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
2022
373,944
39,188
5,143
2021
393,036
63,046
26,986
181,832
558,071
265,401
0.29
0.246
0.214
11.09
6.97
13.96
8.75
4.7%
3.8%
4.34:1
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
*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
EXCLUSIVE WINE OFFER FOR SHAREHOLDERS
1
3
8
21
25
30
61
63
64
65
Report to Shareholders
We performed relatively well in fiscal 2022 despite the many challenges created by the COVID-19 pandemic. Certain trade
channels were closed for parts of the year while supply chain disruptions and inflationary cost increases temporarily
impacted our profitability. Despite these issues we generated solid growth in our open trade channels and continued to invest
in our facilities, our technologies, and our people. As our markets gradually stabilize and we capitalize on the investments
and operating efficiencies implemented over the last year, we are confident we will emerge stronger and more resilient than
ever before and return to our track record of growth.
A Challenging Year
Sales for the year ended March 31, 2022 were impacted by the temporary closure of certain high margin trade channels,
including restaurant, estate winery and export markets. And while we performed well in our markets that remained open
during the pandemic, consolidated sales for the year were down 4.9% compared to fiscal 2021. It is important to highlight
that fiscal 2021 was buoyed by consumers increased purchases of our products over concern and uncertainty about whether
alcohol beverage trade channels would remain open during the early months of the pandemic and that LCBO stores in
Ontario were closed on Mondays through much of fiscal 2021, driving consumers to our higher margin retail outlets. These
factors resulted in higher sales in fiscal 2021 that were not repeated in fiscal 2022.
Profitability in fiscal 2022 was negatively affected by a number of factors, the majority of which we believe are short term in
nature. Inflationary increases in the cost of labour and most production inputs, including imported wine, glass bottles,
packaging and other materials, reduced our gross margin for the year. In addition, supply chain disruptions caused by the
pandemic caused international freight and associated shipping costs to increase significantly while also creating challenges
in sourcing product, packaging and raw materials. Overhead costs also increased as our staffing and marketing expenses
returned to more normal levels after significant pandemic-related overhead reductions in fiscal 2021 implemented to
conserve cash.
Despite these factors, our balance sheet and financial position remained strong at year end. Long-term debt increased due to
reduced cash from operations and increased investment in our facilities and operations. During fiscal 2022 we also invested
in repurchasing and cancelling outstanding common shares under our Normal Course Issuer Bid, buying 598,600 Class A
shares for $5.2 million. At year end we had capacity on our revolving credit facility of approximately $158 million.
High Value Assets
Since the founding of the Company more than sixty-two years ago, the Company has acquired and developed a high-value
and strategic portfolio of assets including production facilities, estate wineries, and vineyards well-located in key wine
producing regions across Canada.
In keeping with our focus to capitalize on the highest and best use for our high-value asset base, in September 2021 we
completed the sale of our Port Coquitlam, British Columbia property for net cash proceeds of $8.8 million, generating a
realized gain of $7.5 million or $0.21 per Class A share. The property became available for sale in fiscal 2020 as a result of
the consolidation of production facilities related to our personal winemaking business.
In a similar strategy, in 2006, our Port Moody British Columbia facility, established in 1961, was closed and production was
consolidated in our Kelowna British Columbia operation. We continue to evaluate the best strategy to unlock the value of
this site in Port Moody.
1
| ANDREW PELLER LIMITED 2022
Looking Ahead
Despite the challenges and issues faced over the last two fiscal years, we look ahead more confident than ever before in our
future.
To mitigate inflationary pressures on operating costs, imported wine, raw material and packaging expenses, during the first
quarter of fiscal 2023, we implemented certain price increases across our product lines. In addition, we have been executing
numerous production efficiency and cost savings programs aimed at enhancing our operating margins. These programs
include consolidating certain warehouses and distribution to increase efficiency, rationalizing stock keeping units (SKUs)
and evaluating alternate sourcing for glass bottles, while also capitalizing on our recently implemented Enterprise Resource
Planning (ERP) system to improve inventory utilization, production scheduling, and logistics. Importantly, over the last five
years we have invested more than $100 million in our facilities, technologies, and people, investments that have built a much
stronger, scalable, and more resilient business platform for the future.
To build sales and market share, we continue to plan and launch new products and product categories through our well-
established trade channels. Our value-priced wine portfolio is being strengthened with the introduction of new imported
products from Australia, Italy and Chile, all packaged in the highly popular four-liter box. Four new Gretzky Cream liqueurs
have been introduced, as well as a craft vodka and new premium whiskeys. The Company’s direct-to-consumer wine clubs
are leveraging the increase in visits to the Company’s estate wineries as the pandemic eases, generating strong sales growth
for the Company’s higher-margin premium and ultra-premium brands.
Our results in the first quarter of the new fiscal year indicate that we are on the right track. Sales increased 5.7% in the
quarter as we generated solid growth across the majority of our trade channels, including in markets that were partially
closed in last year’s first quarter due to the pandemic - our ten estate wineries, sales to restaurants and the hospitality sector,
and through our export business now that international travel has resumed. If we had been able to source product and
materials restricted by the supply chain issues created by the pandemic, based on open orders in the quarter we believe our
sales growth would have been even higher. We were also pleased to see our margins stabilize in the period and expect them
to gradually improve going forward.
In closing, the last two years operating under the COVID-19 pandemic have presented many unexpected and unique
challenges to both our industry and the Company. The fact that we generated relatively strong performance in both years is
a testament to our decades of experience and our proven culture of innovation and performance. As the pandemic eases we
are confident we will emerge stronger than ever before as we return to more normal business conditions.
On behalf of the Board of Directors and all shareholders, I want to thank everyone at the Company for their extraordinary
efforts and hard work over the last two years, contributions that enabled us to successfully work through the pandemic. We
also thank our customers and consumers for their patience and loyalty. We remain committed to what we do best –
providing the best products at the best price. This commitment has driven our growth and success for over six decades and
will continue to build value for our shareholders in the years ahead.
John E. Peller, O.C.
President and Chief Executive Officer
ANDREW PELLER LIMITED 2022 | 2
2021 TOP AWARDS
Black Cellar
Beverage Testing Institute – World Value Wine Challenge
• Silver Medal – 89 points – Highly Recommended,
‘Best Buy’, Top 5 in Category – Shiraz
Cabernet Blend No. 5 Whisky Oak Aged
• Bronze Medal – 84 points – Recommended
– Shiraz Cabernet Blend No. 19
• Bronze Medal – 84 points – Recommended
– Malbec Blend No. 3
• Bronze Medal – 81 points – Recommended
– Malbec Merlot Blend No. 13
Good Natured
Beverage Testing Institute – World Value Wine Challenge
• Silver Medal – 87 points – Highly Recommended,
‘Best Buy’, Top 5 in Category – 2020 Crisp Chardonnay
• Silver Medal – 85 points – Highly Recommended
– 2020 Merlot Gamay Noir
• Bronze Medal – 84 points – Recommended – 2020 Fresh White
No Boats On Sunday
Beverage Testing Institute (BTI) – Chicago, USA
• Silver Medal – 89 points – Highly Recommended
– Best Buy – 100% Ontario Hopped Cider
• Silver Medal – 87 points – Highly Recommended
– Best Buy – 100% NS Cider
All Canadian Wine Championships
• Gold Medal - 100% Ontario Hopped Cider
Peller Estates Winery
International Wine Challenge – UK
• Shortlisted – Sweet Wine Producer of the
Year (results announced June 30)
• Trophy – Canadian Icewine – 2019 AP
Signature Series Riesling Icewine
• Gold Medal – 96 points – 2019 AP
Signature Series Riesling Icewine
• Silver Medal – 93 points – 2019 AP Signature Series Riesling
• Bronze Medal – 87 points – 2018 AP Signature
Series Cabernet Franc Icewine
Experience Rosé, California USA
• Gold Medal – 91 points – 2020 Peller Private Reserve Rose
• Gold Medal – 90 points – 2020 Peller Family Reserve Rose
International Wine & Spirit Competition – UK
• Gold Medal – 97 points – 2019 AP
Signature Series Riesling Icewine
• Silver Medal – 91 points – 2018 AP Signature
Series Cabernet Franc Icewine
• Bronze Medal – 87 points – 2019 AP Signature Series Riesling
Sunset International Wine Competition, California USA
• Best of Class – Double Gold Medal – 97 points
– 2019 Family Vineyards VQA Riesling
• Silver Medal – 2019 Family Reserve VQA Chardonnay
• Silver Medal – 2019 Family Reserve VQA Baco Noir
• Silver Medal – 2019 Family Reserve VQA Merlot
• Silver Medal – 2019 Family Reserve VQA Cabernet Franc
• Silver Medal – 2019 Family Reserve VQA Cabernet Merlot
• Silver Medal – 2019 Family Reserve VQA Winemaker’s Red
Decanter World Wine Awards – UK
• Platinum Medal – 97 points – 2019 Andrew
Peller Signature Series Riesling
• Gold Medal – 95 points – 2019 Andrew Peller
Signature Series Riesling Icewine
• Bronze Medal – 89 points – 2018 Andrew Peller
Signature Series Cabernet Franc Icewine
All Canadian Wine Championships
• Trophy – Best Dessert Wine – Double Gold Medal – 2019
Andrew Peller Signature Series Riesling Icewine
• Double Gold Medal – 2018 Private Reserve Cabernet Franc
• Gold Medal – 2020 Private Reserve Sauvignon Blanc
• Bronze Medal – 2019 Andrew Peller
Signature Series Sauvignon Blanc
Beverage Testing Institute – World Value Wine Challenge
• Silver Medal – 89 points – Highly Recommended,
‘Best Buy’, Top 5 in Category – 2020 Family
Reserve Sauvignon Blanc VQA
• Silver Medal – 89 points – Highly Recommended,
‘Best Buy’ – 2020 Family Reserve Rose Light VQA
• Silver Medal – 87 points – Highly Recommended, ‘Best Buy’,
Top 5 in Category – 2020 Family Reserve Chardonnay VQA
• Silver Medal – 87 points – Highly Recommended,
‘Best Buy’ – 2020 Family Reserve Riesling VQA
• Silver Medal – 86 points – Highly Recommended, ‘Best
Buy’ – 2020 Family Reserve Winemaker’s White VQA
• Silver Medal – 86 points – Highly Recommended,
‘Best Buy’ – 2020 Family Reserve Baco Noir VQA
• Silver Medal – 85 points – Highly Recommended –
2020 Family Reserve Cabernet Sauvignon VQA
• Bronze Medal – 84 points – Recommended
– 2020 Family Reserve Rose VQA
WineAlign – National Wine Awards of Canada
• #3 – Top 10 Ontario Wineries
• #5 – Top 25 Canadian Wineries
• Platinum Medal – 94 points – 2019
Private Reserve Cabernet Franc
• Platinum Medal – 94 points – 2019 Signature Series Riesling
• Gold Medal – 92 points – 2019 Signature
Series Sauvignon Blanc
• Gold Medal – 92 points – 2018 Cabernet Franc Icewine
• Silver Medal – 90 points – 2019 Private Reserve Gamay Noir
• Silver Medal – 90 points – 2019 Signature
Series Cabernet Franc
• Silver Medal – 90 points – 2019 Riesling Icewine
• Silver Medal – 90 points – 2018 Signature
Series Vidal Blanc Icewine
• Bronze Medal – 88 points – Ice Cuvee Rose
• Bronze Medal – 88 points – 2020 Private
Reserve Sauvignon Blanc
• Bronze Medal – 88 points – 2020 Private Reserve Rose
Effervescents du Monde – Best Sparkling
Wines in the World, France
• Silver Medal – Ice Cuvee Rose
Small Mercy
Beverage Testing Institute – World Value Wine Challenge
• Silver Medal – 89 points – Highly Recommended,
‘Best Buy’, Top 10 in Category – Upbeat White
• Bronze Medal – 83 points – Recommended – Easy Going Red
Thirty Bench Wine Makers
International Wine Challenge – UK
• Silver Medal – 91 points – 2018 Small Lot Riesling Wild Cask
• Silver Medal – 90 points – 2018 Small Lot
Riesling Wood Post Vineyard
• Bronze Medal – 89 points – 2018 Small
Lot Riesling Triangle Vineyard
• Bronze Medal – 88 points – 2019 Winemakers Blend Riesling
Experience Rosé, California USA
• Silver Medal – 2020 Thirty Bench Rose
International Wine & Spirit Competition – UK
• Bronze Medal – 88 points – 2017 Small Lot Cabernet Franc
• Bronze Medal – 88 points – 2018 Small Lot Riesling Wild Cask
• Bronze Medal – 86 points – 2018 Small
Lot Riesling Wood Post Vineyard
• Bronze Medal – 85 points – 2019 Winemakers Blend Riesling
Decanter World Wine Awards – UK
• Silver Medal – 92 points – 2018 Small
Lot Riesling Triangle Vineyard
• Silver Medal – 91 points – 2019 Winemaker’s Blend Riesling
• Silver Medal – 91 points – 2018 Small Lot
Riesling Wood Post Vineyard
• Silver Medal – 90 points – 2017 Small Lot Cabernet Franc
• Bronze Medal – 88 points – 2018 Small Lot Riesling Wild Cask
All Canadian Wine Championships
• Gold Medal – 2019 Winemakers Blend Riesling
• Gold Medal – 2018 Small Lot Riesling Triangle Vineyard
• Gold Medal – 2019 Small Lot Pinot Noir
• Bronze Medal – 2018 Small Lot Riesling Wood Post Vineyard
WineAlign – National Wine Awards of Canada
• #4 – Top 10 Ontario Wineries
• #9 – Top 25 Canadian Wineries
• Gold Medal – 92 points – 2019 Small Lot Gewurztraminer
• Gold Medal – 92 points – 2019 Small Lot
Riesling Steel Post Vineyard
• Gold Medal – 92 points – 2018 Small Lot Riesling Wild Cask
• Gold Medal – 92 points – 2018 Small Lot
Riesling Wood Post Vineyard
• Gold Medal – 92 points – 2017 Small Lot Cabernet Franc
• Silver Medal – 90 points – 2019 Winemakers Blend Riesling
• Silver Medal – 90 points – 2018 Small
Lot Riesling Triangle Vineyard
• Silver Medal – 90 points – 2019 Small Lot Riesling Wild cask
• Silver Medal – 90 points – 2019 Small Lot
Riesling Wood Post Vineyard
The Global Riesling Masters – UK
• Master – 2019 Riesling Icewine
• Silver Medal – 2019 Andrew Peller Signature Series Riesling
• Silver Medal – 90 points – 2019 Small Lot Pinot Noir
• Silver Medal – 90 points – 2017 Small Lot Cabernet Sauvignon
• Bronze Medal – 88 points – 2019 Small
Lot Riesling Triangle Vineyard
• Bronze Medal – 88 points – 2019 Winemakers Blend Red
• Bronze Medal – 88 points – 2018 Effervescent Riesling
ONTARIO & N.S.
