ANDREW PELLER LIMITED (Consolidated) (2017)

1 ANDREW PELLER LIMITED consolidated Financial Statements March 31, 2017 and 2016 (in thousands of Canadian dollars) PricewaterhouseCoopers LLPPwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2T: +1 416 863 1133, F: +1 416 365 8215 PwC refers to PricewaterhouseCoopers LLP, an Ontario LIMITED liability partnership. June 7, 2017 Independent Auditor s Report To the Shareholders of ANDREW PELLER LimitedWe have audited the accompanying consolidated financial statements of ANDREW PELLER LIMITED , which comprise the consolidated balance sheets as at March 31, 2017 and 2016 and the consolidated statements of earnings, comprehensive income, changes in equity and cash flows for the years then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information.

2 Management s responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

3 We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.

4 In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

5 We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of ANDREW PELLER LIMITED as at March 31, 2017 and 2016 and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards. Chartered Professional Accountants, Licensed Public AccountantsAndrew PELLER LIMITED consolidated Balance Sheets As at March 31, 2017 and 2016 (in thousands of Canadian dollars) Approved by Director Director The accompanying notes are an integral part of these consolidated financial statements.

6 20172016 AssetsCurrent assetsAccounts receivable (note 20)$26,973$28,223 Inventories (note 4)129,088119,666 Biological assets (note 6)1,4001,196 Prepaid expenses and other assets3,1061,782160,567150,867 Property, plant and equipment (note 5) 118,838108,929 Intangible assets (note 7) 10,60011,040 Goodwill (note 8) 37,47337,473$327,478$308,309 LiabilitiesCurrent liabilitiesBank indebtedness (note 9)$36,620$33,701 Accounts payable and accrued liabilities (note 10)36,26036,772 Dividends payable1,6901,553 Income taxes payable (note 14)2,3482,425 Current portion of derivative financial instruments (note20)418645 Current portion of long-term debt (note 11)4,4064,10681,74279,202 Long-term debt (note 11) 46,678 48,202 Long-term derivative financial instruments (note 20) 6421,529 Post-employment benefit obligations (note 12) 5,2795,947 Deferred income (note 13) - 102 Deferred income taxes (note 14) 15,82015,591150,161150,573 Shareholders EquityCapital stock (note 15)

7 6,9676,967 Retained earnings174,193154,605 Accumulated other comprehensive loss(3,843)(3,836)177,317157,736$327,478 $308,309 ANDREW PELLER LIMITED consolidated Statements of Earnings For the years ended March 31, 2017 and 2016 (in thousands of Canadian dollars, except per share amounts) The accompanying notes are an integral part of these consolidated financial statements. 20172016 Sales$342,606 $334,263 Cost of goods sold,excluding amortization (note 16)211,451211,299 Amortization of plant and equipment used in production6,5496,069 Gross profit124,606116,895 Selling and administration (note 16)86,01882,048 Amortization of equipment and intangible assets used in selling and administration 3,377 3,639 Interest3,0783,575 Net unrealized (gain) loss on derivative financial instruments (note 20)(2,232)1,558 Other expense (income)(note 16)120(40)

8 Earnings before income taxes34,245 26,115 Provision for (recovery of) income taxes(note 14) Current7,6647,181 Deferred231(265)7,8956,916 Net earnings for the year$26,350 $19,199 Net earnings per share (notes 15 and 17) Basic and dilutedClass A shares$ $ B shares$ $ PELLER LIMITED consolidated Statements of Comprehensive Income For the years ended March 31, 2017 and 2016 (in thousands of Canadian dollars) The accompanying notes are an integral part of these consolidated financial statements. 20172016 Net earnings for the year$26,350 $19,199 Items that are never reclassified to net earnings Net actuarial losses on post-employment benefit plans (note 12) (9)(457)Deferred income taxes (note 14) 2 119 Other comprehensive loss for the year (7)(338)Net comprehensive income for the year$26,343 $18,861 ANDREW PELLER LIMITED consolidated Statements of Changes in Equity For the years ended March 31, 2017 and 2016 (in thousands of Canadian dollars)

9 The accompanying notes are an integral part of these consolidated financial statements. Capital stockRetained earningsAccumulatedother comprehensive lossTotal shareholders equityBalance at April 1, 2015$7,026$143,847$(3,498)$147,375 Net earnings for the year-19,199-19,199 Net actuarial losses (netof $119 deferred tax recovery) (note 12)--(338)(338)Net comprehensive income for the year - 19,199 (338)18,861 Issue price of repurchased shares (note 15) (59)- - (59)Excess of repurchase price over average per share issue price (note 15) - (2,195)- (2,195)

10 Dividends (Class A $ per share, Class B $ per share) - (6,246)- (6,246)Balance at March 31, 2016$6,967$154,605$(3,836)$157,736 Balance at April 1, 2016$6,967 $154,605 $(3,836)$157,736 Net earnings for the year-26,350-26,350 Net actuarial losses (net of $2deferred tax recovery) (note 12) - - (7)(7)Net comprehensive income for the year - 26,350 (7)26,343 Dividends (Class A$ per share, Class B $ per share) - (6,762)-(6,762)Balance at March 31, 2017$6,967$174,193$(3,843)$177,317 ANDREW PELLER LIMITED consolidated Statements of Cash Flows For the years ended March 31, 2017 and 2016 (in thousands of Canadian dollars) The accompanying notes are an integral part of these consolidated financial statements.