY
2020 TOP AWARDS
Black Hills Estate Winery
(Okanagan Valley, BC)
Chardonnay du Monde, France
• Silver Medal – 2018 Black Hills Chardonnay
International Wine & Spirit Competition UK
• Gold Medal – 95 points – 2018 Carmenere
• Silver Medal – 92 points – 2017 Syrah
• Silver Medal – 91 points – 2017 Ipso Facto
• Silver Medal – 90 points – 2018 Chardonnay
Decanter World Wine Awards, UK
• Silver Medal – 91 points – 2017 Syrah
• Bronze Medal – 89 points – 2017 Ipso Facto
• Bronze Medal – 88 points – 2018 Viognier
• Bronze Medal – 88 points – 2018 Chardonnay
British Columbia Lieutenant Governor’s Wine Awards
• Gold Medal – 2018 Roussanne
• Silver Medal – 2017 Ipso Facto
• Bronze Medal – 2019 Viognier
• Bronze Medal – 2018 Chardonnay
• Bronze Medal – 2018 Addendum
• Bronze Medal – 2018 Syrah
• Bronze Medal – 2018 Carmenere
WineAlign – Guide to Canada’s Best Wines
• 90 points – 2018 Black Hills Carmenere TOP 10
• 90 points – 2018 Black Hills Tempranillo TOP 10
• 93 points – 2018 Black Hills Addendum TOP 10
• 93 points – 2018 Black Hills Per Se TOP 10
• 91 points – 2018 Black Hills Syrah TOP 10
• 91 points – 2018 Black Hills Roussanne TOP 10
• 91 points – 2019 Black Hills Chardonnay
Gray Monk Estate Winery
(Okanagan Valley, BC)
International East Meets West – Western Division
• Best of Show White Wine – Best of Class –
Double Gold – 97 points – 2018 Pinot Gris
• Gold Medal – 93 points – 2018 Pinot Auxerrois
• Gold Medal – 92 points – 2018 Gewurztraminer
• Silver Medal – 2018 Riesling
• Silver Medal – 2018 Pinot Noir
• Silver Medal – 2018 Latitude 50 Red
Experience Rosé, California USA
• Silver Medal – 2019 Gray Monk Rose
• Silver Medal – 2019 Gray Monk Latitude 50 Rose
Finger Lakes International Wine Competition
• Silver Medal – 2018 Chardonnay Unwooded
• Silver Medal – 2018 Latitude 50 Red
• Bronze Medal – 2018 Pinot Auxerrois
International Wine & Spirit Competition UK
• Bronze Medal – 88 points – 2018 Odyssey Pinot Gris
• Bronze Medal – 87 points – 2017 Odyssey White Brut
Raven Conspiracy
(Okanagan Valley, BC)
Decanter World Wine Awards, UK
• Silver Medal – 90 points – 2018 Odyssey Pinot Gris
• Bronze Medal – 89 points – 2017 Odyssey White Brut
• Bronze Medal – 88 points – 2016 Odyssey Cabernet Franc
• Bronze Medal – 88 points – 2017 Odyssey Rose Brut
British Columbia Lieutenant Governor’s Wine Awards
• Silver Medal – 2017 Odyssey Merlot
• Silver Medal – 2017 Odyssey Rose Brut
• Bronze Medal – 2019 Seigerrebe
• Bronze Medal – 2019 Rose
• Bronze Medal – 2017 Odyssey Cabernet Sauvignon
Women’s Wine & Spirits Awards, UK (2021)
• Trophy – Greatest Sparkling Wine – Double
Gold Medal – 2017 Odyssey White Brut
• Gold Medal – 2016 Odyssey Merlot
• Silver Medal – 2016 Odyssey Cabernet Franc
WineAlign – Guide to Canada’s Best Wines
• 90 points – 2017 Gray Monk Odyssey Meritage
• 89 points – 2017 Gray Monk Odyssey Merlot
• 91 points – 2017 Gray Monk Odyssey
Cabernet Sauvignon TOP 10
• 90 points – 2019 Gray Monk Odyssey Pinot Gris TOP 10
• 90 points – 2016 Gray Monk Odyssey Cabernet Franc
• 89 points – 2017 Gray Monk Odyssey Rose Brut
• 88 points – 2018 Gray Monk Odyssey White Brut
Peller Estates Winery
(Okanagan Valley, BC)
International East Meets West – Western Division
• Gold Medal – 92 points – 2018 Family
Vineyards Select VQA Chardonnay
• Gold Medal – 92 points – 2018 Family
Vineyards Select VQA Sauvignon Blanc
• Silver Medal – 2017 Family Select Cabernet Merlot
Finger Lakes International Wine Competition
• Silver Medal – 2019 Family Vineyards
VQA Select Sauvignon Blanc
• Silver Medal – 2018 Family Vineyards
VQA Select Cabernet Merlot
• Bronze Medal – 2018 Family Vineyards VQA Select Merlot
• Bronze Medal – 2018 Family Vineyards
VQA Select Chardonnay
British Columbia Lieutenant Governor’s Wine Awards
• Silver Medal – 2019 Family Reserve VQA Winemaker’s Red
• Bronze Medal – 2019 Family Reserve VQA Chardonnay
International East Meets West – Western Division
• Silver Medal – 2017 Deep Dark Red
Red Rooster Winery
(Okanagan Valley, BC)
Alberta Beverage Awards – Culinaire magazine
• Judge’s Selection – 2017 Red Rooster Golden Egg
International Wine & Spirit Competition UK
• Silver Medal – 92 points – 2018 Riesling
• Silver Medal – 91 points – 2017 Rare Bird Series Merlot
• Bronze Medal – 87 points – 2018 Riesling Icewine
• Bronze Medal – 87 points – 2017 Rare Bird Series Syrah
• Bronze Medal – 86 points – 2017 Rare Bird Series Meritage
Decanter World Wine Awards, UK
• Gold Medal – 95 points – 2018 Riesling Icewine
• Silver Medal – 90 points – 2018 Riesling
• Bronze Medal – 89 points – 2017 Rare Bird Series Malbec
• Bronze Medal – 89 points – 2016 Rare Bird Series Meritage
British Columbia Lieutenant Governor’s Wine Awards
• Gold Medal – 2019 Rare Bird Series Pinot Gris
• Silver Medal – 2018 Rare Bird Series Syrah
• Silver Medal – Brut
• Bronze Medal – 2018 Rare Bird Series Malbec
• Bronze Medal – 2018 Rare Bird Series Merlot
Women’s Wine & Spirits Awards, UK (2021)
• Gold Medal – 2018 Riesling Icewine
• Gold Medal – 2018 Riesling
WineAlign – Guide to Canada’s Best Wines
• 91 points – 2017 Red Rooster Golden Egg
• 88 points – 2018 Red Rooster Rare Bird Series Syrah
• 88 points – 2019 Red Rooster Rare Bird Series Viognier
Sandhill Winery
(Okanagan Valley, BC)
Experience Rosé, California USA
• Double Gold Medal – 95 points – 2019
Sandhill Rose Terroir Driven Wine
Alberta Beverage Awards – Culinaire magazine
• Judge’s Selection – 2017 Sandhill Cabernet
Franc Terroir Driven Wine
International Wine & Spirit Competition UK
• Silver Medal – 92 points – 2017 Single Vineyard
Malbec Osprey Ridge Vineyard
• Silver Medal – 91 points – 2017 Single Vineyard
Syrah Sandhill Estate Vineyard
BRITISH COLUMBIA
Wayne Gretzky Estates Okanagan
(Okanagan Valley, BC)
International East Meets West – Western Division
• Silver Medal – 2018 Whisky Oak Aged Cask Red
Experience Rosé, California USA
• Gold Medal – 90 points – 2019 Wayne Gretzky Rose
Alberta Beverage Awards – Culinaire magazine
• Best in Class – Wayne Gretzky No.99 Red Cask Whisky
British Columbia Lieutenant Governor’s Wine Awards
• Silver Medal – 2019 Pinot Grigio
• Silver Medal – 2019 Rose
• Silver Medal – 2019 Cabernet Franc Syrah
• Bronze Medal – 2019 Chardonnay
• Bronze Medal – 2019 Whisky Oak Aged Chardonnay
• Bronze Medal – 2019 The Great Red
All Canadian Wine Championships
BEST
SPARKLING WINE
DOUBLE GOLD
Gray Monk Estate Winery
2018 Odyssey Rose Brut
• Silver Medal – 90 points – 2017 Single Vineyard
THREE Sandhill Estate Vineyard
Stone Road Vineyard
• Bronze Medal – 87 points – 2016 Harvest
Series Co Ferment Red
• Bronze Medal – 86 points – 2017 Single
Vineyard ONE Vanessa Vineyard
• Bronze Medal – 86 points – 2017 Single
Vineyard TWO Sandhill Estate Vineyard
Decanter World Wine Awards, UK
• Silver Medal – 94 points – 2018 Riesling Icewine
• Silver Medal – 91 points – 2017 Single Vineyard
TWO Sandhill Estate Vineyard
• Silver Medal – 90 points – 2017 Single
Vineyard ONE Vanessa Vineyard
• Bronze Medal – 89 points – 2018 Harvest Series Chardonnay
• Bronze Medal – 89 points – 2017 Single
Vineyard Syrah Sandhill Estate Vineyard
• Bronze Medal – 88 points – 2017 Single Vineyard
THREE Sandhill Estate Vineyard
British Columbia Lieutenant Governor’s Wine Awards
• Gold Medal – 2019 Pinot Blanc Terroir Driven Wine
• Silver Medal – 2019 Chardonnay Terroir Driven Wine
• Silver Medal – 2017 Single Vineyard
TWO Sandhill Estate Vineyard
• Silver Medal – 2018 Single Vineyard
Syrah Hidden Terrace Vineyard
• Bronze Medal – 2019 Pinot Gris Terroir Driven Wine
• Bronze Medal – 2019 Sovereign Opal Terroir Driven Wine
• Bronze Medal – 2019 Rose Terroir Driven Wine
• Bronze Medal – 2019 Single Vineyard
Viognier Osprey Ridge Vineyard
• Bronze Medal – 2017 Single Vineyard Petit
Verdot Osprey Ridge Vineyard
• Bronze Medal – 2019 Riesling Icewine
WineAlign – Guide to Canada’s Best Wines
• 88 points – 2017 Sandhill Single Vineyard
Barbera Sandhill Estate Vineyard
• 91 points – 2017 Sandhill Single Vineyard
THREE Sandhill Estate Vineyard
• 89 points – 2017 Sandhill Single Vineyard
ONE Vanessa Vineyard
• 89 points – 2018 Sandhill Single Vineyard
Syrah Hidden Terrace Vineyard
• 88 points – 2019 Sandhill Pinot Gris Terroir Driven Wine
• 90 points – 2018 Sandhill Harvest Series Chardonnay
Sandhill Estate Vineyard Harvest Twenty Two
• 88 points – 2019 Sandhill Chardonnay Terroir Driven Wine
International East Meets West – Western Division
• Silver Medal – 2018 Smooth Red
Finger Lakes International Wine Competition
• Silver Medal – 2018 Smooth Red
• Bronze Medal – 2018 Smooth White
Tinhorn Creek Vineyards
(Okanagan Valley, BC)
Chardonnay du Monde, France
• Silver Medal – 2018 Tinhorn Creek Vineyards Chardonnay
International Wine & Spirit Competition UK
• Silver Medal – 90 points – 2017 Merlot
• Silver Medal – 90 points – 2016 Oldfield
Reserve Cabernet Franc
• Bronze Medal – 87 points – 2018 Chardonnay
• Bronze Medal – 86 points – 2018 Pinot Gris
• Bronze Medal – 86 points – 2017 Cabernet Franc
Decanter World Wine Awards, UK
• Silver Medal – 93 points – 2016 Oldfield
Reserve Cabernet Franc
• Silver Medal – 93 points – 2015 The Creek
• Silver Medal – 92 points – 2016 Oldfield Reserve Syrah
• Silver Medal – 92 points – 2016 Oldfield Reserve Merlot
• Bronze Medal – 88 points – 2018 Chardonnay
• Bronze Medal – 88 points – 2017 Cabernet Franc
• Bronze Medal – 87 points – 2017 Merlot
British Columbia Lieutenant Governor’s Wine Awards
• Silver Medal – 2018 Cabernet Franc
• Silver Medal – 2016 The Creek
• Bronze Medal – 2018 Chardonnay
• Bronze Medal – 2019 Pinot Gris
• Bronze Medal – 2018 Oldfield Reserve Cabernet Franc
WineAlign – Guide to Canada’s Best Wines
• 93 points – 2015 Tinhorn Creek The Creek TOP 10
• 92 points – 2016 Tinhorn Creek The Creek
• 92 points – 2017 Tinhorn Creek Oldfield Reserve Syrah TOP 10
• 91 points – 2017 Tinhorn Creek Oldfield Reserve Merlot TOP 10
• 90 points – 2019 Tinhorn Creek Oldfield
Reserve Sauvignon Blanc TOP 10
• 89 points – 2018 Tinhorn Oldfield Reserve Cabernet Franc
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE THREE MONTHS AND YEAR ENDED MARCH 31, 2021
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, 2021 in comparison with those for the three
months and year ended March 31, 2020 for Andrew Peller Limited (the “Company” or “APL”). This discussion is prepared
as of June 16, 2021 and should be read in conjunction with the audited annual consolidated financial statements and
accompanying notes contained therein for the years ended March 31, 2021 and 2020. Additional information relating to the
Company, including the audited annual consolidated financial statements and Annual Information Form for the years ended
March 31, 2021 and March 31, 2020, is available on www.sedar.com. The financial years ending March 31, 2021 and
March 31, 2020 are referred to as “fiscal 2021” and “fiscal 2020” 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; its launch of new premium wines and
craft beverage alcohol products; sales trends in foreign markets; its supply of domestically grown grapes; and current
economic 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 other raw
materials; fluctuations in foreign currency exchange rates; its ability to market products successfully to its anticipated
customers; the trade balance within the domestic Canadian and international wine markets; market trends; reliance on key
personnel; protection of its intellectual property rights; the economic environment; the regulatory requirements regarding
producing, marketing, advertising, and labelling of its products; the regulation of liquor distribution and retailing in Ontario;
the application of federal and provincial environmental laws; and the impact of increasing competition.
These forward-looking statements are also subject to the risks and uncertainties discussed in 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 is a leading producer and marketer of quality wines and craft beverage alcohol products in Canada. With
wineries in British Columbia, Ontario, and Nova Scotia, the Company markets wines produced from grapes grown in
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, Red Rooster, Black Hills Estate Winery, Tinhorn Creek Vineyards,
Gray Monk Estate Winery, Raven Conspiracy and Conviction. Complementing these premium brands are a number of
popularly priced varietal brands including Peller Family Vineyards, Copper Moon, Black Cellar and XOXO. Hochtaler,
Domaine D’Or, Schloss Laderheim, Royal, and Sommet are the Company’s key value priced brands. The Company imports
wines from major wine regions around the world to blend with domestic wine to craft these quality and value priced brands.
The Company also produces craft beverage alcohol products, including No Boats on Sunday ciders and seltzers, and various
beer, spirits and cream whisky products under the Wayne Gretzky No. 99 brand. With a focus on serving the needs of all
wine consumers, the Company produces and markets premium personal winemaking products through its wholly-owned
subsidiary, Global Vintners Inc. (“GVI”), the recognized leader in personal winemaking products. GVI distributes products
through over 200 authorized retailers and more than 400 independent retailers across Canada, with additional distributors in
the United States, the United Kingdom, New Zealand, Australia, and China. GVI’s award-winning premium and ultra-
ANDREW PELLER LIMITED 2021 | 7
premium winemaking brands include Winexpert, Vine Co., Apres, LE, Passport Series, On the House, Wild Grapes, DIY My
Wine Co., Island Mist and Niagara Mist. The Company owns and operates 101 well-positioned independent retail locations
in Ontario under The Wine Shop, Wine Country Vintners, and Wine Country Merchants store names. The Company also
operates Andrew Peller Import Agency and The Small Winemaker’s Collection Inc., importers and marketing agents for
premium wines from around the world.