The Global Riesling Masters – UK
• Gold Medal – 2019 Small Lot Riesling Wild Cask
• Silver Medal – 2019 Small Lot Riesling Wood Post Vineyard
• Silver Medal – 2019 Small Lot Riesling Triangle Vineyard
• Bronze Medal – 2019 Small Lot Riesling Steel Post Vineyard
Global Fine Wine Challenge (formerly Six
Nations Wine Challenge) – Australia
• Gold Medal – 2019 Thirty Bench Winemaker’s Blend Riesling
Trius Winery
International Wine Challenge – UK
• Bronze Medal – 88 points – 2019 Showcase
Riesling Ghost Creek Vineyard
• Bronze Medal – 86 points – 2019 Showcase
Cabernet Franc Icewine
• Bronze Medal – 85 points – 2018 Showcase Riesling Icewine
Experience Rosé, California USA
• Silver Medal – 2020 Trius Rose
International Wine & Spirit Competition – UK
• Gold Medal – 95 points – 2018 Showcase Riesling Icewine
• Silver Medal – 90 points – Trius Brut
• Bronze Medal – 88 points – Showcase Brut Nature
• Bronze Medal – 88 points – 2019 Showcase
Cabernet Franc Icewine
• Bronze Medal – 86 points – 2018 Red The Icon
• Bronze Medal – 85 points – 2019 Showcase
Riesling Ghost Creek Vineyard
Decanter World Wine Awards – UK
• Gold Medal – 95 points – 2019 Showcase
Riesling Ghost Creek Vineyard
• Silver Medal – 92 points – 2018 Showcase Riesling Icewine
• Silver Medal – 91 points – 2019 Showcase
Cabernet Franc Icewine
• Bronze Medal – 89 points – Brut Rose
• Bronze Medal – 89 points – Showcase Brut Nature
• Bronze Medal – 87 points – 2018 Red The Icon
All Canadian Wine Championships
• Gold Medal – 2019 Showcase Late Harvest Vidal
• Silver Medal – 2019 Distinction Chardonnay Barrel Fermented
• Silver Medal – Brut
• Bronze Medal – Showcase Brut Nature
• Bronze Medal – 2019 Showcase Riesling Ghost Creek
Beverage Testing Institute – World Value Wine Challenge
• Silver Medal – 89 points – Highly
Recommended, ‘Best Buy’ – 2020 Rose
• Silver Medal – 88 points – Highly Recommended, ‘Best Buy’,
Top 5 in Category – 2020 Late Autumn Off Dry Riesling
• Silver Medal – 87 points – Highly Recommended,
‘Best Buy’ – 2020 Pinot Grigio
• Silver Medal – 87 points – Highly Recommended,
‘Best Buy’ – 2020 Riesling
• Silver Medal – 85 points – Highly
Recommended – 2020 Sauvignon Blanc
• Silver Medal – 85 points – Highly
Recommended – 2020 Cabernet Franc
WineAlign – National Wine Awards of Canada
• #2 – Top 10 Ontario Wineries
• #4 – Top 25 Canadian Wineries
• Platinum Medal – 94 points – 2019
Showcase Late Harvest Vidal
• Platinum Medal – 94 points – Trius Brut Rose
• Gold Medal – 92 points – 2019 Showcase
Riesling Ghost Creek Vineyard
• Silver Medal – 90 points – Trius Brut
• Silver Medal – 90 points – Showcase Brut Nature
• Silver Medal – 90 points – 2020 Distinction Sauvignon Blanc
• Silver Medal – 90 points – 2019 Distinction Gamay Noir
• Silver Medal – 90 points – 2019 Red The Icon
• Silver Medal – 90 points – 2019 Reserve Syrah
• Silver Medal – 90 points – 2019 Showcase
Cabernet Franc Red Shale
• Bronze Medal – 88 points – 2020 Rose
• Bronze Medal – 88 points – 2019 Distinction Divine White
• Bronze Medal – 88 points – 2020
Distinction Cabernet Sauvignon
• Bronze Medal – 88 points – 2019 Reserve Viognier
• Bronze Medal – 88 points – 2019
Showcase Pinot Noir Clark Farm
Effervescents du Monde – Best Sparkling
Wines in the World, France
• Gold Medal – Top 10 – Brut Rose
The Global Riesling Masters – UK
• Silver Medal – 2019 Showcase Riesling Ghost Creek Vineyard
Wayne Gretzky Brewery
Beverage Testing Institute (BTI) – Chicago, USA
• Gold Medal – 94 points – Exceptional – Hazy IPA
• Gold Medal – 90 points – Exceptional
– Premium Lager, Ontario
• Silver Medal – 89 points – Highly
Recommended – Hazy Pilsner
• Silver Medal – 87 points – Highly
Recommended – Pale Ale, Ontario
• Silver Medal – 86 points – Highly Recommended – Session Ale
Wayne Gretzky Distillery
Canadian Whisky Awards – Victoria, BC
• Best Cream Whisky – Gold Medal – No. 99
Salted Caramel Canadian Cream Whisky
• Silver Medal – No. 99 Red Cask Whisky
• Silver Medal – No. 99 Ice Cask Whisky
• Silver Medal – No. 99 Maple Whisky
• Silver Medal – No. 99 Ninety Nine Proof Whisky
• Bronze Medal – No. 99 Canadian Cream Whisky
San Francisco World Spirits Competition
• Double Gold Medal – Wayne Gretzky No. 99 Red Cask Whisky
• Gold Medal – Wayne Gretzky No. 99 Ice Cask Whisky
• Gold Medal – Wayne Gretzky No. 99 Canadian Cream Whisky
• Gold Medal – Wayne Gretzky No. 99 Canadian
Cream Salted Caramel Whisky
• Silver Medal – Wayne Gretzky No. 99 Maple Cask Whisky
• Bronze Medal – Wayne Gretzky Ninety Nine
Proof Small Batch Canadian Whisky
Alberta Beverage Awards
• Judges Selection – Red Cask Whisky
Wayne Gretzky Estates Niagara
International Wine Challenge – UK
• Gold Medal – 95 points – 2019 No. 99 Vidal Icewine
• Gold Medal – 95 points – 2019 No. 99 Cabernet Franc Icewine
Experience Rosé, California USA
• Bronze Medal – 2020 Wayne Gretzky Estate Rose
International Wine & Spirit Competition – UK
• Gold Medal – 96 points – 2019 No. 99 Vidal Icewine
• Silver Medal – 90 points – 2019 No. 99 Cabernet Franc Icewine
Sunset International Wine Competition, California USA
• Silver Medal – 2019 Founders Series Sauvignon Blanc
Decanter World Wine Awards – UK
• Platinum Medal – 97 points – 2019 Vidal Icewine
• Silver Medal – 90 points – 2019 Cabernet Franc Icewine
All Canadian Wine Championships
• Silver Medal – 2020 Rose
• Bronze Medal – 2019 Cabernet Franc Icewine
Beverage Testing Institute – World Value Wine Challenge
• Silver Medal – 89 points – Highly Recommended, ‘Best
Buy’, Top 5 in Category – 2020 Founders Series Riesling
• Silver Medal – 88 points – Highly Recommended,
‘Best Buy’ – 2020 Founders Series Baco Noir
• Silver Medal – 87 points – Highly Recommended, ‘Best
Buy’ – 2020 Founders Series Cabernet Merlot
• Silver Medal – 86 points – Highly Recommended,
‘Best Buy’ – 2020 Founders Series Pinot Grigio
• Silver Medal – 86 points – Highly
Recommended, ‘Best Buy’ – 2020 Rose
• Bronze Medal – 84 points – Recommended
– 2020 Founders Series Chardonnay
• Bronze Medal – 84 points – Recommended –
2020 Founders Series Sauvignon Blanc
WineAlign – National Wine Awards of Canada
• Gold Medal – 92 points – 2019 Cabernet Franc Icewine
• Silver Medal – 90 points – 2019 Vidal Icewine
• Silver Medal – 90 points – 2017 Signature
Series Shiraz Cabernet
• Bronze Medal – 88 points – 2020 Signature Series White
• Bronze Medal – 88 points – 2020 Signature Series Baco Noir
XOXO
Beverage Testing Institute (BTI) – Chicago, USA
• Silver Medal - 86 points - XOXO Botanical Raspberry Rhubarb
• Silver Medal - 85 points - XOXO Botanical
Peach Orange Blossom
• Silver Medal - 85 points - XOXO Botanical Strawberry Hibiscus
+370
AWARDS NATIONALLY
27% OVER LAST YEAR
2021 TOP AWARDS
Black Cellar
Beverage Testing Institute – World Value Wine Challenge
• Silver Medal – 89 points – Highly Recommended,
‘Best Buy’, Top 5 in Category – Shiraz
Cabernet Blend No.5 Whisky Oak Aged
• Bronze Medal – 84 points – Recommended
– Shiraz Cabernet Blend No.19
• Bronze Medal – 84 points – Recommended
– Malbec Blend No.3
• Bronze Medal – 81 points – Recommended
– Malbec Merlot Blend No.13
Black Hills Estate Winery
International Wine & Spirit Competition UK
• Silver Medal – 91 points – 2019 Chardonnay
• Bronze Medal – 87 points – 2018 Per Se
• Bronze Medal – 86 points – 2018 Addendum
Decanter World Wine Awards, UK
• Gold Medal – 95 points – 2018 Carmenere
• Silver Medal – 93 points – 2018 Addendum
• Silver Medal – 92 points – 2018 Syrah
• Bronze Medal – 89 points – 2018 Per Se
• Bronze Medal – 87 points – 2019 Chardonnay
Alberta Beverage Awards – Culinaire magazine
• Judges Selection – 2018 Syrah
• Judges Selection – 2019 Chardonnay
British Columbia Lieutenant Governor’s Wine Awards
• Gold Medal – 2020 Alibi
• Silver Medal – 2019 Per Se
WineAlign National Wine Awards of Canada
• #24 – Top 25 Canadian Wineries
• Gold Medal – 92 points – 2018 Ipso Facto
• Gold Medal – 92 points – 2019 Syrah
• Gold Medal – 92 points – 2019 Carmenere
• Silver Medal – 90 points – 2019 Per Se
• Silver Medal – 90 points – 2019 Chardonnay
• Bronze Medal – 88 points – 2020 Alibi
• Bronze Medal – 88 points – 2020 Roussanne
• Bronze Medal – 88 points – 2020 Rose
Good Natured Okanagan
Sip Magazine, Best of the Northwest
• Double Gold Medal – 2020 Crisp Chardonnay
WineAlign National Wine Awards of Canada
• Gold Medal – 92 points – 2020 Petit Verdot Merlot
• Silver Medal – 90 points – 2020 Balanced Red
• Bronze Medal – 88 points – 2020 Crisp Chardonnay
Gray Monk Estate Winery
Experience Rosé, California USA
• Gold Medal – 92 points – Gray Monk Rose
• Gold Medal – 91 points – Gray Monk Latitude 50 Rose
International Wine & Spirit Competition UK
• Silver Medal – 91 points – 2018 Odyssey White Brut
• Bronze Medal – 88 points – 2018 Odyssey Pinot Noir
• Bronze Medal – 88 points – 2018 Odyssey Cabernet Franc
• Bronze Medal – 88 points – 2017 Odyssey Cabernet Sauvignon
• Bronze Medal – 87 points – 2019 Odyssey Pinot Gris
• Bronze Medal – 87 points – 2019 Chardonnay Unwooded
• Bronze Medal – 87 points – 2018 Odyssey Merlot
• Bronze Medal – 86 points – 2018 Odyssey Rose Brut
Sunset International Wine Competition, California USA
• Double Gold Medal – 96 points – 2019 Chardonnay Unwooded
• Gold Medal – 93 points – 2019 Siegerrebe
• Silver Medal – 2019 Monk’s Blend
• Silver Medal – 2019 Kerner
• Silver Medal – 2019 Pinot Blanc
• Silver Medal – 2019 Pinot Auxerrois
• Silver Medal – 2019 Riesling
• Silver Medal – 2019 Gewurztraminer
• Silver Medal – 2019 Cabernet Merlot
• Silver Medal – 2019 Latitude 50 White
Decanter World Wine Awards, UK
• Bronze Medal – 89 points – 2018 Odyssey Meritage
• Bronze Medal – 88 points – 2018 Odyssey Cabernet Sauvignon
• Bronze Medal – 88 points – 2018 Odyssey Cabernet Franc
• Bronze Medal – 88 points – 2018 Odyssey Merlot
• Bronze Medal – 88 points – 2018 Odyssey Pinot Noir
• Bronze Medal – 88 points – 2018 Odyssey Rose Brut
• Bronze Medal – 87 points – 2018 Odyssey White Brut
• Bronze Medal – 87 points – 2019 Odyssey Pinot Gris
• Bronze Medal – 86 points – 2019 Chardonnay Unwooded
All Canadian Wine Championships
• Trophy – Best Sparkling Wine – Double Gold
Medal – 2018 Odyssey Rose Brut
• Gold Medal – 2019 Merlot
