A N N U A L R E P O R T
OPERATIONAL HIGHLIGHTS
FOR THE YEARS ENDED MARCH 31
(in thousands of Canadian dollars, except per share amounts)
Net sales
EBITA
FINANCIAL POSITION
Working capital
Total assets
Shareholders' equity
PER SHARE
Net earnings per Class A Share - basic and diluted
Net earnings per Class B Share - basic and diluted
DIVIDENDS
Class A Common Shares, non-voting
Class B Common 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
2023
382,140
38,012
186,318
566,748
253,638
(0.08)
(0.07)
0.246
0.214
7.30
4.36
9.75
5.90
(1.3%)
3.2%
4.11:1
2022
373,944
39,188
181,832
558,071
265,401
0.29
0.26
0.246
0.214
11.09
6.97
13.96
8.75
4.7%
3.8%
4.34:1
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
20
24
29
61
63
64
65
Report to Shareholders
Despite a number of challenges faced in fiscal 2023 we performed well as the strength of our business plan and asset base
underpinned the resilience and skill of our management team. Looking ahead, the issues we experienced last year are now
largely stable and steadily improving, and we look ahead confident we will return to our over sixty-year track record of
growth, performance, and generating long-term value for our shareholders.
From a sales perspective, we generated 2.2% growth in fiscal 2023. However, supply constraints for imported wine, glass
bottles and other input materials significantly reduced our ability to meet strengthening demand for our products,
particularly through the first half of the year. Additionally, we are now paying excise tax on certain of our products,
reducing sales by $1.4 million compared to the prior year. Importantly, sales growth was solid through the majority of our
well-established trade channels including restaurant, hospitality, retail, export and at our ten estate wineries. Price increases
implemented throughout the year also contributed to our growth in fiscal 2023.
To capitalize on the increased demand for value-priced products, we launched new imported wines from Chile, Argentina
and Australia, as well as an innovative low-sugar wine, Honest Lot. We also introduced a new Ice Storm Vodka through our
Gretzky spirit offering, and our No Boats on Sunday premium ciders continue to perform well.
Gross margin for fiscal 2023 as a percentage of sales was 37.1%, consistent with the prior year. Profitability was impacted
by inflationary pressures, with the cost of imported wine, glass bottles, packaging materials, and international freight and
shipping charges remaining well above historical levels. To meet these challenges, we increased our selling prices through
the year and implemented numerous production efficiency and cost savings programs aimed at enhancing operating margins.
These initiatives include evaluating alternate sourcing for imported wine and glass bottles, optimizing our logistics and
freight costs and rationalizing stock keeping units. Profitability in fiscal 2023 was supported by the government’s Wine
Sector Support Program which reduced our cost of sales by $10.3 million for the year.
In the fourth quarter we incurred $2.8 million in one-time costs related to overhead cost reductions which we believe will
enhance profitability going forward.
As a result of the inflationary impact on margins, increased interest expense and the one-time restructuring costs, we
incurred a net loss of $3.4 million in fiscal 2023.
Over the near-term, the significantly higher production costs we incurred during fiscal 2023 are reflected in our inventories
going into the new year, and it will take approximately twelve months to sell through these higher cost products. On the
positive side, we are already purchasing at lower cost levels while we expect our selling and administrative expenses to
decrease as a percentage of sales in fiscal 2024 compared with fiscal 2023 as a result of the restructuring implemented in the
fourth quarter. Other operating efficiency and cost reduction initiatives are also underway which we are confident will
increase future profitability.
On June 13, 2023, we secured a new $275 million asset-backed credit facility replacing our existing loan agreements. This
new facility will result in significant annualized interest cost savings based on comparative debt levels and current interest
rates. We also continue to make progress towards monetizing our Port Moody, British Columbia property, the proceeds of
which will be invested to reduce debt and support our future growth strategies. In fiscal 2022 we recognized a realized gain
of $7.5 million ($0.21 per Class A share) on the sale of our Port Coquitlam, B.C. property.
Despite the challenges and issues faced over the last two fiscal years, we look ahead confident in our future. The significant
achievements and progress made during and recovering from the COVID pandemic are a testament to the experience,
dedication and commitment of our team. Our production efficiency and cost reduction programs, as well as lower interest
costs, will benefit our performance in the years ahead. Most importantly, many of the issues we faced over the last year,
1
| ANDREW PELLER LIMITED 2023
including supply constraints and abnormally high freight and logistics costs, have now stabilized and are reducing to more
normal levels.
We are also proud to be continuing our forty-four-year track record of paying common share dividends, a testament to our
commitment to enhancing long-term value for our shareholders. The Company has consistently paid dividends since 1979
and has increased dividends eight times over the last ten years, most recently in fiscal 2022. Today our dividends represent a
significant and high yield based on current share values, and we look to build on this progress.
In closing, 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. We also thank our customers and consumers for their 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 2023 |
2
2022 TOP AWARDS
Ama Bene
Beverage Testing Institute, Chicago
• Gold Medal – 94 points – Exceptional, Best
Buy – Ama Bene Sangiovese Italy
• Gold Medal – 93 points – Exceptional, Best
Buy – Ama Bene Pinot Grigio Italy
Black Cellar
International Eastern Wine Competition, California USA
• Silver Medal – Tempranillo Merlot Blend 10
• Silver Medal – Shiraz Cabernet Blend 19
• Silver Medal – Cabernet Sauvignon Blend 9
Good Natured
International Eastern Wine Competition, California USA
• Double Gold Medal – 95 points – Best
of Class – 2020 Fresh White
• Double Gold Medal – 95 points – Best
of Class – 2020 Balanced Red
• Gold Medal – 93 points – 2020 Crisp Chardonnay
• Gold Medal – 92 points – 2020 Merlot Gamay Noir
International Eastern Wine Competition, California USA
• Silver Medal – 2021 Good Natured Rosé
Beverage Testing Institute – Canadian Wine Review
• Gold Medal – 94 points – Exceptional – Cellar
Selection – Best Buy – 2020 Balanced Red
• Gold Medal – 91 points – Exceptional – Best Buy – 2021 Rosé
• Silver Medal – 89 points – Highly Recommended –
Best Buy – 2020 Cabernet Merlot (Low Sugar)
• Silver Medal – 87 points – Highly Recommended
– Best Buy – 2020 Fresh White
All Canadian Wine Championships
• Bronze Medal – 2020 Crisp Chardonnay
• Bronze Medal – 2020 Fresh White
• Bronze Medal – 2021 Rosé
Natural Selection
Beverage Testing Institute, Chicago
• Gold Medal – 93 points – Exceptional, Best Buy – Natural
Selection Dangerously Good Chardonnay Australia
• Silver Medal – 87 points – Highly Recommended, Best Buy
– Natural Selection Dangerously Good Shiraz Australia
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
WineAlign – National Wine Awards of Canada
• Bronze Medal – 100% Ontario Hopped Cider
• Bronze Medal – 100% NS Cider
Beverage Testing Institute – Cider Competition
• Silver Medal – 89 points – Highly Recommended – Best
Buy – No Boats on Sunday 100% Ontario Hopped Cider
• Silver Medal – 87 points – Highly Recommended –
Best Buy – No Boats on Sunday 100% NS Cider
Peller Estates Winery
International Eastern Wine Competition, California USA
• Double Gold Medal – 96 points – Best of Class – Best of
Show Rosé Wine –2020 Family Reserve VQA Rosé
• Gold Medal – 93 points – 2020 Family Reserve VQA Rosé Light
• Gold Medal – 93 points – 2020 Family
Reserve VQA Cabernet Merlot
• Gold Medal – 91 points – 2020 Family
Reserve VQA Winemaker’s Red
• Gold Medal – 91 points – 2020 Family
Reserve VQA Chardonnay
• Silver Medal – 2020 Family Reserve VQA Riesling
• Silver Medal – 2020 Family Reserve VQA Sauvignon Blanc
• Silver Medal – 2020 Family Reserve VQA Winemaker’s White
• Silver Medal – 2020 Family Reserve VQA Baco Noir
• Silver Medal – 2020 Family Reserve VQA Merlot
• Silver Medal – 2020 Family Reserve VQA Cabernet Franc
• Silver Medal – 2020 Family Reserve VQA Cabernet Sauvignon
Los Angeles International Wine Competition
• Best of Class – Gold Medal – 98 points – 2019
Signature Series Riesling Icewine
• Gold Medal – 93 points – 2018 Signature
Series Cabernet Franc Icewine
• Gold Medal – 92 points – 2018 Signature
Series Vidal Blanc Icewine
• Gold Medal – 90 points – 2020 Family
Reserve Sauvignon Blanc
• Silver Medal – Ice Cuvee Classic
• Silver Medal – Ice Cuvee Rosé
• Silver Medal – 2020 Family Reserve Winemaker’s White
• Silver Medal – 2020 Family Reserve Cabernet Franc
• Silver Medal – 2020 Family Reserve Winemaker’s Red
• Silver Medal – 2020 Private Reserve Riesling
• Silver Medal – 2020 Private Reserve Sauvignon Blanc
• Silver Medal – 2019 Private Reserve Cabernet Franc
• Silver Medal – 2019 Signature Series Cabernet Franc
• Silver Medal – 2019 Signature Series Sur Lie Chardonnay
• Silver Medal – 2018 Signature Series
Oak Aged Vidal Blanc Icewine
Experience Rosé, California USA
• Gold Medal – 91 points – 2021 Peller Private Reserve Rosé
International Wine Challenge – UK
• Silver Medal – 91 points – 2020 Signature Series Riesling
Beverage Testing Institute – Canadian Wine Review
• Gold Medal – 95 points – Exceptional – Best Buy –
2021 Family Reserve VQA Sauvignon Blanc
• Gold Medal – 95 points – Exceptional – Best
Buy – 2020 Family Reserve VQA Merlot
• Gold Medal – 94 points – Exceptional – Best Buy
– 2020 Family Reserve VQA Cabernet Merlot
• Silver Medal – 86 points – Highly Recommended – Best
Buy – 2020 Family Reserve VQA Winemaker’s Red
Decanter World Wine Awards – UK
• Silver Medal – 90 points – 2020 Signature Series Riesling
All Canadian Wine Championships
• Double Gold Medal – 2020 Private Reserve Merlot
• Gold Medal – 2019 Signature Series Riesling
• Gold Medal – 2018 Signature Series Vidal Blanc Icewine
• Gold Medal – 2018 Signature Series Cabernet Franc Icewine
• Silver Medal – 2020 Private Reserve Gamay Noir
• Bronze Medal – Ice Cuvee Rosé
• Bronze Medal – 2021 Private Reserve Rosé
• Bronze Medal – 2020 Private Reserve Chardonnay
Ontario Wine Awards
• Silver Medal – 2020 Signature Series Sauvignon Blanc
WineAlign – National Wine Awards of Canada
• #5 – Top 10 Ontario Wineries
• #14 – Top 25 Canadian Wineries
• Gold Medal – 2020 Private Reserve Gamay Noir
• Gold Medal – 2020 Signature Series Riesling
• Gold Medal – 2020 Signature Series Sauvignon Blanc
• Gold Medal – 2020 Signature Series Chardonnay Sur Lie
• Gold Medal – 2019 Signature Series Cabernet Sauvignon
• Gold Medal – 2019 Private Reserve Late Harvest Vidal
• Gold Medal – 2019 Oak Aged Vidal Blanc Icewine
• Silver Medal – 2021 Family Reserve Sauvignon Blanc
• Silver Medal – 2021 Private Reserve Rosé
• Silver Medal – 2020 Private Reserve Cabernet Franc
• Silver Medal – 2020 Private Reserve Cabernet Sauvignon
• Bronze Medal – 2020 Private Reserve Merlot
• Bronze Medal – 2020 Private Reserve Meritage
• Bronze Medal – 2019 Signature Series Cabernet Franc
• Bronze Medal – 2019 Cabernet Franc Icewine
Beverage Testing Institute – World Value Wine Challenge
• 94 points – Gold Medal – Exceptional – Best Buy –
“Exceptional Value” – 2021 Family Reserve VQA Rosé
• 92 points – Gold Medal – Exceptional – Best Buy – “Best Value
Canadian Riesling” – 2021 Family Reserve VQA Riesling
• 92 points – Gold Medal – Exceptional – Best Buy – “Top 10
Red Wine $10 and under” – “Best Value Canadian Cabernet
Sauvignon” – 2021 Family Reserve VQA Cabernet Sauvignon
• 92 points – Gold Medal – Exceptional – Best Buy – “Top
10 Red Wine $10 and under” – “Best Value Canadian
Red Blend” – 2021 Family Reserve VQA Double Noir
• 87 points – Silver Medal – Highly Recommended
– Best Buy – “Top 5 White Wine $10 and under”
– 2021 Family Reserve VQA Pinot Grigio
• 87 points – Silver Medal – Highly Recommended
– Best Buy – “Top 5 White Wine $10 and under”
– 2021 Family Reserve VQA Chardonnay
• 87 points – Silver Medal – Highly Recommended
– Best Buy – “Top 10 Red Wine $10 and under” –
2021 Family Reserve VQA Cabernet Merlot
• 87 points – Silver Medal – Highly Recommended – Best
Buy – 2021 Family Reserve VQA Rosé Bubbles
The Global Fine Wine Challenge – Australia
• Runner-Up Double Gold Medal – 2020
Signature Series Riesling
• Double Gold Medal – 2020 Signature Series Sauvignon Blanc
Thirty Bench Wine Makers
Experience Rosé, California USA
• Silver Medal – 2021 Thirty Bench Winemaker’s Blend Rosé
International Wine Challenge – UK
• Silver Medal – 91 points – 2019 Small Lot Riesling Wild Cask
• Silver Medal – 90 points – 2019 Small Lot
Riesling Steel Post Vineyard
ONTARIO & N.S.