The Company’s vision is to Pour Extraordinary into Everyday Life. The Company believes it achieves this objective by
delivering to its customers and consumers the highest quality branded wines, spirits, refreshments, beer and experiences at
the best possible value. To meet this goal, the Company invests in improvements in the quality of grapes, wines, and other
raw materials, its winemaking and distillation capabilities, sales and marketing initiatives, tourism and hospitality
experiences, and its quality management programs.
The 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, Ontario independent retail locations, grocery outlets and e-commerce platform
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 16, 2021, the Company’s Board of Directors approved a 10% increase in common share dividends. The annual
dividend on Class A Shares was increased to $0.246 per share and the dividend on Class B Shares was increased to $0.214.
The Company has consistently paid common share dividends since 1979. APL currently designates all dividends paid as
“eligible dividends” for purposes of the Income Tax Act (Canada) unless indicated otherwise.
On March 4, 2021, the Company announced its notice of intention to make a normal course issuer bid had been approved by
the Toronto Stock Exchange. Under the issuer bid the Company can purchase for cancellation up to 1,773,896 of its
outstanding Class A non-voting shares, representing 5% of the Class A shares outstanding at the time, over the ensuing
twelve months. As of June 16, 2021, the Company had not purchased any shares under the approved issuer bid.
On February 26, 2021, the Company announced it had acquired The Riverbend Inn and Vineyard in Niagara-on-the-Lake,
Ontario. This historic and well-located property, containing 17 acres of prime vineyards and a 21-room hotel and restaurant,
is situated directly adjacent to the Company’s Peller Estates Winery. Located at the corner of John Street and Niagara River
Parkway, the Georgian-style inn was opened in 2004 and has a successful and profitable track record as a destination of
choice for visitors to the Niagara Region. The Company paid $10.0 million for 100% ownership of the assets and the
property. Due to the COVID-19 pandemic, the Inn has been closed since 2020, and management expects it will reopen once
the current lockdown in Ontario has been lifted.
On February 10, 2021, the Company’s Board of Directors approved a 5% increase to the fourth quarter common share
dividend. The quarterly dividend on Class A Shares of $0.0564 per share and the dividend on Class B Shares of $0.0491 will
be payable to shareholders of record on March 31, 2021 and were paid on April 9, 2021. The Company has consistently paid
common share dividends since 1979. APL currently designates all dividends paid as “eligible dividends” for purposes of the
Income Tax Act (Canada) unless indicated otherwise.
On July 27, 2020, it was announced that the Government of Canada has agreed to repeal the federal excise duty exemption
of 100% Canadian wine by June 30, 2022. This agreement was reached due to a World Trade Organization challenge put
forward by Australia against Canadian wine measures. The federal Finance Minister has committed that the Canadian
government is prepared to support the wine industry in managing the impacts of this agreement and are actively
investigating options that align with Canada’s international trade obligations, with a view to ensuring the long-term success
of the industry. Should a permanent replacement program not be implemented, the loss of the federal excise duty exemption
would have a material adverse impact on the Company’s financial condition and results of operations. The Company, along
with its industry partners, will continue to work with the federal government to mitigate the economic impacts of the
negotiated settlement.
On June 24, 2020, Randy Powell resigned as President of the Company to pursue other interests. John Peller, Chief
Executive Officer has assumed his responsibilities.
8
| ANDREW PELLER LIMITED 2021
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
Interest
Gain on debt modification and financing fees
Net unrealized (gain) loss on derivative financial instruments
Other expenses
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)
2021
2020
2019
$ 393,036
156,518
39.8%
93,472
63,046
8,108
(2,312)
(135)
1,770
26,986
27,786
$0.65
$0.57
$0.218
$0.190
$ 382,306
166,250
43.5%
104,749
61,501
8,107
-
1,406
1,769
27,575
23,494
$0.55
$0.48
$ 0.215
$ 0.187
$ 381,796
159,008
41.6%
106,133
52,875
6,872
-
1,679
1,063
29,408
21,958
$0.51
$0.44
$0.205
$0.178
Sales for the year ended March 31, 2021 were $393.0 million, up 2.8% from the prior year. Due to the COVID-19 pandemic,
consumer purchasing patterns changed resulting in an increase in sales from the Company’s new e-commerce platform, at
provincial liquor stores and other retail channels. Partially offsetting the increase was the reduction in hospitality and
licensee sales due to COVID-19 closures and lower duty-free export sales due to restricted travel. Management believes the
highly diversified nature of its well-established network of trade channels will continue to mitigate the impact on sales from
the COVID-19 pandemic.
The Company defines gross margin as gross profit excluding amortization. Gross margin as a percentage of sales was 39.8%
for the year ended March 31, 2021 compared to 43.5% in the prior year. Gross margin in fiscal 2021 has declined as a result
of higher imported wine costs, an increase in consumption of lower margin products, revenue declines in high margin trade
channels, increased distribution costs resulting from the new e-commerce platform, and increased co-packing costs related to
the Company’s new and growing refreshment beverage categories.
Selling and administrative expenses were lower in fiscal 2021 compared to the prior year due to a deliberate effort to
conserve cash resources by temporarily reducing advertising and promotional spending and staffing levels during the
COVID-19 pandemic. As a result, as a percentage of sales, selling and administrative expenses were reduced to 23.8%
compared to 27.4% in the prior year. Going forward, as the pandemic eases and activity in the hospitality and licensee
channels increases, and the Company invests in growth opportunities, selling and administrative expenses will increase as a
percentage of sales compared to fiscal 2021.
Earnings before interest, amortization, net unrealized gains and losses on derivative financial instruments, gain on debt
modification and deferred financing fees, other (income) expenses, and income taxes (“EBITA”) were $63.0 million for the
year ended March 31, 2021, up from $61.5 million in the prior year. EBITA strengthened due primarily to the lower selling
and administrative costs.
Interest expense in fiscal 2021 was consistent compared to the prior year due to lower interest rates partially offset by higher
debt levels resulting primarily from the acquisition of the Riverbend Inn and Vineyard discussed above.
The Company amended and restated its debt facilities on December 8, 2020 (discussed below). Management has assessed
the above amendments and has determined that these amendments constitute a modification of long term debt, in accordance
with IFRS 9, which resulted in a gain on modification of $2.9 million for the year ended March 31, 2021, offset by financing
costs of $0.6 million.
ANDREW PELLER LIMITED 2021 | 9
The Company recorded a net unrealized non-cash gain in fiscal 2021 of $0.1 million related to mark-to-market adjustments
on interest rate swaps and foreign exchange contracts compared to an unrealized net loss of $1.4 million in the prior year.
The change in fiscal 2021 is primarily due to gains on interest rate swaps, partially offset by losses on 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 are expected to mitigate the short-term volatility of
changing foreign exchange and interest rates.
Net earnings for the year ended March 31, 2021 were $27.8 million or $0.65 per Class A Share compared to $23.5 million or
$0.55 per Class A Share in the prior year. Adjusted earnings, defined as net earnings not including gain on debt modification
and financing fees, net unrealized gains and losses on derivative financial instruments, other (income) expenses, and the
related income tax effect were $27.0 million for the year ended March 31, 2021 compared to $27.6 million in the prior year.
COVID-19 Pandemic
After the announcement of the COVID-19 pandemic, Canadian businesses selling beer, wine and other alcohol products
were deemed essential services, as well as those businesses that supply them. Under this provision, all of the Company’s
production facilities, retail locations and retail estate locations remained open throughout fiscal 2021 with enhanced
protocols relating to cleanliness and physical distancing. As a result, the pandemic has not negatively impacted the
Company’s operations or demand for its products and as a result, has also not negatively impacted the Company’s liquidity
position. However, uncertainty resulting from the on-going pandemic could result in an unforeseen disruption to the supply
chain or continued government-mandated closures of restaurant and hospitality businesses that could impact the Company’s
operations and results.
Quarterly Performance
The following table outlines key quarterly highlights.
(in $000, except per share amounts)
Q4 21
Q3 21
Q2 21
Q1 21
Q4 20
Q3 20
Q2 20
Q1 20
Sales
Gross margin
79,126
111,060
104,410
98,440
82,118
101,597
103,375
95,216
28,089
41,537
44,165
42,727
35,550
41,968
46,311
42,421
Gross margin (% of sales)
35.5%
37.4%
42.3%
43.4%
43.3%
41.3%
44.8%
44.6%
EBITA
Interest
Gain on debt modification and
financing fees
1,815
2,619
-
16,223
1,637
(2,312)
22,438
1,813
-
22,570
2,039
-
9,668
1,839
-
16,148
1,818
-
17,335
2,222
-
18,350
2,228
-
Net unrealized (gain) loss on financial
(495)
170
(540)
730
1,984
(646)
(497)
565
instruments
Other expenses (income)
742
148
195
685
Adjusted earnings (loss)
Net earnings (loss)
E.P.S. – Class A basic & diluted
E.P.S. – Class B basic & diluted
(6,145)
(6,328)
$(0.15)
$(0.13)
8,159
10,236
$0.24
$0.21
12,419
12,674
$0.30
$0.26
634
1,196
(996)
12,553
11,204
$0.26
$(0.02)
$0.23
$(0.02)
(57)
7,815
8,056
$0.19
$0.16
1,106
8,716
7,643
$0.18
$0.15
86
9,848
8,791
$0.20
$0.18
The second and third quarters of the Company’s fiscal year are historically the largest due to increased activity at the
Company's estate properties and increased consumer purchasing of the Company’s products during the holiday season.
However, the COVID-19 pandemic has, and may continue to cause unusual fluctuations in the Company’s results and
consequently, quarterly results may not follow historical trends.
Sales in the fourth quarter of fiscal 2021 declined to $79.1 million from $82.1 million in the prior year’s fourth quarter.
When the pandemic was announced in March 2020, the Company saw an increase in sales as a result of higher consumer
purchases due to uncertainty around trade channels for alcoholic beverages remaining open. Furthermore, given the
pandemic was not announced until March 2020, it had minimal impact on the Company’s sales channels during fiscal 2020.
In the fourth quarter of fiscal 2021, sales in hospitality and licensee channels decreased, due to COVID-19 closures and
duty-free export sales decreased due to restricted travel when compared to the fourth quarter of fiscal 2020. These decreases
10
| ANDREW PELLER LIMITED 2021
were partially offset by an increase in sales from the Company’s new e-commerce platform, at provincial liquor stores and
other retail channels.
Gross margin for the three months ended March 31, 2021 reduced to 35.5% of sales compared to 43.3% in the fourth quarter
of fiscal 2020 largely due to a change in product and channel mix due to COVID-19 as described above. Furthermore, gross
margin in the fourth quarter of fiscal 2021 has declined as a result of increased distribution costs resulting from the new e-
commerce platform and increased co-packing costs related to the Company’s new and growing refreshment beverage
categories. The Company expects margin to improve in post COVID-19 periods.
Selling and administrative expenses were higher in the fourth quarter of fiscal 2021 compared to the prior year as the
Company began to increase staffing and marketing expenses in preparation for more normal markets returning as the impact
of the COVID-19 pandemic eases. As these expenses were incurred before the majority of government-mandated closures
were lifted, the Company is expecting selling and administrative expenses as a percentage of sales to decrease in future
quarters when compared to the fourth quarter of 2021.
EBITA was $1.8 million for the three months ended March 31, 2021 compared to $9.7 million in the same quarter in fiscal
2020. EBITA was impacted in the fourth quarter of fiscal 2021 by the reduced gross margin and increased selling and
administrative expenses in the period.
The Company incurred a net loss of $6.3 million or a loss of $0.15 per Class A share for the three months ended March 31,
2021 compared to a net loss of $1.0 million or $0.02 per Class A share in the prior year.
Liquidity and Capital Resources
As at
(in $000)
Current assets
Property, plant, and equipment
Intangible assets
Goodwill
Total assets
Current liabilities
Long-term debt
Long-term derivative financial instruments
Lease obligations
Post-employment benefit obligations
Deferred income taxes
Shareholders’ equity
Total liabilities and shareholders’ equity
March 31, 2021
March 31, 2020
March 31, 2019
$ 225,302
223,931
39,650
53,638
$ 542,521
$ 54,618
174,544
717
13,987
3,316
29,765
265,574
$ 542,521
$ 214,114
221,100
25,067
53,638
$ 513,919
$ 130,460
95,515
1,932
14,802
3,649
22,038
245,523
$ 513,919
$ 196,700
199,749
16,932
53,638
$ 467,019
$ 99,395
106,879
1,008
-
4,657
20,329
234,751
$ 467,019
The change in current assets as at March 31, 2021 compared to March 31, 2020 reflects an increase in cash of
$2.7 million, an increase in inventory due to a change in sales mix and an increase in income taxes receivable, partially
offset by a decrease in trade receivables due to reduced sales in the fourth quarter. Inventory is dependent on domestically
grown grapes that are used in the sale of premium and ultra-premium wines that are held for a longer period than imported
wine. These wines are typically aged for one to three years before they are sold. The cost of producing wine from
domestically grown grapes is also significantly higher than wine purchased on international markets. Included in current
assets as at March 31, 2021 was $1.3 million reflecting the carrying value of the Company’s production facility in Port
Coquitlam British Columbia which is being held for sale.
Accounts receivable are predominantly with provincial liquor boards and, to a lesser extent, licensed establishments and
independent retailers of personal winemaking products. The Company had $16.0 million of accounts receivable with
provincial liquor boards at March 31, 2021, all of which is expected to be collectible. The balance represents amounts due
ANDREW PELLER LIMITED 2021 | 11
from licensees, export customers, and independent retailers of personal winemaking products. The amount of accounts
receivable that was 30 days past due was $0.7 million at March 31, 2021. Against these amounts an expected credit loss of
$0.3 million has been provided which the Company has determined based on a reasonable estimate of lifetime expected
credit losses for trade receivable.
Property, plant and equipment increased during the year due to additions of $20.7 million, which includes additions to land,
vineyards and building as a result of the acquisition of the Riverbend Inn & Vineyard assets, partially offset by amortization.
Intangible assets increased at March 31, 2021 compared to the prior year-end due primarily to the investment in the
Company’s new Enterprise Resource Planning (ERP) solution. The new ERP system successfully went live on
February 2, 2021 and management expects further investments in the new system to reduce going forward.
The change in current liabilities as at March 31, 2021 compared to March 31, 2020 is due primarily to a refinancing of the
Company’s long-term debt, discussed below, and a reduction in accounts payable.
On December 8, 2020 the Company amended and restated its debt facilities. Amendments include a revised maturity date of
December 8, 2024, revised financial covenants and additional tiers to the applicable margins based on the Company’s
leverage. Additionally, the total borrowing limit was increased to $350 million and combined into one revolving, interest
only facility to be used for acquisitions, day-to-day operations, distributions, and capital expenditures. The bank
indebtedness was transferred to this facility and repayment of the facility is due on maturity. As at March 31, 2021, the
applicable margin was 1.90% (2020 - 1.90%). Management assessed the above amendments and determined these
amendments constitute a modification of long term debt, which has resulted in the debt being valued at present values of
future cash flows. As a result, the Company has recorded a gain on debt modification of $2.9 million offset by financing
costs of $0.6 million during the third quarter of fiscal 2021. Overall bank debt increased to $174.5 million at March 31, 2021
from $165.2 million at March 31, 2020, due primarily to the acquisition of the assets and properties of The Riverbend Inn
and Vineyard as discussed above. The Company’s debt to equity ratio was 0.66:1 at March 31, 2021 compared to 0.67:1 at
March 31, 2020. At March 31, 2021, the Company had unutilized debt capacity in the amount of $175.5 million on its
operating facility.
