Annual Report Lassonde 2011

Lassonde Industries Inc.
Message to Shareholders
Dear Shareholders,
As Chairman of the Board and Chief Executive Officer of Lassonde Industries Inc., I am pleased to present the financial
results for the fourth quarter and fiscal 2011.
It should first be noted that, on August 12, 2011, the Company along with members of the Pappas and Lassonde families,
completed the acquisition of Clement Pappas and Company, Inc. (CPC) for a total cash consideration of US$400.9 million.
Pursuant to this transaction, the Company holds 70.7% of the shares in CPC. Of the remaining 29.3%, 19.3% is held by
members of the Pappas family and 10.0% by members of the Lassonde family.
The Company’s sales amounted to $760.3 million in fiscal 2011, up $224.1 million (41.8%) from $536.2 million in 2010.
The growth in sales was mainly due to the acquisition of CPC, which contributed $178.6 million (33.3%) of this increase.
Excluding CPC sales, the Company’s sales were up $45.5 million (8.5%) mainly as a result of an increase in sales of private
label products, a higher volume of national brands and lower slotting fees. The positive impact of these increases was
mitigated by the estimated $1.8 million unfavourable impact of exchange rates on sales in U.S. dollars.
The Company’s operating profit for the year ended December 31, 2011 stood at $60.3 million, up $10.1 million (20.3%)
from the previous year. The CPC acquisition had a $7.8 million net favourable impact (including acquisition costs) on the
2011 operating profit. Excluding the impact of the CPC acquisition, the 2011 operating profit would have increased by
$2.4 million (4.8%) from 2010. Operating profit before the impact of the CPC acquisition grew slower than sales, reflecting
the combined impact of the following factors: (i) significantly higher costs of concentrates expressed in Canadian dollars
and (ii) selling and administrative expenses that increased slightly faster than sales.
The Company’s financial expenses rose from $4.6 million in fiscal 2010 to $13.9 million in fiscal 2011. This $9.3 million
increase was entirely attributable to the financings related to the acquisition of CPC. “Other (gains) losses” went from a
$0.4 million loss in 2010 to a loss of less than $0.1 million in 2011. The 2011 loss resulted primarily from the combined
impact of a $0.9 million exchange gain on a bank balance of approximately US$70 million held to carry out the CPC
acquisition, a $0.3 million exchange loss from operating activities and a $0.6 million loss from a change in fair value of
the forward-starting interest rate swaps.
Profit before income taxes stood at $46.4 million for fiscal 2011, up $1.2 million from $45.2 million in 2010. Excluding
the combined impact of CPC’s profit before taxes, acquisition expenses and related financial costs, profit before income
taxes would have amounted to $47.6 million, an increase of $2.4 million (5.4%) from the previous year.
An income tax expense at an effective rate of 25.4% (29.2% in 2010) brought the 2011 profit to $34.6 million, up 8.1%
from $32.0 million in fiscal 2010. Profit attributable to the Company’s shareholders stood at $34.5 million for basic and
diluted earnings per share of $5.12 for 2011. Profit attributable to the Company’s shareholders reflects the allocation of
a portion of CPC’s profit to a non-controlling interest. In 2010, profit attributable to the Company’s shareholders stood
at $32.0 million for basic and diluted earnings per share of $4.86. It should be noted that the profit from CPC together
with all of the acquisition-related transactions (including the exchange gain on U.S. cash and cash equivalents) added
approximately $0.1 million to the profit attributable to the Company’s shareholders.
Fourth quarter sales totalled $269.6 million versus $140.6 million last year, a year-over-year of $129.0 million (91.7%)
that was mainly due to the addition of $114.9 million in sales from CPC. Excluding the impact of the CPC acquisition, the
Company’s sales were up $14.0 million (10.0%) when compared to the same quarter of 2010. This increase is explained
2
Message to Shareholders (Continued)
by the combined impact of the following items: (i) an increase in the sales volume of national brands; (ii) an increase in
sales of private label products; (iii) price increases resulting from higher input costs and (iv) a $0.1 million favourable
exchange impact.
The cost of sales rose from $95.9 million in the fourth quarter of 2010 to $195.9 million in the same quarter of 2011, up
$100.0 million (104.4%). Most of the increase is explained by CPC’s cost of sales of $87.7 million. Excluding the CPC
acquisition, fourth quarter cost of sales stood at $108.2 million, up 12.9% from the same quarter last year. This increase is