International Wine & Spirit Competition – UK
• Silver Medal – 90 points – 2020 Winemakers Blend Riesling
• Bronze Medal – 89 points – 2019 Small
Lot Riesling Steel Post Vineyard
Decanter World Wine Awards – UK
• Silver Medal – 92 points – 2020 Wild Cask Cabernet Franc
• Silver Medal – 91 points – 2020 Winemakers
Blend Cabernet Franc
• Silver Medal – 91 points – 2019 Small Lot Riesling Wild Cask
• Silver Medal – 91 points – 2019 Small
Lot Riesling Triangle Vineyard
• Bronze Medal – 89 points – 2019 Small
Lot Riesling Steel Post Vineyard
• Bronze Medal – 88 points – 2019 Small
Lot Riesling Wood Post Vineyard
• Bronze Medal – 87 points – 2020 Winemakers Blend Riesling
All Canadian Wine Championships
• Best White Wine of the Year – Double Gold Medal
– 2019 Small Lot Riesling Triangle Vineyard
• Gold Medal – 2020 Winemaker’s Blend Riesling
• Gold Medal – 2021 Winemaker’s Blend Rosé
• Gold Medal – 2020 Winemaker’s Blend Cabernet Franc
• Gold Medal – 2019 Small Lot Riesling Wild Cask
• Gold Medal – 2019 Special Select Late Harvest
• Silver Medal – 2019 Small Lot Riesling Wood Post Vineyard
• Bronze Medal – 2020 Small Lot Chardonnay
Ontario Wine Awards
• Gold Medal – 2019 Small Lot Riesling Wild Cask
• Gold Medal – 2019 Special Select Late Harvest
WineAlign – National Wine Awards of Canada
• #3 – Top 10 Ontario Wineries
• #10 – Top 25 Canadian Wineries
• Gold Medal – 2020 Winemaker’s Blend Cabernet Franc
• Gold Medal – 2020 Small Lot Riesling Steel Post Vineyard
• Gold Medal – 2019 Small Lot Riesling Triangle Vineyard
• Gold Medal – 2019 Small Lot Riesling Wood Post Vineyard
• Gold Medal – 2020 Small Lot Pinot Noir
• Gold Medal – 2019 Special Select Late Harvest
• Silver Medal – 2020 Winemaker’s Blend Riesling
• Silver Medal – 2021 Winemaker’s Blend Rosé
• Silver Medal – 2020 Winemaker’s Blend Red
• Silver Medal – 2020 Small Lot Riesling Wild Cask
• Silver Medal – 2020 Wild Cask Cabernet Franc
• Silver Medal – 2019 Small Lot Cabernet Franc
• Silver Medal – 2019 Small Lot Cabernet Sauvignon
• Bronze Medal – 2021 Small Lot Gewurztraminer
The Global Fine Wine Challenge – Australia
• Double Gold Medal – 2019 Small Lot Cabernet Franc
The Global Riesling Masters – UK
• Silver Medal – 2020 Small Lot Riesling Wood Post Vineyard
• Silver Medal – 2020 Small Lot Riesling Wild Cask
Trius Winery
Los Angeles International Wine Competition
• Best of Class – Gold Medal – 95 points – Brut Rosé
• Best of Class – Gold Medal – 94 points –
2020 Late Autumn Off Dry Riesling
• Best of Class – Gold Medal – 95 points – 2020 Baco Noir
• Gold Medal – 93 points – 2020 Riesling
• Gold Medal – 91 points – 2020 Distinction Sauvignon Blanc
• Gold Medal – 91 points – 2019 Showcase
Wild Ferment Chardonnay
• Silver Medal – Brut
• Silver Medal – 2020 Sauvignon Blanc
• Silver Medal – 2020 Rosé
• Silver Medal – 2019 Red The Icon
• Silver Medal – 2020 Cabernet Franc
Experience Rosé, California USA
• Silver Medal – 2021 Trius Rosé
International Wine Challenge – UK
• Silver Medal – 93 points – 2018 Vidal Icewine
• Silver Medal – 90 points – Brut Rosé
International Wine & Spirit Competition – UK
• Silver Medal – 90 points – 2018 Showcase Vidal Icewine
Decanter World Wine Awards – UK
• Silver Medal – 93 points – 2018 Vidal Icewine
• Silver Medal – 92 points – 2018 Showcase Vidal Icewine
• Bronze Medal – 89 points – 2020 Showcase
Riesling Ghost Creek Vineyard
• Bronze Medal – 87 points – Brut Rosé
All Canadian Wine Championships
• Gold Medal – 2020 Distinction Chardonnay Barrel Fermented
• Silver Medal – 2020 Distinction Cabernet Sauvignon
• Silver Medal – 2019 Showcase Riesling Ghost Creek Vineyard
• Silver Medal – 2020 Showcase Chardonnay Wild Ferment
• Bronze Medal – 2020 Showcase Pinot Noir Clark Farm
• Bronze Medal – 2021 Sauvignon Blanc
Ontario Wine Awards
• Silver Medal – 2019 Showcase Late Harvest Vidal
WineAlign – National Wine Awards of Canada
• Gold Medal – 2020 Reserve Syrah
• Gold Medal – 2020 Showcase Riesling Ghost Creek Vineyard
• Gold Medal – 2020 Showcase Sauvignon Blanc Wild Ferment
• Silver Medal – 2021 Sauvignon Blanc
• Silver Medal – 2020 Red The Icon
• Silver Medal – 2020 Distinction Gamay Noir
• Silver Medal – 2020 Distinction Pinot Noir
• Silver Medal – 2020 Showcase Clark Farm Pinot Noir
• Silver Medal – 2019 Showcase Cabernet Franc Icewine
• Bronze Medal – Brut
• Bronze Medal – Brut Rosé
• Bronze Medal – 2021 Rosé
• Bronze Medal – 2020 Showcase Chardonnay Wild Ferment
• Bronze Medal – 2019 Showcase East
Block Cabernet Sauvignon
The Global Fine Wine Challenge – Australia
• Runner-Up Double Gold Medal – Showcase Brut Nature
• Double Gold Medal – 2020 Showcase
Riesling Ghost Creek Vineyard
• Gold Medal – 2019 Showcase Red Shale Cabernet Franc
The Global Riesling Masters – UK
• Master – 2018 Showcase Riesling Icewine
Wayne Gretzky Distillery
Canadian Whisky Awards – Victoria, BC
• Silver Medal – No.99 Ice Cask Whisky
• Silver Medal – No.99 Maple Cask Whisky
• Silver Medal – No.99 Ninety-Nine Proof Whisky
• Silver Medal – No.99 Canadian Cream Whisky
• Silver Medal – No.99 Salted Caramel Canadian Cream Whisky
• Silver Medal – No.99 Maple Canadian Cream Whisky
TAG Global Spirits Awards, Las Vegas Nevada 2022
• Best in Show – Canadian Whisky – Wayne Gretzky
No.99 Ninety Nine Proof Small Batch Whisky
• Silver Medal – Wayne Gretzky No.99 Red Cask Whisky
• Silver Medal – Wayne Gretzky No.99 Maple Canadian Cream
San Francisco World Spirits Competition
• Gold Medal – Wayne Gretzky No.99 Canadian Cream Whisky
• Silver Medal – Wayne Gretzky No.99 Ninety
Nine Proof Small Batch Canadian Whisky
• Silver Medal – Wayne Gretzky No.99 Ice Cask Whisky
Alberta Beverage Awards
• Best in Class – Gold – Wayne Gretzky
No.99 Double Oaked Whisky
• Judge’s Selection – Wayne Gretzky No.99 Red Cask Whisky
Wayne Gretzky Estates Niagara
International Eastern Wine Competition, California USA
• Silver Medal – 2020 Founders Series Riesling
• Silver Medal – 2020 Founders Series Chardonnay
• Silver Medal – 2020 Founders Series Baco Noir
Los Angeles International Wine Competition
• Silver Medal – 2020 Founders Series Riesling
• Silver Medal – 2018 Vidal Icewine
• Silver Medal – 2019 Cabernet Franc Icewine
All Canadian Wine Championships
• Double Gold Medal – 2019 Vidal Icewine
• Silver Medal – 2019 Cabernet Franc Icewine
Ontario Wine Awards
• Silver Medal – 2020 Signature Series Baco Noir
• Silver Medal – 2019 Cabernet Franc Icewine
WineAlign – National Wine Awards of Canada
• Gold Medal – 2020 Signature Series Shiraz Cabernet
• Gold Medal – 2020 Signature Series Cabernet Sauvignon
• Silver Medal – 2020 Signature Series Cabernet Merlot
• Silver Medal – 2021 Founders Series Sauvignon Blanc
• Bronze Medal – 2021 Founders Series Rosé
Beverage Testing Institute – World Value Wine Challenge
• 95 points – Gold Medal – Exceptional – Best Buy – “Best
Value Canadian Rosé” – 2021 Founders Series Rosé
• 93 points – Gold Medal – Exceptional – Best Buy – “Top
10 White Wine $15 and under” – “Best Value Canadian
Sauvignon Blanc” – 2021 Founders Series Sauvignon Blanc
• 91 points – Gold Medal – Exceptional – Best Buy – “Top 10 Red
Wine $15 and under” – 2021 Founders Series Cabernet Merlot
• 87 points – Silver Medal – Highly Recommended
– Best Buy – “Top 10 White Wine $15 and under”
– 2021 Founders Series Fresh & Crisp White
• 87 points – Silver Medal – Highly Recommended
– Best Buy – “Top 10 White Wine $15 and
under” – 2021 Founders Series Riesling
• 86 points – Silver Medal – Highly Recommended –
Best Buy – 2021 Founders Series Pinot Grigio
Selections Mondiales des Vin Canada, Quebec City
• Gold Medal – 2021 Wayne Gretzky
Founders Series Cabernet Merlot
+426
AWARDS NATIONALLY
15% OVER LAST YEAR
2022 TOP AWARDS
Black Cellar
West Coast Wine Competition, California USA
• Silver Medal – Malbec Merlot Blend 13
Black Hills Estate Winery
Chardonnay du Monde, France
• Silver Medal – 2020 Black Hills Chardonnay
Decanter World Wine Awards, UK
• Silver Medal – 93 points – 2019 Carmenere
• Silver Medal – 91 points – 2019 Per Se
• Silver Medal – 90 points – 2020 Chardonnay
• Bronze Medal – 89 points – 2019 Tempranillo
WineAlign National Wine Awards of Canada
• #5 – Top 10 BC Wineries
• #7 – Top 25 Canadian Wineries
• Platinum Medal – 2020 Ipso Facto
• Gold Medal – 2020 Roussanne
• Gold Medal – 2020 Chardonnay
• Gold Medal – 2021 Alibi
• Gold Medal – 2020 Per Se
• Gold Medal – 2020 Addendum
• Silver Medal – Brut
• Silver Medal – 2020 Carmenere
• Silver Medal – 2020 Tempranillo
• Bronze Medal – 2020 Viognier
• Bronze Medal – 2021 Rosé
• Bronze Medal – 2020 Bona Fide
Alberta Beverage Awards – Culinaire magazine
• Judges Selection – 2020 Black Hills Bona Fide
The Global Fine Wine Challenge – Australia
• Double Gold Medal – 2019 Per Se
Good Natured Okanagan
West Coast Wine Competition, California USA
• Double Gold Medal – 98 points – Best of
Class – 2020 Crisp Chardonnay
• Gold Medal – 92 points – 2020 Petit Verdot Merlot
• Silver Medal – 2020 Balanced Red
Los Angeles International Wine Competition
• Best of Class – Gold Medal – 94 points – 2020 Crisp
Chardonnay [Silver Medal – Shelf Appeal – Label Design]
• Bronze Medal – 2020 Balanced Red
All Canadian Wine Championships
• Double Gold Medal – 2020 Balanced Red
• Bronze Medal – 2020 Crisp Chardonnay
• Bronze Medal – 2020 Petit Verdot Merlot
WineAlign National Wine Awards of Canada
• Bronze Medal – 2021 Crisp Chardonnay
Alberta Beverage Awards – Culinaire magazine
• Best in Class – Gold – 2020 Good Natured
Okanagan Petit Verdot Merlot
Sip Magazine, Best of the Northwest
• Judge’s Pick – 2021 Crisp Chardonnay
Gray Monk Estate Winery
West Coast Wine Competition, California USA
• Gold Medal – 94 points – Best of Class
– 2020 Chardonnay Unwooded
• Gold Medal – 93 points – Best of Class – 2020 Gewurztraminer
• Gold Medal – 94 points – 2020 Kerner
• Gold Medal – 93 points – 2020 Pinot Auxerrois
• Silver Medal – 2020 Monk’s Blend
• Silver Medal – 2020 Riesling
• Silver Medal – 2019 Cabernet Merlot
• Bronze Medal – 2018 Merlot
• Bronze Medal – 2019 Pinot Noir
Los Angeles International Wine Competition
• Gold Medal – 93 points – 2020 Latitude 50 White
• Gold Medal – 92 points – 2020 Pinot Gris
• Silver Medal – 2020 Chardonnay Unwooded
• Silver Medal – 2020 Rosé
• Bronze Medal – 2020 Monk’s Blend
• Bronze Medal – 2020 Latitude 50 Rosé
Experience Rosé, California USA
• Silver Medal – 2021 Gray Monk Rosé
• Bronze Medal – 2021 Gray Monk Latitude 50 Rosé
International Wine & Spirit Competition UK
• Bronze Medal – 87 points – 2018 Odyssey Traditional Brut
• Bronze Medal – 86 points – 2019 Odyssey White Brut
• Bronze Medal – 86 points – 2019 Odyssey Rosé Brut
Decanter World Wine Awards, UK
• Bronze Medal – 89 points – 2019 Odyssey White Brut
• Bronze Medal – 87 points – 2018 Odyssey Traditional Brut
• Bronze Medal – 87 points – 2019 Odyssey Rosé Brut
All Canadian Wine Championships
• Gold Medal – 2020 Pinot Noir
• Gold Medal – 2021 Chardonnay Unwooded
• Silver Medal – 2021 Pinot Auxerrois
• Silver Medal – 2019 Odyssey White Brut
• Bronze Medal – 2019 Odyssey Rosé Brut
WineAlign National Wine Awards of Canada
• Gold Medal – 2021 Odyssey Pinot Gris
• Gold Medal – 2019 Odyssey Meritage
• Silver Medal – 2019 Odyssey Rosé Brut