Management expects to generate sufficient cash flow from operations to meet its debt servicing and working capital
requirements over both the short and long-term through continued profitability and strong management of working capital
and prioritization of capital expenditures. The Company regularly reviews all of its assets to ensure appropriate returns on
investment are being achieved and that they fit with the Company’s long-term strategic objectives.
For the year ended March 31, 2021, the Company generated cash from operating activities, after changes in non-cash
working capital items, of $41.1 million compared to $31.5 million in the prior year. Investing activities include the
acquisition of The Riverbend Inn and Vineyard for $10.0 million and $18.9 million related to capital expenditures to
implement the new ERP system that successfully went live on February 2, 2021.
Financing activities for the year ended March 31, 2021 primarily reflect the refinancing of the Company’s long-term debt as
discussed above, the payment of dividends, and principal repayment of lease obligations.
Working capital at March 31, 2021 was $170.7 million compared to $83.7 million at March 31, 2020. The increase is
primarily attributed to the refinancing of the Company’s long-term debt as discussed above. Shareholders’ equity at March
31, 2021 was $265.6 million or $6.08 per common share compared to $245.5 million or $5.63 per common share at March
31, 2020. The increase in shareholders’ equity was due to the increased net earnings in the period partially offset by the
payment of dividends.
12
| ANDREW PELLER LIMITED 2021
The following table outlines the Company’s contractual obligations as at March 31, 2021:
(in $000)
Long-term debt
Leases and royalties
Service agreements
Grape and bulk wine purchase contracts
Packaging purchase contracts
Interest rate swap
Foreign exchange forwards
Total contractual obligations
< 1
Year
-
5,893
2,448
93,344
39,702
141,387
2,030
37,038
180,455
2 – 3
Years
-
9,285
4,063
91,611
45,472
150,431
904
-
151,335
4 – 5
Years
174,640
4,904
763
58,668
-
238,975
-
-
238,975
> 5
Years
-
15,880
-
95,347
-
111,227
-
-
111,227
Total
174,640
35,962
7,274
338,970
85,174
642,020
2,934
37,038
681,992
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.
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.
Shares outstanding
Class A Shares
Class B Shares
Total
March 31, 2021
35,525,639
8,144,183
43,669,822
March 31, 2020
35,403,767
8,191,883
43,595,650
March 31, 2019
35,988,148
8,198,994
44,187,142
As discussed above, on March 4, 2021 the Company announced its notice of intention to make a normal course issuer bid
had been approved by the Toronto Stock Exchange. Under the bid the Company can purchase for cancellation up to
1,773,896 of its outstanding Class A non-voting shares, representing 5% of the Class A shares outstanding, over the ensuing
twelve months. As of June 16, 2021 the Company had not purchased any shares under the approved issuer bid.
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 consumers and customers. Over the long term the Company believes higher-priced premium wine and spirits
sales will continue to grow in Canada, generating higher margins and increased profitability compared to its lower-priced
products. The Company has also entered the spirits and craft beer categories, through its strategic alliance with Wayne
Gretzky, and has introduced ciders and seltzers through its own brand labels.
The Company has focused its product development and sales and marketing initiatives by capitalizing on alcohol
consumption trends and expects to see 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 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 key brands through all of the Company’s distribution channels will continue to receive increased marketing
and sales support.
ANDREW PELLER LIMITED 2021 | 13
From time to time the Company evaluates investment opportunities, including acquisitions, which support its strategic
direction.
The Company believes that sales will grow over the long term due to strong positioning of key brands, the continued launch
of new and innovative products in both its core wine business and in new product categories, as well as overall growth in the
Canadian beverage alcohol market. The Company expects to continue to invest in capital expenditures to improve
efficiencies, increase capacity, support its ongoing commitment to producing the highest-quality wines and spirits, and
improve productivity.
Risks and Uncertainties
The Company’s sales of wine and craft beverage alcohol products are affected by general economic conditions and social
trends such as changes in discretionary consumer spending and consumer confidence, future economic conditions, changes
to inter-provincial trade laws, tax laws, the prices of its products and health trends. During the year ended March 31, 2021,
the COVID-19 pandemic has not materially impacted the Company’s operations or demand for its products, and as a result,
has also not negatively impacted the Company’s liquidity position. The impact of the outbreak on the financial results of the
Company will continue to depend on future developments, including the duration and spread of the outbreak and its impact
on the overall economy and related advisories and restrictions. It is not possible to reliably estimate the length and severity
of these developments and conclusively quantify the impact on the financial results and condition of the Company in future
periods. Such general economic conditions have, and may continue to, impact the Company’s sales through duty-free export,
restaurant and estate property channels.
The outbreak may also have an effect on the future collectability of certain receivables, recoverability of property plant and
equipment, goodwill and intangible assets, as well as fair value of derivatives. As the duration and impact of the COVID-19
outbreak or the efficacy of the Government and Bank of Canada interventions is not known at this time, it is not possible to
reliably estimate the length and severity of these developments or quantify the impact this pandemic may have on the
financial results and condition of the Company in future periods. In response to COVID-19, the Company has implemented
working practices to address potential impacts to its operations, employees and customers and will take further measures in
the future, if required. At present, the Company has not identified any material continuity-risks specifically associated with
COVID-19.
The Government of Ontario has announced its intention to modernize the rules for selling beverage alcohol in Ontario by
expanding retail distribution in the province. This could represent a significant change to the retail landscape in Ontario with
the goal of providing more convenience and choice to consumers. While there has not been a proposal by the Government of
Ontario regarding implementation, the Company is working closely with its industry partners to mitigate the risks that this
transition may have on its financial results.
The Canadian wine market continues to be the target of low-priced imported wines from regions and countries that subsidize
wine production and grape growing as well as providing sizeable export incentives on subsidies. Many of these countries
and regions prohibit or restrict the sale of imported wine in their own domestic markets. The Company, along with other
members of the Canadian wine industry, are working with 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 sales 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 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
14
| ANDREW PELLER LIMITED 2021
decrease in production of certain products from those regions and/or result in an increase in costs. The inability to secure
premium quality grapes could impair the ability of the Company to supply certain wines to its customers. 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. Fluctuating foreign currencies may have a positive or negative impact on gross margins,
however, the Company believes the impact on gross margin will be largely offset by its continued ability to leverage scale
and successful cost control initiatives to reduce other cost of goods sold. The 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. The Company does not enter into foreign exchange contracts for trading or speculative purposes and contracts
are reviewed periodically. As at March 31, 2021, the Company has forward foreign currency contracts to buy $24.0 million
US at rates ranging between $1.24 and $1.29; $1.5 million Euro at rates ranging between $1.52 and $1.53 and $4.5 million
AUD at a rate of $1.00. These contracts mature at various dates to February 2022. Based on the Company’s forecasts for
foreign currency purchases and the amount of foreign exchange forward contracts outstanding at March 31, 2021, each one
percent change in the respective foreign currency exchange rates would not result in a material impact on the Company’s net
earnings.
The Company purchases glass, bag in box, tetra paks, and other components used for bottling and packaging. The largest
component of packaging is glass, of which there are few domestic or international suppliers. There is currently only one
commercial supplier of glass in Canada that is able to supply glass to 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 and sales through grocery
outlets remains a risk to the Company through its impact on the Company’s retail operations.
The wine industry and the domestic and international markets in which the Company operates are consolidating. This has
resulted in fewer, but larger, competitors who have increased their resources and scale. The increased competition from
these larger market 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 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 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.
ANDREW PELLER LIMITED 2021 | 15
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. The Company’s 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 the Company.
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 fourth 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 fourth-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 fourth 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.
Non-IFRS Measures
The Company utilizes EBITA (defined as earnings before interest, amortization, net unrealized gains and losses on
derivative financial instruments, gain on debt modification and deferred financing fees, other (income) expenses, and income
taxes) to measure its financial performance. EBITA is not recognized measures 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, as well as providing an indication of recurring
earnings compared to prior periods.
16
| ANDREW PELLER LIMITED 2021
The Company calculates EBITA as follows.
For the three months and year ended March 31,
(in $000)
Net earnings (loss)
Add: Interest
Income taxes
Gain on debt modification and financing fees
Amortization of plant and equipment used in production
Amortization of equipment and intangibles used in
selling and administration
Three Months
Year
2021
$ (6,328)
2,619
153
-
2,265
2,859
2020
$ (996)
1,839
621
-
2,882
2,704
2021
$ 27,786
8,108
9,667
(2,312)
10,138
8,024
2020
$ 23,494
8,107
8,971
-
10,057
7,697
Net unrealized (gain) loss on derivative financial
(495)
1,984
(135)
1,406
instruments
Other expenses
EBITA
742
634
1,770
1,769
$ 1,815
$ 9,668
$ 63,046
$ 61,501
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 utilizes gross margin (defined as sales less cost of goods sold, excluding amortization) as calculated below.
For the three months and year ended March 31,
(in $000)
Sales
Less: Cost of goods sold, excluding amortization
Gross margin
Gross margin (% of sales)
Three Months
2021
$ 79,126
51,037
2020
$ 82,118
46,568
Year
2021
$ 393,036
236,518
2020
$ 382,306
216,056
$ 28,089
$ 35,550
$ 156,518
$ 166,250
35.5%
43.3%
39.8%
43.5%
The Company calculates adjusted earnings (loss) as follows:
For the three months and year ended March 31,
Three Months
Year
(in $000)
Net earnings (loss)
Net unrealized (gain) loss on derivative financial instruments
Other expenses
Fair value adjustment for acquired inventory sold during the
period
Income tax effect of the above
Gain on debt modification and financing fees
Adjusted earnings (loss)
2021
$ (6,328)
(495)
742
-
(64)
-
2020
$ (996)
1,984
634
256
2021
$ 27,786
(135)
1,770
302
(682)
-
(425)
(2,312)
2020
$ 23,494
1,406
1,769
1,732
(826)
-
$ (6,145)
$ 1,196
$ 26,986
$ 27,575
The Company’s method of calculating EBITA, gross margin, and Adjusted earnings (loss) may differ from the methods used
by other companies and accordingly, may not be comparable to the corresponding measures used by other companies.
Transactions with Related Parties
The Company is controlled by Peller Family Enterprises Inc. (formerly, Jalger Limited), which owns 61.3% 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 Peller Family Enterprises Inc.
ANDREW PELLER LIMITED 2021 | 17
The compensation expense recorded for directors and members of the Executive Management Team of the Company is
shown below:
For the years ended March 31
(in $000)
Compensation and short-term benefits
Post-employment benefits
Stock based compensation expense
2021
$ 4,421
265
823
$ 5,509
2020
$ 4,374
266
1,613
$ 6,253
The compensation and short-term benefits expense consist 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 International Financial Reporting
Standards, as issued by the International Accounting Standards Board (“IFRS”).
Critical Accounting Estimates
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 revenue 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 and indefinite life intangible assets
Testing goodwill for impairment at least annually involves estimating the recoverable amount of the cash generating units
(CGUs) to which goodwill is allocated. This requires making assumptions about future cash flows, growth rates and
discount rates. Testing indefinite life intangible assets for impairment at least annually involves estimating the fair value
using the relief of royalty method. This requires making assumptions about royalty rates, growth rates and discount rates.
These assumptions are inherently uncertain and as such, actual amounts may vary from these assumptions and cause
significant adjustments.
Post-employment benefits
Measuring the liability for post-employment benefits requires assumptions for the discount rates, increases in compensation,
increases in medical costs and the timing of the payment of benefits. Actual amounts may vary from these assumptions and
cause significant adjustments.
Leases
Critical accounting estimates were made in determining the lease term and incremental borrowing rate. In determining the
lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension
option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the
lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant
event or a significant change in circumstances occurs which affects this assessment and that is within the control of the
lessee.
In determining the carrying amount of right-of-use assets and lease liabilities, the Company is required to estimate the
incremental borrowing rate specific to each leased asset or portfolio of leased assets if the interest rate implicit in the lease is
not readily determined. Management determines the incremental borrowing rate of each leased asset or portfolio of leased
assets by using the Company’s specific risk portfolio, the security, term and value of the underlying leased asset, and the
economic environment in which the leased asset operates in. The incremental borrowing rates are subject to change mainly
due to macroeconomic changes in the environment.
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| ANDREW PELLER LIMITED 2021
Recently adopted accounting pronouncements
IAS 1, Presentation of Financial Statements; IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors
These standards have been amended to use a consistent definition of materiality throughout all accounting standards, clarify
the explanation of the definition of material and incorporate some of the guidance in IAS 1 about immaterial information.
The amendments are effective for annual periods beginning on or after January 1, 2020. The adoption of these amendments
did not have a significant impact on the consolidated financial statements.
IFRS 3, Business Combinations
This standard has been amended to improve the definition of a business. The amendments will help companies determine
whether an acquisition made is of a business or a group of assets. To be considered a business, an acquisition would have to
include an input and a substantive process that together significantly contribute to the ability to create outputs. The
amendments are effective for annual periods beginning on or after January 1, 2020. The adoption of these amendments did
not have a significant impact on the consolidated financial statements.
Recently issued accounting pronouncements
IFRS 16, Leases
This standard has been amended to provide lessees with an optional exemption from assessing whether a rent concession
related to COVID-19 is a lease modification. This amendment is effective for annual periods beginning on or after June 1,
2020. At this time, the Company has not received rent concessions related to COVID-19 and therefore, this amendment is
not expected to have a significant impact on the consolidated financial statements.
London Inter-bank Offered Rate (LIBOR) Reform with Amendments to IFRS 9, Financial Instruments, IFRS 7, Financial
Instruments: Disclosures and IFRS 16
In August 2020, the IASB issued Interest Rate Benchmark Reform Phase 2 (the “Reform Phase 2”), which complemented
the Reform Phase 1 and amended various standards requiring interest rates or interest rate calculations. The Reform Phase 2
provides guidance on the impacts on the financial statements after the LIBOR reform and its replacement with alternative
benchmark rates. The amendments are effective for annual periods beginning on or after January 1, 2021. The Company has
not yet assessed the impact of the amendments on the consolidated financial statements.
IAS 16, Property, Plant and Equipment
This standard has been amended to prohibit an entity from deducting from the cost of an item of property, plant and
equipment any proceeds received from selling items produced while the entity is preparing the asset for its intended use,
clarify that an entity is “testing whether the asset is functioning properly” when it assesses the technical and physical
performance of the asset and require certain related disclosures. The amendments are effective for annual periods beginning
on or after January 1, 2022. The Company has not yet assessed the impact of the amendments on the consolidated financial
statements.
IAS 37, Provisions
This standard has been amended to clarify that, before a separate provision for an onerous contract is established, an entity
recognizes an impairment loss that has occurred on assets used in fulfilling the contract, rather than on assets dedicated to
that contract and to clarify the meaning of costs to fulfill a contract. The amendments are effective for annual periods
beginning on or after January 1, 2022. The Company has not yet assessed the impact of the amendments on the consolidated
financial statements.
IFRS 9, Financial Instruments
This standard has been amended to address which fees should be included in the 10% test for derecognition of financial
liabilities. This amendment is effective for annual periods beginning on or after January 1, 2022. The Company has not yet
assessed the impact of the amendment on the consolidated financial statements.