higher than the 10.0% increase in sales, reflecting the combined impact of: (i) a significant increase in the cost of orange
and apple concentrates expressed in Canadian dollars and (ii) a significant increase in the purchase price of PET, which
affects the manufacturing cost of plastic bottles.
Selling and administrative expenses (SG&A) went from $27.1 million in the fourth quarter of 2010 to $48.7 million in
the fourth quarter of 2011, a 79.4% increase that was essentially due to the addition of CPC’s selling and administrative
expenses in an amount of $17.6 million. CPC’s SG&A would have been $16.5 million without the $1.1 million in
acquisition-related costs incurred by CPC in the fourth quarter. Excluding CPC’s expenses, the Company’s selling and
administrative expenses stood at $31.1 million, up $4.0 million (14.6%) from the same quarter of 2010. This 14.6%
increase is larger than the increase in sales and it is explained by the following factors: (i) higher transportation costs
arising from greater volumes; (ii) $0.4 million in acquisition-related costs incurred by the Company’s Canadian entities
and (iii) a $0.6 million expense related to a plant closure.
The Company’s operating profit for the fourth quarter of 2011 stood at $24.9 million, up $7.3 million from operating
profit of $17.6 million in the same quarter of 2010. CPC’s contribution to operating profit for the fourth quarter of 2011
was $9.6 million. Excluding CPC’s operating profit and $0.4 million in costs related to the CPC acquisition, the Company
reports $15.7 million in operating profit, down $1.9 million from the operating profit for 2010.
The Company’s financial expenses rose from $1.1 million in the fourth quarter of 2010 to $7.2 million in the same period
of 2011. This $6.1 million increase is entirely due to financing of the CPC acquisition. “Other (gains) losses” went from
a $0.2 million loss in the fourth quarter of 2010 to a $0.5 million loss in the fourth quarter of 2011. The loss in 2011
stems essentially from a $0.4 million mark-to-market adjustment on forward-starting interest rate swaps. These financial
instruments are related to CPC’s long-term borrowing of US$230 million.
Profit before income taxes stood at $17.3 million for the fourth quarter of 2011, up $1.0 million from $16.3 million in the
fourth quarter of 2010.
Income tax expense went from $4.8 million for the fourth quarter of 2010 to $3.8 million for the fourth quarter of 2011.
The effective income tax rate of 21.8% for the fourth quarter of 2011 was lower than the rate of 29.5% for the same period
of 2010. This decrease in tax rate reflects end-of-year adjustments attributable to the mix of statutory tax rates.
Profit for the fourth quarter of 2011 stood at $13.5 million, up $2.0 million or 17.2% from profit of $11.5 million recorded
for the fourth quarter of 2010.
3
Message to Shareholders (Continued)
Profit attributable to the Company’s shareholders totalled $13.2 million, resulting in basic and diluted earnings per share
of $1.91 for the fourth quarter of 2011. This amount reflects the allocation of a portion of CPC’s profit to a non-controlling
interest. It compares to $11.5 million in profit attributable to the Company’s shareholders for basic and diluted earnings
per share of $1.75 for the same period of 2010. It should be noted that the combined favourable impact, after taxes, of all
activities related to the CPC acquisition was approximately $2.6 million in the fourth quarter of 2011.
The food industry is currently facing strong headwinds caused by a sustained increase in the price of commodities.
Higher costs of apple and orange concentrates have resulted in targeted price increases for products made from such
concentrates. The Company has noted some volume declines for certain items subject to price increases, but it is difficult
to determine whether these declines in consumption levels are permanent.
Fiscal 2012 will include an entire year of CPC results. To better understand the impact of this acquisition, it is important
to note that CPC recorded, for the 12 months ended October 1, 2011, sales of approximately US$400 million. It should
also be noted that the Company believes that CPC will record slightly higher sales in 2012 compared to the twelve-month
period ended October 1, 2011. For its Canadian entities, Lassonde Industries Inc. anticipates slightly higher sales than in
2011.
The Company does not plan on making major changes to its business model in fiscal 2012 as it intends to focus on the
integration of the CPC acquisition.
In closing, I would like to thank you for the trust you have placed in us during this period of considerable change. We are
confident that the actions we undertook in 2011 will help position the Company to meet future challenges.
Pierre-Paul Lassonde
Chairman of the Board
and Chief Executive Officer