• Silver Medal – 2021 Chardonnay Unwooded
• Silver Medal – 2019 Odyssey Merlot
• Bronze Medal – 2019 Odyssey White Brut
• Bronze Medal – 2021 Pinot Gris
• Bronze Medal – 2021 Siegerrebe
• Bronze Medal – 2021 Rosé
• Bronze Medal – 2019 Odyssey Cabernet Sauvignon
Sip Magazine, Best of the Northwest
• Platinum Medal – 2021 Chardonnay Unwooded
• Platinum Medal – 2019 Odyssey Rosé Brut
• Double Gold Medal – 2018 Odyssey Traditional Brut
• Double Gold Medal – 2021 Siegerrebe
• Double Gold Medal – 2021 Gewurztraminer
• Double Gold Medal – 2019 Odyssey Meritage
• Gold Medal – 2019 Odyssey White Brut
The Global Fine Wine Challenge – Australia
• Trophy – Best Pinot Gris / Pinot Grigio
– 2021 Odyssey Pinot Gris
No Boats On Sunday
WineAlign National Wine Awards of Canada
• Bronze Medal – 100% BC Cider
Beverage Testing Institute – Cider Competition
• Silver Medal – 87 points – Highly Recommended –
Best Buy – No Boats on Sunday 100% BC Cider
Alberta Beverage Awards – Culinaire magazine
• Judge’s Selection – No Boats on Sunday 100% BC Cider – Pear
Peller Estates Winery Okanagan
West Coast Wine Competition, California USA
• Double Gold Medal – 97 points – 2020 Family
Reserve VQA Winemaker’s Red
• Double Gold Medal – 96 points – Best of Class – 2019
Family Reserve VQA (Series) Cabernet Merlot
• Silver Medal – 2020 Family Reserve
VQA Sauvignon Blanc (Select)
• Silver Medal – 2020 Family Reserve VQA Winemaker’s White
Red Rooster
Decanter World Wine Awards, UK
• Silver Medal – 93 points – 2019 Malbec
• Bronze Medal – 88 points – Sparkling Brut
• Bronze Medal – 86 points – 2020 Sauvignon Blanc
• Bronze Medal – 86 points – 2020 Viognier
WineAlign National Wine Awards of Canada
• Silver Medal – 2020 Sur Lie Chardonnay
• Silver Medal – 2020 Viognier
• Silver Medal – 2020 Gew
• Silver Medal – Sparkling Rosé
• Silver Medal – 2021 Rosé
• Bronze Medal – 2021 Riesling
• Bronze Medal – 2021 Sauvignon Blanc
• Bronze Medal – 2021 Pinot Gris
• Bronze Medal – 2020 Pinot 3
• Bronze Medal – 2019 Pinot Noir (Reserve)
• Bronze Medal – 2018 Rare Bird Series Syrah
• Bronze Medal – 2019 Malbec
BRITISH COLUMBIA
WineAlign National Wine Awards of Canada
• Gold Medal – 2019 Single Vineyard
Three Sandhill Estate Vineyard
• Silver Medal – 2020 Cabernet Merlot Terroir Driven Wine
• Silver Medal – 2020 Merlot Terroir Driven Wine
• Silver Medal – 2020 Cabernet Franc Terroir Driven Wine
• Silver Medal – 2019 Single Vineyard
Syrah Hidden Terrace Vineyard
• Bronze Medal – 2021 Pinot Gris Terroir Driven Wine
• Bronze Medal – 2021 Sovereign Opal Terroir Driven Wine
• Bronze Medal – 2021 Rosé Terroir Driven Wine
• Bronze Medal – 2021 Sangiovese Rosé Single Block C9
• Bronze Medal – 2020 Syrah Terroir Driven Wine
• Bronze Medal – 2019 Single Vineyard One Vanessa Vineyard
• Bronze Medal – 2019 Single Vineyard
Two Sandhill Estate Vineyard
• Bronze Medal – 2019 Single Vineyard
Malbec Osprey Ridge Vineyard
Alberta Beverage Awards – Culinaire magazine
• Best in Class – Gold – 2021 Sandhill Rosé Terroir Driven Wine
Sip Magazine, Best of the Northwest
• Platinum Medal – 2021 Rosé Terroir Driven Wine
• Platinum Medal – 2021 Sovereign Opal Terroir Driven Wine
• Judge’s Pick – 2021 Sauvignon Blanc Terroir Driven Wine
Tinhorn Creek Vineyards
WineAlign National Wine Awards of Canada
• #23 – Top 25 Canadian Wineries
• Gold Medal – 2018 Blanc de Blancs
• Gold Medal – 2021 Pinot Gris
• Gold Medal – 2020 Chardonnay
• Gold Medal – 2019 Oldfield Reserve Syrah
• Silver Medal – 2021 Reserve Rosé
• Silver Medal – 2020 Reserve Chardonnay
• Silver Medal – 2019 Oldfield Reserve Merlot
• Silver Medal – 2019 Oldfield Reserve Cabernet Franc
• Bronze Medal – 2021 Gewurztraminer
• Bronze Medal – 2020 Merlot
• Bronze Medal – 2020 Cabernet Franc
Sip Magazine, Best of the Northwest
• Judge’s Pick – 2020 Chardonnay
• Judge’s Pick – 2019 Reserve Merlot
The Global Fine Wine Challenge – Australia
• Double Gold Medal – 2021 Pinot Gris
Sip Magazine, Best of the Northwest
• Gold Medal – 2020 Carbonic Merlot Malbec
• Judge’s Pick – 2020 Cabernet Merlot
• Judge’s Pick – 2020 Pinot 3
• Judge’s Pick – 2021 Rosé
Sandhill
West Coast Wine Competition, California USA
• Double Gold Medal – 97 points – Best of Class –
2020 Sovereign Opal Terroir Driven Wine
• Gold Medal – 91 points – 2020 Chardonnay Terroir Driven Wine
• Silver Medal – 2020 Pinot Gris Terroir Driven Wine
• Silver Medal – 2019 Merlot Terroir Driven Wine
• Silver Medal – 2019 Cabernet Franc Terroir Driven Wine
• Silver Medal – 2019 Cabernet Merlot Terroir Driven Wine
• Bronze Medal – 2019 Syrah Terroir Driven Wine
Los Angeles International Wine Competition
• Gold Medal – 90 points – 2020 Sovereign
Opal Terroir Driven Wine
• Silver Medal – 2020 Sauvignon Blanc Terroir Driven Wine
• Silver Medal – 2019 Merlot Terroir Driven Wine
• Silver Medal – 2019 Cabernet Franc Terroir Driven Wine
• Silver Medal – 2019 Syrah Terroir Driven Wine
• Bronze Medal – 2020 Chardonnay Terroir Driven Wine
Experience Rosé, California USA
• Silver Medal – 2021 Sandhill Rosé Terroir Driven Wine
International Wine & Spirit Competition UK
• Bronze Medal – 89 points – 2018 Single Vineyard
THREE Sandhill Estate Vineyard
• Bronze Medal – 87 points – 2018 Single
Vineyard TWO Sandhill Estate Vineyard
• Bronze Medal – 87 points – 2018 Single Vineyard
Petit Verdot Osprey Ridge Vineyard
• Bronze Medal – 87 points – 2018 Single
Vineyard Syrah Hidden Terrace Vineyard
• Bronze Medal – 87 points – 2018 Single Vineyard
Sangiovese Sandhill Estate Vineyard
• Bronze Medal – 85 points – 2018 Single
Vineyard ONE Vanessa Vineyard
Decanter World Wine Awards, UK
• Silver Medal – 91 points – 2019 Single Vineyard
Syrah Hidden Terrace Vineyard
• Silver Medal – 90 points – 2019 Single
Vineyard ONE Vanessa Vineyard
• Silver Medal – 90 points – 2019 Single Vineyard
Malbec Osprey Ridge Vineyard
• Bronze Medal – 89 points – 2019 Harvest
Series Co-fermented Red
• Bronze Medal – 89 points – 2019 Single Vineyard
Petit Verdot Osprey Ridge Vineyard
• Bronze Medal – 86 points – Single Vineyard
TWO Sandhill Estate Vineyard
All Canadian Wine Championships
• Silver Medal – 2021 Sangiovese Rosé
• Silver Medal – 2021 Sauvignon Blanc
Wayne Gretzky Estates Okanagan
West Coast Wine Competition, California USA
• Silver Medal – 2020 Founders Series Pinot Grigio
• Silver Medal – 2020 Founders Series Cabernet Franc Syrah
All Canadian Wine Championships
• Bronze Medal – 2021 Founders Series Pinot Grigio
WineAlign National Wine Awards of Canada
• Silver Medal – 2020 Founders Series Cabernet Franc Syrah
• Silver Medal – 2021 Founders Series Rosé
• Bronze Medal – 2021 Founders Series Sauvignon Blanc
• Bronze Medal – 2021 Founders Series Pinot Grigio
WineAlign National Wine
Awards of Canada
BEST BLEND
PLATINUM MEDAL
Black Hills Estate Winery
2020 Ipso Facto
MANAGEMENT’S DISCUSSION & ANALYSIS
FOR THE THREE MONTHS AND YEAR ENDED MARCH 31, 2023
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, 2023, in comparison with those for the
three months and year ended March 31, 2022, for Andrew Peller Limited (the “Company” or “APL”). This discussion is
prepared as of June 14, 2023 and should be read in conjunction with the audited consolidated financial statements and
accompanying notes contained therein for the period ended March 31, 2023 and 2022. Additional information relating to the
Company, including the audited annual consolidated financial statements and Annual Information Form for the years ended
March 31, 2023, and March 31, 2022, is available on www.sedar.com. The financial years ending March 31, 2023 and
March 31, 2022 are referred to as “fiscal 2023 and “fiscal 2022” 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 products. The Company also
produces craft beverage alcohol products, including No Boats on Sunday ciders and seltzers, and various 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
ANDREW PELLER LIMITED 2023 |
8
authorized retailers and more than 400 independent retailers across Canada, with additional distributors in the United States,
the United Kingdom, New Zealand, Australia, and China. GVI’s award winning premium and ultra-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 achieves this objective by delivering to
its customers and consumers the highest quality branded wines, spirits, refreshments, and experiences. 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 drive production efficiencies and realize cost savings through a continual review of
its operations and cost structure with a view to improving 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 14, 2023 the Company’s Board of Directors approved an annual common share dividend of $0.246 per Class A
Share and $0.214 per Class B Share, to be declared and paid quarterly. 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 13, 2023, the Company entered into a $275 million Asset Backed Lending credit facility to reduce the cost of
borrowing. The new facility replaces the Company’s existing credit facility entered into on December 8, 2020, and will be
used to fund working capital needs, acquisitions, and other general corporate purposes.
In June 2022, Agriculture Canada announced the Wine Sector Support Program (“WSSP”) to provide non-repayable grants
to licensed Canadian wineries based on the production of bulk wine fermented in Canada from domestic and/or imported
grapes. In January 2023, the Company received $18.1 million under this program. In the Company’s judgment, the grant is
intended to compensate for inventory production costs that the Company incurred to produce bulk wine in the prior year, and
it will be recognized in the consolidated statement of earnings as a reduction in the cost of goods sold in the period the
eligible wine is sold. For the year ended March 31, 2023, $10.3 million ($2.7 million in fourth quarter) of the grant has been
recognized as a credit to cost of goods sold and $7.8 million is recorded as a reduction to the cost of inventory which will be
released to cost of goods sold as the inventory is sold.
As previously announced in July 2020, the Government of Canada has repealed the federal excise duty exemption of 100%
Canadian wine effective June 30, 2022. This agreement was reached due to a World Trade Organization challenge put
forward by Australia against Canadian wine measures. As a result of the repeal, excise tax will be payable on any 100%
Canadian wine. As part of the transition provisions, any 100% Canadian wine packaged prior to June 30, 2022 could
continue to be sold under the previous exemption. This inventory was depleted in the fourth quarter of fiscal 2023 and as
such, revenue for the fourth quarter of fiscal 2023 was reduced by approximately $1.4 million.
On September 13, 2022, the Company’s notice of intention to make a Normal Course Issuer Bid (NCIB) had been approved
by the Toronto Stock Exchange. Under the issuer bid the Company can purchase for cancellation up to 1,000,000 of its
outstanding Class A non-voting shares, representing 2.86% of the Class A Common shares outstanding at the time, over the
ensuing twelve months. As of June 14, 2023 Company had not purchased any Class A non-voting common shares under its
current NCIB.