• Gold Medal – 2018 Odyssey Meritage
• Silver Medal – 2020 Ehrenfelser
• Silver Medal – 2019 Odyssey Pinot Gris
• Silver Medal – 2020 Rose
• Bronze Medal – 2020 Gewurztraminer
Alberta Beverage Awards – Culinaire magazine
• Judges Selection – 2020 Chardonnay Unwooded
• Judges Selection – 2020 Pinot Auxerrois
• Judges Selection – 2018 Merlot
• Judges Selection – 2019 Monk’s Blend
British Columbia Lieutenant Governor’s Wine Awards
• Gold Medal – 2018 Odyssey Cabernet Sauvignon
• Silver Medal – 2018 Odyssey Merlot
• Silver Medal – 2018 Odyssey Rose Brut
Sip Magazine, Best of the Northwest
• Platinum Medal – 2019 Monk’s Blend
• Platinum Medal – 2020 Chardonnay Unwooded
• Silver Medal – 2020 Pinot Gris
WineAlign National Wine Awards of Canada
• Silver Medal – 90 points – 2018 Odyssey White Brut
• Silver Medal – 90 points – 2018 Odyssey Rose Brut
• Silver Medal – 90 points – 2018 Odyssey Traditional Brut
• Silver Medal – 90 points – 2018 Odyssey Merlot
• Silver Medal – 90 points – 2018 Odyssey Cabernet Franc
• Bronze Medal – 88 points – 2018 Odyssey Cabernet Sauvignon
• Bronze Medal – 88 points – 2020 Chardonnay Unwooded
• Bronze Medal – 88 points – 2020 Rose
• Bronze Medal – 88 points – 2020 Odyssey Pinot Gris
• Bronze Medal – 2020 Ehrenfelser
No Boats On Sunday
Beverage Testing Institute (BTI) – Chicago, USA
• Gold Medal – 90 points – Exceptional
– Best Buy – 100% BC Cider
Alberta Beverage Awards – Culinaire magazine
• Judges Selection – 100% BC Original Cider
Peller Estates Winery Okanagan
Sunset International Wine Competition, California USA
• Gold Medal – 91 points – 2019 Family
Reserve VQA Sauvignon Blanc
• Silver Medal – 2019 Family Reserve VQA Cabernet Merlot
• Silver Medal – 2019 Family Reserve VQA Winemaker’s Red
• Silver Medal – 2019 Family Reserve VQA Chardonnay
All Canadian Wine Championships
• Double Gold Medal – 2019 Family Reserve VQA Chardonnay
• Gold Medal – 2020 Family Reserve VQA Winemakers White
Alberta Beverage Awards – Culinaire magazine
• Top Value – 2018 Family Vineyards VQA Cabernet Merlot
British Columbia Lieutenant Governor’s Wine Awards
• Silver Medal – 2020 Family Reserve Sauvignon Blanc
Sip Magazine, Best of the Northwest
• Gold Medal – 2019 Family Reserve Winemaker’s Red
WineAlign National Wine Awards of Canada
• Silver Medal – 90 points – 2020 Family
Reserve Winemaker’s Red
• Bronze Medal – 88 points – 2020 Family
Reserve Winemaker’s White
• Bronze Medal – 88 points – 2020 Family
Reserve Cabernet Merlot
Red Rooster
Experience Rosé, California USA
• Silver Medal – 2020 Red Rooster Rose
• Silver Medal – Red Rooster Rose (sparkling)
Decanter World Wine Awards, UK
• Gold Medal – 95 points – 2018 Rare Bird Series Syrah
• Silver Medal – 92 points – 2017 Golden Egg
• Silver Medal – 91 points – 2018 Rare Bird Series Malbec
• Bronze Medal – 87 points – Brut Rose
BRITISH COLUMBIA
British Columbia Lieutenant Governor’s Wine Awards
• Silver Medal – 2020 Viognier
• Sip Magazine, Best of the Northwest
• Gold Medal – 2020 Sauvignon Blanc
• Gold Medal – 2020 Pinot Gris
WineAlign National Wine Awards of Canada
• Gold Medal – 92 points – 2018 Golden Egg
• Silver Medal – 90 points – Sparkling Brut
• Silver Medal – 90 points – 2020 Sauvignon Blanc
• Silver Medal – 90 points – 2020 Viognier
• Silver Medal – 90 points – 2020 Sur Lie Chardonnay
• Silver Medal – 90 points – 2020 Carbonic Merlot Malbec
• Bronze Medal – 88 points – 2020 Pinot Gris
• Bronze Medal – 88 points – 2020 Rose
• Bronze Medal – 88 points – 2018 Rare Bird Series Pinot Noir
• Bronze Medal – 88 points – 2019 Malbec
• Bronze Medal – 88 points – 2020 Pinot 3
Sandhill
Experience Rosé, California USA
• Silver Medal – 2020 Sandhill Rose Terroir Driven Wine
Decanter World Wine Awards, UK
• Silver Medal – 91 points – 2018 Single Vineyard Petit Verdot
• Silver Medal – 91 points – 2018 Single Vineyard TWO
• Bronze Medal – 89 points – 2018 Single Vineyard Syrah
• Bronze Medal – 88 points – 2018 Single Vineyard THREE
• Bronze Medal – 88 points – 2018 Single Vineyard Sangiovese
• Bronze Medal – 88 points – Sauvignon
Blanc Terroir Driven Wine
All Canadian Wine Championships
• Silver Medal – 2020 Sangiovese Rose Single Block
• Bronze Medal – 2020 Sovereign Opal
• Bronze Medal – 2020 Pinot Gris
• Bronze Medal – 2020 Rose
• Bronze Medal – 2018 Single Vineyard Sangiovese
Alberta Beverage Awards – Culinaire magazine
• Judges Selection – 2020 Rose Terroir Driven Wine
• Judges Selection – 2018 Cabernet Merlot Terroir Driven Wine
• Judges Selection – 2019 Chardonnay Terroir Driven Wine
British Columbia Lieutenant Governor’s Wine Awards
• Silver Medal – 2020 Pinot Gris Terroir Driven Wine
• Silver Medal – 2020 Sovereign Opal Terroir Driven Wine
• Silver Medal – 2019 Syrah Terroir Driven Wine
• Silver Medal – 2019 Cabernet Merlot Terroir Driven Wine
• Silver Medal – 2020 Sangiovese Rose Single Block C9
Sip Magazine, Best of the Northwest
• Silver Medal – 2020 Rose Terroir Driven Wine
WineAlign National Wine Awards of Canada
• Silver Medal – 90 points – 2019 Cabernet
Merlot Terroir Driven Wine
• Bronze Medal – 88 points – 2020 Pinot
Gris Terroir Driven Wine
• Bronze Medal – 88 points – 2020 Sovereign
Opal Terroir Driven Wine
• Bronze Medal – 88 points – 2020 Sauvignon
Blanc Terroir Driven Wine
• Bronze Medal – 88 points – 2019 Cabernet
Franc Terroir Driven Wine
• Bronze Medal – 88 points – 2019 Harvest Series Chardonnay
• Bronze Medal – 88 points – 2020 Single
Vineyard Sangiovese Rose
• Bronze Medal – 88 points – 2018 Single Vineyard Sangiovese
• Bronze Medal – 88 points – 2018 Single Vineyard TWO
• Bronze Medal – 88 points – 2018 Single Vineyard Petit Verdot
• Bronze Medal – 88 points – 2018 Single Vineyard Malbec
Small Mercy
Beverage Testing Institute – World Value Wine Challenge
• Silver Medal – 89 points – Highly Recommended,
‘Best Buy’, Top 10 in Category – Upbeat White
• Bronze Medal – 83 points – Recommended – Easy Going Red
Stone Road Vineyards
Sunset International Wine Competition, California USA
• Silver Medal – 2019 Cabernet Merlot
Tinhorn Creek Vineyards
International Wine & Spirit Competition UK
• Silver Medal – 91 points – 2019 Oldfield
Reserve Sauvignon Blanc
• Bronze Medal – 88 points – 2017 Oldfield Reserve Merlot
Decanter World Wine Awards, UK
• Silver Medal – 92 points – 2019 Oldfield Reserve Viognier
• Silver Medal – 90 points – 2019 Oldfield
Reserve Sauvignon Blanc
• Silver Medal – 90 points – 2017 Oldfield Reserve Merlot
• Silver Medal – 90 points – 2018 Oldfield
Reserve Cabernet Franc
• Bronze Medal – 88 points – 2018 Oldfield Reserve Syrah
Alberta Beverage Awards – Culinaire magazine
• Best in Class – 2019 Merlot
• Judges Selection – 2019 Gewurztraminer
British Columbia Lieutenant Governor’s Wine Awards
• Silver Medal – 2020 Pinot Gris
• Silver Medal – 2020 Oldfield Reserve Sauvignon Blanc
• Silver Medal – 2018 Oldfield Reserve Merlot
• Sip Magazine, Best of the Northwest
• Double Gold Medal – 2020 Pinot Gris
• Silver Medal – 2018 Oldfield Reserve Cabernet Franc
WineAlign National Wine Awards of Canada
• Gold Medal – 92 points – 2019 Oldfield Reserve Chardonnay
• Gold Medal – 92 points – 2018 Oldfield Reserve Merlot
• Silver Medal – 90 points – 2018 Oldfield Reserve Syrah
• Silver Medal – 90 points – 2019 Chardonnay
• Bronze Medal – 88 points – 2020 Pinot Gris
• Bronze Medal – 88 points – 2020 Gewurztraminer
• Bronze Medal – 88 points – 2019 Merlot
• Bronze Medal – 88 points – 2018 Oldfield
Reserve Cabernet Franc
Wayne Gretzky Brewery
Beverage Testing Institute (BTI) – Chicago, USA
• Gold Medal – 92 points – Exceptional
– Pale Ale, British Columbia
• Silver Medal – 89 points – Highly Recommended
– Premium Lager, British Columbia
Wayne Gretzky Estates Okanagan
Experience Rosé, California USA
• Double Gold – Best of Class – 95 points –
2020 Wayne Gretzky Okanagan Rose
• Best International Dry Rose – 2020
Wayne Gretzky Okanagan Rose
Sunset International Wine Competition, California USA
• Silver Medal – 2019 Pinot Grigio
All Canadian Wine Championships
• Bronze Medal – 2020 Rose
Alberta Beverage Awards – Culinaire magazine
• Judges Selection – Red Cask Whisky
• Judges Selection – Session Ale Beer
British Columbia Lieutenant Governor’s Wine Awards
• Gold Medal – 2020 Rose
WineAlign National Wine Awards of Canada
• Silver Medal – 90 points – 2020 Rose
• Bronze Medal – 88 points – 2020 Pinot Grigio
• Bronze Medal – 88 points – 2019 Signature
Series Cabernet Merlot
• Bronze Medal – 88 points – 2020
Founders Series The Great Red
All Canadian Wine Championships
BEST
SPARKLING WINE
DOUBLE GOLD
Gray Monk Estate Winery
2018 Odyssey Rose Brut
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE THREE MONTHS AND YEAR ENDED MARCH 31, 2022
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, 2022, in comparison with those for the
three months and year ended March 31, 2021, for Andrew Peller Limited (the “Company” or “APL”). This discussion is
prepared as of June 15, 2022 and should be read in conjunction with the audited consolidated financial statements and
accompanying notes contained therein for the years ended March 31, 2022 and 2021. Additional information relating to the
Company, including the audited annual consolidated financial statements and Annual Information Form for the years ended
March 31, 2022, and March 31, 2021, is available on www.sedar.com. The financial years ending March 31, 2023, March
31, 2022, and March 31, 2021 are referred to as “fiscal 2023, “fiscal 2022” and “fiscal 2021” 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
ANDREW PELLER LIMITED 2022 | 8
the United States, the United Kingdom, New Zealand, Australia, and China. GVI’s award-winning premium and ultra-
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 to all customers and consumers through its extensive distribution network, which is supported by enhanced
sales, marketing, and promotional programs. From time to time the Company also evaluates the potential for acquisitions
and partnerships, both in Canada and internationally, to further complement its product portfolio and market presence.
Recent Events
On June 15, 2022, the Company’s Board of Directors approved a common share dividend with no increase from fiscal 2022.