755 Principale Street
Rougemont (Quebec)
J0L 1M0
4
Management’s responsibility
for financial reporting
The preparation and presentation of the consolidated financial statements of Lassonde Industries Inc. and the other
financial information contained in the MD&A for years ended December 31, 2011 and 2010 are the responsibility of
management.
This responsibility is based on a judicious choice of appropriate accounting principles and methods, the application
of which requires making estimates and informed and careful judgments. It also includes ensuring that the financial
information in the MD&A is consistent with the consolidated financial statements. The consolidated financial statements
were prepared in accordance with the International Financial Reporting Standards and were examined and approved by
the Board of Directors.
The Company maintains disclosure controls and procedures which, in the opinion of management, provide reasonable
assurance regarding the disclosure of important information relating to the Company, as well as to its subsidiaries, and
the safeguarding of assets, and the well-ordered, efficient management of the Company’s business activities. Management
recognizes its responsibility for conducting the Company’s business activities to comply with the requirements of
applicable laws and established financial standards and principles. Management conducted an evaluation of the
effectiveness of the system of internal control over financial reporting based on the framework in Internal Control –
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this
evaluation, management concluded that the Company’s system of internal control over financial reporting was effective
as at December 31, 2011.
The Board of Directors fulfills its duty, to oversee management in the performance of its financial reporting responsibilities
and to review the consolidated financial statements and MD&A, principally through its Audit Committee. The Committee
is comprised solely of directors who are independent of the Company and is also responsible for making recommendations
for the nomination of external auditors. Also, it holds periodic meetings with members of management as well as external
auditors, to discuss internal controls, auditing matters and financial reporting issues. The external auditors have access
to the Committee without management. The Audit Committee has reviewed the consolidated financial statements of
Lassonde Industries Inc. and the annual management’s discussion and analysis and recommended their approval to the
Board of Directors.
The enclosed consolidated financial statements were audited by Samson Bélair/Deloitte & Touche s.e.n.c.r.l., Chartered
Accountants, and their report indicates the extent of their audit and their opinion on the consolidated financial statements.
Rougemont, Quebec, Canada

March 29, 2012
Pierre-Paul Lassonde GUY BLANCHETTE, CA, FCMA
Chairman of the Board Vice-President
and Chief Executive Officer and Chief Financial Officer
5
Table of Contents
Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Consolidated Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Consolidated Statements of Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6
Independent Auditor’s Report
To the Shareholders of Lassonde Industries Inc.
We have audited the accompanying consolidated financial statements of Lassonde Industries Inc., which comprise the
consolidated statements of financial position as at December 31, 2011, December 31, 2010 and January 1, 2010 and the
consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for the years ended
December 31, 2011 and December 31, 2010, and a summary of significant accounting policies and other explanatory
information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with International Financial Reporting Standards (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.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted
our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks
of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements give, in all material respects, a true and fair view of the financial
position of Lassonde Industries Inc. as at December 31, 2011, December 31, 2010 and January 1, 2010 and its financial
performance and cash flows for the years ended December 31, 2011 and December 31, 2010, in accordance with
International Financial Reporting Standards (IFRS).
March 29, 2012

Montreal, Quebec, Canada
1
Chartered accountant auditor permit no. 17456
7
Consolidated Statements of Income

(in thousands of Canadian dollars)
(audited)
Years ended
Notes Dec. 31, 2011 Dec. 31, 2010
$ $

Sales 6 760,258 536,245

Cost of sales 548,876 376,879
Selling and administrative expenses 151,035 109,183
699,911 486,062
Operating profit 60,347 50,183

Financial expenses 8 13,928 4,617
Other (gains) losses 9 33 378
Profit before income taxes 46,386 45,188