IAS 1, Presentation of Financial Statements
This standard has been amended to clarify that liabilities are classified as either current or non-current depending on the
rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after
the reporting date. The amendment also clarifies the meaning of settlement of a liability. This amendment is effective for
annual periods beginning on or after January 1, 2023. The Company has not yet assessed the impact of the amendment on
the consolidated financial statements.
ANDREW PELLER LIMITED 2021 | 19
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 Officer (“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”. As at June 16, 2021, the CEO and CFO of the Company
have evaluated the effectiveness of the disclosure controls and procedures. Based on these evaluations, the CEO and CFO
have concluded that the controls and procedures were operating effectively.
Internal Controls over Financial Reporting
Internal controls over financial reporting are procedures 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 preparation. Designing, establishing and maintaining
adequate internal controls over financial reporting is the responsibility of management. Internal controls over financial
reporting is a process designed by, or under the 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, 2021, 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 16, 2021, 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.
20
| ANDREW PELLER LIMITED 2021
Independent auditor’s report
To the Shareholders of Andrew Peller Limited
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial
position of Andrew Peller Limited and its subsidiaries (together, the Company) as at March 31, 2021 and 2020, and its
financial performance and its cash flows for the years then ended in accordance with International Financial Reporting
Standards as issued by the International Accounting Standards Board (IFRS).
What we have audited
The Company’s consolidated financial statements comprise:
the consolidated balance sheets as at March 31, 2021 and 2020;
the consolidated statements of earnings for the years then ended;
the consolidated statements of comprehensive income for the years then ended;
the consolidated statements of changes in equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
the notes to the consolidated financial statements, which include significant accounting policies and other explanatory
information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section
of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the
consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these
requirements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements for the year ended March 31, 2021. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
ANDREW PELLER LIMITED 2021 | 21
Key audit matter
Costing of bulk wine and spirits inventory
Refer to Note 2 – Summary of significant accounting policies
and Note 4 – Inventories to the consolidated financial
statements.
The total value of bulk wine and spirits amounted to $81.7
million as at March 31, 2021. The Company carries bulk
wine and spirits inventory on an average cost basis. The
weighted average costs are determined separately for import
wine, domestic wine and spirits for each varietal and vintage
year.
We considered this a key audit matter due to the magnitude
of the bulk wine and spirits inventory balance and the high
degree of audit effort in performing procedures related to
evaluating management’s calculation of average costs.
How our audit addressed the key audit matter
Our approach to addressing the matter involved the
following procedures, amongst others:
Tested the operating effectiveness of controls relating to
management’s bulk wine and spirits inventory costing
process, including controls over the review of the inputs
in the calculation of average costing and approval of
bulk wine and spirit inventory costs.
On a sample basis of bulk wine and spirits inventory
items, tested the underlying inputs in the calculation of
weighted average cost against supporting third party
support, evidence of payment and the allocation of
internal overhead costs.
Performed a reconciliation of total domestic bulk wine
purchases made during the year to the carrying value of
domestic bulk wine inventory and performed testing
over any significant reconciling items.
Tested the mathematical accuracy of the weighted
average cost calculation.
Attended and observed inventory counts or obtained
third party confirmations for significant locations to test
the existence and accuracy of the quantity of bulk wine
and spirits inventory as an input to the weighted average
costs calculations.
Other information
Management is responsible for the other information. The other information comprises the Management’s Discussion and
Analysis, which we obtained prior to the date of this auditor’s report and the information, other than the consolidated
financial statements and our auditor’s report thereon, included in the annual report, which is expected to be made available
to us after that date.
Our opinion on the consolidated financial statements does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report,
we conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard. When we read the information, other than the consolidated financial statements and our
auditor’s report thereon, included in the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with governance.
Responsibilities of management and those charged with governance for the consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance
with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
22
| ANDREW PELLER LIMITED 2021
In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative
but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal
control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a
going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
ANDREW PELLER LIMITED 2021 | 23
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
The engagement partner on the audit resulting in this independent auditor’s report is John Donnelly.
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Ontario
June 16, 2021
24
| ANDREW PELLER LIMITED 2021
Consolidated Balance Sheets
As at March 31, 2021 and 2020
(in thousands of Canadian dollars)
Assets
Current assets
Cash
Accounts receivable (note 20)
Inventories (note 4)
Biological assets (note 6)
Prepaid expenses and other assets
Income taxes receivable
Derivative financial instruments (note 20)
Assets held for sale (note 5)
Property, plant and equipment (notes 5 and 10)
Intangible assets (note 7)
Goodwill (note 8)
Liabilities
Current liabilities
Bank indebtedness (note 11)
Accounts payable and accrued liabilities (note 9)
Dividends payable
Lease obligations (note 10)
Derivative financial instruments (note 20)
Long-term debt (note 11)
Long-term debt (note 11)
Long-term derivative financial instruments (note 20)
Lease obligations (note 10)
Post-employment benefit obligations (note 12)
Deferred income taxes (note 13)
Shareholders’ Equity
Capital stock (note 14)
Contributed surplus (note 15)
Retained earnings
Accumulated other comprehensive loss
2021
$
2020
$
2,737
28,896
178,727
2,815
4,879
5,973
-
1,275
225,302
223,931
39,650
53,638
542,521
-
46,487
2,404
3,826
1,901
-
54,618
174,544
717
13,987
3,316
29,765
276,947
27,020
4,950
236,773
(3,169)
265,574
542,521
-
34,096
170,779
1,951
3,998
1,232
783
1,275
214,114
221,100
25,067
53,638
513,919
58,114
53,821
2,288
3,018
1,604
11,615
130,460
95,515
1,932
14,802
3,649
22,038
268,396
26,014
4,834
218,263
(3,588)
245,523
513,919
Contingent liabilities and unrecognized contractual commitments (note 18)
Events after the reporting period (note 24)
The accompanying notes are an integral part of these consolidated financial statements.
Director
Director
ANDREW PELLER LIMITED 2021 | 25
Consolidated Statements of Earnings
For the years ended March 31, 2021 and March 31, 2020
(in thousands of Canadian dollars, except per share amounts)
Sales
Cost of goods sold, excluding amortization (note 16)
Amortization of plant and equipment used in production
Gross profit
Selling and administration (note 16)
Amortization of equipment and intangible assets used in selling and
administration
Interest
Gain on debt modification and financing fees (note 11)
Net unrealized (gain) loss on derivative financial instruments (note 20)
Other expense (note 16)
Earnings before income taxes
Income taxes (note 13)
Current
Deferred
2021
$
393,036
236,518
10,138
2020
$
382,306
216,056
10,057
146,380
156,193
93,472
104,749
8,024
8,108
(2,312)
(135)
1,770
7,697
8,107
-
1,406
1,769
108,927
123,728
37,453
32,465
2,091
7,576
9,667
7,456
1,515
8,971
Net earnings for the year
27,786
23,494
Net earnings per share (note 17)
Basic and diluted
Class A shares
Class B shares
0.65
0.57
0.55
0.48
The accompanying notes are an integral part of these consolidated financial statements.
26
| ANDREW PELLER LIMITED 2021
Consolidated Statements of Comprehensive Income
For the years ended March 31, 2021 and March 2020
(in thousands of Canadian dollars)
Net earnings for the year
Items that are never reclassified to net earnings
Net actuarial gains on post-employment benefit plans (note 12)
Deferred income taxes (note 13)
Other comprehensive income for the year
2021
$
2020
$
27,786
23,494
570
(151)
419
822
(214)
608
Net comprehensive income for the year
28,205
24,102
The accompanying notes are an integral part of these consolidated financial statements.
ANDREW PELLER LIMITED 2021 | 27
Consolidated Statements of Changes in Equity
For the years ended March 31, 2021 and March 31, 2020
(in thousands of Canadian dollars)
Capital
stock
$
Contributed
surplus
$
Retained
earnings
$
Accumulated
other
comprehensive
loss
$
Total
shareholders’
equity
$
Balance at April 1, 2019
26,330
2,737
209,825
(4,141)
234,751
Net comprehensive income for the
year
Exercise of DSUs and issuance of
Class A non-voting shares
(notes 14 and 15)
Cancellation of post-retirement
benefit arrangement (note 12)
Repurchase and cancellation of Class
A non-voting shares (note 14)
Share-based compensation (note 15)
Dividends (Class A $0.215 per share,
Class B $0.187 per share)
-
-
23,494
608
24,102
115
(115)
-
-
(5,810)
-
75
-
2,137
-
(9,246)
-
(431)
-
-
-
(55)
-
-
-
-
20
(6,241)
2,137
(9,246)
Balance at March 31, 2020
26,014
4,834
218,263
(3,588)
245,523
Net comprehensive income for the
year
Exercise of share awards and
issuance of Class A non-voting
shares (notes 14 and 15)
Share-based compensation (note 15)
Dividends (Class A $0.218 per share,
Class B $0.190 per share)
-
-
27,786
419
28,205
1,006
-
(1,006)
1,122
-
-
-
-
(9,276)
-
-
-
-
1,122
(9,276)
Balance at March 31, 2021
27,020
4,950
236,773
(3,169)
265,574
The accompanying notes are an integral part of these consolidated financial statements.
28
| ANDREW PELLER LIMITED 2021
Consolidated Statements of Cash Flows
For the years ended March 31, 2021 and March 31, 2020
(in thousands of Canadian dollars)
Cash provided by (used in)
Operating activities
Net earnings for the year
Adjustments for non-cash items
Loss on disposal of property, plant and equipment and intangible assets
Amortization of plant, equipment and intangible assets
Amortization of deferred financing fees
Interest expense
Income taxes
Net unrealized (gain) loss on derivative financial instruments
Gain on debt modification
Share-based compensation expense
Post-employment benefits
Interest paid
Income taxes paid
Change in non-cash working capital items related to operations (note 19)
Investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Financing activities
Increase in bank indebtedness (note 11)
Repayment of lease obligations
Drawings on long-term debt (note 11)
Repayment of long-term debt (note 11)
Deferred financing fees paid (note 11)
Repurchase of Class A shares
Dividends paid
Increase in cash during the year
Cash – Beginning of year
Cash – End of year
Supplementary information
Property, plant and equipment acquired that were unpaid in cash and included in
accounts payable and accrued liabilities
Intangible assets acquired that were unpaid in cash and included in accounts payable
and accrued liabilities
2021
$
2020
$
27,786
23,494
677
18,162
10
8,098
9,667
(135)
(2,861)
937
237
(7,076)
(6,832)
48,670
(7,551)
729
17,754
251
7,856
8,971
1,406
-
1,876
(186)
(8,208)
(10,165)
43,778
(12,235)
41,119
31,543
(17,651)
(18,888)
(17,699)
(5,609)
(36,539)
(23,308)
-
(3,812)
76,620
(64,836)
(655)
-
(9,160)
(1,843)
2,737
-
2,737
61
1,478
19,939
(3,022)
-
(9,741)
-
(6,241)
(9,170)
(8,235)
-
-
-
1,360
4,270
The accompanying notes are an integral part of these consolidated financial statements.
ANDREW PELLER LIMITED 2021 | 29
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2021 and March 31, 2020
(in thousands of Canadian dollars, except per share amounts)
1 Nature of operations
Andrew Peller Limited (the Company) produces and markets wine, spirits, craft beer 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.
During the year ended March 31, 2021, the COVID-19 pandemic has not materially impacted the Company’s
operations or demand for its products, and as a result, has also not negatively impacted the Company’s liquidity
position. The Company continues to generate operating cash flows to meet short-term liquidity needs. However,
uncertainty resulting from the ongoing pandemic could result in an unforeseen disruption to the supply chain or
continued government-mandated closures of restaurant and hospitality businesses that could impact the Company’s
operations and results.
2
Summary of significant accounting policies
Basis of presentation
These consolidated financial statements have been prepared in compliance with International Financial Reporting
Standards as issued by the International Accounting Standards Board (IFRS).
These consolidated financial statements were approved by the Board of Directors for issuance on June 16, 2021.
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, including
Canrim Packaging Limited, Global Vintners Inc., Riverbend Inn & Winery Inc., Sandhill Vineyards Ltd. and Small
Winemakers Collections Inc., all of which are wholly-owned by Andrew Peller Limited. 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.
Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred by the Company
is measured as the fair value of assets transferred and equity instruments issued at the date of completion of the
acquisition. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at fair
value at the acquisition date. The excess of the consideration transferred over the fair value of the net assets acquired is
recorded as goodwill. If the consideration transferred is less than the net assets acquired, the difference is recognized
directly in the consolidated statements of earnings as a gain on acquisition. Results of operations of a business acquired
are included in the Company’s consolidated financial statements from the date of the business acquisition. Acquisition
costs incurred are expensed and included in selling and administrative expenses.
30
| ANDREW PELLER LIMITED 2021
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.
Revenue
Revenue is derived from the sale of goods and is recognized at a point in time when the performance obligation is
fulfilled. For sales to consumers through retail stores, winery restaurants and estate wineries, the performance
obligation is deemed fulfilled when the product is purchased. For sales transactions with provincial liquor boards,
licensee retail stores and wine kit retailers, the Company’s performance obligation is fulfilled when the product is
shipped from the Company’s distribution facilities.
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 the selling price to determine the transaction price at which revenue
is recognized. Expected product returns and breakage are estimated based on historical actuals as a percentage of sales.
Deferred revenue represents amounts paid by customers in advance of the purchase of products which typically takes
the form of pre-loaded gift cards. The amounts received are recorded as deferred revenue within accounts payable and
accrued liabilities on the consolidated balance sheets. Once a gift card is redeemed to make a purchase, the liability is
relieved and revenue is recognized.
The Company also enters into arrangements with third parties for the sale of products to customers. When the terms of
the arrangement are such that the Company is acting as an agent of the third party, revenue is recognized in the amount
of the commission to which the Company is entitled in exchange for arranging for the third party to provide its goods to
customers.
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 spirits
and finished goods). Average cost is determined separately for import wine, domestic wine and spirits 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 and spirit 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
ANDREW PELLER LIMITED 2021 | 31
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.
Biological assets
The Company measures biological assets, consisting of grapes grown on vineyards controlled by the Company, at fair
value, which approximates cost 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 and 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 – indefinite life
Brands – finite life
Customer contracts and lists
Contract packaging
Software
Amortization
method
n/a
straight-line
straight-line
straight-line
straight-line
Useful life
indefinite
2 years
10 – 20 years
10 years
5 – 15 years
Remaining
useful life
indefinite
none
3 – 15 years
none
3 – 15 years
Certain of the Company’s 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 the amount of royalty the Company would have
had to pay in an arm’s length licensing arrangement to secure access to the same rights to its carrying value. If
necessary, the fair value is also considered. An impairment charge is recorded to the extent the carrying value exceeds
the fair value. Management has determined there was no impairment in intangible assets for the years ended March 31,
2021 and 2020.
Certain of the Company’s brands have a finite life based on the remaining expected usage. Therefore, amortization for
these brands is being recorded on a straight-line basis over the remaining period of expected usage.
Where the Company incurs costs to configure and customize cloud computing software, the costs incurred are
capitalized and amortized over the useful life only if the expenditures meet the recognition criteria of IAS 38,
Intangible Assets.
32
| ANDREW PELLER LIMITED 2021
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 cash generating unit (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, 2021 and 2020.
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 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 income (loss) in the period in which they arise. The
corresponding change in shareholders’ equity is adjusted to retained earnings for the year.
Financial instruments and hedge accounting
Financial assets and liabilities are initially recorded at fair value including, where permitted by IFRS 9, Financial
Instruments (IFRS 9), any directly attributable transaction costs. For those financial assets that are not subsequently
held at fair value, the Company assesses whether there is evidence of impairment at each consolidated balance sheet
dates.