The annual dividend on Class A Shares is $0.246 per share and the dividend on Class B Shares is $0.214. The Company has
consistently paid common share dividends since 1979. APL currently designates all dividends paid as “eligible dividends”
for purposes of the Income Tax Act (Canada) unless indicated otherwise.
On June 8, 2022, the Company announced the appointment of Paul Dubkowski as Chief Financial Officer and Executive
Vice-President of Information Services effective July 11, 2022. Steve Attridge, current CFO and EVP, IT, will remain with
the Company to transition with Paul and continue to lead the Company’s digital and business process transformation.
On September 28, 2021, the Company completed the sale of its Port Coquitlam, British Columbia property and related assets
for total proceeds of approximately $8.8 million, net of transaction costs, and generated a realized gain on sale of $7.5
million or $0.21 per Class A share.
On March 4, 2021, the Company announced its notice of intention to make a normal course issuer bid had been approved by
the Toronto Stock Exchange. Under the 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, during the 12-month
period from March 8, 2021 to March 7, 2022. As of March 7, 2022, the Company had purchased 598,600 Class A non-
voting common shares, at a weighted average price of $8.70 per Class A non-voting common share, for a total cash
consideration of $5.2 million.
9
| ANDREW PELLER LIMITED 2022
Results of Operations
For the years ended March 31,
(in $000, except per share amounts)
Sales
Gross margin (1)
Gross margin (% of sales)
Selling and administrative expenses
EBITA (1)
Interest
Net unrealized (gain) loss on derivative financial instruments
Gain on sale of assets held for sale
Gain on debt modification and financing fees
Other expenses
Adjusted earnings (1)
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)
(1) See “Non-IFRS Measures” section of this MD&A
2022
2021
2020
373,944
138,992
37.2%
99,804
39,188
9,337
(2,269)
(7,518)
-
1,210
5,143
12,468
0.29
0.26
0.246
0.214
393,036
156,518
39.8%
93,472
63,046
8,108
(135)
-
(2,312)
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
Sales for the year ended March 31, 2022 were $374.0 million, down 4.9% from the prior year. When the pandemic was
announced in March 2020 the Company saw an increase in sales in fiscal 2021 as a result of changes in consumer
purchasing patterns and uncertainty around trade channels for alcoholic beverages remaining open. Additionally, provincial
liquor stores in Ontario were closed on Mondays for the majority of fiscal 2021, resulting in an increase in sales at the
Company’s retail locations. As pandemic restrictions ease, sales in these channels have normalized when compared to prior
year. Government-mandated closures of restaurants and hospitality businesses were lifted in June 2021, however
restrictions on capacity remained in place throughout fiscal 2022. As a result, the recovery in the restaurant and hospitality
industries lagged during the first half of fiscal 2022 when compared to the retail industry. Sales in restaurants, estate
wineries and hospitality locations have begun to increase as the pandemic eases and consumers return to pre-pandemic
activities, and management expects this to continue.
The Company defines gross margin (see “Non-IFRS Measures” section of this MD&A) as gross profit excluding
amortization. Gross margin as a percentage of sales was 37.2% for the year ended March 31, 2022 compared to 39.8% in the
prior year. Gross margin has declined throughout fiscal 2022 due to higher imported wine and raw material costs and
increased co-packing costs related to the Company’s refreshment beverage categories. The cost of raw materials such as
import wine, glass bottles and other packaging materials have increased due to inflationary pressures. Gross margin is also
being suppressed due to an increase in global supply chain costs such as international freight and associated shipping
charges.
Selling and administrative expenses increased in fiscal 2022 as the Company increased staffing and marketing expenses in
preparation for more normal markets returning as the impact of the COVID-19 pandemic eases. During the first six months
of fiscal 2021, the Company laid off a significant part of its workforce due to government-mandated closures and reduced
advertising and promotional spending to conserve cash in response to the pandemic. In addition, certain start-up costs were
incurred in fiscal 2022 related to the acquisition of the Riverbend Inn and Vineyard, which opened on June 19, 2021. As a
percentage of sales, selling and administrative expenses were 26.7% in fiscal 2022 compared to 23.8% in the prior year. As
activity in the hospitality, licensee and export channels increases, the Company expects selling and administrative expenses
will trend to pre-pandemic levels as a percentage of sales.
Earnings before interest, amortization, gain on sale of assets held for sale, net unrealized gains and losses on derivative
financial instruments, other (income) expenses, gain on debt modification net of financing fees, and income taxes
(“EBITA”) (see “Non-IFRS Measures” section of this MD&A) were $39.2 million for the year ended March 31, 2022
ANDREW PELLER LIMITED 2022 | 10
compared to $63.0 million in the prior year. The decline in EBITA in fiscal 2022 is due to lower sales, higher cost of goods
sold and higher selling and administrative expenses compared to the prior year.
Interest expense in fiscal 2022 increased compared to the prior year due higher debt levels resulting primarily from capital
investments in the Company’s operations and properties and higher overall interest rates.
The Company recorded a net unrealized non-cash gain in fiscal 2022 of $2.3 million related to mark-to-market adjustments
on interest rate swaps and foreign exchange contracts compared to an unrealized gain of $0.1 million in the prior year. The
change is largely due to a gain on the interest rate swap as Canadian interest rates increase. The Company has elected not to
apply hedge accounting and accordingly the change in fair value of these financial instruments is reflected in the 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.
On September 28, 2021 the Company recorded a realized gain of $7.5 million on the sale of its Port Coquitlam, British
Columbia property and related assets.
The Company amended and restated its debt facilities on December 8, 2020. Management assessed the amendments and
determined that these amendments constituted a modification of long-term debt resulting in a gain on modification of $2.9
million for the year ended March 31, 2021, offset by financing costs of $0.6 million.
Net earnings for the year ended March 31, 2022 were $12.5 million or $0.29 per Class A Share compared to $27.8 million or
$0.65 per Class A Share in the prior year.
Quarterly Performance
The following table outlines key quarterly highlights.
(in $000, except per share amounts)
Q4 22
Q3 22
Q2 22
Q1 22
Q4 21
Q3 21
Q2 21
Q1 21
Sales
Gross margin (1)
78,838
103,485
99,224
92,397
79,126
111,060
104,410
98,440
23,029
36,294
42,408
37,261
28,089
41,537
44,165
42,727
Gross margin (% of sales)
29.2%
35.1%
42.7%
40.3%
35.5%
37.4%
42.3%
43.4%
EBITA (1)
Interest
(630)
12,084
15,821
11,913
1,815
16,223
22,438
22,570
2,162
2,424
2,478
2,273
2,619
1,637
1,813
2,039
Gain on debt modification and financing
fees
Net unrealized (gain) loss on financial
instruments
Gain on sale of assets held for sale
Other expenses (income)
Adjusted earnings (loss) (1)
-
-
-
-
-
(2,312)
-
-
(485)
-
946
(359)
-
(103)
(1,037)
(7,518)
26
(388)
-
341
(495)
-
742
170
-
148
(540)
-
195
730
-
685
(6,678)
2,765
5,801
3,255
(6,145)
8,159
12,419
12,553
Net earnings (loss)
(7,019)
3,107
13,090
3,290
(6,328)
10,236
12,674
11,204
E.P.S. – Class A basic and diluted
E.P.S. – Class B basic and diluted
$(0.17)
$(0.14)
$0.07
$0.06
$0.31
$0.27
$0.08
$(0.15)
$0.07
$(0.13)
$0.24
$0.21
$0.30
$0.26
$0.26
$0.23
(1) See “Non-IFRS Measures” section of this MD&A
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 fluctuations in the Company’s results and consequently,
quarterly results may not follow historical trends.
Sales for the three months ended March 31, 2022 were consistent with the prior year’s fourth quarter. The recovery in
restaurant, estate winery and hospitality sales has offset the normalization of retail sales. Gross margin (see “Non-IFRS
Measures” section of this MD&A) was 29.2% in the fourth quarter of fiscal 2022, compared to 35.5% for the fourth quarter
11
| ANDREW PELLER LIMITED 2022
of fiscal 2021 as raw material and supply chain costs have increased significantly when compared to prior year as described
above. Selling and administrative expenses decreased as a percentage of sales for the three months ended March 31, 2022
compared to the prior year’s fourth quarter as activity in the restaurant and hospitality channels has increased as the
pandemic eases. The Company incurred a net loss for the three months ended March 31, 2022 of $7.0 million or a loss of
$0.17 per Class A Share compared to a net loss of $6.3 million or $0.15 per Class A Share in the fourth quarter of fiscal
2021. The Company incurred an adjusted loss (see “Non-IFRS Measures” section of this MD&A) of $6.7 million for the
three months ended March 31, 2022 compared to an adjusted loss of $6.1 million in the prior year.
Liquidity and Capital Resources
As at
(in $000)
Current assets
Property, plant, and equipment
Right-of-use assets
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, 2022
March 31, 2021
March 31, 2020
236,213
209,015
15,215
43,990
53,638
558,071
54,381
192,065
-
12,193
1,605
32,426
265,401
558,071
225,302
206,920
17,011
39,650
53,638
542,521
54,618
174,544
717
13,987
3,316
29,765
265,574
542,521
214,114
203,549
17,551
25,067
53,638
513,919
130,460
95,515
1,932
14,802
3,649
22,038
245,523
513,919
The change in current assets as at March 31, 2022 compared to March 31, 2021 reflects a decrease in accounts receivable
due offset by higher levels of inventory due to lower sales in the fourth quarter of fiscal 2022 compared to fiscal 2021.
Inventory is dependent on domestically grown grapes that are used in the sale of premium and ultra-premium wines that are
held for a longer period than 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.
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 $15.3 million of accounts receivable with
provincial liquor boards at March 31, 2022, all of which is expected to be collectible. The balance represents amounts due
from licensees, export customers, and independent retailers of personal winemaking products. The amount of accounts
receivable that was 30 days past due was $1.4 million at March 31, 2022. Against these amounts an expected credit loss of
$0.3 million has been provided which the Company has determined based on a reasonable estimate of lifetime expected
credit losses for trade receivable.
Property, plant and equipment at March 31, 2022 increased by $2.1 million compared to March 31, 2021. This is due to
$15.6 million of additions in the Company’s properties and operations, offset by $13.5 million in depreciation. Intangible
assets at March 31, 2022 increased by $4.3 million, attributed to $7.8 million of software additions, offset by $3.5 million of
amortization.
Right-of-use assets decreased from $17.0 million as at March 31, 2021 to $15.2 million as at March 31, 2022. The decrease
of $1.8 million was primarily due to lease additions and modifications of $2.6 million, offset by depreciation of $4.4 million.
ANDREW PELLER LIMITED 2022 | 12
Current liabilities were $54.4 million as at March 31, 2022, consistent with March 31, 2021. Accounts payable and accrued
liabilities increased by $0.9 million due to the timing of payments at year-end. This increase was offset by a decrease of $1.6
million in derivative financial instruments as a result of fair value changes.
Long-term debt increased to $192.1 million at March 31, 2022 from $174.5 million at March 31, 2021, due to a reduction in
cash from operations and increased investment in the Company’s properties and operations. The Company’s debt to equity
ratio was 0.72:1 at March 31, 2022 compared to 0.66:1 at March 31, 2021. At March 31, 2022, the Company had unutilized
debt capacity in the amount of $157.6 million on its credit facility.
On November 10, 2021, the Company amended and restated its debt facility to revise its interest charge coverage ratio
financial covenant for the three-month period ended December 31, 2021. On December 22, 2021, the Company obtained a
waiver from its lenders in connection with the financial covenants of its credit agreement for the fiscal quarter ended
December 31, 2021. Furthermore, on February 9, 2022, the Company amended its credit agreement to amend financial
covenants for reporting periods from March 31, 2022 to the end of the term of the credit facility. The financial covenants for
the reporting periods from June 30, 2022 to the end of the term of the credit facility were further amended on June 15, 2022.
This amendment also contains post-closing covenants which require the Company to provide additional first ranking
security in favour of the lenders on real property with a certain fair market value by a specified date.
Management expects to generate sufficient cash flow from operations to meet its debt servicing and working capital
requirements over the short-term through strong management of working capital and prioritization of capital expenditures.
The Company regularly reviews all of its assets to ensure appropriate returns on investment are being achieved and that they
fit with the Company’s long-term strategic objectives.
For the year ended March 31, 2022, the Company generated cash from operating activities, after changes in non-cash
working capital items, of $15.6 million compared to $41.1 million in the prior year. The reduction in cash provided by
operating activities is primarily due to impact of COVID-19 on the operations of the Company during 2021 compared to
2022, compounded by higher raw materials costs and global supply chain costs due to inflationary pressures.
Cash used in investing activities decreased by $22.4 million. This is primarily due to the sale of the Port Coquitlam property
resulting in net proceeds of $8.8 million, as well as a reduction in additions for both property, plant and equipment and
intangible assets.
Financing activities for the year ended March 31, 2022 include the payment of dividends, principal repayment of lease
obligations and the purchase of Class A shares under the Company’s approved issuer bid.
Working capital at March 31, 2022 was $181.8 million compared to $170.7 million at March 31, 2021. Shareholders’ equity
at March 31, 2022 was $265.4 million or $6.15 per common share compared to $265.6 million or $6.08 per common share at
March 31, 2021.