Income tax expense 10 11,804 13,212
Profit 34,582 31,976

Attributable to:
Company’s shareholders 34,471 31,976
Non-controlling interest 111 -
34,582 31,976

Basic and diluted earnings per share (in $) 25 5.12 4.86

Weighted average number of shares outstanding (in thousands) 6,729 6,582
Additional information on income is presented in Notes 7 and 27.
8
Consolidated Statements of Comprehensive Income

(audited)
Years ended
Notes Dec. 31, 2011 Dec. 31, 2010
$ $

Profit 34,582 31,976

Other comprehensive income (loss):
Net change in cash flow hedge
Gains (losses) on financial instruments designated as hedges 1,646 (4,162)
Reclassification of losses on financial instruments designated as hedges 5,691 5,873
Taxes 10 (2,085) (536)
5,252 1,175

Actuarial gains and losses on defined benefit plans
Actuarial losses resulting from defined benefit plans 27 (5,423) (2,918)
Taxes 10 1,454 791
(3,969) (2,127)

Translation difference
Exchange difference on translating foreign operations 4,550 -

Total other comprehensive income (loss) 5,833 (952)
Comprehensive income 40,415 31,024

Attributable to:
Company’s shareholders 39,743 31,024
Non-controlling interest 672 -
40,415 31,024
9
Consolidated Statements of Financial Position

(audited)
As at As at As at
Notes Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $
Assets
Current
Cash and cash equivalents - 40,937 20,512
Accounts receivable 12 96,999 57,934 47,992
Inventories 13 166,708 91,833 101,252
Investment 14 2,036 2,000 -
Other current assets 15 16,157 9,901 6,502
Non-current assets held for sale 16 605 - -
Derivative instruments 11 4,137 - 88
286,642 202,605 176,346
Property, plant and equipment 17 237,486 149,843 144,436

Other intangible assets 18 143,449 9,815 11,543
Net defined benefit asset 27 1,069 819 2,692
Deferred tax assets 10 3,284 - -
Other long-term assets 922 - -
Goodwill 19 125,189 5,776 5,776
798,041 368,858 340,793

Liabilities
Current
Bank overdraft 7,987 - -
Bank indebtedness 20 15,710 - -
Accounts payable and accrued liabilities 21 117,858 65,996 60,015
Other current liabilities 22 550 - 980
Derivative instruments 11 228 3,487 5,740
Current portion of long-term debt 23 6,835 1,028 1,381
149,168 70,511 68,116

Derivative instruments 11 612 376 -
Net defined benefit liability 27 634 868 305
Long-term debt 23 312,451 79,553 78,833
Deferred tax liabilities 10 17,918 16,704 14,784
Other long-term liabilities 24 38,007 - -
518,790 168,012 162,038

Shareholders’ equity
Capital, reserves and retained earnings attributable to the
Company’s shareholders 262,661 200,846 178,755
Non-controlling interest 16,590 - -
279,251 200,846 178,755
798,041 368,858 340,793

Approved by the Board

Director Director
10
Consolidated Statements of Shareholders’ Equity

(audited)
Foreign
currency Attributable to Total
Contributed Hedging translation Retained the Company’s Non-controlling shareholders’
Share capital surplus reserve reserve earnings shareholders interest equity
$ $ $ $ $ $ $ $
Balance as at December 31, 2010 18,673 1,382 (2,581) - 183,372 200,846 - 200,846
Profit - - - - 34,471 34,471 111 34,582
Other comprehensive income - - 5,252 3,989 (3,969) 5,272 561 5,833
Dividends - - - - (8,066) (8,066) - (8,066)
Issuance of Class A shares 30,196 - - - - 30,196 - 30,196
Repurchase of Class A shares (5) - - - (53) (58) - (58)
Investment of a non-controlling
interest (Note 5) - - - - - - 15,918 15,918
Balance as at December 31, 2011 48,864 1,382 2,671 3,989 205,755 262,661 16,590 279,251
11
Balance as at January 1, 2010 18,793 1,386 (3,756) - 162,332 178,755 - 178,755
Profit - - - - 31,976 31,976 - 31,976
Other comprehensive income - - 1,175 - (2,127) (952) - (952)
Dividends - - - - (7,502) (7,502) - (7,502)
Repurchase of Class A shares (120) (4) - - (1,307) (1,431) - (1,431)
Balance as at December 31, 2010 18,673 1,382 (2,581) - 183,372 200,846 - 200,846
Additional information on shareholders’ equity is presented in Note 25.