The Company classifies its financial assets and liabilities into the following categories: financial assets and liabilities at
amortized cost and financial assets and liabilities at fair value through profit or loss.
Expected credit losses on financial assets carried at amortized cost are assessed on a forward-looking basis. The
impairment methodology applied depends on whether there has been a significant increase in credit risk. The loss
allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Company
uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on past
history, existing market conditions as well as forward-looking estimates at the end of each reporting period.
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.
Leases
Leases are recognized as a right-of-use asset within property, plant and equipment and a corresponding lease liability at
the date at which the leased asset is available for use by the Company. Each lease payment is allocated between the
repayment of the principal portion of lease liability and the interest portion. The interest expense is charged to the
ANDREW PELLER LIMITED 2021 | 33
consolidated statements of earnings over the lease period so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
Fixed payments, including in-substance fixed payments, less any lease incentives receivable;
Variable lease payments that are based on an index or a rate;
Amounts expected to be payable by the lessee under residual value guarantees;
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
Payment of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the
lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
Payments associated with variable lease payments not based on an index or a rate, short-term leases and leases of low
value assets are recognized on a straight-line basis as an expense in the consolidated statements of earnings.
Right-of-use assets are included in property, plant and equipment in the consolidated balance sheets and are measured
at cost comprising the following:
The amount of the initial measurement of the lease liability;
Any lease payments made at or before the commencement date, less any lease incentives received;
Any initial direct costs; and
Restoration costs.
The right-of-use assets are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line
basis. Right-of-use assets are subject to impairment. Amortization of right-of-use vineyard land, buildings and
machinery and equipment is as follows:
Vineyard land
Buildings
Machinery and equipment
Impairment of non-financial assets
2 – 29 years
3 – 10 years
2 – 6 years
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 recoverable amount. The recoverable amount is the greater of the CGU’s fair
value less costs to dispose and its value in use, determined by discounting expected cash flows. An impairment loss is
reversed if there is a reversal in circumstances that led to the impairment and 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.
34
| ANDREW PELLER LIMITED 2021
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, spirits, craft beer and wine related 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, substantially all of
the Company’s sales are made in Canada. As a result, management has concluded the Company operates in one
geographic segment.
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
recorded in net earnings and other comprehensive income (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 income (loss). Other comprehensive
income (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 records actuarial gains and losses on defined benefit
pension plans and other post-employment benefit plans in other comprehensive income (loss) in the period incurred.
Equity
The Company separately presents changes in equity related to capital stock, contributed surplus, retained earnings and
accumulated other comprehensive income (loss) in the consolidated statements of changes in equity.
Share-based compensation
The Company grants stock options, performance share units (PSUs) and deferred share units (DSUs) to employees and
directors under its share-based compensation plan. All share-based compensation arrangements are equity-settled in
Class A non-voting common shares.
ANDREW PELLER LIMITED 2021 | 35
Equity-settled share-based payments to employees are measured at the fair value of the equity instrument granted. An
option valuation model (Black-Scholes) is used to fair value stock options issued on the date of grant.
The grant date fair value of equity-settled share-based awards is recognized as compensation expense with a
corresponding increase in equity reserves over the related service period provided to the Company. The total amount of
expense recognized in profit or loss is determined by reference to the fair value of the options granted or share awards,
which factors in the number of options expected to vest. Equity-settled share-based payment transactions are not
remeasured once the grant date fair value has been determined, except in cases where the share-based payment is linked
to non-market performance conditions. Stock options vest in tranches (graded vesting) and, accordingly, the expense is
recognized in vesting tranches. PSUs vest in full at the end of the third fiscal year after the date of grant and,
accordingly, the expense is recognized evenly over the vesting period. DSUs vest immediately and, accordingly, the
expense is recognized in full at the date of grant.
Compensation expense is recognized over the applicable vesting period by increasing contributed surplus based on the
number of awards expected to vest. At the end of each reporting period, the Company revises its estimates of the
number of awards that are expected to vest based on the non-market performance vesting conditions. The Company
recognizes the impact of the revision to original estimates, if any, in the consolidated statements of earnings, with a
corresponding adjustment to contributed surplus.
Recently adopted accounting pronouncements
IAS 1, Presentation of Financial Statements (IAS 1), and IAS 8, Accounting Policies, Changes in Accounting Estimates
and Errors
These standards have been amended to use a consistent definition of materiality throughout all accounting standards,
clarify the explanation of the definition of material and incorporate some of the guidance in IAS 1 about immaterial
information. The amendments are effective for annual periods beginning on or after January 1, 2020. The adoption of
these amendments did not have a significant impact on the consolidated financial statements.
IFRS 3, Business Combinations
This standard has been amended to improve the definition of a business. The amendments will help companies
determine whether an acquisition made is of a business or a group of assets. To be considered a business, an acquisition
would have to include an input and a substantive process that together significantly contribute to the ability to create
outputs. The amendments are effective for annual periods beginning on or after January 1, 2020. The adoption of these
amendments did not have a significant impact on the consolidated financial statements.
Recently issued accounting pronouncements
IFRS 16, Leases (IFRS 16)
This standard has been amended to provide lessees with an optional exemption from assessing whether a rent
concession related to COVID-19 is a lease modification. This amendment is effective for annual periods beginning on
or after June 1, 2020. At this time, the Company has not received rent concessions related to COVID-19 and therefore,
this amendment is not expected to have a significant impact on the consolidated financial statements.
London Inter-bank Offered Rate (LIBOR) reform with amendments to IFRS 9, IFRS 7, Financial Instruments:
Disclosures and IFRS 16
In August 2020, the IASB issued Interest Rate Benchmark Reform Phase 2 (the Reform Phase 2), which complemented
the Reform Phase 1 and amended various standards requiring interest rates or interest rate calculations. The Reform
Phase 2 provides guidance on the impacts on the financial statements after the LIBOR reform and its replacement with
alternative benchmark rates. The amendments are effective for annual periods beginning on or after January 1, 2021.
The Company has not yet assessed the impact of the amendments on the consolidated financial statements.
IAS 16, Property, Plant and Equipment
This standard has been amended to prohibit an entity from deducting from the cost of an item of property, plant and
equipment any proceeds received from selling items produced while the entity is preparing the asset for its intended
use, clarify that an entity is “testing whether the asset is functioning properly” when it assesses the technical and
physical performance of the asset and require certain related disclosures. The amendments are effective for annual
36
| ANDREW PELLER LIMITED 2021
periods beginning on or after January 1, 2022. The Company has not yet assessed the impact of the amendments on the
consolidated financial statements.
IAS 37, Provisions
This standard has been amended to clarify that, before a separate provision for an onerous contract is established, an
entity recognizes an impairment loss that has occurred on assets used in fulfilling the contract, rather than on assets
dedicated to that contract and to clarify the meaning of costs to fulfill a contract.
The amendments are effective for annual periods beginning on or after January 1, 2022. The Company has not yet
assessed the impact of the amendments on the consolidated financial statements.
IFRS 9, Financial Instruments
This standard has been amended to address which fees should be included in the 10% test for derecognition of financial
liabilities. This amendment is effective for annual periods beginning on or after January 1, 2022. The Company has not
yet assessed the impact of the amendment on the consolidated financial statements.
IAS 1, Presentation of Financial Statements
This standard has been amended to clarify that liabilities are classified as either current or non-current depending on the
rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events
after the reporting date. The amendment also clarifies the meaning of settlement of a liability. This amendment is
effective for annual periods beginning on or after January 1, 2023. The Company has not yet assessed the impact of the
amendment on the consolidated financial statements.
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 and indefinite life intangible assets
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 and discount rates.
Testing indefinite life intangible assets for impairment at least annually involves estimating the fair value using the
relief of royalty method. This requires making assumptions about royalty rates, growth rates and discount rates. These
assumptions are inherently uncertain and as such, actual amounts may vary from these assumptions and cause
significant adjustments. Refer to note 8 for further information.
Post-employment benefits
Measuring the liability for post-employment benefits requires assumptions for the discount rates, increases in
compensation, increases in medical costs and the timing of the payment of benefits. Actual amounts may vary from
these assumptions and cause significant adjustments.
Leases
Critical accounting estimates were made in determining the lease term and incremental borrowing rate. In determining
the lease term, management considers all facts and circumstances that create an economic incentive to exercise an
extension option, or not exercise a termination option. Extension options (or periods after termination options) are only
included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is
reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is
within the control of the lessee.
ANDREW PELLER LIMITED 2021 | 37
In determining the carrying amount of right-of-use assets and lease liabilities, the Company is required to estimate the
incremental borrowing rate specific to each leased asset or portfolio of leased assets if the interest rate implicit in the
lease is not readily determined. Management determines the incremental borrowing rate of each leased asset or
portfolio of leased assets by using the Company’s specific risk portfolio, the security, term and value of the underlying
leased asset and the economic environment in which the leased asset operates. The incremental borrowing rates are
subject to change mainly due to macroeconomic changes in the environment.
4
Inventories
Packaging materials and supplies
Bulk wine and spirits
Finished goods
2021
$
12,791
81,718
84,218
2020
$
11,513
88,921
70,345
178,727
170,779
Interest included in the cost of inventories
1,203
1,697
Inventory writedowns recognized as an expense amounted to $3,523 (2020 – $2,033).
The cost of inventories recognized as an expense and included in cost of goods sold, excluding amortization, was
$232,995 (2020 – $214,023).
5
Property, plant and equipment
Vines, vineyard
land and
infrastructure
Machinery
and
equipment
Buildings
$
$
$
Land
$
Total
$
At March 31, 2019
Cost
Accumulated amortization
35,801
-
48,047
(12,915)
88,785
(23,204)
151,289
(88,054)
323,922
(124,173)
Net carrying amount
35,801
35,132
65,581
63,235
199,749
Year ended March 31, 2020
Right-of-use assets capitalized on
adoption of IFRS 16
Additions
Assets held for sale
Disposals
Amortization
-
-
(275)
-
-
7,176
956
-
-
(3,895)
9,009
11,083
(1,000)
(116)
(4,759)
1,473
9,785
-
(515)
(7,571)
17,658
21,824
(1,275)
(631)
(16,225)
Closing net carrying amount
35,526
39,369
79,798
66,407
221,100
At March 31, 2020
Cost
Accumulated amortization
35,526
-
56,179
(16,810)
107,161
(27,363)
156,823
(90,416)
355,689
(134,589)
Net carrying amount
35,526
39,369
79,798
66,407
221,100
38
| ANDREW PELLER LIMITED 2021
Year ended March 2021
Additions
Disposals
Amortization
Vines, vineyard
land and
infrastructure
Machinery
and
equipment
Buildings
$
$
$
Total
$
1,301
(86)
(3,100)
6,027
(692)
(5,239)
8,921
(421)
(8,310)
20,679
(1,199)
(16,649)
Land
$
4,430
-
-
Closing net carrying amount
39,956
37,484
79,894
66,597
223,931
At March 31, 2021
Cost
Accumulated amortization
39,956
-
57,293
(19,809)
112,189
(32,295)
164,710
(98,113)
374,148
(150,217)
Net carrying amount
39,956
37,484
79,894
66,597
223,931
Included in buildings and machinery and equipment are assets amounting to $1,831 (2020 – $8,678) that are under
development and are not being amortized.
Contractual commitments to purchase property, plant and equipment were $3,871 as at March 31, 2021 (2020 –
$1,235).
During 2020, the Company listed for sale plant assets in Port Coquitlam, British Columbia, as a result of the
consolidation of production assets. The assets listed for sale have a net book value of $1,275, and the Company intends
to close the transaction during the fiscal year ending March 31, 2022.
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, 2021, the Company harvested grapes valued at $8,419 (2020 – $9,402).
The changes in the carrying amount of biological assets are as follows:
Carrying amount – Beginning of year
Net increase in fair value less costs to sell due to biological
transformation
Transferred to inventory on harvest
Biological assets
2021
$
1,951
9,283
(8,419)
2,815
2020
$
1,736
9,617
(9,402)
1,951
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.
ANDREW PELLER LIMITED 2021 | 39
7
Intangible assets
Brands –
indefinite
life
$
Brands –
finite life
$
Customer
contracts
and lists
$
Contract
packaging
$
Software
$
Other
$
Total
$
At March 31, 2019
Cost
Accumulated amortization
and impairment
10,239
375
12,827
1,100
4,202
1,917
30,660
(200)
(125)
(8,036)
(1,100)
(2,451)
(1,816)
(13,728)
Net carrying amount
10,039
250
4,791
Year ended March 31,
2020
Additions
Disposal
Amortization
Closing net carrying
amount
At March 31, 2020
Cost
Accumulated amortization
and impairment
Year ended March 31,
2021
Additions
Amortization
Closing net carrying
amount
At March 31, 2021
Cost
Accumulated amortization
and impairment
-
-
-
-
-
(250)
-
-
(820)
10,039
-
3,971
-
-
-
-
-
1,751
101
16,932
9,879
(215)
(459)
-
-
-
9,879
(215)
(1,529)
10,956
101
25,067
10,239
375
12,827
1,100
13,832
1,917
40,290
(200)
(375)
(8,856)
(1,100)
(2,876)
(1,816)
(15,223)
-
-
-
-
3,971
-
(611)
3,360
-
-
-
-
10,956
101
25,067
16,096
(902)
-
-
16,096
(1,513)
26,150
101
39,650
-
-
10,039
10,239
375
12,827
1,100
29,928
1,917
56,386
(200)
(375)
(9,467)
(1,100)
(3,778)
(1,816)
(16,736)
Net carrying amount
10,039
Net carrying amount
10,039
-
3,360
-
26,150
101
39,650
Contractual commitments to purchase software were $1,269 as at March 31, 2021 (2020 – $3,805).
Included in software are assets amounting to $404 (2020 – $9,351) that are under development and are not being
amortized.
40
| ANDREW PELLER LIMITED 2021
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
2021
$
3,134
26,695
23,809
53,638
2020
$
3,134
26,695
23,809
53,638
The Company determined the recoverable amount of the related CGUs by estimating their value in use. The weighted
average key assumptions used are:
Discount rate
Period of projected cash flows
Gross profit percentage, excluding amortization
Growth rate beyond period of projected cash flows
2021
2020
10.4%
5 years
42.8%
3.6%
9.1%
5 years
44.0%
3.3%
The Company uses past experience and current expectations about future performance in projecting cash flows,
including the impact of COVID-19, 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 recoverable amount of each CGU is sensitive to changes in market conditions and could result in changes in the
carrying value of goodwill in the future. Sensitivity analysis was performed for each CGU by changing the following
key assumptions: discount rate, gross profit percentage and the growth rate beyond the period of projected cash flows.
Each key assumption was changed independently while holding all other assumptions constant and does not
contemplate management’s ability to mitigate against any adverse effects that may arise in the future. Changing the key
assumptions for the projected cash flows by 100 basis points would not result in an impairment of the Company’s
CGUs.