The following table outlines the Company’s contractual obligations as at March 31, 2022:
(in $000)
Long-term debt
Leases and royalties
Service agreements
Grape, bulk wine and whisky purchase contracts
Packaging purchase contracts
Interest rate swap
Foreign exchange forwards
Total contractual obligations
< 1
Year
-
6,027
2,293
101,407
41,094
150,821
904
22,948
174,673
2 - 3
Years
192,132
8,451
2,281
95,824
15,485
314,173
-
-
314,173
4 - 5
Years
-
5,074
260
63,745
-
69,079
-
-
69,079
> 5
Years
-
18,960
-
76,456
-
95,416
-
-
95,416
Total
192,132
38,512
4,834
337,432
56,579
629,489
904
22,948
653,341
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.
13
| ANDREW PELLER LIMITED 2022
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
March 31, 2022 March 31, 2021 March 31, 2020
Class A Shares
Class B Shares
Total
34,978,011
8,144,183
43,122,194
35,525,639
8,144,183
43,669,822
35,403,767
8,191,883
43,595,650
On March 4, 2021 the Company announced its notice of intention to make a normal course issuer bid had been approved by
the Toronto Stock Exchange. Under the bid the Company can purchase for cancellation up to 1,773,896 of its outstanding
Class A non-voting shares, representing 5% of the Class A shares outstanding, during the 12-month period from March 8,
2021 to March 7, 2022. As of March 7, 2022, the Company had purchased 598,600 Class A shares at a weighted average
price of $8.70 per share for a total of $5.2 million.
Strategic Outlook 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 continuing sales growth as markets continue to normalize after COVID-19. The
Company will continue to closely monitor its costs and will react to changes to risks and opportunities in the marketplace.
The Company will continue to expand product offerings outside the traditional table wine segment into other alcoholic
beverages where it is able to leverage its detailed knowledge of growth opportunities and operational advantages in the
Canadian market. The Company will also make packaging design changes that are more appealing to its target markets and
are consistent with its initiative to be more environmentally friendly. Increased focus will be made on 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.
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. For the year ended March 31, 2022, the
COVID-19 pandemic continued to impact consumer purchasing patterns resulting in fluctuations in the Company’s results,
however, the Company continues to generate operating cash flows to meet short-term working capital needs. The Company
is also experiencing uncertainty with respect to raw materials and import wine costs due to inflation, and component
shortages because of the global supply chain crisis. The impact on the financial results of the Company will depend on
management’s ability to successfully mitigate against these risks. In the first quarter of fiscal 2023, the Company has
implemented price increases that are expected to partially offset inflationary pressures on margin and is also exploring
opportunities to implement further increases should inflation continue to rise. The Company is also executing cost savings
ANDREW PELLER LIMITED 2022 | 14
initiatives to mitigate against increasing supply chain costs and supply constraints through alternative sourcing arrangements
for components and the negotiation of lower outbound freight costs.
The Government of Ontario has announced its 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 competitor’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 adverse 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 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. When
environmental risks such as wildfires occur, the Company’s viticultural teams have internal processes to ensure the
Company’s vineyards are protected. This may include the use of technology and fire suppression activities. The Company’s
winemaking teams are also able to monitor the quality of the grapes and use enhanced processing technology to minimize
the risk of smoke taint. APL has also developed programs to maintain access to a consistent supply of premium quality
grapes and wine. The price of grapes is determined through negotiations with the Ontario Grape Growers Marketing Board
in 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 (see
“Non-IFRS Measures” section of this MD&A), however, the Company believes the impact on gross margin will be largely
offset by its continued ability to leverage scale and successful cost control initiatives to reduce other cost of goods sold. The
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, 2022, the Company has forward foreign
currency contracts to buy $15.0 million US at rates averaging $1.26, EUR1.4 million at rates averaging $1.41 and $2.4
million AUD at a rate of $0.91. These contracts mature at various dates to September 2022. Based on the Company’s
forecasts for foreign currency purchases and the amount of foreign exchange forward contracts outstanding at March 31,
2022, each one percent change in the respective foreign currency exchange rates would not result in a material impact on the
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.
15
| ANDREW PELLER LIMITED 2022
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 (see “Non-IFRS Measures” section of this
MD&A) and implement a higher level of promotion and advertising activity to remain competitive. APL and other wine
industry participants also generally compete with 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.
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 on 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.
ANDREW PELLER LIMITED 2022 | 16
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, gain on sale of assets held for sale, net
unrealized gains and losses on derivative financial instruments, other (income) expenses, gain on debt modification net of
financing fees, and income taxes) to measure its financial performance. EBITA is not a recognized measure under IFRS;
however, management believes that EBITA is a useful supplemental measure to net earnings as it provides readers with an
indication of earnings available for investment prior to debt service, capital expenditures, and income taxes, as well as
providing an indication of recurring earnings compared to prior periods.
The Company calculates EBITA as follows.
For the three months and year ended March 31,
(in $000)
Net earnings (loss)
Add: Interest
Income taxes
Amortization of plant and equipment used in production
Amortization of equipment and intangibles used in selling
and administration
Net unrealized gains on derivative financial instruments
Gain on debt modification
Gain on sale of assets held for sale
Other expenses
EBITA
Three Months
Year
2022
(7,019)
2,162
(1,773)
2,223
3,316
(485)
-
-
946
(630)
2021
(6,328)
2,619
153
2,265
2,859
(495)
-
-
742
1,815
2022
12,468
9,337
4,607
9,116
12,237
(2,269)
-
(7,518)
1,210
39,188
2021
27,786
8,108
9,667
10,138
8,024
(135)
(2,312)
-
1,770
63,046
Readers are cautioned that EBITA should not be construed as an alternative to net earnings determined in accordance with
IFRS as an indicator 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
Year
2022
78,838
55,809
23,029
29.2%
2021
79,126
51,037
28,089
35.5%
2022
373,944
234,952
2021
393,036
236,518
138,992
156,518
37.2%
39.8%
17
| ANDREW PELLER LIMITED 2022
The Company calculates adjusted earnings (loss) as follows:
For the three months and year ended March 31,
(in $000)
Net earnings (loss)
Net unrealized gains on derivative financial instruments
Other expenses
Gain on debt modification
Gain on sale of assets held for sale
Fair value adjustment for acquired inventory sold during the
period
Income tax effect of the above
Adjusted earnings (loss)
Three Months
Year
2022
(7,019)
(485)
946
-
-
-
2021
(6,328)
(495)
742
-
-
-
(120)
(64)
(6,678)
(6,145)
2022
12,468
(2,269)
1,210
-
(7,518)
-
1,252
5,143
2021
27,786
(135)
1,770
(2,312)
-
302
(425)
26,986
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.
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
2022
3,867
323
1,132
5,322
2021
4,421
265
823
5,509
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 IFRS, 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 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 judgement in 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.
ANDREW PELLER LIMITED 2022 | 18
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. The incremental borrowing rates are subject to change mainly due
to macroeconomic changes in the environment.
Recently adopted accounting pronouncements
IFRS 16, Leases
This standard has been amended to provide lessees with an optional exemption from assessing whether a rent concession
related to COVID 19 is a lease 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 has
not had an 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 adoption of
these amendments did not have a significant impact on the consolidated financial statements.
Recently issued accounting pronouncements
IAS 16, Property, Plant and Equipment
This standard has been amended to prohibit an entity from deducting from the cost of an item of property, plant and
equipment any proceeds received from selling items produced 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.
19
| ANDREW PELLER LIMITED 2022
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.
IAS 12, Income Taxes
This standard has been amended to require companies to recognize deferred tax on transactions that, on initial recognition,
give rise to equal amounts of taxable and deductible temporary differences. The amendments are effective for annual
reporting periods beginning on or after January 1, 2023. The Company has not yet assessed the impact of the amendments
on the consolidated financial statements.
Evaluation of Disclosure Controls and Procedures and Internal Control over 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 15, 2022, 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, 2022, 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 15, 2022, 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.
ANDREW PELLER LIMITED 2022 | 20
Independent auditor’s report
To the Shareholders of Andrew Peller Limited and its subsidiaries
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, 2022 and 2021, 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, 2022 and 2021;
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, 2022. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
21
| ANDREW PELLER LIMITED 2022
Key audit matter
Costing of bulk wine and spirits inventories
Refer to note 2 – Summary of significant accounting policies
and note 4 – Inventories to the consolidated financial
statements.
The total value of bulk wine and spirits inventories
amounted to $94.3 million as at March 31, 2022. The
Company carries bulk wine and spirits inventories on an
average cost basis. The weighted average costs are
determined separately for import bulk wine, domestic bulk
wine and spirits for each varietal and vintage year.
We considered this a key audit matter due to the magnitude
of the bulk wine and spirits inventories balance and the high
degree of audit effort in performing procedures related to
evaluating management’s calculation of average costs.
Goodwill impairment assessment for the Western
Canadian wine cash generating unit (CGU)
Refer to note 2 – Summary of significant accounting policies,
note 3 – Critical accounting estimates and judgments and
note 8 – Goodwill to the consolidated financial statements.
to
related
The Company had goodwill of $26.7 million as at March 31,
2022
its Western Canadian wine CGU.
Management performs an impairment test on an annual
basis, or more frequently if events or circumstances indicate
that the carrying value may be impaired. An impairment loss
is recognized if the carrying amount of a CGU to which the
goodwill relates exceeds its recoverable amount. The
recoverable amount of the Western Canadian wine CGU was
based on a value in use method using a discounted cash flow
model. Key assumptions used by management in the
discounted cash flow model included the average revenue
growth rate during the period of projected cash flows, gross
profit percentage, selling and administration margin,
terminal growth rate, and the discount rate. No impairment
was recognized as a result of the 2022 impairment test.
We considered this a key audit matter due to the judgment
by management in determining the recoverable amount of
the Western Canadian wine CGU, including the use of key
in a high degree of
assumptions. This has resulted
the matter
How our audit addressed the key audit matter
Our approach
to addressing
following procedures, amongst others:
Tested the operating effectiveness of controls relating to
management’s bulk wine and spirits inventories costing
process, including controls over the review of the inputs
in the calculation of average costing and approval of
bulk wine and spirit inventories costs.
involved
the
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.
On a sample basis of inventory items, tested the
mathematical accuracy of the weighted average cost
calculation.
Attended and performed inventory test counts for a
sample of locations or obtained third party confirmations
at certain locations to test the existence and accuracy of
the quantity of bulk wine and spirits inventories as an
input to the weighted average costs calculations.
the
included
the matter
to addressing
Our approach
following procedures, among others:
Evaluated how management determined the recoverable
amount of the Western Canadian wine CGU, which
included the following:
– Tested the appropriateness of the method used and
the mathematical accuracy of the discounted cash
flow model.
– Tested the underlying data used in the discounted
cash flow model.
– Tested the reasonableness of the average revenue
growth rate during the period of projected cash
selling and
flows, gross profit percentage,
administration margin, and terminal growth rate
applied by management in the discounted cash flow
model by comparing
the budget,
management’s strategic plans approved by the
Board of Directors, current and past performance,
or available third party published industry and
economic data, as applicable.
them
to
– Professionals with specialized skill and knowledge
in the field of valuation assisted in testing the
reasonableness of the discount rate applied by
management based on available data of comparable
companies.
ANDREW PELLER LIMITED 2022 | 22
subjectivity and audit effort in performing procedures to test
the key assumptions. Professionals with specialized skill and
knowledge in the field of valuation assisted us in performing
our procedures.
● Tested the disclosures made in the consolidated financial
the key
the sensitivity of
including
statements,
assumptions used by management.
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.
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.
23
| ANDREW PELLER LIMITED 2022
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.
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 Peter Dalziel.
Chartered Professional Accountants, Licensed Public Accountants
Oakville, Ontario
June 15, 2022
ANDREW PELLER LIMITED 2022 | 24
Consolidated Balance Sheets
As at March 31, 2022 and 2021
(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
Assets held for sale (note 5)
Property, plant and equipment (note 5)
Right-of-use assets (note 10)
Intangible assets (note 7)
Goodwill (note 8)
Liabilities
Current liabilities
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 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
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
25
| ANDREW PELLER LIMITED 2022
2022
$
2021
$
1,297
27,376
197,042
2,045
5,893
2,560
-
236,213
209,015
15,215
43,990
53,638
558,071
47,375
2,587
4,070
349
54,381
192,065
-
12,193
1,605
32,426
292,670
27,290
5,756
233,710
(1,355)
265,401
558,071
2,737
28,896
178,727
2,815
4,879
5,973
1,275
225,302
206,920
17,011
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
Consolidated Statements of Earnings
For the years ended March 31, 2022 and March 31, 2021
(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
2022
$
373,944
234,952
9,116
2021
$
393,036
236,518
10,138
Gross profit
129,876
146,380
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)
Gain on sale of assets held for sale (note 5)
Net unrealized gain on derivative financial instruments (note 20)
Other expense (note 16)
Earnings before income taxes
Income taxes (note 13)
Current
Deferred
99,804
12,237
9,337
-
(7,518)
(2,269)
1,210
93,472
8,024
8,108
(2,312)
-
(135)
1,770
112,801
108,927
17,075
37,453
2,458
2,149
4,607
2,091
7,576
9,667
Net earnings for the year
12,468
27,786
Net earnings per share (note 17)
Basic and diluted
Class A shares
Class B shares
0.29
0.26
0.65
0.57
The accompanying notes are an integral part of these consolidated financial statements.