Consolidated Statements of Cash Flows

(audited)
Years ended
Notes Dec. 31, 2011 Dec. 31, 2010
$ $
Operating activities
Profit 34,582 31,976

Adjustments for:
Income tax expense 10 11,804 13,212
Interest income and expense 12,051 4,470
Depreciation and amortization 23,073 16,469
Change in fair value of financial instruments 8, 9 1,948 -
Change in net defined benefit asset/liability (5,907) (482)
Loss on disposal of property, plant and equipment 49 11
Unrealized foreign exchange (gain) loss (308) 129
77,292 65,785

Change in non-cash operating working capital items 26 (7,573) 3,711
Taxes received 283 -
Taxes paid (14,497) (13,030)
Interest received 593 354
Interest paid (10,260) (4,735)
45,838 52,085

Financing activities
Change in bank indebtedness 15,710 -
Change in long-term debt related to the operating line of credit 9,018 -
Increase in long-term debt 227,749 -
Repayment of long-term debt (8,240) (1,553)
Dividends paid on Class A shares (3,601) (3,225)
Dividends paid on Class B shares (4,465) (4,277)
Proceeds from the issuance of Class A shares 25 30,196 -
Repurchase of Class A shares 25 (58) (1,431)
Investment of the non-controlling interest 15,918 -
Increase in other long-term liabilities 35,774 -
318,001 (10,486)

Investing activities
Consideration transferred on business combination, net of acquired cash on hand (392,910) -
Acquisition of an investment (36) (2,000)
Acquisition of property, plant and equipment (19,322) (19,132)
Acquisition of other intangible assets (279) (131)
Proceeds from the disposal of property, plant and equipment 106 89
(412,441) (21,174)

(Decrease) increase in cash and cash equivalents (48,602) 20,425
Cash and cash equivalents at beginning 40,937 20,512
Impact of exchange rate changes on foreign currency cash balances (322) -
Cash and cash equivalents at end (7,987) 40,937
Additional cash flow information is presented in Note 26.
12
Notes to the Consolidated Financial Statements

Table of Contents
Note 1. Description of the Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Note 2. Statement of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Note 3. Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Note 4. Future Accounting Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Note 5. Business Combination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Note 6. Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Note 7. Additional Information on Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Note 8. Financial Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Note 9. Other (Gains) Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Note 10. Income Tax Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Note 11. Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Note 12. Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Note 13. Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Note 14. Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Note 15. Other Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Note 16. Non-Current Assets Held for Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Note 17. Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Note 18. Other Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Note 19. Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Note 20. Bank Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Note 21. Accounts Payable and Accrued Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Note 22. Other Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Note 23. Long-Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Note 24. Other Long-Term Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Note 25. Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Note 26. Additional Cash Flow Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Note 27. Post-Employment Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Note 28. Managing Financial Risk Arising From Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Note 29. Capital Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Note 30. Commitments and Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Note 31. Segmented Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Note 32. Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Note 33. Basis of Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Note 34. Transition to IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
13

(tabular amounts are in thousands of Canadian dollars unless otherwise indicated)
(audited)
Note 1. Description of the Business
Lassonde Industries Inc. (the Company) is incorporated under the Canada Business Corporations Act and is listed on the Toronto Stock Exchange.
The Company’s head office is located at 755 Principale street in Rougemont, Quebec.
The Company develops, manufactures and markets a wide range of fruit and vegetable juices and drinks. One of its subsidiaries, Clement
Pappas and Company, Inc., is the second largest producer of store brand ready-to-drink fruit juices and drinks in the United States and a major
producer of cranberry juices, drinks and sauces. Furthermore, the Company develops, manufactures and markets specialty food products such
as fondue broths and sauces, soups, sauces and gravies, canned corn-on-the-cob, bruschetta toppings, tapenades, pestos and sauces for
pasta and pizza. It imports selected wines from several countries of origin for packaging and marketing purposes. It also produces apple cider
and wine-based beverages.
Note 2. Statement of Compliance