9
| ANDREW PELLER LIMITED 2023
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 on derivative financial instruments
Gain on sale of land and property
Other expenses
Net earnings (loss)
Earnings (loss) per share – Class A basic
Earnings (loss) per share –Class B basic
Dividend per share – Class A (annual)
Dividend per share – Class B (annual)
(1) See “Non-IFRS Measures” section of this MD&A
2023
2022
$ 382,140
141,892
37.1%
103,880
38,012
16,565
(380)
-
3,547
(3,352)
(0.08)
(0.07)
0.246
0.214
$ 373,944
138,992
37.2%
99,804
39,188
9,337
(2,269)
(7,518)
1,210
12,468
0.29
0.26
0.246
0.214
Sales for the year ended March 31, 2023 increased 2.2% over the prior year. The majority of the Company’s well established
trade channels performed well with solid growth generated in markets closed for a portion of fiscal 2022 due to the
pandemic, including at the Company’s ten estate wineries, sales to restaurants and hospitality locations, and through its
export business. The growth in these channels was partially offset by a decrease in personal winemaking revenue due to
softer post-pandemic demand and distribution. Additionally, the Company implemented price increases through fiscal 2023
to partially offset inflationary pressures, further contributing to an increase in sales compared to the prior year. In the fourth
quarter of fiscal 2023, there was a $1.4 million reduction in sales resulting from the repeal of the federal excise duty
exemption.
Gross margin as a percentage of sales was 37.1% for the year ended March 31, 2023, consistent with the prior year. The
Company’s cost of goods sold in fiscal 2023 included a reduction of $10.3 million related to a Wine Sector Support Program
(“WSSP”) grant provided by Agriculture Canada as it relates to historical inventory sold during the year. The Company
continues to experience inflationary cost pressures, with the cost of imported wine, glass bottles, packaging materials, and
international freight and shipping charges remaining above historical levels. In response to these margin pressures, the
Company has implemented price increases and is targeting increasing sales of higher margin VQA products. In addition, the
Company is executing numerous production efficiency and cost savings programs aimed at enhancing operating margins
including rationalizing stock keeping units (SKUs) and evaluating alternate sourcing for imported wine and glass bottles.
As a percentage of sales, selling and administrative expenses rose to 27.2% in fiscal 2023 from 26.7% in prior year. Selling
and administration expenses in fiscal 2023 include the increase in Ontario’s minimum wage when compared to the prior year
and a return to full operations at the Company.
Earnings before interest, amortization, gain on sale of assets held for sale, net unrealized gains and losses on derivative
financial instruments, other (income) expenses, and income taxes (“EBITA”) (see “Non-IFRS Measures” section of this
MD&A) was $38.0 million for the year ended March 31, 2023 compared to $39.2 million in the prior year.
Interest expense for the year ended March 31, 2023 has increased compared to prior year due to higher average debt levels in
fiscal 2023 when compared to prior year and increases in interest rates.
The Company recorded a net unrealized non-cash gain in fiscal 2023 of $0.4 million related to mark-to-market adjustments
on interest rate swaps and foreign exchange contracts compared to a gain of $2.3 million in the prior year. The change is
largely due to a decrease in the unrealized non-cash gain on the interest rate swap which expired in September 2022. The
Company has elected not to apply hedge accounting and accordingly the change in fair value of these financial instruments
ANDREW PELLER LIMITED 2023 |
10
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.
In the second quarter of fiscal 2022 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, generating a realized gain on sale of
$7.5 million or $0.21 per Class A share.
Other expenses increased in fiscal 2023 compared to the prior year due primarily to a one-time $2.8 million overhead
restructuring initiative completed in the fourth quarter of the year.
The Company incurred a net loss of $3.4 million ($0.08 per Class A share) for the year ended March 31, 2023 compared to
net income of $12.5 million ($0.29 per Class A Share) in the prior year.
Quarterly Performance
The following table outlines key quarterly highlights.
(in $000, except per share amounts)
Q4 23
Q3 23
Q2 23
Q1 23
Q4 22
Q3 22
Q2 22
Q1 22
Sales
Gross margin (1)
77,712
104,913
101,816
97,699
78,838
103,485
99,224
92,397
22,059
42,290
39,480
38,063
23,029
36,294
42,408
37,261
Gross margin (% of sales)
28.4%
40.3%
38.8%
39.0%
29.2%
35.1%
42.7%
40.3%
EBITA (1)
Interest
(1,247)
15,630
11,658
11,971
(630)
12,084
15,821
11,913
2,663
5,273
6,016
2,613
2,162
2,424
2,478
2,273
Net unrealized (gain) loss on financial
instruments
Gain on sale of land and property
Other expenses (income)
Net earnings (loss)
E.P.S. – Class A basic
E.P.S. – Class B basic
(1) See “Non-IFRS Measures” section of this MD&A
-
-
-
-
3,030
(93)
(10,009)
3,892
112
-
213
(98)
(492)
-
397
(485)
-
946
(359)
-
(103)
(1,037)
(7,518)
26
2,863
(7,019)
3,107
13,090
$(0.24)
$0.09
$(0.00)
$0.07
$(0.17)
$(0.21)
$0.08
$(0.00)
$0.06
$(0.14)
$0.07
$0.06
$0.31
$0.27
(388)
-
341
3,290
$0.08
$0.07
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.
Sales for the three months ended March 31, 2023 decreased 1.4% compared to the prior year’s fourth quarter due to a
decrease in personal winemaking sales which was largely offset by increases in export, licensee, and retail sales. In addition,
sales in the fourth quarter of fiscal 2023 were reduced by approximately $1.4 million compared to fiscal 2022 due to the
repeal of the federal excise duty exemption noted above. Gross margin decreased to 28.4% of sales in the fourth quarter of
fiscal 2023 from 29.2% in the prior year’s fourth quarter. Inflationary cost pressures, with the cost of imported wine, glass
bottles, packaging materials, international freight and shipping charges continue to put pressure on the Company’s gross
margin. The Company’s cost of goods sold in the fourth quarter of fiscal 2023 includes a credit of $2.7 million related to the
WSSP grant as discussed above. Selling and administrative expenses remained consistent with the prior year’s fourth
quarter. Other expenses in the fourth quarter of fiscal 2023 contained a one-time $2.8 million overhead restructuring cost
related to initiatives completed in the fourth quarter.
The Company incurred a net loss of $10.0 million ($0.24 per Class A share) for the three months ended March 31, 2023
compared to a net loss of $7.0 million ($0.17 per Class A Share) in the fourth quarter of the prior year.
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| ANDREW PELLER LIMITED 2023
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
Lease obligations
Post-employment benefit obligations
Deferred income taxes
Shareholders’ equity
Total liabilities and shareholders’ equity
March 31,
2023
$ 246,168
210,265
13,612
43,065
53,638
$ 566,748
$ 59,850
208,089
10,205
1,271
33,695
253,638
March 31,
2022
$ 236,213
209,015
15,215
43,990
53,638
$ 558,071
$ 54,381
192,065
12,193
1,605
32,426
265,401
$ 566,748
$ 558,071
The increase in current assets as at March 31, 2023 compared to March 31, 2022 is primarily due to an increase in finished
goods inventory based on timing of production and sales, partially offset by $7.8 million related to the unamortized portion
of the WSSP grant to be recognized in future periods when the related inventory is sold. 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 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 $14.1 million of accounts receivable with
provincial liquor boards at March 31, 2023, all of which is expected to be collectible. The remaining receivable balance
represents amounts due from licensees, export customers, and independent retailers of personal winemaking products.
Against these amounts, an expected credit loss of $0.2 million has been provided which the Company has determined based
on a reasonable estimate of lifetime expected credit losses for trade receivables. The amount of accounts receivable that was
30 days past due was $1.2 million at March 31, 2023.
Long-lived assets at March 31, 2023, which includes property, plant and equipment and right-of-use assets, decreased
compared to March 31, 2022 due to amortization in excess of additions in fiscal 2023. Additions to property, plant and
equipment relate to investments made in the Company’s production facilities and vineyard management programs.
Current liabilities were $59.9 million at March 31, 2023 compared to $54.4 million at March 31, 2022. The increase is
primarily due to the timing of payments at year-end.
Long-term debt increased to $208.1 million at March 31, 2023 from $192.1 million at March 31, 2022 due to a reduction in
cash from operations and investment in the Company’s operations and properties. The Company’s debt to equity ratio was
0.82:1 at March 31, 2023 compared to 0.72:1 at March 31, 2022. At March 31, 2023, the Company had unutilized debt
capacity in the amount of $141.9 million on its credit facility.
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, 2023, the Company generated cash from operating activities, after changes in non-cash
working capital items, of $13.8 million compared to $15.6 million in the prior year. The decrease in cash from operating
ANDREW PELLER LIMITED 2023 |
12
activities is due to an increase in interest paid due to higher debt levels and increasing interest rates, compounded by higher
raw materials costs and global supply chain costs. This is partially offset by the balance of the unamortized WSSP grant
which is recorded as a reduction to the cost of inventory.
Cash used in investing activities for the year ended March 31, 2023 was $20.3 million compared to $14.1 million in the prior
fiscal year. In fiscal 2022, cash used in investing activities was offset by $8.8 million in proceeds from the sale of the
Company’s Port Coquitlam, British Columbia property and related assets.
Cash provided by financing activities for the year ended March 31, 2023 of $5.3 million included an increase in bank
indebtedness, drawings of long-term debt, offset by the payment of dividends and lease obligations. Cash used in the prior
year’s financing activities of $2.9 million included $5.2 million used in the purchase of Class A Common Shares under the
Company’s NCIB.
Working capital at March 31, 2023 was $186.3 million compared to $181.8 million at March 31, 2022. Shareholders’ equity
at March 31, 2023 was $253.6 million or $5.87 per share compared to $265.4 million or $6.15 per share at March 31, 2022.
The following table outlines the Company’s contractual obligations as at March 31, 2023:
(in $000)
Long-term debt
Leases and royalties
Service agreements
Grape, bulk wine and whisky purchase contracts
Packaging purchase contracts
Total contractual obligations
< 1
Year
-
5,774
1,779
58,023
15,485
81,061
2 - 3
Years
208,129
7,042
763
83,588
25,421
324,943
4 - 5
Years
-
4,365
-
77,635
-
82,000
> 5
Years
-
18,154
-
51,334
-
69,488
Total
208,129
35,335
2,542
270,580
40,906
557,492
Common Shares Outstanding
The Company is authorized to issue an unlimited number of Class A and Class B Common Shares. Class A Common 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
Common Shares. Class B Common Shares are voting and convertible into Class A Common Shares on a one-for-one basis.
On September 13, 2022, 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 1,000,000
of its outstanding Class A non-voting shares, representing 2.86% of the Class A Common Shares outstanding at the time,
over the ensuing twelve months. As of June 14, 2023, the Company had not purchased any Class A non-voting common
shares under its current NCIB.
Shares outstanding
Class A Common Shares
Class B Common Shares
Total
March 31,
2023
35,040,656
8,144,183
43,184,839
March 31,
2022
34,978,011
8,144,183
43,122,194
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 entered the spirits and craft beverage alcohol 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 opportunities and risks in the marketplace.
13
| ANDREW PELLER LIMITED 2023
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. The Company is 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 Company is also monitoring the impact of the recently introduced guidelines regarding
alcohol consumption and the associated health risks. The impact on the financial results of the Company will depend on
management’s continued ability to successfully mitigate against these risks.
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.
VQA wines are a key driver of APL’s growth strategy, and as a result, the Company 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, or other severe environmental problems, 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
ANDREW PELLER LIMITED 2023 |
14
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.
The Company is exposed to interest rate risk as a result of cash balances and floating rate debt. Of these risks, the
Company’s principal exposure is that increases in the floating interest rates on its debt, if unmitigated, could lead to
decreases in cash flow and earnings. The Company’s objective in managing interest rate risk is to achieve a balance between
minimizing borrowing costs over the long term, ensuring it meets borrowing covenants, and ensuring it meets other
expectations and requirements of investors. To meet these objectives, the Company’s policy is to effectively fix the rates on
long-term debt to match the duration of investments in long-lived assets and to use floating rate funding for short-term
borrowing. The Company’s interest rate swap expired in September 2022, and therefore, all borrowings are currently funded
using a floating interest rate and as such, are sensitive to interest rate movements. As at March 31, 2023, with other variables
unchanged, a 100 basis point change in interest rates would impact the Company’s net earnings by approximately $1.6
million.
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, 2023, the Company has no open forward
foreign currency contracts. As such, 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 $0.5 million, $0.1 million or $0.1 million,
respectively.
The Company purchases glass, bag in box, tetra paks, and other components used for bottling and packaging. The largest
component of packaging is glass, of which there are few domestic or international suppliers. There is currently only one
commercial supplier of glass in Canada that is able to supply glass to APL’s specifications. Any interruption in supply could
have an adverse impact on the Company’s ability to supply its markets. APL has taken steps to reduce its dependence on
domestic suppliers through the development of relationships with several international producers of glass and through
carrying increased inventory of selected bottles.
The Company operates in a highly regulated industry with requirements regarding the production, distribution, marketing,
advertising, and labelling of wine and spirits. These regulatory requirements may inhibit or restrict the Company’s ability to
maintain or increase strong consumer support for and recognition of its brands and may adversely affect APL’s business
strategies and results of operations. Privatization of liquor distribution and retailing has been implemented in varying
degrees across the country. The recent regulatory changes relating to privatization in Ontario and sales through grocery
outlets remains a risk to the Company through its impact on the Company’s retail operations.
The wine industry and the domestic and international markets in which the Company operates are consolidating. This has
resulted in fewer, but larger, competitors who have increased their resources and scale. The increased competition from
these larger market participants may affect the Company’s pricing strategies and create margin pressures. 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
15
| ANDREW PELLER LIMITED 2023
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 uses information technology and the internet, including online banking, to streamline business operations and
to improve customer experience. The Company’s information systems, and those of its third-party service providers,
creditors, and vendors, are vulnerable to an increasing threat of continually evolving cybersecurity risks. These risks may
take the form of malware, computer viruses, cyber threats, extortion, employee error, malfeasance, system errors or other
types of risks, and may occur from inside or outside of the organization. Cybersecurity risk is increasingly difficult to
identify and quantify and cannot be fully mitigated because of the rapidly evolving nature of the threats, targets, and
consequences. Additionally, unauthorized parties may attempt to gain access to these systems or the Company’s information
through fraud or other means of deceiving the Company’s third-party service providers, employees, creditors or vendors. As
the threat landscape is ever-changing, the Company must make continuous mitigation efforts. The Company employs third-
party information technology services and continually monitors and improves its internal controls to protect against known
and emerging threats. However, there can be no assurance that the Company’s ability to monitor for or mitigate
cybersecurity risks will be fully effective, and it may fail to identify cybersecurity breaches or discover them in a timely
manner.