ANDREW PELLER LIMITED 2021 | 41
9 Accounts payable and accrued liabilities
Trade payables
Accrued liabilities
Deferred revenue
2021
$
24,796
20,444
1,247
46,487
10 Right-of-use assets and lease obligations
Leases are included as part of property, plant and equipment in the consolidated balance sheets as follows:
Vineyard
land
$
7,176
-
-
(517)
Buildings
$
9,009
3,103
(116)
(2,327)
Machinery
and
equipment
$
1,473
198
-
(448)
6,659
9,669
1,223
17,551
522
(86)
(517)
1,435
(195)
(2,713)
2,370
(247)
(1,109)
4,327
(528)
(4,339)
6,578
8,196
2,237
17,011
At April 1, 2019
Additions
Terminations
Amortization
Closing net carrying
amount as at March
31, 2020
Year ended March 31,
2021
Additions
Terminations
Amortization
Closing net carrying
amount as at March
31, 2021
2020
$
34,250
18,608
963
53,821
Total
$
17,658
3,301
(116)
(3,292)
42
| ANDREW PELLER LIMITED 2021
The lease obligations transactions during the year were as follows:
Lease obligations
Balance – Beginning of year
Additions
Terminations
Repayments
Interest
Balance – End of year
Less: Current portion of lease obligations
2021
$
17,820
4,327
(522)
(4,674)
862
17,813
3,826
2020
$
17,658
3,301
(117)
(3,859)
837
17,820
3,018
Lease obligations
13,987
14,802
Expenses related to leases with variable consideration amounting to $1,981 (2020 – $1,759) and short-term leases and
low value leases amounting to $501 (2020 – $595) were recorded within selling and administration expenses. The total
cash outflows relating to leases during the year were $7,156 (2020 – $6,213).
Some property leases contain variable payment terms that are linked to sales generated from a store. For individual
stores, up to 100% of lease payments are on the basis of variable payment terms. Variable lease payments are
recognized in the consolidated statements of earnings in the period in which the condition that triggers those payments
occurs. A 5% increase in sales across all stores with such variable lease contracts would not result in a material change
to the total lease payments.
11 Bank indebtedness and long-term debt
Bank indebtedness
Significant terms
Committed until
Borrowing limit
Interest rate
Unused amount
2021
$
-
-
-
-
-
2020
$
58,114
September 29,
2022
$90,000
CDOR + 1.90%
$31,886
ANDREW PELLER LIMITED 2021 | 43
Revolving, amortizing loan – investment facility
Other
Less: Financing costs
Less: Current portion of revolving, amortizing loan
Less: Current portion of other loan
2021
$
174,640
-
174,640
96
174,544
-
-
174,544
2020
$
107,591
106
107,697
567
107,130
11,509
106
95,515
On December 8, 2020, the Company amended and restated its debt facilities. Amendments include a revised maturity
date of December 8, 2024, revised financial covenants and additional tiers to the applicable margins based on the
Company’s leverage. Additionally, the total borrowing limit was increased to $350,000 and combined into one
revolver, interest only facility to be used for acquisitions and day-to-day operations, distributions and capital
expenditures. Repayment of the facility is due on maturity. As at March 31, 2021, the applicable margin was 1.90%
(2020 – 1.90%). Management has assessed and determined that these amendments constitute a modification of long-
term debt, which has resulted in the debt being valued at present values of future cash flows. As a result, the Company
has recorded a gain on debt modification of $2,861 offset by financing costs of $549. Financing costs of $106 are being
amortized over the new term of the loan.
The Company has entered into interest rate swap agreements to fix the interest rate on a portion of the balance
outstanding on the investment facility. Until September 29, 2022, the interest rate is fixed at 2.25%, plus the applicable
margin. Interest expense on long-term debt during the year was $5,925 (2020 – $4,695).
The Company and its subsidiaries have provided their assets as security for these loans.
The following table summarizes the change in the Company’s bank indebtedness and long-term debt arising from
financing activities for the year ended March 31, 2021.
Balance – Beginning of year
Cash previously held net of bank indebtedness, reclassified to cash
Drawings
Repayments
Deferred financing fees paid
Amortization of deferred financing fees
Gain on modification of debt
Amortization of gain on modification of debt
Other
Transfer to long-term debt on December 8, 2020
Bank
indebtedness
$
Long-term
debt
$
58,114
7,620
43,000
(51,771)
-
-
-
-
37
(57,000)
107,130
-
26,000
(13,065)
(106)
258
(2,861)
257
(69)
57,000
Balance – End of year
-
174,544
44
| ANDREW PELLER LIMITED 2021
12 Post-employment benefits
Defined contribution plans
The total expenses for the defined contribution savings plans were $2,099 (2020 – $2,028).
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. On June 1, 2019, under the Company’s new collective bargaining
agreement with its unionized employees, one of the post-retirement benefit agreements was cancelled with no further
amounts payable to employees. As a result, the balance of this post-employment benefit obligation of $107 was
recorded as a credit against current service cost, and the accumulated actuarial gain of $75 was released to contributed
surplus during the fiscal year ended March 31, 2020.
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.
ANDREW PELLER LIMITED 2021 | 45
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 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 income
Net actuarial gain (loss)
Expected contributions for the year ending March 31,
2022
Weighted average duration of the defined benefit
obligations in years
46
| ANDREW PELLER LIMITED 2021
Pension
benefits
$
Other post-
employment
benefits
$
23,274
2,137
863
419
(1,535)
25,158
24,686
505
928
(1,535)
(667)
2,152
26,069
911
-
-
-
63
(63)
-
2,237
63
86
(63)
-
82
2,405
2,405
Pension
benefits
$
Other post-
employment
benefits
$
505
65
570
652
192
12.9
63
86
149
(82)
65
11.9
2021
Total
$
23,274
2,137
863
482
(1,598)
25,158
26,923
568
1,014
(1,598)
(667)
2,234
28,474
3,316
2021
Total
$
568
151
719
570
257
12.8
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
Past service cost
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
Past service cost
Net benefit plan expense
Amount recognized in other comprehensive income
Net actuarial gain
Expected contributions for the year ending March 31,
2021
Weighted average duration of the defined benefit
obligations in years
Pension
benefits
$
Other post-
employment
benefits
$
23,953
(1,075)
784
776
(1,164)
23,274
25,900
529
853
(1,164)
-
123
(1,555)
24,686
1,412
-
-
-
95
(95)
-
2,710
(37)
87
(95)
37
(339)
(126)
2,237
2,237
Pension
benefits
$
Other post-
employment
benefits
$
529
69
-
598
357
488
12.1
(37)
87
37
87
465
85
11.3
2020
Total
$
23,953
(1,075)
784
871
(1,259)
23,274
28,610
492
940
(1,259)
37
(216)
(1,681)
26,923
3,649
2020
Total
$
492
156
37
685
822
573
12.1
ANDREW PELLER LIMITED 2021 | 47
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
2021
3.8%
3.1%
2.5%
5.0%
60 – 65 years
2.0%
MI-2017
2020
3.3%
3.8%
2.5%
5.0%
60 – 65
years
2.0%
MI-2017
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.
2021
Other post-
employment
benefits
$
2020
Other post-
employment
benefits
$
Pension
benefits
$
(267)
304
(2,705)
3,279
(238)
269
-
-
-
-
742
(671)
74
(73)
-
-
-
-
Pension
benefits
$
(3,020)
3,682
655
(594)
51
(51)
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
At March 31, 2021, the accumulated actuarial losses, net of deferred taxes, recognized in other comprehensive income
were $3,169 (2020 – $3,588).
Plan assets
The plan assets consist of the following:
Mutual funds
Fixed income
Equity
$
18,036
7,122
25,158
2021
72%
28%
100%
$
17,107
6,167
23,274
2020
74%
26%
100%
48
| ANDREW PELLER LIMITED 2021
13
Income taxes
Current income tax expense
Change in temporary differences
Impact of change in tax rate
Deferred income tax expense
Total income tax expense
The Company’s income tax expense consists of the following:
Income taxes at blended statutory rate of
26.46% (2020 – 25.81%)
Permanent differences and non-deductible items
Future income tax rate changes
Other
The movement of the deferred income tax account is as follows:
Beginning of year
Deferred income taxes in net earnings
Deferred income taxes in other comprehensive income
Deferred tax liability reversed for cancelled post-retirement benefit
arrangement
End of year
2021
$
2,091
7,198
378
7,576
9,667
2021
$
9,910
321
378
(942)
9,667
2021
$
22,038
7,576
151
2020
$
7,456
1,875
(360)
1,515
8,971
2020
$
8,378
648
(360)
305
8,971
2020
$
20,329
1,515
214
-
(20)
29,765
22,038
ANDREW PELLER LIMITED 2021 | 49
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
$
17,823
4,096
21,919
(5,433)
16,486
466
(45)
421
12,870
13,291
Tax
deductions
on
inventory
$
Tax
deductions
on goodwill
$
516
(436)
80
(80)
3,712
(2,854)
858
(138)
Total
$
22,517
761
23,278
7,219
-
720
30,497
March 31, 2019
Expense (income) in net earnings
March 31, 2020
Expense (income) in net earnings
March 31, 2021
Deferred income tax asset
March 31, 2019
Expense (income) in net earnings
Expense (income) in other comprehensive income
Deferred tax liability reversed for cancelled post-retirement
benefit arrangement
March 31, 2020
Expense (income) in net earnings
Expense (income) in other comprehensive income
March 31, 2021
(356)
356
-
-
-
-
-
-
Fair value
change on
derivatives
$
Post-
employment
benefits
$
Other
$
(602)
306
-
Total
$
(2,188)
754
214
-
(20)
(296)
440
-
(1,240)
357
151
(1,230)
92
214
(20)
(944)
(83)
151
(876)
144
(732)
The income tax effects relating to components of accumulated other comprehensive loss are as follows:
Before
income tax
amount
$
Deferred
tax
expense
$
2021
Net of
income tax
expense
$
Before
income tax
amount
$
Deferred
tax
expense
2020
Net of
income tax
expense
$
Accumulated actuarial losses
4,278
1,109
3,169
4,848
1,260
3,588
50
| ANDREW PELLER LIMITED 2021
14 Capital stock
Authorized
Unlimited preference shares
Unlimited Class A shares, non-voting
Unlimited Class B shares, voting
Issued
Number
of shares
2021
Amount
$
Number
of shares
Class A shares, non-voting
Class B shares, voting
35,525,639
8,144,183
26,656
364
35,403,767
8,191,883
43,669,822
27,020
43,595,650
All of the issued Class A and Class B shares are fully paid and have no par value.
2020
Amount
$
25,650
364
26,014
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.
During the year ended March 31, 2021, 47,700 Class B shares were converted into Class A shares on a one-for-one
basis.
As described in note 15, 71,049 Class A shares were issued as a result of the exercise of share-based awards during the
year ended March 31, 2021. In addition to the shares issued due to the exercise, the holders of DSUs and PSUs earn
dividends in the form of additional units and as a result, the Company issued an additional 3,123 Class A shares.
On March 4, 2021, the Company announced a normal course issuer bid (NCIB) to repurchase for cancellation up to
1,773,896 Class A non-voting shares, representing 5% of Class A non-voting shares issued and outstanding as at the
close of markets on February 25, 2021, during the 12-month period from March 8, 2021 to March 7, 2022. There were
no Class A non-voting shares repurchased for cancellation under the NCIB during the fiscal year ended March 31,
2021.
On November 8, 2019, the Company announced an NCIB to repurchase for cancellation up to 1,799,733 Class A non-
voting common shares, representing 5% of Class A non-voting common shares issued and outstanding as at the close of
market on November 7, 2019, during the 12-month period from November 12, 2019 to November 12, 2020. The total
number of Class A non-voting common shares repurchased for cancellation under the NCIB during the fiscal year
March 31, 2020 amounted to 597,900 common shares, at a weighted average price of $10.44 per Class A non-voting
common share, for total cash consideration of $6,241. The Company’s share capital was reduced by $413 and the
remaining $5,810 was accounted for as a decrease to retained earnings.
Annual dividends of $0.215 (2020 – $0.215) per Class A share and $0.187 (2020 – $0.187) per Class B share were
approved by the Board of Directors on June 10, 2020 and are formally declared in each quarter. On February 10, 2021,
the Board of Directors approved a 5% increase to the fourth quarter dividend for shareholders of record on March 31,
2021. The quarterly dividend was increased from $0.054 to $0.056 per Class A share and $0.047 to $0.049 per Class B
share.
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, 2021 and 2020, there
were no preference shares issued or outstanding.
ANDREW PELLER LIMITED 2021 | 51
Stock purchase plan
The Company’s full-time salaried and certain hourly employees 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. The Company is responsible for the
remainder of the cost and, during 2021, expensed $264 (2020 – $258) related to the employee program.
15 Share based compensation
On September 13, 2017, the Company established a share-based compensation plan comprised of stock options, PSUs
and DSUs. The impact of the share-based compensation expense is summarized as follows:
1,041,800 stock options (2020 – 765,200) (a)
218,562 performance share units (2020 – 219,876) (b)
65,669 deferred share units (2020 – 72,459) (c)
2021
$
655
282
-
937
2020
$
1,028
848
-
1,876
The stock options, PSUs and DSUs are equity settled and, as such, the expense associated with these instruments is
recorded as a share-based compensation expense through the consolidated statements of earnings and comprehensive
income with a corresponding entry made to contributed surplus on the consolidated balance sheets.
The maximum number of shares that may be issued under all share-based compensation arrangements implemented by
the Company, including the stock option plan, the PSU plan and the DSU plan, may not exceed 10% of the total
number of Class A non-voting common shares issued and outstanding from time to time. As at March 31, 2021, the
Company had 3,266,974 Class A non-voting common shares reserved for issuance under the share-based compensation
arrangements.
a) Stock options
The Company has a stock option plan under which options to purchase Class A non-voting common shares may
be granted to officers and employees of the Company. Options granted under the plan have an exercise price of
not less than the volume weighted average trading price of the Class A non-voting common shares where they are
listed for the five trading days prior to the date of the grant. Options granted vest in tranches, equally over a three-
year period on each anniversary of the grant date, commencing on the first anniversary of the grant date.
The Company’s stock option transactions during the year were as follows:
2021
Weighted
average
exercise price
per share
$
Number of
options
Number of
options
Balance – Beginning of year
Granted
Forfeited
765,200
500,600
(224,000)
14.19
9.31
(14.26)
436,467
354,800
(26,067)
Balance – End of year
1,041,800
11.89
765,200
Exercisable
338,254
13.85
211,788
52
| ANDREW PELLER LIMITED 2021
2020
Weighted
average
exercise price
per share
$
14.25
14.14
(14.45)
14.19
13.18
For options granted during the year, the fair value was estimated on the grant date using the Black-Scholes fair
value option pricing model using the following weighted average assumptions:
Weighted average fair value per share option
Expected volatility (1)
Dividend yield
Risk-free interest rate
Weighted average expected life in years
2021
$1.99
24.41%
1.82%
0.54%
10
2020
$3.97
23.34%
1.34%
2.25%
10
(1) Expected volatility was determined using historical volatility.
Information relating to stock options outstanding and exercisable as at March 31, 2021 is as follows:
Share options outstanding
Share options exercisable
Weighted
average
remaining
life
(in months)
Number
of share
options
Weighted
average
exercise
price
Weighted
average
remaining
life
(in months)
Number
of share
options
Weighted
average
exercise
price
$
113
92
89
489,200
414,600
138,000
$
9.29
13.18
17.21
-
-
86 246,258
91,996
89
-
12.59
17.21
102
1,041,800
11.89
87 338,254
13.85
Range of
exercise
prices
5.01 to 10.00
10.01 to 15.00
15.01 to 20.00
b) PSU plan
The Company has established a PSU plan for employees and officers of the Company. PSUs represent the right to
receive Class A non-voting common shares settled by the issuance of treasury shares or shares purchased on the
open market. PSUs vest in full at the end of the third fiscal year after the grant date. The number of units that will
vest is determined based on the achievement of certain performance conditions (i.e., financial targets) established
by the Board of Directors and are adjusted by a factor, which ranges from 0.5 to 2.0, depending on the
achievement of the targets established. Therefore, the number of units that will vest and are exchanged for Class A
non-voting common shares may be higher or lower than the number of units originally granted to a participant.