The Company’s consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards
(IFRS) issued by the International Accounting Standards Board (IASB).They are the first annual consolidated financial statements prepared in
accordance with IFRS, and IFRS 1 First-Time Adoption of International Financial Reporting Standards has been applied. The IFRS transition date
was January 1, 2010.
The Company’s consolidated financial statements were previously prepared in accordance with Canadian Generally Accepted Accounting
Principles (GAAP). The transition from previous GAAP to IFRS had impacts on the Company’s financial position, financial performance and cash
flows. Explanations about these impacts are provided in Note 34.
The Board of Directors approved these consolidated financial statements on March 29, 2012.
Note 3. Accounting Policies
The below-described accounting policies have been applied to all of the periods presented in these consolidated financial statements. These policies
are the published IFRS accounting policies and the current issued and in force interpretations applicable to years ended December 31, 2011.
3.1 Basis of preparation

These consolidated financial statements have been prepared using the going concern assumption and the historical cost method except for
the net defined benefit asset/liability and certain financial instruments, for which the accounting treatments are described, respectively, in
Notes 3.21 and 3.22.
3.2 Functional and presentation currency

These consolidated financial statements are presented using the Company’s functional currency, which is the Canadian dollar. Each entity of the
Company determines its own functional currency, and the financial statement items of each entity are measured using that functional currency.
Functional currency is the currency of the primary economic environment in which the entity operates.
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(audited)
3.3 Foreign currency translation

Monetary assets and liabilities that are denominated in a currency other than the Company’s functional currency are translated using the
exchange rate in effect on the reporting date, whereas non-monetary items are translated using historical exchange rates. Revenues and
expenses are translated at the exchange rate in effect on the transaction date, except for depreciation and amortization, which are translated
using historical exchange rates. Exchange gains and losses are recognized in profit or loss in the period in which they arise in other gains/losses.
The assets and liabilities of a foreign operation with a functional currency different from that of the Company are translated using the exchange
rate in effect on the reporting date. Revenues and expenses are translated using the exchange rate in effect on the transaction date. Exchange
differences arising from the translation of a foreign operation are recognized in other comprehensive income. Upon disposal or partial disposal of
the investment in the foreign operation, the foreign currency translation reserve or a portion of it is recognized in profit or loss in other gains/losses.
3.4 Method of consolidation

The consolidated financial statements include the Company’s accounts and the accounts of the subsidiaries that it controls directly or indirectly
through its subsidiaries. Subsidiaries are consolidated from the acquisition date until the date on which the Company ceases to control them. The
Company has control when it has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. All
intercompany transactions, balances, revenues and expenses were fully eliminated upon consolidation. Non-controlling interests are recognized
in shareholders’ equity. When necessary, adjustments are made to the financial statements of subsidiaries to align their accounting policies with
those of the Company.
3.5 Recognition of sales

3.5.1 Revenues from product sales
Revenues from product sales are recognized at the fair value of the consideration received or receivable, net of trade marketing
costs consisting of rebates or allowances used to promote products and slotting fees incurred to introduce products.
Revenues from sales of products to clients whose terms of sale are free on board (FOB) shipping point are recognized when the
goods leave the Company’s premises. For clients whose terms of sale are FOB destination, revenues are recognized when the
goods are delivered to clients.
In addition, all of the following conditions must be met to recognize revenues from product sales:
• The Company has transferred the significant risks and rewards of ownership of the goods to the buyer;
• The Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective
control over the goods sold;
• The amount of the sale can be measured reliably;
• It is probable that the economic benefits associated with the transaction will flow to the Company; and
• The costs incurred or to be incurred in respect of the transaction can be measured reliably.
3.5.2 Revenues from delivery services

Revenues from delivery services for clients whose terms of sale are FOB shipping point are recognized when the goods are
delivered to the client, separately from revenues related to product sales. Shipping and handling fees related to those revenues
are classified as selling and administrative expenses in the consolidated statement of income.
15