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.
The success of the Company’s brands depends upon the positive image that consumers have of those brands. Contamination
of APL’s products, whether arising accidentally or through deliberate third-party action, or other events that harm the
integrity or consumer support for those brands could adversely affect their sales. Contaminants in raw materials purchased
from third parties and used in the production of the Company’s products or defects in the fermentation process could lead to
low product quality as well as illness among, or injury to, consumers of the products and may result in reduced sales of the
affected brand or all of the Company’s brands.
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
ANDREW PELLER LIMITED 2023 |
16
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 periods 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 gain on derivative financial instruments
Gain on sale of land and property
Other expenses
EBITA
Three Months
Year
2023
$ (10,009)
2022
$ (7,019)
2023
$ (3,352)
2022
$ 12,468
2,663
(2,614)
2,509
3,174
-
-
3,030
2,162
(1,773)
2,223
3,316
(485)
-
946
16,565
(888)
9,790
12,730
(380)
-
3,547
9,337
4,607
9,116
12,237
(2,269)
(7,518)
1,210
$ (1,247)
$ (630)
$ 38,012
$ 39,188
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 periods ended March 31,
(in $000)
Sales
Three Months
Year
2023
2022
2023
2022
$ 77,712
$ 78,838
$ 382,140
$ 373,944
Less: Cost of goods sold, excluding amortization
55,653
55,809
240,248
234,952
Gross margin
Gross margin (% of sales)
$ 22,059
$ 23,029
$ 141,892
$ 138,992
28.4%
29.2%
37.1%
37.2%
The Company’s method of calculating EBITA and gross margin 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
Termination benefits
Post-employment benefits
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| ANDREW PELLER LIMITED 2023
2023
2022
$ 4,266
$ 3,867
1,032
339
-
323
For the years ended March 31
(in $000)
Stock based compensation expense
2023
2022
1,081
$ 6,718
1,132
$ 5,322
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 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.
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
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 adoption of the amendment did not have a significant impact on the consolidated financial
statements.
ANDREW PELLER LIMITED 2023 |
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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 fulfil a contract. The amendments are effective for annual periods
beginning on or after January 1, 2022. The adoption of the amendment did not have a significant impact 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 adoption of the
amendment did not have a significant impact on the consolidated financial statements.
Recently issued accounting pronouncements
IAS 1, Presentation of Financial Statements
This standard has been amended to clarify the classification of liabilities as 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, 2024. The standard has also been amended to specify that covenants to be complied
with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead,
the amendments require a company to disclose information about these covenants in the notes to the financial statements.
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, with early adoption
permitted. 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 14, 2023, 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, 2023, 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 14, 2023, 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.
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| ANDREW PELLER LIMITED 2023
Independent auditor’s report
To the Shareholders of Andrew Peller Limited
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial
position of Andrew Peller Limited and its subsidiaries (together, the Company) as at March 31, 2023 and 2022, 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, 2023 and 2022;
the consolidated statements of (loss) earnings for the years then ended;
the consolidated statements of comprehensive (loss) 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, 2023. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
ANDREW PELLER LIMITED 2023 |
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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 $84.8 million as at March 31, 2023. 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 and Personal winemaking cash
generating units (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.
The Company had goodwill of $53.6 million as at March 31,
2023, of which $26.7 million and $23.8 million related to the
Western Canadian wine and Personal winemaking products
CGUs, respectively. 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
the
recoverable amount. The recoverable amounts of
Western Canadian wine and Personal winemaking products
CGUs were based on a value in use method using discounted
cash flow models. Key assumptions used by management in
the discounted cash flow model for the Western Canadian
wine CGU included the average revenue growth rate during
the period of projected cash flows, gross profit percentage,
selling and administration margin, terminal growth rate,
continuation of government assistance and the discount rate.
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| ANDREW PELLER LIMITED 2023
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:
Tested how management determined the recoverable
amounts of the Western Canadian wine and Personal
the
winemaking products CGUs, which
following:
– Tested the appropriateness of the method used and
the mathematical accuracy of the discounted cash
flow models.
included
– Tested the underlying data used in the discounted
cash flow models.
and
– Evaluated the reasonableness of the average revenue
growth rates during the period of projected cash
flows, gross profit percentages, selling and
administration margins
continuation of
government assistance, applied by management in
the discounted cash flow models by comparing
them to the budget, management’s strategic plans
approved by the Board of Directors, current and
past performance of the CGUs, or available third
party published industry and economic data, as
applicable.
– Professionals with specialized skill and knowledge
in the field of valuation assisted in testing the
appropriateness of the method and reasonableness
Key assumptions used by management in the discounted
cash flow model for the Personal winemaking products CGU
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 2023
impairment tests.
of the discount rates and terminal growth rates.
● Tested the disclosures made in the consolidated financial
the key
the sensitivity of
statements,
including
assumptions used by management.
We considered this a key audit matter due to the judgment
by management in determining the recoverable amounts of
the Western Canadian wine and Personal winemaking
products CGUs, including key assumptions. This has
resulted in a high degree of subjectivity and audit effort in
the key assumptions.
performing procedures
Professionals with specialized skill and knowledge in the
field of valuation assisted in performing our procedures.
test
to
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.
ANDREW PELLER LIMITED 2023 |
22
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment
and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Company to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
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 14, 2023
23
| ANDREW PELLER LIMITED 2023
Consolidated Balance Sheets
As at March 31, 2023 and 2022
(in thousands of Canadian dollars)
Assets
Current assets
Cash
Accounts receivable (note 21)
Inventories (notes 4 and 17)
Biological assets (note 6)
Prepaid expenses and other assets
Income taxes receivable
Property, plant and equipment (note 5)
Right-of-use assets (note 10)
Intangible assets (note 7)
Goodwill (note 8)
Liabilities
Current liabilities
Bank indebtedness (note 11)
Accounts payable and accrued liabilities (note 9)
Dividends payable
Lease obligations (note 10)
Derivative financial instruments (note 21)
Long-term debt (note 11)
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
2023
$
2022
$
-
25,297
209,154
2,920
4,493
4,304
246,168
210,265
13,612
43,065
53,638
566,748
4,942
47,794
2,591
4,523
-
59,850
208,089
10,205
1,271
33,695
313,110
28,033
6,627
219,999
(1,021)
253,638
566,748
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
Contingent liabilities and unrecognized contractual commitments (note 19)
Events after the reporting period (note 25)
The accompanying notes are an integral part of these consolidated financial statements.
Director
Director
ANDREW PELLER LIMITED 2023 |
24
Consolidated Statements of (Loss) Earnings
For the years ended March 31, 2023 and 2022
(in thousands of Canadian dollars, except per share amounts)
Sales
Cost of goods sold, excluding amortization (notes 16 and 17)
Amortization of plant and equipment used in production
Gross profit
Selling and administration (note 16)
Amortization of equipment, right-of-use and intangible assets used in selling
and administration
Interest
Gain on sale of assets held for sale (note 5)
Net unrealized gain on derivative financial instruments (note 21)
Other expense (note 16)
(Loss) earnings before income tax
Income tax (recovery) expense (note 13)
Current
Deferred
Net (loss) earnings for the year
Net (loss) earnings per share (note 18)
Basic and diluted
Class A Common Shares
Class B Common Shares
2023
$
382,140
240,248
9,790
132,102
103,880
12,730
16,565
-
(380)
3,547
2022
$
373,944
234,952
9,116
129,876
99,804
12,237
9,337
(7,518)
(2,269)
1,210
136,342
112,801
(4,240)
17,075
(2,037)
1,149
(888)
(3,352)
(0.08)
(0.07)
2,458
2,149
4,607
12,468
0.29
0.26
The accompanying notes are an integral part of these consolidated financial statements.
25
| ANDREW PELLER LIMITED 2023
Consolidated Statements of Comprehensive (Loss) Income
For the years ended March 31, 2023 2022
(in thousands of Canadian dollars)
Net (loss) earnings for the year
Items that are never reclassified to net (loss) earnings
Net actuarial gains on post-employment benefit plans (note 12)
Deferred income taxes (note 13)
Other comprehensive income for the year
2023
$
(3,352)
454
(120)
334
2022
$
12,468
1,938
(512)
1,426
Net comprehensive (loss) income for the year
(3,018)
13,894
The accompanying notes are an integral part of these consolidated financial statements.
ANDREW PELLER LIMITED 2023 |
26
Consolidated Statements of Changes in Equity
For the years ended March 31, 2023 and 2022
(in thousands of Canadian dollars)
Capital
stock
$
Contributed
surplus
$
Retained
earnings
$
Accumulated
other
comprehensive
loss
$
Total
shareholders’
equity
$
Balance at March 31, 2021
27,020
4,950
236,773
(3,169)
265,574
12,468
1,426
13,894
Net comprehensive income for the year
Repurchase and cancellation of
Class A non-voting Common
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
-
-
-
-
-
(719)
1,525
(4,761)
-
-
-
-
(388)
(10,382)
-
-
-
388
-
(5,210)
-
1,525
-
(10,382)
Balance at March 31, 2022
27,290
5,756
233,710
(1,355)
265,401
Net comprehensive (loss) 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 $0.246 per share,
Class B $0.214 per share)
-
743
-
-
-
(3,352)
334
(3,018)
(743)
1,614
-
-
-
(10,359)
-
-
-
-
1,614
(10,359)
Balance at March 31, 2023
28,033
6,627
219,999
(1,021)
253,638
The accompanying notes are an integral part of these consolidated financial statements.
27
| ANDREW PELLER LIMITED 2023
Consolidated Statements of Cash Flows
For the years ended March 31, 2023 and 2022
(in thousands of Canadian dollars)
Cash provided by (used in)
Operating activities
Net (loss) earnings for the year
Adjustments for non-cash items
Gain on disposal of property, plant and equipment and intangible assets
Amortization of plant, equipment, right-of-use and intangible assets
Amortization of deferred financing fees
Interest expense
Income taxes
Net unrealized gain on derivative financial instruments
Share-based compensation expense
Post-employment benefits
Interest paid
Wine Sector Support Program grant received (note 17)
Income tax received
Change in non-cash working capital items related to operations (note 20)
Investing activities
Proceeds from sale of land and property
Purchase of property, plant and equipment
Purchase of intangible assets
Financing activities
Increase in bank indebtedness
Repayment of lease obligations
Drawings on long-term debt
Repayment of long-term debt
Financing fees paid
Repurchase of Class A Common Shares
Dividends paid
Decrease in cash during the year
Cash – Beginning of year
Cash – End of year
2023
$
2022
$
(3,352)
(1)
22,520
27
16,538
(888)
(380)
1,483
120
(15,873)
7,755
293
28,242
(14,488)
13,754
-
(17,301)
(3,033)
(20,334)
4,942
(4,304)
54,000
(39,000)
-
-
(10,355)
5,283
(1,297)
1,297
-
12,468
(7,495)
21,353
29
9,308
4,607
(2,269)
1,399
227
(8,636)
-
955
31,946
(16,354)
15,592
8,793
(13,612)
(9,289)
(14,108)
-
(4,115)
56,000
(39,000)
(400)
(5,210)
(10,199)
(2,924)
(1,440)
2,737
1,297
Supplementary information
Property, plant and equipment and intangibles acquired that were unpaid in cash and
included in accounts payable and accrued liabilities
226
2,088
The accompanying notes are an integral part of these consolidated financial statements.
ANDREW PELLER LIMITED 2023 |
28
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2023 and 2022
(in thousands of Canadian dollars, except per share amounts)
1 Nature of operations
Andrew Peller Limited (the Company) produces and markets wine, spirits, 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 14, 2023.
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 (loss) 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 (loss) earnings.
29
| ANDREW PELLER LIMITED 2023
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.
Government grants
Grants from the government are recognized at the amount of cash received or to be received when there is reasonable
assurance that the grant will be received and the Company will comply with all conditions. Government grants are
recognized in the consolidated statements of (loss) earnings as a reduction of the expense that the grant is intended to
compensate. In the Company’s judgment, based on the provisions of the program, the grant is intended to compensate
for inventory production costs that the Company has incurred to produce bulk wine inventory in the prior fiscal year.
The grant has been allocated pro rata to the eligible wine produced in the prior year and is recognized in the
consolidated statements of (loss) earnings as a reduction in the cost of goods sold in the period the eligible wine is sold
or is recognized as a reduction in the cost of inventory to the extent that the eligible wine is unsold and remains in
inventory.
ANDREW PELLER LIMITED 2023 |
30
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.
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 (loss)
earnings in the period in which they arise.
Intangible assets
Intangible assets include brands, customer contracts and lists, 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
Customer contracts and lists
Software
Amortization
method
n/a
straight-line
straight-line
Useful life
indefinite
10 – 20 years
5 – 15 years
Remaining
useful life
indefinite
2 – 14 years
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.
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.
31
| ANDREW PELLER LIMITED 2023
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
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.
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 (loss) earnings in the period they arise. Adjustments arising from actuarially
determined gains or losses are recognized in other comprehensive (loss) income 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.