ANDREW PELLER LIMITED 2021 | 53
The Company’s PSU transactions during the year were as follows:
2021
Grant date
fair value
per unit
$
14.20
9.31
(11.74)
(14.25)
12.44
17.14
Number of
units
137,546
87,980
-
(5,650)
219,876
44,444
2020
Grant date
fair value
per unit
$
14.29
14.14
-
14.45
14.20
11.74
Number of
units
219,876
107,050
(44,419)
(63,945)
218,562
30,219
Balance – Beginning of year
Granted
Exercised
Forfeited
Balance – End of year
Exercisable
Awards granted September 12, 2018 and November 7, 2018 vested March 31, 2021 and, based on the
achievement of the performance condition, 30,219 shares vested.
c) DSU plan
The Company has established a DSU plan for employees, officers and directors of the Company. DSUs represent
the right to receive Class A non-voting common shares settled by the issuance of treasury shares or shares
purchased on the open market. DSUs vest immediately, but are only exercisable when the participant’s
employment with the Company ceases, or when the participant is no longer a director of the Company. DSUs may
be offered to directors of the Company subsequent to the year in which fees are earned. As a result, the issuance of
DSUs is reflected as an increase to contributed surplus in the year the offer is made, which may not correspond to
when the expense is recognized.
The Company’s DSU transactions during the year were as follows:
Number of
units
2021
Grant date
fair value
per unit
$
Number of
units
Balance – Beginning of year
Issued
Exercised
72,459
19,840
(26,630)
17.19
9.48
(18.22)
61,819
16,960
(6,320)
Balance – End of year
65,669
14.40
72,459
2020
Grant date
fair value
per unit
$
18.26
13.75
(18.22)
17.19
54
| ANDREW PELLER LIMITED 2021
16 Nature of expenses
The nature of 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 are as follows:
Ongoing maintenance costs related to Port Moody winery facility,
net of income (a)
Restructuring (b)
Other
2021
$
181,134
78,084
31,053
8,408
6,939
24,372
2020
$
172,430
77,379
28,169
10,048
8,302
24,477
329,990
320,805
2021
$
278
1,897
(405)
1,770
2020
$
421
1,703
(355)
1,769
a) During fiscal 2006, the Company closed its Port Moody winery facility and transferred production to its winery
operations in Kelowna, British Columbia. The costs of maintaining this idle facility are recorded in other expenses
(income).
b) Restructuring costs of $1,897 (2020 – $1,703) were recorded during the year ended March 31, 2021. These costs
relate to restructuring of certain production facilities within the Company’s personal winemaking product division
and restructuring due to the implementation of a new enterprise resource planning system.
17 Net earnings per share
Class A
$
Class B
$
2021
Total
$
Net earnings attributed for the year – basic and
diluted
23,145
4,641
27,786
Weighted average number of shares outstanding –
basic and diluted
35,471,394
8,180,089
Net earnings per share – basic and diluted
0.65
0.57
ANDREW PELLER LIMITED 2021 | 55
Class A
$
Class B
$
2020
Total
$
Net earnings attributed for the year – basic and
diluted
19,597
3,897
23,494
Weighted average number of shares outstanding –
basic and diluted
35,835,372
8,195,401
Net earnings per share – basic and diluted
0.55
0.48
18 Commitments
The Company is subject to various claims by third parties arising out of the normal course and conduct of its business,
including, but not limited to, labour and employment and regulatory and environmental claims. In addition, the
Company is potentially subject to regular audits from federal and provincial tax authorities relating to income,
commodity and capital taxes and as a result of these audits, may receive assessments and reassessments. Although such
matters cannot be predicted with certainty, management currently considers the Company’s exposure to such claims
and litigation, to the extent not covered by the Company’s insurance policies or otherwise provided for, not to be
material to these consolidated financial statements.
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
2021
$
5,200
(8,812)
(881)
(3,058)
(7,551)
2020
$
(4,015)
(10,457)
628
1,609
(12,235)
56
| ANDREW PELLER LIMITED 2021
20 Financial instruments
Classification of financial instruments
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
$
2021
Fair
value
$
Financial assets
Amortized cost
28,896
28,896
Accounts receivable
Accounts payable and
accrued liabilities
Dividends payable
Long-term debt
Financial liabilities
Financial liabilities
Financial liabilities
Interest rate swap liability
Foreign exchange forward
contracts liability
Derivatives
Derivatives
Amortized cost
Amortized cost
Amortized cost
Fair value through
profit or loss
Fair value through
profit or loss
Assets/liabilities
Category
Measurement
Financial assets
Financial liabilities
Amortized cost
Amortized cost
Accounts receivable
Bank indebtedness
Accounts payable and
accrued liabilities
Dividends payable
Long-term debt
Financial liabilities
Financial liabilities
Financial liabilities
Interest rate swap liability
Foreign exchange forward
contracts asset
Derivatives
Derivatives
Amortized cost
Amortized cost
Amortized cost
Fair value through
profit or loss
Fair value through
profit or loss
46,487
2,404
174,544
2,314
304
Carrying
amount
$
34,096
58,114
53,821
2,288
107,130
3,536
783
46,487
2,404
174,640
2,314
304
2020
Fair
value
$
34,096
58,114
53,821
2,288
107,697
3,536
783
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.
ANDREW PELLER LIMITED 2021 | 57
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 values 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 (gain) loss on derivative financial instruments is comprised of:
Unrealized loss (gain) on foreign exchange forward contracts
Unrealized (gain) loss on interest rate swaps
2021
$
1,087
(1,222)
(135)
2020
$
(779)
2,185
1,406
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.
Quoted prices in
active markets
for
identical assets
(Level 1)
$
-
-
Quoted prices in
active markets
for
identical assets
(Level 1)
$
Significant
observable
inputs
other than
quoted prices
(Level 2)
$
2,314
304
Significant
observable
inputs
other than
quoted prices
(Level 2)
$
2021
Significant
unobservable
inputs
(Level 3)
$
-
-
2020
Significant
unobservable
inputs
(Level 3)
$
Asset/liability
Interest rate swap liability
Foreign exchange forward contracts
liability
Asset/liability
Interest rate swap liability
Foreign exchange forward contracts asset
-
-
3,536
783
-
-
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,
58
| ANDREW PELLER LIMITED 2021
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 $97,421 of its long-term debt until September 2022 by entering
into interest rate swaps. The interest rate swaps are measured at fair value.
An unrealized gain of $1,222 (2020 – unrealized loss of $2,185) was recognized on the interest rate swaps, which are
classified as a component of the net unrealized gain on derivative financial instruments in the consolidated statements
of earnings.
The remaining portion of the Company’s borrowings are funded using a floating interest rate and as such are sensitive
to interest rate movements. As at March 31, 2021, with other variables unchanged, a 100 basis point change in interest
rates would impact the Company’s net earnings by approximately $571 (2020 – $430), exclusive of the mark-to-market
adjustments on the interest rate swaps.
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 60% 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 $15,990 (2020 – $20,807) of the total accounts receivable for which no allowance has been provided.
Of the remaining non-provincial liquor board balances, $719 (2020 – $1,512) was over thirty days past due as at March
31, 2021. An expected credit loss of $257 (2020 – $875) has been provided against these accounts receivable amounts,
which the Company has determined represents a reasonable estimate of the lifetime expected credit losses for trade
receivables.
Sales to its largest customer, a provincial Crown corporation, were $69,578 (2020 – $69,181) during the year ended
March 31, 2021. Sales to its second largest customer, a branch of a provincial government, were $30,561 (2020 –
$41,553) during the year. No other customers accounted for over 10% of sales during the years ended March 31, 2021
and March 31, 2020.
An analysis of accounts receivable is as follows:
Liquor boards
Non-liquor boards
Current
Past due 0 – 30 days
Past due 31 – 60 days
Past due > 60 days
Expected credit loss
2021
$
15,990
11,938
506
204
515
(257)
28,896
2020
$
20,807
10,872
1,798
206
1,288
(875)
34,096
ANDREW PELLER LIMITED 2021 | 59
The change in the expected credit loss was as follows:
Balance – Beginning of year
Provision for (recovery of) expected credit losses
Write-offs
Balance – End of year
Liquidity risk
2021
$
875
(217)
(401)
257
2020
$
128
795
(48)
875
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 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.
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, leases, service agreements 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, 2021.
Long-term debt
Leases and royalties
Service agreements
Grape and bulk wine purchase
contracts
Packaging purchase contracts
< 1
year
$
-
5,893
2,448
2 – 3
years
$
-
9,285
4,063
4 – 5
years
$
> 5
years
$
Total
$
174,640
4,904
763
-
15,880
-
174,640
35,962
7,274
93,344
39,702
91,611
45,472
58,668
-
95,347
-
338,970
85,174
141,387
150,431
238,975
111,227
642,020
Interest rate swap
Foreign exchange forwards
2,030
37,038
904
-
-
-
-
-
2,934
37,038
Total contractual obligations
180,455
151,335
238,975
111,227
681,992
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.
60
| ANDREW PELLER LIMITED 2021
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, 2021, the
Company has forward foreign currency contracts to buy US$24,000 at rates ranging between $1.24 and $1.29;
EUR1,500 at rates ranging between $1.52 and $1.53 and AU$4,500 at a rate of $1.00. These contracts mature at
various dates to February 2022. 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 $129 (2020 – $234), $31 (2020 – $50) or $20 (2020 – $39), respectively. The Company has
elected to not use hedge accounting and as a result, has recognized unrealized foreign exchange losses of $1,087 (2020
– unrealized foreign exchange gains of $779) in the consolidated statements of earnings as a component of the net
unrealized loss (gain) on derivative financial instruments and has recorded the fair value of $304 (2020 – $783) in the
current portion of derivative financial instruments in the consolidated balance sheets.
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, long-term debt and shareholders’ equity. The primary uses of capital are to
fund working capital, 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 EBITA, 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
Interest charge coverage ratio.
Compliance with these covenants is monitored by management on a quarterly basis. As at March 31, 2021 and 2020,
the Company was in compliance with these covenants.
22 Related parties and management compensation
The Company is controlled by Peller Family Enterprises Inc., which owns 61.3% (2020 – 61.0%) 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 Peller Family Enterprises Inc.
ANDREW PELLER LIMITED 2021 | 61
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
Share-based compensation expense
2021
$
4,421
265
823
5,509
2020
$
4,374
266
1,613
6,253
The compensation and short-term benefits expense consist of amounts that will primarily be settled within twelve
months.
23 Entity wide disclosures
During the year, export sales were $15,550 (2020 – $12,871), 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 16, 2021, the Company’s Board of Directors approved the annual dividend for holders of its Class A and Class
B shares in the amount of $0.246 per Class A share and $0.214 per Class B share to be paid quarterly to shareholders,
subject to management’s review of projected cash flows and compliance with financial covenants.
62
| ANDREW PELLER LIMITED 2021
TEN-YEAR SUMMARY
(in thousands of Canadian dollars,
except per share amounts)
Sales and earnings
Net sales
EBITA
Net earnings
Financial position
Working capital
Total assets
Shareholders’ equity
Per share (3)
Net earnings (3)
Basic & diluted Class A
Basic & diluted Class B
Dividends (3)
Class A Shares, non-voting
Class B Shares, voting
Number of shares outstanding
(in thousands of shares) (3)
Class A Shares, non-voting
Class B Shares, voting
Other information
Return on average
shareholders’ equity (1)
Return on average
capital employed (2)
2021
2020
2019
2018
2017
$ 393,036
63,046
27,786
$ 382,306
61,501
23,494
$ 381,796
52,875
21,958
$ 363,897
52,860
30,117
$ 342,606
45,137
26,350
170,684
542,521
265,574
83,654
513,919
245,523
97,305
467,019
234,751
104,417
457,780
220,246
78,825
327,478
177,317
0.65
0.57
0.218
0.190
35,526
8,144
43,670
0.55
0.48
0.215
0.187
35,404
8,192
43,596
10.9%
9.8%
10.1%
10.7%
0.51
0.44
0.205
0.178
35,988
8,199
44,187
9.7%
11.5%
0.71
0.62
0.180
0.156
35,471
8,702
44,173
15.2%
14.0%
0.64
0.55
0.163
0.142
33,581
9,012
42,593
15.7%
14.1%
(1) Return on average shareholders' equity is calculated as net earnings divided by average shareholders’ equity.
(2) 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.
(3) Restated to reflect the three-for-one stock split completed in October of 2016.
ANDREW PELLER LIMITED 2021 | 63
2016
2015
Restated (5)
$ 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 (5)
15,224 (5)
68,982
301,519 (5)
147,375 (5)
0.36 (5)
0.32 (5)
0.140
0.122
33,882
9,012
42,894
10.6% (5)
11.0% (5)
2014
297,824
33,729
14,021
44,564
301,015
138,003
0.34
0.29
0.133
0.116
33,882
9,012
42,894
10.5%
10.8%
2013
Restated (4)
$
289,143
33,489 (4)
14,519 (4)
41,670
296,519
129,701 (4)
2012
$ 276,883
32,651
13,001
34,869
285,552
120,552
0.35 (4)
0.30 (4)
0.120
0.105
33,882
9,012
42,894
11.6% (4)
11.1% (4)
0.31
0.27
0.120
0.105
33,882
9,012
42,894
11.1%
11.5%
(4) Restated to reflect the adoption of the amendments to IAS 19.
(5) Restated to reflect the adoption of the amendments to IAS 16 and IAS 41.
64
| ANDREW PELLER LIMITED 2021
DIRECTORS & OFFICERS
Directors
Officers
JOHN E. PELLER, O.C.
Burlington, Ontario
President & Chief Executive Officer
Andrew Peller Limited
SHAUNEEN BRUDER
Toronto, Ontario
Corporate Director
MARK W. COSENS
Burlington, Ontario
Managing Director
Kilbride Capital Partners
PERRY J. MIELE
Burlington, Ontario
Chairman and Partner
Beringer Capital
A. ANGUS PELLER M.D.
Toronto, Ontario
Senior Medical Consultant
RBC Insurance
FRANCOIS VIMARD
Mississauga, Ontario
Corporate Director
Honorary Directors
RICHARD D. HOSSACK
Toronto, Ontario
JOHN F. PETCH, O.C.
Toronto, Ontario
BRIAN J. SHORT
Hamilton, Ontario
JOHN E. PELLER, O.C.
President & Chief Executive Officer
STEVE ATTRIDGE
Chief Financial Officer and Executive Vice-President, IT
PATRICK R. O’BRIEN
Chief Commercial Officer
JAMES H. COLE
Executive Vice-President, Business to Consumer
SHAWN B. MACLEOD
Executive Vice-President, Marketing
SARA E. PRESUTTO
Executive Vice-President, People & Culture
BRENDAN P. WALL
Executive Vice-President, Operations
GREGORY J. BERTI
Vice-President, Global Markets, Industry Relations &
Business Development
GAVIN J. HAWTHORNE
Vice-President, Sales & Marketing GVI
CRAIG D. MCDONALD
Vice-President, Winemaking
ANDREW PELLER LIMITED 2021 | 65
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
Registrar and Transfer Agent
COMPUTERSHARE INVESTOR SERVICES INC.
Auditors
PRICEWATERHOUSECOOPERS LLP
Bankers
BANK OF MONTREAL
NATIONAL BANK
RABOBANK
ROYAL BANK OF CANADA
TORONTO DOMINION BANK
Shareholder Inquiries
Computershare Investor Services Inc. operates services for
inquiries regarding changes of address, stock transfers,
registered shareholdings, dividends and lost certificates.
Phone: 1-800-564-6253 toll free North America
(International 514-982-7555)
Fax:
1-866-249-7775 toll free North America
(International 416-263-9524)
Internet: 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:
Steve Attridge
Chief Financial Officer and Executive Vice President,
Information Technology at the Head Office address or by
email at: info@andrewpeller.com
2021 Annual Shareholders’ Meeting
The 2021 Annual Meeting of Shareholders’ will be held
virtually on Wednesday, September 8, 2021 at 3:00 p.m.