ANDREW PELLER LIMITED 2022 | 26
Consolidated Statements of Comprehensive Income
For the years ended March 31, 2022 and March 2021
(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
2022
$
2021
$
12,468
27,786
1,938
(512)
1,426
570
(151)
419
Net comprehensive income for the year
13,894
28,205
The accompanying notes are an integral part of these consolidated financial statements.
27
| ANDREW PELLER LIMITED 2022
Consolidated Statements of Changes in Equity
For the years ended March 31, 2022 and March 31, 2021
(in thousands of Canadian dollars)
Capital
stock
$
Contributed
surplus
$
Retained
earnings
$
Accumulated
other
comprehensive
loss
$
Total
shareholders’
equity
$
Balance at April 1, 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
Net comprehensive income for the year
Repurchase and cancellation of Class A
non-voting shares (note 14)
Exercise of share awards and issuance
of Class A non-voting shares
(notes 14 and 15)
Share-based compensation (note 15)
Settlement of post-retirement benefit
arrangement (note 12)
Dividends (Class A $0.246 per share,
Class B $0.214 per share)
-
(449)
719
-
-
-
-
-
12,468
(4,761)
(719)
1,525
-
-
-
-
(388)
(10,382)
1,426
-
-
-
388
-
13,894
(5,210)
-
1,525
-
(10,382)
Balance at March 31, 2022
27,290
5,756
233,710
(1,355)
265,401
The accompanying notes are an integral part of these consolidated financial statements.
ANDREW PELLER LIMITED 2022 | 28
Consolidated Statements of Cash Flows
For the years ended March 31, 2022 and March 31, 2021
(in thousands of Canadian dollars)
Cash provided by (used in)
Operating activities
Net earnings for the year
Adjustments for non-cash items
(Gain) 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 on derivative financial instruments
Gain on debt modification
Share-based compensation expense
Post-employment benefits
Interest paid
Income taxes received (paid)
Change in non-cash working capital items related to operations (note 19)
Investing activities
Proceeds from sale of land and property
Purchase of property, plant and equipment
Purchase of intangible assets
Financing activities
Repayment of lease obligations
Drawings on long-term debt
Repayment of long-term debt
Financing fees paid
Repurchase of Class A shares
Dividends paid
(Decrease) 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
The accompanying notes are an integral part of these consolidated financial statements.
29
| ANDREW PELLER LIMITED 2022
2022
$
2021
$
12,468
(7,495)
21,353
29
9,308
4,607
(2,269)
-
1,399
227
(8,636)
955
31,946
(16,354)
27,786
677
18,162
10
8,098
9,667
(135)
(2,861)
937
237
(7,076)
(6,832)
48,670
(7,551)
15,592
41,119
8,793
(13,612)
(9,289)
-
(17,651)
(18,888)
(14,108)
(36,539)
(4,115)
56,000
(39,000)
(400)
(5,210)
(10,199)
(3,812)
76,620
(64,836)
(655)
-
(9,160)
(2,924)
(1,843)
(1,440)
2,737
2,737
1,297
2,088
-
-
2,737
61
1,478
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022 and March 31, 2021
(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.
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 15, 2022.
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.
Foreign currency translation
The consolidated financial statements are presented in Canadian dollars, which is the Company’s functional currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions
and from the translation at year end exchange rates of monetary assets and liabilities denominated in currencies other
than the Company’s functional currency are recognized in the consolidated statements of earnings.
ANDREW PELLER LIMITED 2022 | 30
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,
packaging materials and supplies, 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
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
40 years
20 years
5 to 20 years
Land and vineyard land is carried at cost and is not amortized.
31
| ANDREW PELLER LIMITED 2022
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
2 – 14 years
none
2 – 14 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,
2022 and 2021.
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 International
Accounting Standard (IAS) 38, Intangible Assets.
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 events or circumstances indicate that the carrying value 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. An impairment loss is recognized if the
ANDREW PELLER LIMITED 2022 | 32
carrying amount of a CGU to which the goodwill relates exceeds its recoverable amount. The recoverable amount of a
CGU is based on a value in use method using a discounted cash flow model. If necessary, a CGU’s fair value is also
considered. An impairment loss in respect of goodwill cannot be reversed. No impairment in goodwill for the years
ended March 31, 2022 and 2021 was recognized as a result of the impairment test.
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
date.
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 (FVTPL).
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 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 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:
33
| ANDREW PELLER LIMITED 2022
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 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.
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.
ANDREW PELLER LIMITED 2022 | 34
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), restricted share units (RSUs) 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.
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
35
| ANDREW PELLER LIMITED 2022
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. RSUs vest ratably over the restriction period and
accordingly, the expense is recognized over the restriction 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
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 has not had an 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 consolidated financial statements after the LIBOR reform and its
replacement with alternative benchmark rates. The amendments are effective for annual periods beginning on or after
January 1, 2021. The adoption of these amendments did not have a significant impact on the consolidated financial
statements.
Recently issued accounting pronouncements
IAS 16, Property, Plant and Equipment
This standard has been amended to prohibit an entity from deducting from the cost of an item of property, plant and
equipment any proceeds received from selling items produced 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.
ANDREW PELLER LIMITED 2022 | 36
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.
IAS 12, Income Taxes
This standard has been amended to require companies to recognize deferred tax on transactions that, on initial
recognition, give rise to equal amounts of taxable and deductible temporary differences. The amendments are effective
for annual reporting periods beginning on or after January 1, 2023. The Company has not yet assessed the impact of the
amendments on the consolidated financial statements.
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 judgment in 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.
37
| ANDREW PELLER LIMITED 2022
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
2022
$
23,264
94,337
79,441
2021
$
12,791
81,718
84,218
197,042
178,727
Interest included in the cost of inventories
1,825
1,203
Inventory writedowns recognized as an expense amounted to $6,375 (2021 – $3,523).
The cost of inventories recognized as an expense and included in cost of goods sold, excluding amortization, was
$228,577 (2021 – $232,995).
5
Property, plant and equipment
At March 31, 2020
Cost
Accumulated amortization
Net carrying amount
Year ended March 31, 2021
Additions
Disposals
Amortization
Closing net carrying amount
At March 31, 2021
Cost
Accumulated amortization
Net carrying amount
Year ended March 2022
Additions
Disposals
Amortization
Vines, vineyard
land and
infrastructure
$
Machinery
and
equipment
$
Buildings
$
Total
$
49,003
(16,293)
95,049
(25,036)
155,152
(89,968)
334,730
(131,297)
32,710
70,013
65,184
203,433
779
-
(2,583)
4,592
(381)
(2,526)
6,551
(174)
(7,201)
16,352
(555)
(12,310)
30,906
71,698
64,360
206,920
49,782
(18,876)
99,070
(27,372)
161,219
(96,859)
350,027
(143,107)
30,906
71,698
64,360
206,920
764
-
(1,505)
1,649
-
(2,733)
13,226
(23)
(9,283)
15,639
(23)
(13,521)
Land
$
35,526
-
35,526
4,430
-
-
39,956
39,956
-
39,956
-
-
-
Closing net carrying amount
39,956
30,165
70,614
68,280
209,015
ANDREW PELLER LIMITED 2022 | 38
At March 2022
Cost
Accumulated amortization
Net carrying amount
39,956
-
39,956
50,546
(20,381)
100,719
(30,105)
174,385
(106,105)
365,606
(156,591)
30,165
70,614
68,280
209,015
Included in buildings and machinery and equipment are assets amounting to $1,419 (2021 – $1,831) that are under
development and are not being amortized.
Contractual commitments to purchase property, plant and equipment were $1,268 as at March 31, 2022 (2021 –
$3,871).
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 had a net book value of $1,275. On September 28, 2021,
the Company completed the sale of the assets for total consideration, net of selling costs, of $8,793 resulting in a
realized gain on sale of $7,518.
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, 2022, the Company harvested grapes valued at $8,666 (2021 – $8,419).
The changes in the carrying amount of biological assets are as follows:
Balance – Beginning of year
Net increase in fair value less costs to sell due to biological
transformation
Transferred to inventory on harvest
Biological assets
2022
$
2,815
7,896
(8,666)
2,045
2021
$
1,951
9,283
(8,419)
2,815
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.
39
| ANDREW PELLER LIMITED 2022
7
Intangible assets
At March 31, 2020
Cost
Accumulated
amortization and
impairment
Brands –
indefinite
life
$
Brands –
finite life
$
Customer
contracts
and lists
$
Contract
packaging
$
Software
$
Other
$
Total
$
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)
Net carrying amount
10,039
Year ended March 31,
2021
Additions
Amortization
-
-
Closing net carrying
amount
10,039
-
-
-
-
3,971
-
(611)
3,360
-
-
-
-
10,956
101
25,067
16,096
(902)
-
-
16,096
(1,513)
26,150
101
39,650
At March 31, 2021
Cost
Accumulated
amortization and
impairment
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
Year ended March 31,
2022
Additions
Amortization
Closing net carrying
amount
At March 31, 2022
Cost
Accumulated
amortization and
impairment
-
-
10,039
10,239
(200)
Net carrying amount
10,039
-
-
-
-
-
-
-
3,360
-
(574)
2,786
12,827
(10,041)
2,786
-
-
-
-
-
-
-
26,150
101
39,650
7,811
(2,897)
-
-
7,811
(3,471)
31,064
101
43,990
36,611
1,917
61,594
(5,547)
(1,816)
(17,604)
31,064
101
43,990
Contractual commitments to purchase software were $405 as at March 31, 2022 (2021 – $1,269).
Included in software are assets amounting to $2,430 (2021 – $404) that are under development and are not being
amortized.
ANDREW PELLER LIMITED 2022 | 40
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
2022
$
3,134
26,695
23,809
53,638
2021
$
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
Average revenue growth rate during the period of projected cash
flows
Gross profit percentage
Selling and administration margin
Terminal growth rate
2022
%
11.0
3.7
41.2
25.9
3.4
2021
%
10.4
5.0
42.8
24.6
3.6
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, selling and administration margin, average revenue growth rate
during the period of projected cash flows and the terminal growth rate.
In relation to the Ontario and Eastern Canadian wine CGU and personal winemaking products CGU, the Company
determined the impact of what a reasonable change in each key assumption would be to the discounted cash flows. The
discount rates were increased by 9.1% (a 100 basis point increase), the gross profit percentages were decreased by
2.0% – 3.2% (a 100 basis point decrease), average revenue growth rates during the period of projected cash flows were
decreased by 20.3% – 196.9% (a 100 basis point decrease) and the terminal growth rate was decreased by 22.2% –
28.6% (a 100 basis point decrease). 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. Both the Ontario and Eastern Canadian wine CGU and personal winemaking products CGU show no
signs of impairment in any of the sensitivities performed.
In relation to the Western Canadian wine CGU, the Company determined that the recoverable amount exceeds the
carrying amount by $10,360, however the recoverable amount is sensitive to changes to the key assumptions. Changing
each assumption independently, an increase in the discount rate of 2.9% (a 32 basis point increase), a decrease in the
gross profit percentage or an increase in the selling and administration margin of 2.1% (a 69 basis point decrease), a
decrease in the average revenue growth rate of 3.8% (a 13 basis point decrease) or a decrease in the terminal growth
41
| ANDREW PELLER LIMITED 2022
rate of 8.6% (a 39 basis point decrease) would result in the recoverable amount being equal to the carrying amount. As
each key assumption was changed independently, the results of the sensitivity analyses do not contemplate
management’s ability to mitigate against any adverse effects that may arise in the future.
9 Accounts payable and accrued liabilities
Trade payables
Accrued liabilities
Deferred revenue
10 Right-of-use assets and lease obligations
2022
$
29,667
16,294
1,414
47,375
2021
$
24,796
20,444
1,247
46,487
Vineyard
land
$
Buildings
$
Machinery
and
equipment
$
At April 1, 2020
Additions
Terminations
Amortization
Closing net carrying amount
Year ended March 31, 2022
Additions
Modifications
Amortization
Closing net carrying amount
6,659
522
(86)
(517)
6,578
-
-
(493)
6,085
9,669
1,435
(195)
(2,713)
8,196
336
778
(2,915)
6,395
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
1,223
2,370
(247)
(1,109)
2,237
1,451
-
(953)
2,735
2022
$
17,813
2,565
-
(4,900)
785
16,263
4,070
Total
$
17,551
4,327
(528)
(4,339)
17,011
1,787
778
(4,361)
15,215
2021
$
17,820
4,327
(522)
(4,674)
862
17,813
3,826
Lease obligations
12,193
13,987
Expenses related to leases with variable consideration amounting to $1,118 (2021 – $1,981) and short term leases and
low value leases amounting to $1,322 (2021 – $501) were recorded within selling and administration expenses. The
total cash outflows relating to leases during the year were $7,340 (2021 – $7,156).
ANDREW PELLER LIMITED 2022 | 42
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 Long-term debt
Revolving, amortizing loan – investment facility
Less: Financing costs
2022
$
192,132
67
192,065
2021
$
174,640
96
174,544
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. 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 for the year ended March 31, 2021. Financing costs of $106 are being amortized over the new term of the
loan.
On November 10, 2021 and February 9, 2022, the Company amended its debt facilities. Amendments include revised
financial covenants for the period of March 31, 2022 to June 30, 2024. Management has assessed and determined that
these amendments do not constitute a modification of long-term debt. Financing costs of $400 were incurred and
expensed immediately as part of interest expense.
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. As at March 31, 2022, the applicable margin was 4.00% (2021 – 1.90%). Interest expense on long term debt
during the year was $7,750 (2021 – $5,925).