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 (loss) earnings
ANDREW PELLER LIMITED 2023 |
32
over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for
each period.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
Fixed payments, including in-substance fixed payments, less any lease incentives receivable;
Variable lease payments that are based on an index or a rate;
Amounts expected to be payable by the lessee under residual value guarantees;
The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
Payment of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the
lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
Payments associated with variable lease payments not based on an index or a rate, short-term leases and leases of low
value assets are recognized on a straight-line basis as an expense in the consolidated statements of (loss) 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 (loss) earnings per share
Basic net (loss) earnings per share have been calculated using the weighted average number of Class A and Class B
Common Shares outstanding during the year. Diluted net (loss) 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.
33
| ANDREW PELLER LIMITED 2023
Dividends
Dividends on Class A and Class B Common Shares are recognized in the period in which they are formally declared by
the Board of Directors.
Segmented information
The Company produces and markets wine, spirits, 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 (loss) 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 (loss) income
in the years in which temporary differences are expected to be recovered or settled. The deferred income tax provision
recorded in net (loss) earnings and other comprehensive (loss) income 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 (loss) income
Comprehensive (loss) income is comprised of net (loss) earnings and other comprehensive (loss) income. Other
comprehensive (loss) income 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 (loss) earnings. The Company records actuarial gains and losses on
defined benefit pension plans and other post employment benefit plans in other comprehensive (loss) income in the
period incurred.
Equity
The Company separately presents changes in equity related to capital stock, contributed surplus, retained earnings and
accumulated other comprehensive (loss) income 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.
ANDREW PELLER LIMITED 2023 |
34
Equity settled share based payments to employees are measured at the fair value of the equity instrument granted. An
option valuation model (Black Scholes) is used to fair value stock options issued on the date of grant.
The grant date fair value of equity settled share based awards is recognized as compensation expense with a
corresponding increase in equity reserves over the related service period provided to the Company. The total amount of
expense recognized in profit or loss is determined by reference to the fair value of the options granted or share awards,
which factors in the number of options expected to vest. Equity settled share based payment transactions are not
remeasured once the grant date fair value has been determined, except in cases where the share based payment is linked
to non market performance conditions. Stock options vest in tranches (graded vesting) and, accordingly, the expense is
recognized in vesting tranches. PSUs vest in full at the end of the third fiscal year after the date of grant and,
accordingly, the expense is recognized evenly over the vesting period. 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 (loss) earnings, with
a corresponding adjustment to contributed surplus.
Recently adopted 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 adoption of the amendment did not have a significant impact 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 fulfil a contract. The amendments are effective for
annual periods beginning on or after January 1, 2022. The adoption of the amendment did not have a significant impact
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 adoption of the
amendment did not have a significant impact on the consolidated financial statements.
Recently issued accounting pronouncements
IAS 1, Presentation of Financial Statements
This standard has been amended to clarify the classification of liabilities as 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, 2024. The standard has also been amended to specify that
covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current
35
| ANDREW PELLER LIMITED 2023
at the reporting date. Instead, the amendments require a company to disclose information about these covenants in the
notes to the financial statements. The amendments are effective for annual reporting periods beginning on or after
January 1, 2024, with early adoption permitted. 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
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.
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.
ANDREW PELLER LIMITED 2023 |
36
4
Inventories
Packaging materials and supplies
Bulk wine and spirits, net of government grant (note 17)
Finished goods
Interest included in the cost of inventories
Inventory writedowns recognized as an expense amounted to $6,892 (2022 – $6,375).
2023
$
27,360
84,783
97,011
2022
$
23,264
94,337
79,441
209,154
197,042
4,820
1,825
The cost of inventories recognized as an expense and included in cost of goods sold, excluding amortization, was
$233,356 (2022 – $228,577).
5
Property, plant and equipment
At March 2021
Cost
Accumulated amortization
Net carrying amount
Year ended March 2022
Additions
Disposals
Amortization
Vines, vineyard
land and
infrastructure
$
Machinery
and
equipment
$
Buildings
$
Total
$
49,782
(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
$
39,956
-
39,956
-
-
-
Closing net carrying amount
39,956
30,165
70,614
68,280
209,015
At March 2022
Cost
Accumulated amortization
Net carrying amount
Year ended March 2023
Additions
Amortization
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
2,503
(1,577)
1,592
(2,832)
11,329
(9,765)
15,424
(14,174)
Closing net carrying amount
39,956
31,091
69,374
69,844
210,265
At March 2023
Cost
Accumulated amortization
Net carrying amount
39,956
-
39,956
53,049
(21,958)
102,311
(32,937)
185,714
(115,870)
381,030
(170,765)
31,091
69,374
69,844
210,265
Included in buildings and machinery and equipment are assets amounting to $nil (2022 – $1,419) that are under
development and are not being amortized.
37
| ANDREW PELLER LIMITED 2023
Contractual commitments to purchase property, plant and equipment were $1,405 as at March 31, 2023 (2022 –
$1,268).
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, 2023, the Company harvested grapes valued at $7,082 (2022 – $8,666).
The changes in the carrying amount of biological assets are as follows:
Carrying amount – Beginning of year
Net increase in fair value less costs to sell due to biological
transformation
Transferred to inventory on harvest
Biological assets
2023
$
2,045
7,957
(7,082)
2,920
2022
$
2,815
7,896
(8,666)
2,045
The Company is exposed to financial risk because of the long period of time between the cash outflow required to plant
grape vines, cultivate vineyards and harvest grapes and the cash inflow from selling wine and related products from the
harvested grapes.
Substantially all of the grapes from owned and leased vineyards are used in the Company’s winemaking processes.
Owned and leased vineyards, in combination with supply contracts with grape growers, are used to secure a supply of
domestic grapes. These strategies reduce the financial risks associated with changes in grape prices.
ANDREW PELLER LIMITED 2023 |
38
7
Intangible assets
Brands –
indefinite
life
$
Customer
contracts
and lists
$
Software
$
Other
$
Total
$
At March 31, 2021
Cost
Accumulated amortization and
impairment
Net carrying amount
Year ended March 31, 2022
Additions
Amortization
10,239
(200)
10,039
-
-
Closing net carrying amount
10,039
At March 31, 2022
Cost
Accumulated amortization and
impairment
Net carrying amount
Year ended March 31, 2023
Additions
Amortization
10,239
(200)
10,039
-
-
Closing net carrying amount
10,039
At March 31, 2023
Cost
Accumulated amortization and
impairment
10,239
(200)
12,827
(9,467)
3,360
-
(574)
2,786
12,827
(10,041)
2,786
-
(523)
2,263
12,827
(10,564)
Net carrying amount
10,039
2,263
29,928
(3,778)
26,150
7,811
(2,897)
31,064
36,611
(5,547)
31,064
3,048
(3,450)
30,662
39,659
(8,997)
30,662
1,917
54,911
(1,816)
(15,261)
101
39,650
-
-
101
7,811
(3,471)
43,990
1,917
61,594
(1,816)
(17,604)
101
43,990
-
-
101
3,048
(3,973)
43,065
1,917
64,642
(1,816)
(21,577)
101
43,065
Contractual commitments to purchase software were $456 as at March 31, 2023 (2022 – $405).
Included in software are assets amounting to $nil (2022 – $2,430) that are under development and are not being
amortized.
Management has determined there was no impairment in intangible assets for the years ended March 31, 2023 and
2022.
39
| ANDREW PELLER LIMITED 2023
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
2023
$
3,134
26,695
23,809
53,638
2022
$
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
2023
%
11.2
2.7
41.5
26.7
3.5
2022
%
11.0
3.7
41.2
25.9
3.4
As at March 31, 2023, the Company’s book value of net assets exceeded its market capitalization, which was an
indication of impairment and triggered an overall impairment assessment. The Company uses past experience and
current expectations about future performance in projecting cash flows, which are based on financial budgets for five
years. For the period after five years, the Company projects cash flows using an assumed growth rate, which is based
on expectations about long-term economic growth in Canada and any known industry specific factors that may
influence long-term growth in the Canadian wine industry. The discount rate is estimated by referring to external
sources of information about the cost of capital and the leverage of companies that operate in a similar industry to the
Company and that are of similar size. No impairment in goodwill for the years ended March 31, 2023 and 2022 was
recognized as a result of the impairment test.
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, 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 8.9% (a
100 basis point increase), the gross profit percentages were decreased by 2.0% (a 100 basis point decrease), average
revenue growth rates during the period of projected cash flows were decreased by 43.5% (a 100 basis point decrease)
and the terminal growth rate was decreased by 33.3% (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. The Ontario and Eastern Canadian wine CGU shows 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 $7,715, however, the recoverable amount is sensitive to changes to the key assumptions. Changing
each assumption independently, an increase in the discount rate of 2.1% (a 23 basis point increase), a decrease in the
gross profit percentage or an increase in the selling and administration margin of 1.4% (a 51 basis point decrease), a
ANDREW PELLER LIMITED 2023 |
40
decrease in the average revenue growth rate of 3.9% (a 14 basis point decrease) or a decrease in the terminal growth
rate of 6.2% (a 28 basis point decrease) would result in the recoverable amount being equal to the carrying amount. In
addition, the Company has estimated that the Wine Sector Support Program (note 17) will continue to be received by
the Company at the same level of funding received in the current year throughout its five-year cash flow projection. If
the Wine Sector Support Program is discontinued or the funding were to significantly change it would have a material
impact on the discounted cash flows of the Company and could result in an impairment of the Western Canadian wine
CGU. 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.
In relation to the personal winemaking products CGU, the Company determined that the recoverable amount exceeds
the carrying amount by $2,802, however, the recoverable amount is sensitive to changes to the key assumptions.
Changing each assumption independently, an increase in the discount rate of 3.4% (a 38 basis point increase), a
decrease in the gross profit percentage or an increase in the selling and administration margin of 2.3% (a 70 basis point
decrease), a decrease in the average revenue growth rate of 11.8% (a 22 basis point decrease) or a decrease in the
terminal growth rate of 33.3% (50 basis points) 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
2023
$
26,964
19,214
1,616
47,794
Vineyard
land
$
Buildings
$
Machinery
and
equipment
$
Closing net carrying amount as at
March 31, 2021
Additions
Modifications
Amortization
Closing net carrying amount as at
March 31, 2022
Year ended March 31, 2023
Additions
Terminations
Amortization
Closing net carrying amount as at
March 31, 2023
6,578
-
-
(493)
6,085
395
-
(466)
6,014
41
| ANDREW PELLER LIMITED 2023
8,196
336
778
(2,915)
6,395
1,231
(11)
(2,702)
2,237
1,451
-
(953)
2,735
1,205
(50)
(1,205)
4,913
2,685
13,612
2022
$
29,667
16,294
1,414
47,375
Total
$
17,011
1,787
778
(4,361)
15,215
2,831
(61)
(4,373)
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
2023
$
16,263
2,831
(62)
(4,991)
687
14,728
4,523
2022
$
17,813
2,565
-
(4,900)
785
16,263
4,070
Lease obligations
10,205
12,193
Expenses related to leases with variable consideration amounting to $1,015 (2022 – $1,118) and short term leases and
low value leases amounting to $1,651 (2022 – $1,322) were recorded within selling and administration expenses. The
total cash outflows relating to leases during the year were $7,657 (2022 – $7,340).
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 (loss) earnings in the period in which the condition that triggers those
payments occurs. A 5% increase in sales across all stores with such variable lease contracts would not result in a
material change to the total lease payments.
11 Bank indebtedness and Long-term debt
Bank indebtedness
Revolving, amortizing loan – investment facility
Less: Financing costs
Long-term debt
2023
$
4,942
208,129
40
208,089
2022
$
-
192,132
67
192,065
The Company’s debt facility consists of a $350,000 revolving, interest only facility to be used for acquisitions and day-
to-day operations, distributions and capital expenditures. The facility matures on December 8, 2024 and repayment of
the facility is due on maturity. Financing costs of $106 are being amortized over the term of the loan. On November 10,
2021, February 9, 2022 and June 15, 2022, the Company amended its debt facilities. Amendments include revised
financial covenants for the period of March 31, 2022 to December 31, 2023. Management has assessed and determined
that these amendments did not constitute a modification of long term debt. Financing costs of $400 were incurred
during the year ended March 31, 2022 and expensed immediately as part of interest expense.
The Company had entered into interest rate swap agreements to fix the interest rate on a portion of the balance
outstanding on the facility until September 29, 2022. The interest rate was fixed at 2.25%, plus the applicable margin.
From October 1, 2022 to March 31, 2023, the Company had a variable interest rate of CDOR plus the applicable
margin. As at March 31, 2023, the applicable margin was 4.50% (2022 – 4.00%). Interest expense on long-term debt
during the year was $16,650 (2022 – $7,750).
The Company and its subsidiaries have provided their assets as security for these loans.
ANDREW PELLER LIMITED 2023 |
42
The following table summarizes the change in the Company’s long term debt arising from financing activities for the
year ended March 31, 2023:
Balance – Beginning of year
Drawings
Repayments
Amortization of deferred financing fees
Amortization of gain on modification of debt
Balance – End of year
12 Post-employment benefits
Defined contribution plans
$
192,065
54,000
(39,000)
27
997
208,089
The total expenses for the defined contribution savings plans were $2,669 (2022 – $2,599).
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 (loss) 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
43
| ANDREW PELLER LIMITED 2023
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.