66
| ANDREW PELLER LIMITED 2021
AJAX
SOBEYS
WITHIN GROCERY AISLE
955 WESTNEY ROAD S.
(905) 683-1705
SOBEYS
260 KINGSTON ROAD W.
(905) 428-6500
REAL CANADIAN SUPERSTORE
30 KINGSTON ROAD W.
(905) 428-7829
ANCASTER
SOBEYS
WITHIN GROCERY AISLE
977 GOLF LINKS ROAD
(905) 648-1465
FORTINOS
54 WILSON STREET
(905) 304-0094
BARRIE
ZEHRS
11 BRYNE DRIVE
(705) 725-8121
BARRIE ESSA CENTRE
555 ESSA ROAD UNIT#5
(705) 797-0844
BOLTON
ZEHRS
487 QUEEN STREET S.
(905) 857-4166
BRAMALEA
METRO
25 PEEL CENTRE DRIVE
(905) 793-4246
BRAMPTON
FOOD BASICS
CENTENNIAL MALL
227 VODDEN STREET
(905) 459-2386
SOBEYS
WITHIN GROCERY AISLE
930 NORTH PARK DRIVE
(905) 793-9071
BROCKVILLE
REAL CANADIAN SUPERSTORE
1972 PARKEDALE AVE.
(613) 342-8477
BURLINGTON
FORTINOS
WITHIN GROCERY AISLE
2025 GUELPH LINE
(905) 336-3849
MARILU’S MARKET
4025 NEW STREET
(905) 632-8580
SOBEYS
WITHIN GROCERY AISLE
1250 BRANT STREET
(905) 319-8670
WALKERS PLACE
3505 UPPER MIDDLE ROAD
(905) 336-9101
LAKESIDE SHOPPING VILLAGE
5353 LAKESHORE ROAD
(905) 681-8282
CAMBRIDGE
ZEHRS
180 HOLIDAY INN DRIVE
(519) 651-1145
ZEHRS
400 CONESTOGA BLVD.
(519) 624-1103
NO FRILLS
980 FRANKLIN BLVD
(519) 622-2552
COLLINGWOOD
LOBLAWS
12 HURONTARIO STREET
(705) 446-2237
METRO
WITHIN GROCERY AISLE
640 FIRST STREET EXTENSION
(705) 444-1730
EAST YORK
SOBEYS
1015 BROADVIEW AVE.
(416) 467-7760
ETOBICOKE
LOBLAWS
WITHIN GROCERY AISLE
380 THE EAST MALL
(416) 695-9567
FERGUS
ZEHRS
800 TOWER STREET S.
(519) 787-7721
GEORGETOWN
REAL CANADIAN SUPERSTORE
WITHIN GROCERY AISLE
171 GUELPH STREET
(905) 877-1815
GRIMSBY
REAL CANADIAN SUPERSTORE
361 SOUTH SERVICE ROAD
(905) 945-9982
GUELPH
ZEHRS
297 ERAMOSA ROAD
(519) 824-7922
MILTON
LONGOS
1079 MAPLE AVE
(905) 693-8850
ZEHRS HARTSLAND PLAZA
WITHIN GROCERY AISLE
160 KORTRIGHT ROAD, W.
(519) 837-9293
MISSISSAUGA
SQUARE ONE
100 CITY CENTRE DRIVE
(905) 896-7822
NO FRILLS
167 SILVERCREEK PARKWAY
(519) 837-0540
SOUTH COMMON CENTRE
2150 BURNHAMTHORPE ROAD W.
(905) 820-9958
HAMILTON
FORTINOS
50 DUNDURN STREET S.
(905) 528-4003
NEWMARKET
METRO
1111 DAVIS DRIVE
(905) 853-0401
FORTINOS EASTGATE MALL
WITHIN GROCERY AISLE
75 CENTENNIAL PARKWAY N.
(905) 561-4504
REAL CANADIAN SUPERSTORE
WITHIN GROCERY AISLE
18120 YONGE STREET N.
(905) 895-2412
FORTINOS
WITHIN GROCERY AISLE
1579 MAIN STREET W.
(905) 522-8882
KESWICK
ZEHRS
24018 WOODBINE AVE.
(905) 476-8544
KINGSTON
LOBLAWS
WITHIN GROCERY AISLE
1048 MIDLAND AVE.
(613) 389-6139
KITCHENER
ZEHRS
750 OTTAWA STREET S.
(519) 745-2183
LOBLAW SUPERSTORE
WITHIN GROCERY AISLE
39 - 875 HIGHLAND ROAD W.
(519) 742-5844
LONDON
METRO ADELAIDE CENTRE
WITHIN GROCERY AISLE
1030 ADELAIDE STREET N.
(519) 679-3717
METRO
WITHIN GROCERY AISLE
395 WELLINGTON STREET S.
(519) 649-7180
LOBLAWS
3040 WONDERLAND ROAD S.
(519) 668-2224
METRO
16640 YONGE STREET
(905) 830-3448
UPPER CANADA MALL
17600 YONGE STREET
(905) 853-6246
NIAGARA ON THE LAKE
THE OUTLET COLLECTION
300 TAYLOR ROAD
(905) 704-0550
WINE COUNTRY VINTNERS
27 QUEEN STREET
(905) 468-1881
NORTH YORK
LOBLAW GREAT FOOD
3501 YONGE STREET
(416) 481-7699
OAKVILLE
SOBEYS
511 MAPLE GROVE DRIVE
(905) 338-3042
LONGOS
469 CORNWALL ROAD
(905) 338-0880
SOBEYS ABBEY PLAZA
1500 UPPER MIDDLE ROAD W.
(905) 847-2944
ORANGEVILLE
ZEHRS, HERITAGE MALL
50 - 4TH AVE.
(519) 942-8752
ANDREW PELLER LIMITED 2021 | 67
OSHAWA
METRO
1265 RITSON ROAD N.
(905) 571-6167
PICKERING
YOUR INDEPENDENT GROCER
1900 DIXIE ROAD
(905) 831-6705
TORONTO
METRO
656 EGLINTON AVE. E.
(416) 485-0093
REAL CANADIAN SUPERSTORE
1385 HARMONY ROAD N.
(905) 438-1800
NO FRILLS
1300 KING STREET E.
(905) 728-3767
OTTAWA
SOUTHGATE SHOPPING CENTRE
2515 BANK STREET
(613) 523-5837
FARM BOY
187 METCALFE STREET
(613) 565-5062
METRO
WITHIN GROCERY AISLE
50 BEECHWOOD AVENUE
(613) 746-4300
(Ottawa) GLOUCESTER
YOUR INDEPENDENT GROCER
671 RIVER ROAD
(613) 822-3080
(Ottawa) NEPEAN
LOBLAWS
59 ROBERTSON ROAD
(613) 820-7219
LOBLAWS
1460 MERIVALE ROAD
(613) 723-5507
(Ottawa) VANIER
LOBLAWS
WITHIN GROCERY AISLE
100 MCARTHUR ROAD
(613) 749-9618
OWEN SOUND
ZEHRS
1150 SIXTEENTH STREET E.
(519) 371-8664
PETERBOROUGH
LOBLAWS
769 BORDEN AVE.
(705) 740-2513
SCARBOROUGH
METRO
WITHIN GROCERY AISLDE
3221 EGLINTON AVE. E.
(416) 267-2795
SIMCOE
SOBEYS
WITHIN GROCERY AISLE
470 NORFOLK STREET S.
(519) 426-1033
ST. CATHARINES
FRESCHO
318 ONTARIO STREET
(905) 685-8898
ZEHRS, PEN CENTRE
221 GLENDALE AVE.
(905) 688-4767
ZEHRS, FAIRVIEW MALL
WITHIN GROCERY AISLE
285 GENEVA STREET
(905) 646-7363
LOBLAWS
WITHIN GROCERY AISLE
50 MUSGRAVE STREET
(416) 693-6336
LONGOS
93 LAIRD DRIVE
(416) 424-1362
LOBLAWS
WITHIN GROCERY AISLE
3671 DUNDAS STREET W.
(416) 762-8635
QUEENS QUAY
228 QUEENS QUAY W.
(416) 598-8880
SOBEYS
125 THE QUEENSWAY
(416) 201-8221
YORKVILLE VILLAGE
87 AVENUE ROAD
(416) 923-6336
REAL CANADIAN SUPERSTORE
411 LOUTH STREET
(905) 685-9779
ST. LAWRENCE MARKET
93 FRONT STREET E.
(416) 364-1811
GRANTHAM PLAZA
400 SCOTT STREET
(905) 934-0981
SOBEYS URBAN FRESH
22 FORT YORK BLVD.
(416) 623-0793
LAKESHORE SQUARE PLAZA
33 LAKESHORE ROAD
(905) 937-5093
LOBLAWS
650 DUPONT STREET
(416) 533-8484
ST. THOMAS
REAL CANADIAN SUPERSTORE
1063 TALBOT STREET
(519) 633-6343
METRO
1230 QUEEN STREET
WEST
(416) 533-9180
STITTSVILLE
YOUR INDEPENDENT GROCER
WITHIN GROCERY AISLE
1251 MAIN STREET
(613) 831-3837
BLOOR WEST VILLAGE
2273 BLOOR STREET W.
(416) 766-8654
METRO
WITHIN GROCERY AISLE
100 LYNN WILLIAMS ST
(416) 543-5228
UXBRIDGE
ZEHRS
WITHIN GROCERY AISLE
323 TORONTO STREET S.
(905) 852-5008
WATERDOWN
WATERDOWN SHOPPING
CENTRE
255 DUNDAS STREET E.
(905) 689-3420
WATERLOO
ZEHRS, BEECHWOOD PLAZA
450 ERB STREET W.
(519) 747-5897
ZEHRS
315 LINCOLN ROAD
(519) 746-7226
WELLAND
ZEHRS
821 NIAGARA STREET
(905) 714-9521
WHITBY
SOBEYS
1615 DUNDAS STREET E.
(416) 728-4118
REAL CANADIAN
SUPERSTORE
WITHIN GROCERY AISLE
200 TAUNTON ROAD
(905) 668-7568
WHITBY TOWN SQUARE
3050 GARDEN STREET
(905) 430-5314
WINDSOR
METRO
WITHIN GROCERY AISLE
3100 HOWARD AVENUE
(519) 972-8346
WOODBRIDGE
LONGOS
9200 WESTON ROAD
(905) 303-3055
68
| ANDREW PELLER LIMITED 2021
Exclusive 2021 Wine Offer for Shareholders
We are pleased to offer exceptional VQA wines from our wineries in both the East & West. These exclusive
collections are available at a 15% Savings and complimentary delivery.
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).
To place an order for the 2021 Shareholder Collections, see instructions on the pages to follow.
This special offer ends Wednesday, September 30th, 2021.
Don’t forget, our Wine Club memberships are also available for Peller Estates, Trius, Thirty Bench Winery
and Wayne Gretzky Winery & Distillery in the East and Sandhill Wines, Red Rooster Winery, Black Hills
Estate Winery, Gray Monk Estate Winery & Tinhorn Creek in the West. For more information on our
programs, give us a call!
Ontario VQA Wine Collections:
To place an online order for our Ontario Collections please visit
www.thewineshops.com/shareholders or contact the Ontario Direct to Consumer Team at
1.866.440.4383 or by email at wineorders@peller.com
Signature Series Ice Cuvee Rose
Family Vineyard Chardonnay
Private Reserve Gamay Noir
Signature Series Sauvignon Blanc
Signature Series Merlot
Late Harvest Vidal
Trius Brut
Trius Divine White
Trius Pinot Grigio
Trius Merlot
Trius Red
Showcase Late Harvest Vidal
Gretzky Riesling
Gretzky Pinot Grigio
Gretzky Chardonnay
Gretzky Baco Noir
Signature Series Cabernet Merlot
Estates Series Shiraz Cabernet
Winemakers Riesling
Small Lot Gewurztraminer
Small Lot Rose
Winemakers Red
Small Lot Cabernet Sauvignon
Small Lot Merlot
6 bottle
Collection
$154.61
(Reg $181.70)
~
12 bottle
Collection
$309.22
(Reg $363.40)
6 bottle
Collection
$118.91
(Reg $139.70)
~
12 bottle
Collection
$237.82
(Reg $279.40)
6 bottle
Collection
$102.78
(Reg $120.70)
~
12 bottle
Collection
$205.55
(Reg $241.40)
6 bottle
Collection
$177.15
(Reg $208.20)
~
12 bottle
Collection
$354.40
(Reg $416.40)
Peller Family Vineyard Riesling
Peller Private Reserve Pinot Noir
Trius Sauvignon Blanc
Trius Cabernet Franc
Thirty Bench Winemakers Riesling
Wayne Gretzky Estate Series Shiraz
Cabernet
6 bottle
Collection
$109.58
(Reg $128.70)
~
12 bottle
Collection
$219.15
(Reg $257.40)
British Columbia VQA Wine Collections:
To place an online order for our Red Rooster, Sandhill & Grey Monk Collections please visit
www.thewineshops.com/can/shareholders or contact the BC Direct to Consumer Team at
1.866.440.4383
Order the Black Hills Collection by contacting us at 1.250.498.0666 or info@blackhillswinery.com
Order the Tinhorn Creek Vineyards Collection by contacting us at 1.888.484.6467
Red Rooster Riesling
Red Rooster Rare Bird Series Viognier
Red Rooster Rare Bird Series Rose
Red Rooster Rare Bird Pinot Noir
Red Rooster Rare Bird Meritage
Red Rooster Golden Egg
*Prices shown do not include applicable BC Taxes
Sandhill Soveriegn Opal
Sandhill Estate Chardonnay
Sandhill Estate Rose
Sandhill Small Lot Sangiovese
Sandhill Small Lot Barbera
Sandhill Small Lot Syrah
*Prices shown do not include applicable BC Taxes
6 bottle
Collection
$163.77
(Reg $192.57)
~
12 bottle
Collection
$327.55
(Reg $385.14)
6 bottle
Collection
$142.11
(Reg $167.08)
~
12 bottle
Collection
$284.22
(Reg $334.16)
Gray Monk Odyssey Brut Rose
Gray Monk Pinot Aux
Gray Monk Chardonnay
Gray Monk Odyssey Merlot
Gray Monk Cabernet Merlot
Gray Monk Odyssey Meritage
*Prices shown do not include applicable BC Taxes
Black Hills Nota Bene
Black Hills Carmenere
Black Hills Syrah
Black Hills Addendum
Black Hills Rose
Black Hills Ipso Facto
*Prices shown do not include applicable BC Taxes
Tinhorn Creek Vineyards Chardonnay
Tinhorn Creek Vineyards
Gewurztraminer
Tinhorn Creek Vineyards Cabernet Franc
Tinhorn Creek Vineyards Reserve Merlot
Tinhorn Creek Vineyards Reserve Syrah
Tinhorn Creek Vineyards Reserve
Roussanne
*Prices shown do not include applicable BC Taxes
6 bottle
Collection
$122.97
(Reg $144.57)
~
12 bottle
Collection
$245.95
(Reg $289.14)
6 bottle
Collection
$254.64
(Reg $299.58)
~
12 bottle
Collection
$509.29
(Reg $599.16)
6 bottle
Collection
$139.95
(Reg $164.54)
~
12 bottle
Collection
$279.88
(Reg $329.08)
~
Offer Ends Thursday, September 30th, 2021.
Delivery Information:
You can expect your order within 5-10 business days based on delivery location. Your wines will be
delivered in a sturdy corrugated box. Please ensure someone of legal drinking age is available to sign at
the time of delivery.