The Company and its subsidiaries have provided their assets as security for these loans.
The following table summarizes the change in the Company’s long term debt arising from financing activities for the
year ended March 31, 2022:
Balance – Beginning of year
Drawings
Repayments
Amortization of deferred financing fees
Amortization of gain on modification of debt
Long-term debt
43
| ANDREW PELLER LIMITED 2022
Long-term
debt
$
174,544
56,000
(39,000)
29
492
192,065
12 Post-employment benefits
Defined contribution plans
The total expenses for the defined contribution savings plans were $2,599 (2021 – $2,099).
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. In November 2021, the Company entered into an agreement to purchase
an irrevocable group annuity contract to fund the accrued benefit obligation associated with one of the Company’s
defined benefit pension plans. In connection with this transaction, the Company recognized a settlement loss of $110,
which was recorded as part of the net benefit plan expense in the consolidated statements of earnings. The Company
also transferred the accumulated other comprehensive loss, net of deferred income taxes, associated with this plan to
retained earnings in the amount of $388. The transaction has no impact on the amount, timing, or form of the monthly
retirement benefit payments to the affected retirees and beneficiaries.
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 require 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 2022 | 44
Pension
benefits
$
Other post-
employment
benefits
$
25,158
(566)
752
302
(1,325)
(1,588)
22,733
26,069
310
786
(1,325)
(1,588)
110
155
(2,453)
22,064
(669)
310
110
34
454
1,732
203
11.8
-
-
-
77
(77)
-
-
2,405
76
76
(77)
-
-
-
(206)
2,274
2,274
76
-
76
152
206
71
10.6
2022
Total
$
25,158
(566)
752
379
(1,402)
(1,588)
22,733
28,474
386
862
(1,402)
(1,588)
110
155
(2,659)
24,338
1,605
386
110
110
606
1,938
274
11.7
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
Settlement
Fair value – End of year
Plan obligations
Accrued benefit obligations – Beginning of
year
Total current service cost
Interest cost
Benefits paid
Settlement paid
Settlement loss
Remeasurements
Experience loss
Gain from change in financial
assumptions
Accrued benefit obligations – End of year
Post-employment benefit (asset) obligation
Benefit plan expense
Current service cost
Settlement loss
Net interest cost on defined benefit liability
Net benefit plan expense
Amount recognized in other comprehensive
income
Net actuarial gain
Expected contributions for the year ending
March 31, 2023
Weighted average duration of the defined benefit
obligations in years
45
| ANDREW PELLER LIMITED 2022
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 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
Expected contributions for the year ending
March 31, 2022
Weighted average duration of the defined benefit
obligations in years
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
505
65
570
652
192
12.9
-
-
-
63
(63)
-
2,237
63
86
(63)
-
82
2,405
2,405
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
568
151
719
570
257
12.8
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
2022
%
3.1
4.0
2.5
5.0
60 – 65 years
2.0
MI-2017
2021
%
3.8
3.1
2.5
5.0
60 – 65 years
2.0
MI-2017
ANDREW PELLER LIMITED 2022 | 46
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.
2022
Other post-
employment
benefits
$
2021
Other post-
employment
benefits
$
Pension
benefits
$
(227)
255
(3,020)
3,682
(267)
304
-
-
-
-
655
(594)
51
(51)
-
-
-
-
Pension
benefits
$
(2,344)
2,854
580
(527)
35
(35)
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, 2022, the accumulated actuarial losses, net of deferred taxes, recognized in other comprehensive income
were $1,355 (2021 – $3,169).
Plan assets
The plan assets consist of the following:
$
15,778
6,955
22,733
2022
%
69
31
100
Mutual funds
Fixed income
Equity
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
47
| ANDREW PELLER LIMITED 2022
$
18,036
7,122
25,158
2022
$
2,458
2,135
14
2,149
4,607
2021
%
72
28
100
2021
$
2,091
7,198
378
7,576
9,667
The Company’s income tax expense consists of the following:
Income taxes at blended statutory rate of
26.43% (2021 – 26.46%)
Permanent differences and non-deductible items
Future income tax rate changes
Other
The movement of the deferred income tax account is as follows:
Balance - Beginning of year
Deferred income taxes in net earnings
Deferred income taxes in other comprehensive income
Deferred income taxes
2022
$
4,513
(68)
14
148
4,607
2022
$
29,765
2,149
512
32,426
2021
$
9,910
321
378
(942)
9,667
2021
$
22,038
7,576
151
29,765
The significant temporary differences giving rise to the deferred income tax liability are comprised of the following:
Deferred income tax liability
Accelerated tax
depreciation
and deductions
on property,
plant and
equipment
Accelerated
tax
deductions
on intangible
assets
Tax
deductions
on
inventory
$
21,919
$
421
$
80
Tax
deductions
on goodwill
$
Total
$
858
23,278
(5,433)
12,870
(80)
(138)
7,219
March 31, 2020
(Income) expense in net
earnings
March 31, 2021
Expense in net earnings
16,486
1,277
13,291
1,372
March 31, 2022
17,763
14,663
-
-
-
720
11
30,497
2,660
731
33,157
ANDREW PELLER LIMITED 2022 | 48
Deferred income tax asset
March 31, 2020
(Income) expense in net earnings
Expense in other comprehensive income
March 31, 2021
Income in net earnings
Expense in other comprehensive income
March 31, 2022
Post-
employment
benefits
$
(944)
(83)
151
(876)
(60)
512
(424)
Other
$
(296)
440
-
144
(451)
-
(307)
Total
$
(1,240)
357
151
(732)
(511)
512
(731)
The income tax effects relating to components of accumulated other comprehensive loss are as follows:
2022
Before
income tax
amount
Deferred
tax
expense
Net of
income tax
expense
Before
income tax
amount
Deferred
tax
expense
$
$
$
$
$
2021
Net of
income tax
expense
$
1,816
461
1,355
4,278
1,109
3,169
Accumulated actuarial
losses
14 Capital stock
Authorized
Unlimited preference shares
Unlimited Class A shares, non-voting
Unlimited Class B shares, voting
Issued
Number
of shares
2022
Amount
$
Number
of shares
Class A shares, non-voting
Class B shares, voting
34,978,011
8,144,183
26,926
364
35,525,639
8,144,183
43,122,194
27,290
43,669,822
All of the issued Class A and Class B shares are fully paid and have no par value.
2021
Amount
$
26,656
364
27,020
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, 2022, no Class B shares were converted into Class A shares.
49
| ANDREW PELLER LIMITED 2022
As described in note 15, 49,056 Class A shares were issued as a result of the exercise of share based awards during the
year ended March 31, 2022. 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 1,916 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. The total
number of Class A non voting common shares repurchased for cancellation under the NCIB during the fiscal year
March 31, 2022 amounted to 598,600 common shares, at a weighted average price of $8.70 per Class A non voting
common share, for total cash consideration of $5,210. The Company’s share capital was reduced by $449 and the
remaining $4,761 was accounted for as a decrease to retained earnings.
Annual dividends of $0.246 (2021 – $0.218) per Class A share and $0.214 (2021 – $0.190) per Class B share were
approved by the Board of Directors on June 16, 2021 and are formally declared in each quarter.
The authorized share capital of the Company also consists of an unlimited number of preference shares, issuable in one
or more series, of which 33,315 are designated as preference shares, Series A. As at March 31, 2022 and 2021, there
were no preference shares issued or outstanding.
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 2022, expensed $276 (2021 – $264) related to the employee program.
15 Share based compensation
The Company has a share based compensation plan comprised of stock options, PSUs, RSUs and DSUs. The impact of
the share based compensation expense is summarized as follows:
1,303,367 stock options (2021 – 1,041,800) (a)
292,731 performance share units (2021 – 218,562) (b)
62,750 restricted share units (2021 – nil) (c)
57,799 deferred share units (2021 – 65,669) (d)
2022
$
789
422
188
-
1,399
2021
$
655
282
-
-
937
The stock options, PSUs, RSUs 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, the RSU 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,
2022, the Company had 3,217,918 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
ANDREW PELLER LIMITED 2022 | 50
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:
2022
Weighted
average
exercise price
per share
$
11.89
8.75
10.97
11.19
12.95
Number of
options
765,200
500,600
(224,000)
1,041,800
338,254
2021
Weighted
average
exercise price
per share
$
14.19
9.31
(14.26)
11.89
13.85
Number of
options
1,041,800
290,700
(29,133)
1,303,367
619,986
Balance – Beginning of year
Granted
Forfeited
Balance – End of year
Exercisable
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
(1) Expected volatility was determined using historical volatility.
2022
1.89
24.68%
2.19%
1.19%
10
2021
1.99
24.41%
1.82%
0.54%
10
Information relating to stock options outstanding and exercisable as at March 31, 2022 is as follows:
Share options outstanding
Share options exercisable
Range of
exercise
prices
5.01 to 10.00
10.01 to 15.00
15.01 to 20.00
(b) PSU plan
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
$
106
80
77
760,067
406,700
136,600
$
9.09
13.15
17.21
101 158,934
78 324,452
77 136,600
9.29
12.94
17.21
95
1,303,367
11.21
84 619,986
12.95
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
51
| ANDREW PELLER LIMITED 2022
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.
The Company’s PSU transactions during the year were as follows:
2022
Grant date
fair value
per unit
$
12.44
8.75
(17.16)
(15.97)
10.13
14.09
Number of
units
218,562
125,320
(28,416)
(22,735)
292,731
32,165
2021
Grant date
fair value
per unit
$
14.20
9.31
(11.74)
(14.25)
12.44
17.14
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 in September 2019 vested March 31, 2022 and, based on the achievement of the performance
condition, 32,165 shares vested.
(c) RSU plan
The Company has established an RSU plan for employees and officers of the Company. RSUs 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. RSUs will vest ratably over the Restriction Period, as to one-third of the RSUs on each anniversary
of the grant date, commencing on the first anniversary of the grant date.
The Company’s RSU transactions during the year were as follows:
2022
Grant date
fair value
per unit
$
-
8.75
8.75
Number of
units
-
-
-
2021
Grant date
fair value
per unit
$
-
-
-
Number of
units
-
62,750
62,750
Balance – Beginning of year
Issued
Balance – End of year
(d) 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.
ANDREW PELLER LIMITED 2022 | 52
The Company’s DSU transactions during the year were as follows:
Number of
units
2022
Grant date
fair value
per unit
$
Number of
units
Balance – Beginning of year
Issued
Exercised
65,669
12,770
(20,640)
14.40
9.35
(11.19)
72,459
19,840
(26,630)
Balance – End of year
57,799
14.43
65,669
16 Nature of expenses
2021
Grant date
fair value
per unit
$
17.19
9.48
(18.22)
14.40
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 costs related to Port Moody winery facility (a)
Restructuring (b)
Other
2022
$
172,296
85,121
33,025
9,739
7,989
26,586
2021
$
181,134
78,084
31,053
8,408
6,939
24,372
334,756
329,990
2022
$
606
858
(254)
1,210
2021
$
278
1,897
(405)
1,770
(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 this idle facility are recorded in other expenses
(income).
(b) Restructuring costs of $858 (2021 – $1,897) were recorded during the year ended March 31, 2022. These costs
relate to restructuring of certain departments within the Company.
53
| ANDREW PELLER LIMITED 2022
17 Net earnings per share
Class A
$
Class B
$
2022
Total
$
Net earnings attributed for the year – basic and
diluted
10,380
2,088
12,468
Weighted average number of shares outstanding –
basic and diluted
35,200,969
8,144,183
Net earnings per share – basic and diluted
0.29
0.26
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
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
2022
$
1,520
(17,545)
(1,014)
685
(16,354)
2021
$
5,200
(8,812)
(881)
(3,058)
(7,551)
ANDREW PELLER LIMITED 2022 | 54
47,375
2,587
192,132
263
86
2021
Fair
value
$
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
$
2022
Fair
value
$
Financial assets
Amortized cost
27,376
27,376
Accounts receivable
Accounts payable and
accrued liabilities
Dividends payable
Long-term debt
Interest rate swap liability
Foreign exchange forward
contracts liability
Financial liabilities
Financial liabilities
Financial liabilities
Derivatives
Amortized cost
Amortized cost
Amortized cost
FVTPL
47,375
2,587
192,065
263
Derivatives
FVTPL
86
Assets/liabilities
Category
Measurement
Carrying
amount
$
Accounts receivable
Accounts payable and
accrued liabilities
Dividends payable
Long-term debt
Interest rate swap liability
Foreign exchange forward
contracts liability
Financial assets
Amortized cost
28,896
28,896
Financial liabilities
Financial liabilities
Financial liabilities
Derivatives
Amortized cost
Amortized cost
Amortized cost
FVTPL
46,487
2,404
174,544
2,314
46,487
2,404
174,640
2,314
Derivatives
FVTPL
304
304
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 long term debt is equivalent to its carrying value because the variable interest rate is comparable to
market rates. The fair value of the interest rate swaps used to fix the interest rate on long term debt is included in the
current and long term derivative financial instruments in the consolidated balance sheets.
The fair value of foreign exchange forward contracts is determined based on the difference between the contract rate
and the forward rate at the date of the valuation.
The fair value of the interest rate swaps is determined based on the difference between the fixed interest rate in the
contract that will be paid by the Company and the forward curve of the floating interest rates that are expected to be
55
| ANDREW PELLER LIMITED 2022
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 on derivative financial instruments is comprised of:
Unrealized gain on interest rate swaps
Unrealized (gain) loss on foreign exchange forward contracts
2022
$
(2,051)
(218)
(2,269)
2021
$
(1,222)
1,087
(135)
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.