Amounts pertaining to defined benefit plans are as follows:
Plan assets
Fair value – Beginning of year
Return on plan assets excluding amounts in
interest income
Interest income
Company’s contributions
Benefits paid
Fair value – End of year
Plan obligations
Accrued benefit obligations – Beginning of
year
Total current service cost
Interest cost
Benefits paid
Remeasurements
Experience gain
Gain from change in financial
assumptions
Accrued benefit obligations – End of year
Post-employment benefit (asset) obligation
Benefit plan expense
Current service cost
Net interest (income) 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, 2024
Weighted average duration of the defined benefit
obligations in years
Pension
benefits
$
Other post-
employment
benefits
$
22,733
(1,965)
888
193
(1,238)
20,611
22,064
261
868
(1,238)
(517)
(1,706)
19,732
(879)
261
(20)
241
258
193
10.0
-
-
-
86
(86)
-
2,274
66
92
(86)
(84)
(112)
2,150
2,150
66
92
158
196
88
9.7
2023
Total
$
22,733
(1,965)
888
279
(1,324)
20,611
24,338
327
960
(1,324)
(601)
(1,818)
21,882
1,271
327
72
399
454
281
10.0
ANDREW PELLER LIMITED 2023 |
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
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 2023
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
2023
%
4.0
4.8
2.5
5.0
60 – 65 years
2.0
MI-2017
2022
%
3.1
4.0
2.5
5.0
60 – 65 years
2.0
MI-2017
The following table outlines the impact of a reasonable change in significant assumptions assuming all other
assumptions are held constant. Changes in numerous assumptions may occur at the same time, which could increase or
decrease the impact. With respect to a 1% increase or decrease in the inflation rate, the analysis excludes any impact
this would have on the discount rate, medical cost trend rates and the rate of compensation increase.
2023
Other post-
employment
benefits
$
2022
Other post-
employment
benefits
$
Pension
benefits
$
(189)
230
(2,344)
2,854
(227)
255
-
-
-
-
580
(527)
35
(35)
-
-
-
-
Pension
benefits
$
(1,772)
2,167
158
(95)
13
(12)
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
As at March 31, 2023, the accumulated actuarial losses, net of deferred taxes, recognized in other comprehensive (loss)
income were $1,021 (2022 – $1,355).
Plan assets
The plan assets consist of the following:
Mutual funds
Fixed income
Equity
$
14,581
6,030
20,611
2023
%
71
29
100
$
15,778
6,955
22,733
2022
%
69
31
100
ANDREW PELLER LIMITED 2023 |
46
13
Income taxes
Current income tax (recovery) expense
Change in temporary differences
Impact of change in tax rate
Deferred income tax expense
Total income tax (recovery) expense
The Company’s income tax (recovery) expense consists of the following:
Income taxes at blended statutory rate of
26.40% (2022 – 26.43%)
Permanent differences and non-deductible items
Future income tax rate changes
Other
The movement of the deferred income tax account is as follows:
Beginning of year
Deferred income taxes in net (loss) earnings
Deferred income taxes in other comprehensive (loss) income
End of year
2023
$
(2,037)
1,192
(43)
1,149
(888)
2023
$
(1,119)
504
(43)
(230)
(888)
2023
$
32,426
1,149
120
33,695
2022
$
2,458
2,135
14
2,149
4,607
2022
$
4,513
(68)
14
148
4,607
2022
$
29,765
2,149
512
32,426
The significant temporary differences giving rise to the deferred income tax liability are comprised of the following:
47
| ANDREW PELLER LIMITED 2023
Deferred income tax liability
Accelerated tax
depreciation
and deductions
on property,
plant and
equipment
$
Accelerated
tax
deductions
on intangible
assets
$
Tax
deductions
on goodwill
$
March 31, 2021
Expense in net earnings
March 31, 2022
(Income) expense in net (loss)
earnings
March 31, 2023
Deferred income tax asset
16,486
1,277
17,763
1,901
19,664
March 31, 2021
Income in net earnings
Expense in other comprehensive income
March 31, 2022
Income in net (loss) earnings
Expense in other comprehensive (loss) income
March 31, 2023
13,291
1,372
14,663
(55)
14,608
Post-
employment
benefits
$
(876)
(60)
512
(424)
(31)
120
(335)
720
11
731
9
740
Other
$
144
(451)
-
(307)
(675)
-
(982)
Total
$
30,497
2,660
33,157
1,855
35,012
Total
$
(732)
(511)
512
(731)
(706)
120
(1,317)
The income tax effects relating to components of accumulated other comprehensive loss are as follows:
2023
Before
income tax
amount
Deferred
tax
expense
Net of
income tax
expense
Before
income tax
amount
Deferred
tax
expense
$
$
$
$
$
2022
Net of
income tax
expense
$
Accumulated actuarial
losses
1,362
341
1,021
1,816
461
1,355
14 Capital stock
Authorized
Unlimited preference shares
Unlimited Class A Common Shares, non-voting
Unlimited Class B Common Shares, voting
ANDREW PELLER LIMITED 2023 |
48
Issued
Class A Common
Shares,
non-voting
Class B Common
Shares, voting
Number
of shares
2023
Amount
$
Number
of shares
35,040,656
27,669
34,978,011
8,144,183
364
8,144,183
43,184,839
28,033
43,122,194
2022
Amount
$
26,926
364
27,290
All of the issued Class A and Class B Common Shares are fully paid and have no par value.
Class A Common 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 Common Shares. Class B Common Shares are voting and convertible into Class A Common
Shares on a one for one basis. During the year ended March 31, 2023, no Class B Common Shares were converted into
Class A Common Shares.
As described in note 15, 58,851 Class A Common Shares were issued as a result of the exercise of share-based awards
during the year ended March 31, 2023. In addition to the shares issued due to the exercise, the holders of DSUs, RSUs
and PSUs earn dividends in the form of additional units and as a result, the Company issued an additional 3,794 Class
A Common Shares.
On September 13, 2022, the Company announced a normal course issuer bid (NCIB) to repurchase for cancellation up
to 1,000,000 Class A non-voting Common Shares, representing 2.86% of Class A non-voting Common Shares issued
and outstanding as at the close of markets on August 31, 2022, during the 12-month period from September 16, 2022 to
September 15, 2023. During the fiscal year ended March 31, 2023, no Class A non-voting Common Shares were
repurchased for cancellation under the NCIB.
Annual dividends of $0.246 (2022 – $0.246) per Class A Common Share and $0.214 (2022 – $0.214) per Class B
Common Share were approved by the Board of Directors on June 15, 2022 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, 2023 and 2022, 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 Common Shares on an annual
basis. Employees are required to pay 67% of the market price per Class A Common Share. The Company is responsible
for the remainder of the cost and, during 2023, expensed $251 (2022 – $276) related to the employee program.
49
| ANDREW PELLER LIMITED 2023
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:
1,641,335 stock options (2022 – 1,303,367) (a)
402,781 performance share units (2022 – 292,731) (b)
143,486 restricted share units (2022 – 62,750) (c)
71,529 deferred share units (2022 – 57,799) (d)
2023
$
575
481
427
-
1,483
2022
$
789
422
188
-
1,399
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 (loss) earnings and
comprehensive (loss) 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,
2023, the Company had 3,159,067 Class A non-voting common shares reserved for issuance under the share-based
compensation arrangements.
(a) Stock options
The Company has a stock option plan under which options to purchase Class A non voting common shares may
be granted to officers and employees of the Company. Options granted under the plan have an exercise price of
not less than the volume weighted average trading price of the Class A non voting common shares where they are
listed for the five trading days prior to the date of the grant. Options granted vest in tranches, equally over a three
year period on each anniversary of the grant date, commencing on the first anniversary of the grant date.
The Company’s stock option transactions during the year were as follows:
2023
Weighted
average
exercise price
per share
$
Number of
options
11.19
5.70
(7.28)
1,041,800
290,700
(29,133)
9.95
1,303,367
12.02
619,986
2022
Weighted
average
exercise price
per share
$
11.89
8.75
10.97
11.19
12.95
Number of
options
1,303,367
447,133
(109,165)
1,641,335
950,535
Balance – Beginning of year
Granted
Forfeited
Balance – End of year
Exercisable
ANDREW PELLER LIMITED 2023 |
50
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.
2023
1.38
25.50%
2.85%
3.14%
10
2022
1.89
24.68%
2.19%
1.19%
10
Information relating to stock options outstanding and exercisable as at March 31, 2023 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
$
101
68
65
1,098,035
406,700
136,600
$
7.91
13.15
17.21
92 409,135
68 404,800
68 136,600
9.16
13.17
17.21
90
1,641,335
9.95
78 950,535
12.02
The Company has established a PSU plan for employees and officers of the Company. PSUs represent the right to
receive Class A non voting common shares settled by the issuance of treasury shares or shares purchased on the
open market. PSUs vest in full at the end of the third fiscal year after the grant date. The number of units that will
vest is determined based on the achievement of certain performance conditions (i.e., financial targets) established
by the Board of Directors and are adjusted by a factor, which ranges from 0.5 to 2.0, depending on the
achievement of the targets established. Therefore, the number of units that will vest and are exchanged for Class A
non voting common shares may be higher or lower than the number of units originally granted to a participant.
The Company’s PSU transactions during the year were as follows:
2023
Grant date
fair value
per unit
$
10.13
5.70
(14.14)
(10.52)
7.40
9.31
Number of
units
218,562
125,320
(28,416)
(22,735)
292,731
32,165
2022
Grant date
fair value
per unit
$
12.44
8.75
(17.16)
(15.97)
10.13
14.09
Number of
units
292,731
213,020
(32,165)
(70,805)
402,781
46,555
Balance – Beginning of year
Granted
Exercised
Forfeited
Balance – End of year
Exercisable
51
| ANDREW PELLER LIMITED 2023
Awards granted in September 2020 vested March 31, 2023 and, based on the achievement of the performance
condition, 46,555 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:
2023
Grant date
fair value
per unit
$
8.75
5.70
(8.75)
(6.58)
6.51
Number of
units
-
62,750
-
-
62,750
2022
Grant date
fair value
per unit
$
-
8.75
-
-
8.75
Number of
units
62,750
115,180
(20,916)
(13,528)
143,486
Balance – Beginning of year
Granted
Exercised
Forfeited
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.
The Company’s DSU transactions during the year were as follows:
2023
Grant date
fair value
per unit
$
14.43
6.77
(18.22)
Number of
units
65,669
12,770
(20,640)
12.03
57,799
2022
Grant date
fair value
per unit
$
14.40
9.35
(11.19)
14.43
Number of
units
57,799
19,500
(5,770)
71,529
Balance – Beginning of year
Issued
Exercised
Balance – End of year
ANDREW PELLER LIMITED 2023 |
52
16 Nature of expenses
The nature of expenses included in selling and administration and cost of goods sold, excluding amortization, are as
follows:
Raw materials and consumables
Employee compensation and benefits
Advertising, promotion and distribution
Occupancy
Repairs and maintenance
Other external charges
Wine Sector Support Program grant (note 17)
Other expenses are as follows:
Ongoing costs related to Port Moody winery facility (a)
Restructuring (b)
Other
2023
$
186,340
89,751
33,903
11,230
8,910
24,289
(10,295)
344,128
2023
$
678
2,795
74
3,547
2022
$
172,296
85,121
33,025
9,739
7,989
26,586
-
334,756
2022
$
606
858
(254)
1,210
(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.
(b) Restructuring costs of $2,795 (2022 – $858) were recorded during the year ended March 31, 2023. These costs
relate to severance and other restructuring costs of certain departments within the Company.
17 Wine Sector Support Program grant
During the year, Agriculture Canada announced the Wine Sector Support Program (WSSP), a two-year support
program to provide non-repayable grants to licensed Canadian wineries based on the production of bulk wine
fermented in Canada from domestic and/or imported grapes. The amount of grant received is dependent on the
Company’s inventory production compared to total inventory production of the industry and varies with the amount of
inventory produced in a specific year.
These conditions were met when the details of the amount to be received were provided by Agriculture Canada. As a
result, during the year, the Company recorded $18,050 under WSSP. As at March 31, 2023, all amounts have been
received and there are no unfulfilled conditions attached to the government grant received under the WSSP.
For the year ended March 31, 2023, $10,295 was recorded in the consolidated statement of (loss) earnings as a
reduction in cost of goods sold. As at March 31, 2023, $7,755 of the grant has been recognized as a reduction to the
cost of inventory.
53
| ANDREW PELLER LIMITED 2023
18 Net (loss) earnings per share
Class A
$
Class B
$
Net loss attributed for the year – basic and diluted
(2,788)
(564)
Weighted average number of shares outstanding –
basic and diluted
35,019,457
8,144,183
Net loss per share – basic and diluted
(0.08)
(0.07)
Class A
$
Class B
$
2023
Total
$
(3,352)
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
19 Contingent liabilities and unrecognized contractual 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.
20 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
2023
$
2,079
(20,742)
1,400
2,775
(14,488)
2022
$
1,520
(17,545)
(1,014)
685
(16,354)
ANDREW PELLER LIMITED 2023 |
54
21 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
Accounts receivable
Bank indebtedness
Accounts payable and
accrued liabilities
Dividends payable
Long-term debt
Financial assets
Financial liabilities
Amortized cost
Amortized cost
Financial liabilities
Financial liabilities
Financial liabilities
Amortized cost
Amortized cost
Amortized cost
Assets/liabilities
Category
Measurement
Financial assets
Amortized cost
Accounts receivable
Accounts payable and
accrued liabilities
Dividends payable
Long-term debt
Financial liabilities
Financial liabilities
Financial liabilities
Interest rate swap liability
Foreign exchange forward
contracts liability
Derivatives
Derivatives
Amortized cost
Amortized cost
Amortized cost
Fair value through
profit or loss
Fair value through
profit or loss
Carrying
amount
$
25,297
4,942
47,794
2,591
208,089
Carrying
amount
$
27,376
47,375
2,587
192,065
263
86
2023
Fair
value
$
25,297
4,942
47,794
2,591
208,129
2022
Fair
value
$
27,376
47,375
2,587
192,132
263
86
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 (loss) earnings, which reflect changes in fair value.
Fair value
The fair value of accounts receivable, accounts payable and accrued liabilities and dividends payable approximates
their carrying value because of the short term maturity of these instruments.
The fair value of bank indebtedness and long term debt is equivalent to its carrying value because the variable interest
rate is comparable to market rates. The fair value of the interest rate swaps used to fix the interest rate on long term
debt is included in the current and long term derivative financial instruments in the consolidated balance sheets.
The fair value of foreign exchange forward contracts is determined based on the difference between the contract rate
and the forward rate at the date of the valuation.
The fair value of the interest rate swaps is determined based on the difference between the fixed interest rate in the
contract that will be paid by the Company and the forward curve of the floating interest rates that are expected to be
55
| ANDREW PELLER LIMITED 2023
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 on foreign exchange forward contracts
2023
$
(340)
(40)
(380)
2022
$
(2,051)
(218)
(2,269)
The fair value measurements of the Company’s financial instruments are classified in the hierarchy below according to
the significance of the inputs used in making the fair value measurements.
Quoted prices in
active markets
for
identical assets
(Level 1)
$
Quoted prices in
active markets
for
identical assets
(Level 1)
$
-
-
-
-
Significant
observable
inputs
other than
quoted prices
(Level 2)
$
-
-
Significant
observable
inputs
other than
quoted prices
(Level 2)
$
263
86
2023
Significant
unobservable
inputs
(Level 3)
$
2022
Significant
unobservable
inputs
(Level 3)
$
-
-
-
-
Asset/liability
Interest rate swap liability
Foreign exchange forward contracts
liability
Asset/liability
Interest rate swap liability
Foreign exchange forward contracts
liability
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 and floating rate debt. 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
ANDREW PELLER LIMITED 2023 |
56
between minimizing borrowing costs over the long term, ensuring it meets borrowing covenants, and ensuring it meets
other expectations and requirements of investors. To meet these objectives, the Company’s policy is to effectively fix
the rates on long term debt to match the duration of investments in long lived assets and to use floating rate funding for
short term borrowing.
As of March 31, 2023, the Company had no open swap agreements outstanding, and as such, all of the Company’s
borrowings are subject to interest rate movements. As at March 31, 2023, with other variables unchanged, a 100 basis
point change in interest rates would impact the Company’s net (loss) earnings by approximately $1,576 (2022 – $795).
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 63% of the
Company’s accounts receivable balance relates to amounts owing from Canadian provincial liquor boards. Excluding
accounts receivable from Canadian provincial liquor boards, the Company does not have a significant concentration of
credit risk with any single counterparty or group of counterparties. Amounts owing from Canadian provincial liquor
boards represent $14,091 (2022 – $15,327) of the total accounts receivable against which an expected credit loss of $22
has been provided. Of the remaining nonprovincial liquor board balances, $1,246 (2022 – $1,391) was over thirty days
past due as at March 31, 2023. An expected credit loss of $207 (2022 – $316) 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 $66,855 (2022 – $67,587) during the year ended
March 31, 2023. Sales to its second largest customer, a branch of a provincial government, were $25,590 (2022 –
$29,031) during the year. No other customers accounted for over 10% of sales during the years ended March 31, 2023
and 2022.
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
The change in the expected credit loss was as follows:
Balance – Beginning of year
Provision for expected credit losses
Writeoffs
Balance – End of year
57
| ANDREW PELLER LIMITED 2023
2023
$
14,091
9,475
714
160
1,086
(229)
2022
$
15,327
9,820
1,154
699
692
(316)
25,297
27,376
2023
$
316
52
(139)
229
2022
$
257
172
(113)
316
Liquidity risk
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, leases, and service agreements as at March 31, 2023.
Long-term debt
Leases and royalties
Service agreements
Grape, bulk wine and whisky
purchase contracts
Packaging purchase contracts
< 1
year
$
2 – 3
years
$
-
5,774
1,779
208,129
7,042
763
4 – 5
years
$
-
4,365
-
> 5
years
$
Total
$
-
18,154
-
208,129
35,335
2,542
58,023
15,485
83,588
25,421
77,635
-
51,334
-
270,580
40,906
Total contractual obligations
81,061
324,943
82,000
69,488
557,492
The Company has entered into grape purchase contracts with certain suppliers to purchase their crops at the time of
harvest for prices set by the market. The amount of the commitment will change based on the total tonnes harvested or
the prices set by the market for specific grapes, and the amount included in the table above represents management’s
best estimate of the Company’s commitment over the periods noted.
Foreign exchange risk
Certain of the Company’s purchases are denominated in US dollars (US$), euro (EUR) or Australian dollars (AU$).
Any increases or decreases to the foreign exchange rates could increase or decrease the Company’s earnings. To
mitigate the exposure to foreign exchange risk, the Company will enter 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, 2023, the
Company has no open forward foreign currency contracts. As such, 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 (loss) earnings by approximately $484
(2022 – $238), $96 (2022 – $30) or $58 (2022 – $35), respectively. The Company has elected to not use hedge
accounting and as a result, has recognized unrealized foreign exchange gains of $340 (2022 – $218) in the consolidated
statements of (loss) earnings as a component of the net unrealized gain on derivative financial instruments and has
recorded the fair value of $nil (2022 – $86) in the current portion of derivative financial instruments in the consolidated
balance sheets.
22 Capital disclosures
The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern,
to provide an adequate return to shareholders and to meet external capital requirements on debt and credit facilities.
The Company’s capital consists of cash, bank indebtedness, long-term debt and shareholders’ equity. The primary uses
of capital are to fund working capital, maintenance and growth-related capital expenditures, pay dividends and finance
ANDREW PELLER LIMITED 2023 |
58
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 September
30, 2023. Minimum EBITA is defined as consolidated (loss) 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 December 31, 2023 to the end of the term of
the credit facility;
Interest charge coverage ratio for the periods ending December 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, 2023 and 2022,
the Company was in compliance with these covenants.
23 Related parties and management compensation
The Company is controlled by Peller Family Enterprises Inc., which owns 61.3% (2022 – 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
Termination benefits
Post-employment benefits
Share-based compensation expense
2023
$
4,266
1,032
339
1,081
6,718
2022
$
3,867
-
323
1,132
5,322
The compensation and short term benefits expense consist of amounts that will primarily be settled within twelve
months.
24 Entity wide disclosures
During the year, export sales were $10,593 (2022 – $13,352), primarily in the United States. The remainder of sales
occurred in Canada. All of the Company’s assets are located in Canada.
59
| ANDREW PELLER LIMITED 2023
25 Events after the reporting period
On June 14, 2023, the Company’s Board of Directors approved the annual dividend for holders of its Class A and Class
B Common Shares in the amount of $0.246 per Class A Common Share and $0.214 per Class B Common Share to be
paid quarterly to shareholders, subject to management’s review of projected cash flows and compliance with financial
covenants.
On June 13, 2023, the Company amended and restated its credit facility. The borrowing limit was reduced to $275
million, which is comprised of an asset-backed revolving facility maturing on June 13, 2027 and is subject to a
minimum fixed charge coverage ratio covenant when excess availability is below a certain level.
ANDREW PELLER LIMITED 2023 |
60
TEN-YEAR SUMMARY
(in thousands, except per share amounts)
Sales and earnings
Net sales
EBITA
Net (loss) earnings
Financial position
Working capital
Total assets
Shareholders’ equity
Per share (3)
Net (loss) earnings (3)
Basic & diluted Class A
Basic & diluted Class B
Dividends (3)
Class A Common Shares, non-voting
Class B Common Shares, voting
Number of shares outstanding (3)
Class A Common Shares, non-voting
Class B Common Shares, voting
Other information
Return on average
shareholders’ equity (1)
Return on average
capital employed (2)
2023
2022
2021
2020
2019
$382,140 $ 373,944 $ 393,036 $ 382,306 $ 381,796
52,875
63,046
21,958
27,786
38,012
(3,352)
61,501
23,494
39,188
12,468
186,318
566,748
253,638
181,832
558,071
265,401
170,684
542,521
265,574
83,654
513,919
245,523
97,305
467,019
234,751
(0.08)
(0.07)
0.246
0.214
35,041
8,144
43,185
0.29
0.26
0.246
0.214
34,978
8,144
43,122
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
(1.3%)
4.7%
10.9%
9.8%
9.7%
3.2%
3.8%
10.1%
10.7%
11.5%
(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 16 and IAS 41.
61
| ANDREW PELLER LIMITED 2023
2018
2017
2016
$ 363,897
52,860
30,117
104,417
457,780
220,246
$ 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 (4)
$ 315,697
35,184 (4)
15,224 (4)
68,982
301,519 (4)
147,375 (4)
2014
$ 297,824
33,729
14,021
44,564
301,015
138,003
0.71
0.62
0.180
0.156
35,471
8,702
44,173
15.2%
14.0%
0.64
0.55
0.163
0.142
33,581
9,012
42,593
15.7%
14.1%
0.46
0.40
0.150
0.130
33,581
9,012
42,593
12.6%
13.2%
0.36 (4)
0.32 (4)
0.140
0.122
33,882
9,012
42,894
10.6% (4)
11.0% (4)
0.34
0.29
0.133
0.116
33,882
9,012
42,894
10.5%
10.8%
ANDREW PELLER LIMITED 2023 |
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
CRAIG D. MCDONALD
Executive Vice-President, Operations
SARA E. PRESUTTO
Executive Vice-President, People & Culture
JOSÉ SALGADO
Executive Vice-President, Corporate Planning and
Development (VQA & DTC)
GREGORY J. BERTI
Vice-President, Industry Relations & Business
Development
RAMIT BORDIA
Vice-President, Integrated Customer Solutions and Global
Vintners Inc.
MARK TORRANCE
Vice-President, Estate Wine Group Operations
JOHN E. PELLER, O.C.
Burlington, Ontario
President & Chief Executive Officer
Andrew Peller Limited
SHAUNEEN BRUDER
Toronto, Ontario
Corporate Director
PERRY J. MIELE
Burlington, Ontario
Chairman and Partner
Beringer Capital
A. ANGUS PELLER M.D.
Toronto, Ontario
Senior Medical Consultant
RBC Insurance
FRACOIS VIMARD
Toronto, Ontario
Corporate Director
DAVID MONGEAU
Monte Carlo, Monaco
Chairman and Founder
The Avington Group
Honorary Directors
RICHARD D. HOSSACK
Toronto, Ontario
JOHN F. PETCH, O.C.
Toronto, Ontario
BRIAN J. SHORT
Hamilton, Ontario
63
| ANDREW PELLER LIMITED 2023
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
ROYAL BANK OF CANADA
FARM CREDIT CANADA
NATIONAL BANK
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
2023 Annual Shareholders’ Meeting
The 2023 Annual Meeting of Shareholders’ will be held at
Trius Winery and Restaurant on Thursday, September
28, 2023 at 1:00 p.m.
ANDREW PELLER LIMITED 2023 |
64
Exclusive 2023 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 on 6 and 12 bottle collections. Complimentary delivery will be
extended to orders of 12+ bottles. Combining two (2)x 6 bottle collections for complimentary delivery is only
applicable to the eastern wineries and to those in the west marked with an asterisk*.
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 2023 Shareholder Collections, see instructions on the pages to follow.
This special offer ends Saturday, October 14th, 2023.
Don’t forget, Wine Club memberships are also available at Peller Estates Winery, Trius Winery, Thirty
Bench Winery, and Wayne Gretzky Estates 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
$188.61
(Reg $221.70)
~
12 bottle
Collection
$377.22
(Reg $443.40)
6 bottle
Collection
$129.96
(Reg $152.70)
~
12 bottle
Collection
$259.92
(Reg $305.40)
6 bottle
Collection
$111.28
(Reg $130.70)
~
12 bottle
Collection
$222.55
(Reg $261.40)
6 bottle
Collection
$195.60
(Reg $229.90)
~
12 bottle
Collection
$391.19
(Reg $459.80)
Peller Family Reserve 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
$114.68
(Reg $134.70)
~
12 bottle
Collection
$229.35
(Reg $269.40)
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 1.289.797.7559 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 Sur Lie Chardonnay
*
Red Rooster Rosé
Red Rooster Gewürztraminer
Red Rooster Reserve Merlot
Red Rooster Carbonic Malbec Merlot
Red Rooster Golden Egg
6 bottle
Collection
$166.60
(Reg $196.00)
~
12 bottle
Collection
$333.20
(Reg $392.00)
*Prices shown do not include applicable BC Taxes
Sandhill Pinot Gris
Sandhill Estate Chardonnay
Sandhill Estate Rosé
Sandhill Small Lot Sangiovese
Sandhill Small Lot Barbera
Sandhill Estate Merlot
*Prices shown do not include applicable BC Taxes
Gray Monk Rotberger Rosé
Gray Monk Reflection White
Gray Monk Odyssey Chardonnay
Gray Monk Merlot
Gray Monk Cabernet Merlot
Gray Monk Odyssey Meritage
*Prices shown do not include applicable BC Taxes
*
*
6 bottle
Collection
$142.80
(Reg $168.00)
~
12 bottle
Collection
$285.60
(Reg $336.00)
6 bottle
Collection
$135.96
(Reg $159.95)
~
12 bottle
Collection
$271.92
(Reg $319.90)
Black Hills Nota Bene
Black Hills Per Se
Black Hills Alibi
Black Hills Roussanne
Black Hills Rosé
Black Hills Ipso Facto
*Prices shown do not include applicable BC Taxes
Tinhorn Creek Blanc de Blanc
Tinhorn Creek Reserve Rosé
Tinhorn Creek Reserve Cabernet Franc
Tinhorn Creek Reserve Merlot
Tinhorn Creek Reserve Syrah
Tinhorn Creek Reserve Roussanne
*Prices shown do not include applicable BC Taxes
~
Offer Ends Saturday, October 14th, 2023.
6 bottle
Collection
$246.50
(Reg $290.00)
~
12 bottle
Collection
$493.00
(Reg $580.00)
6 bottle
Collection
$187.00
(Reg $220.00)
~
12 bottle
Collection
$374.00
(Reg $440.00)
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.