Asset/liability
Quoted prices in
active markets
for
identical assets
(Level 1)
$
Significant
observable
inputs
other than
quoted prices
(Level 2)
$
Interest rate swap liability
Foreign exchange forward contracts
liability
-
-
263
86
Asset/liability
Quoted prices in
active markets
for
identical assets
(Level 1)
$
Significant
observable
inputs
other than
quoted prices
(Level 2)
$
2022
Significant
unobservable
inputs
(Level 3)
$
-
-
2021
Significant
unobservable
inputs
(Level 3)
$
Interest rate swap liability
Foreign exchange forward contracts asset
-
-
2,314
304
-
-
Objectives and policy relating to financial risk management
Interest rate risk
The Company is exposed to interest rate risk as a result of cash balances, floating rate debt and interest rate swaps. Of
these risks, the Company’s principal exposure is that increases in the floating interest rates on its debt, if unmitigated,
could lead to decreases in cash flow and earnings. The Company’s objective in managing interest rate risk is to achieve
a balance between minimizing borrowing costs over the long term, ensuring it meets borrowing covenants, and
ANDREW PELLER LIMITED 2022 | 56
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 $84,574 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 $2,051 (2021 – $1,222) 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, 2022, with other variables unchanged, a 100 basis point change in interest
rates would impact the Company’s net earnings by approximately $795 (2021 – $571), 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 55% 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 $15,327 (2021 – $15,990) of the total accounts receivable for which no allowance has been provided.
Of the remaining non provincial liquor board balances, $1,391 (2021 – $719) was over thirty days past due as at March
31, 2022. An expected credit loss of $316 (2021 – $257) 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 $67,587 (2021 – $69,578) during the year ended
March 31, 2022. Sales to its second largest customer, a branch of a provincial government, were $29,031 (2021 –
$30,561) during the year. No other customers accounted for over 10% of sales during the years ended March 31, 2022
and March 31, 2021.
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
57
| ANDREW PELLER LIMITED 2022
2022
$
15,327
9,820
1,154
699
692
(316)
27,376
2021
$
15,990
11,938
506
204
515
(257)
28,896
The change in the expected credit loss was as follows:
Balance – Beginning of year
Provision for (recovery of) expected credit losses
Writeoffs
Balance – End of year
Liquidity risk
2022
$
257
172
(113)
316
2021
$
875
(217)
(401)
257
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, 2022.
Long-term debt
Leases and royalties
Service agreements
Grape, bulk wine and whisky
purchase contracts
Packaging purchase contracts
< 1
year
$
2 – 3
years
$
-
6,027
2,293
192,132
8,451
2,281
4 – 5
years
$
-
5,074
260
> 5
years
$
Total
$
-
18,960
-
192,132
38,512
4,834
101,407
41,094
95,824
15,485
63,745
-
76,456
-
337,432
56,579
150,821
314,173
69,079
95,416
629,489
Interest rate swap
Foreign exchange forwards
904
22,948
-
-
-
-
-
-
904
22,948
Total contractual obligations
174,673
314,173
69,079
95,416
653,341
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.
ANDREW PELLER LIMITED 2022 | 58
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, 2022, the
Company has forward foreign currency contracts to buy US$15,000 at rates averaging $1.26; EUR1,350 at rates
averaging $1.41 and AU$2,400 at a rate of $0.91. These contracts mature at various dates to September 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 $238 (2021 –
$129), $30 (2021 – $31) or $35 (2021 – $20), respectively. The Company has elected to not use hedge accounting and
as a result, has recognized unrealized foreign exchange gains of $218 (2021 – unrealized foreign exchange losses of
$1,087) in the consolidated statements of earnings as a component of the net unrealized gain on derivative financial
instruments and has recorded the fair value of $86 (2021 – $304) 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:
Minimum EBITA measured on a rolling twelve-month basis for the periods ending March 31, 2022 to December
31, 2022. Minimum EBITA 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;
Funded debt to a rolling twelve-month EBITA for the periods ending March 31, 2023 to the end of the term of the
credit facility;
Interest charge coverage ratio for the periods ending March 31, 2023 to the end of the term of the credit facility;
Capital expenditures not to exceed a specified amount on an annualized basis; and
Liquidity shall be maintained at or above a specified amount as defined in the credit agreement at the end of each
fiscal quarter.
Compliance with these covenants is monitored by management on a quarterly basis. As at March 31, 2022 and 2021,
the Company was in compliance with these covenants.
59
| ANDREW PELLER LIMITED 2022
22 Related parties and management compensation
The Company is controlled by Peller Family Enterprises Inc., which owns 61.3% (2021 – 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.
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
2022
$
3,867
323
1,132
5,322
2021
$
4,421
265
823
5,509
The compensation and short term benefits expense consists of amounts that will primarily be settled within twelve
months.
23 Entity wide disclosures
During the year, export sales were $13,352 (2021 – $15,550), 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 15, 2022, 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.
On June 15, 2022, the Company amended its credit agreement to amend the minimum EBITA, funded debt to a rolling
twelve-month EBITA and interest charge coverage covenants. The minimum EBITA covenant will be in place for the
periods ending March 31, 2022 to September 30, 2023. The funded debt to a rolling twelve-month EBITA and interest
charge coverage covenants will be in place for the periods ending December 31, 2023 to the end of the term of the
credit facility. The amendment also contains post-closing covenants, which require the Company to provide additional
first ranking security in favour of the lenders on real property with a certain fair market value by a specified date.
ANDREW PELLER LIMITED 2022 | 60
TEN-YEAR SUMMARY
(in thousands, 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 (3)
Class A Shares, non-voting
Class B Shares, voting
Other information
Return on average
shareholders’ equity (1)
Return on average
capital employed (2)
2022
2021
2020
2019
2018
$ 373,944
39,188
12,468
$ 393,036
63,046
27,786
$ 382,306
61,501
23,494
$ 381,796
52,875
21,958
$ 363,897
52,860
30,117
181,832
558,071
265,401
170,684
542,521
265,574
83,654
513,919
245,523
97,305
467,019
234,751
104,417
457,780
220,246
0.29
0.26
0.246
0.214
34,978
8,144
43,122
4.7%
3.8%
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
0.51
0.44
0.205
0.178
35,988
8,199
44,187
0.71
0.62
0.180
0.156
35,471
8,702
44,173
10.9%
9.8%
9.7%
15.2%
10.1%
10.7%
11.5%
14.0%
(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.
(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.
61
| ANDREW PELLER LIMITED 2022
2017
2016
$ 342,606
45,137
26,350
78,825
327,478
177,317
$ 334,263
40,916
19,199
71,665
308,309
157,736
2015
Restated (5)
$ 315,697
35,184 (5)
15,224 (5)
68,982
301,519 (5)
147,375 (5)
2014
$ 297,824
33,729
14,021
44,564
301,015
138,003
2013
Restated (4)
$ 289,143
33,489 (4)
14,519 (4)
41,670
296,519
129,701 (4)
0.64
0.55
0.163
0.142
33,581
9,012
42,593
15.7%
14.1%
0.46
0.40
0.150
0.130
33,581
9,012
42,593
12.6%
13.2%
0.36 (5)
0.32 (5)
0.140
0.122
33,882
9,012
42,894
10.6% (5)
11.0% (5)
0.34
0.29
0.133
0.116
33,882
9,012
42,894
10.5%
10.8%
0.35 (4)
0.30 (4)
0.120
0.105
33,882
9,012
42,894
11.6% (4)
11.1% (4)
ANDREW PELLER LIMITED 2022 | 62
DIRECTORS & OFFICERS
Directors
Officers
JOHN E. PELLER, O.C.
President & Chief Executive Officer
PAUL DUBKOWSKI
Chief Financial Officer and Executive Vice-President, IT
PATRICK R. O’BRIEN
Chief Commercial Officer
JAMES H. COLE
Executive Vice-President, Business to Consumer
SARA E. PRESUTTO
Executive Vice-President, People & Culture
BRENDAN P. WALL
Executive Vice-President, Operations
STEFAN BARKER
Vice-President, Integrated Supply Chain
GREGORY J. BERTI
Vice-President, Global Markets, Industry Relations &
Business Development
RAMIT BORDIA
Vice-President, Integrated Customer Solutions
GAVIN J. HAWTHORNE
Vice-President, Sales & Marketing GVI
CRAIG D. MCDONALD
Vice-President, Winemaking
JOSÉ SALGADO
Vice President, VQA & DTC Division, Legal Counsel
MARK TORRANCE
Vice-President, EWG Operations
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
FRANÇOIS VIMARD
Mississauga, Ontario
Corporate Director
Honorary Directors
RICHARD D. HOSSACK
Toronto, Ontario
JOHN F. PETCH, O.C.
Toronto, Ontario
BRIAN J. SHORT
Hamilton, Ontario
63
| ANDREW PELLER LIMITED 2022
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:
Paul Dubkowski
Chief Financial Officer and Executive Vice President,
Information Technology at the Head Office address or by
email at: info@andrewpeller.com
2022 Annual Shareholders’ Meeting
The 2022 Annual Meeting of Shareholders’ will be held
virtually on Wednesday, September 14, 2022 at 4:30 p.m.
ANDREW PELLER LIMITED 2022 | 64
Exclusive 2022 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 on orders for 12+ bottles.
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 2022 Shareholder Collections, see instructions on the pages to follow.
This special offer ends Friday, September 30th, 2022.
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 contact the Ontario Direct to Consumer Team at
1.866.440.4383 or by email at wineorders@peller.com
Signature Series Ice Cuvee Rosé
Family Reserve Chardonnay
Private Reserve Gamay Noir
Signature Series Sauvignon Blanc
Signature Series Cabernet Franc
Signature Series Vidal Icewine 200ml
Trius Brut
Trius Divine White
Trius Pinot Grigio
Trius Merlot
Trius Red
Showcase Late Harvest Vidal
Gretzky Riesling
Gretzky Signature Series Pinot Grigio
Gretzky Whisky Oak Aged Chardonnay
Gretzky Baco Noir
Signature Series Cabernet Merlot
Gretzky Whisky Oak Aged Red
Winemakers Riesling
Small Lot Pinot Gris
Small Lot Rosé
Winemakers Red
Small Lot Cabernet Sauvignon
Small Lot Merlot
6 bottle
Collection
$179.26
(Reg $210.70)
~
12 bottle
Collection
$358.52
(Reg $421.40)
6 bottle
Collection
$120.61
(Reg $141.70)
~
12 bottle
Collection
$241.22
(Reg $283.40)
6 bottle
Collection
$107.03
(Reg $125.70)
~
12 bottle
Collection
$214.05
(Reg $251.40)
6 bottle
Collection
$206.65
(Reg $242.90)
~
12 bottle
Collection
$413.29
(Reg $485.80)
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
$110.43
(Reg $129.70)
~
12 bottle
Collection
$220.85
(Reg $259.40)
British Columbia VQA Wine Collections:
To place an online order for our Red Rooster, Sandhill & Grey Monk Collections please contact the BC Direct to
Consumer Team at 1.866.440.4383 or by email at ordersbc@andrewpeller.com
Order the Black Hills Collection by emailing us at myorder@blackhillswinery.com
Order the Tinhorn Creek Vineyards Collection by emailing us at crushclub@tinhorn.com.
A representative will be sure to contact you.
Red Rooster Chardonnay Sur Lie
Red Rooster Rosé
Red Rooster Viognier
Red Rooster Reserve Meritage
Red Rooster Carbonic Malbec Merlot
Red Rooster Golden Egg
*Prices shown do not include applicable BC Taxes
Sandhill Soveriegn Opal
Sandhill Estate Chardonnay
Sandhill Estate Rosé
Sandhill Small Lot Sangiovese
Sandhill Small Lot Barbera
Sandhill Estate Cabernet Franc
*Prices shown do not include applicable BC Taxes
Gray Monk Odyssey Brut Rosé
Gray Monk Reflection White
Gray Monk Unwooded Chardonnay
Gray Monk Merlot
Gray Monk Cabernet Merlot
Gray Monk Odyssey Meritage
*Prices shown do not include applicable BC Taxes
6 bottle
Collection
$162.31
(Reg $190.95)
~
12 bottle
Collection
$324.62
(Reg $380.19)
6 bottle
Collection
$134.27
(Reg $157.96)
~
12 bottle
Collection
$268.53
(Reg $315.92)
6 bottle
Collection
$130.85
(Reg $153.94)
~
12 bottle
Collection
$261.70
(Reg $307.88)
Black Hills Nota Bene
Black Hills Nota Bene
Black Hills Syrah
Black Hills Roussanne
Black Hills Rose
Black Hills Ipso Facto
*Prices shown do not include applicable BC Taxes
Tinhorn Creek Blanc de Blanc
Tinhorn Creek Gewürztraminer
Tinhorn Creek Reserve Rosé
Tinhorn Creek Merlot
Tinhorn Creek Reserve Syrah
Tinhorn Creek Reserve Roussanne
*Prices shown do not include applicable BC Taxes
6 bottle
Collection
$246.30
(Reg $289.76)
~
12 bottle
Collection
$492.59
(Reg $579.52)
6 bottle
Collection
$168.85
(Reg $197.94)
~
12 bottle
Collection
$337.70
(Reg $395.88)
~
Offer Ends Friday, September 30th, 2022.
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.