(audited)
3.6 Research and development costs

Research-related expenses are recognized in profit or loss in the period in which they are incurred. Development costs that qualify as internally
generated intangible assets are capitalized as other intangible assets whereas those that do not qualify as internally generated intangible assets
are recognized in profit or loss in the period in which they are incurred. The related tax credits are recognized as a reduction to these expenses
or to the carrying amount of the internally–generated intangible assets in accordance with the accounting treatment applicable to the associated
item.
3.7 Income tax expense

Income tax expense consists of current tax and deferred tax. Current tax and deferred tax are recognized in profit or loss except when
they are related to items recognized directly in shareholders’ equity or in other comprehensive income, in which case the current tax and
deferred tax are recognized directly in shareholders’ equity or in other comprehensive income, in accordance with the accounting treatment
of the item to which it relates.
3.7.1 Current tax
Current tax consists of tax payable or receivable on the taxable income for the period, using the enacted or substantively enacted
tax rates and laws at the reporting date, as well as adjustments to the income tax payable or receivable of prior years. With respect
to current tax assets or liabilities, they include the prepayments made during the period.
Taxable income for the period differs from the profit before income taxes item on the consolidated statement of income because it
excludes revenue and expense items that will be taxable or deductible in other fiscal years as well as items that are neither taxable
nor deductible and includes revenue and expense items of previous years that are taxable or deductible during this fiscal year.
3.7.2 Deferred tax

Deferred tax is recognized on the temporary differences between the carrying amounts of the assets and liabilities presented in the
consolidated statement of financial position and the corresponding tax bases used for tax purposes. No deferred tax is recognized
for the following items:
• Temporary differences upon the initial recognition of assets and liabilities in a transaction that is not a business combination
and that affects neither accounting or taxable income; and
• Taxable temporary differences resulting from the initial recognition of goodwill.
Deferred tax is calculated using the enacted or substantively enacted tax rates and laws at the reporting date that will be in effect
when the differences are expected to reverse. The deferred tax assets are recognized to the extent that they are likely to be
realized.
Deferred tax assets and liabilities for which there is a right of set-off within a same jurisdiction are presented on a net basis in the
consolidated statement of financial position.
3.8 Earnings per share

Basic earnings per share is determined by dividing profit or loss attributable to the Company’s shareholders by the weighted average number of
shares outstanding for the period. Diluted earnings per share is determined using the same method as basic earnings per share, except that the
weighted average number of shares outstanding includes the potential dilutive effect of stock options granted by the Company.
16

(audited)
3.9 Cash and cash equivalents

The cash and cash equivalents item includes cash on hand and short-term investments, if any, with maturities upon acquisition of generally three
months or less or that are redeemable at any time at full value and for which the risk of a change in value is not significant. Bank overdrafts are
presented as current liabilities.
3.10 Inventories
Inventories are measured at the lower of cost and net realizable value. Cost of inventories is determined on a first-in, first–out basis. It includes
acquisition costs net of discounts, processing costs, and other costs incurred to bring inventories to their present location and condition. The
cost of finished goods includes a pro rata share of production overhead based on normal production capacity. It may also include, coming from
shareholders’ equity, the reclassification of foreign exchange gains and losses on foreign exchange forward contracts used to hedge exchange
rate fluctuations affecting inventories purchased in foreign currencies.
3.11 Investments
Investments are investments that, upon acquisition, generally mature in more than three months but in less than one year or that are redeemable
annually on the anniversary dates at full value without penalty.
3.12 Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current
asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be
expected to qualify for recognition as a completed sale within one year from the date of classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to
sell. Impairment losses on long-term assets initially classified as held for sale and gains or losses on subsequent remeasurement are recognized
in profit or loss. Once classified as held for sale, property, plant and equipment and intangible assets are no longer depreciated and amortized,
and the entities are no longer accounted for under the equity method.
3.13 Property, plant and equipment

Property, plant and equipment is measured at cost less accumulated depreciation and accumulated impairment losses. Government grants
received to acquire property, plant and equipment are recognized as a reduction to the cost.
Cost includes the costs directly attributable to the acquisition of property, plant and equipment incurred up until the time it is in the condition
necessary to be operated in the manner intended by management.
When an item of property, plant and equipment is made up of components that have differing useful lives, cost is allocated among the different
components that are depreciated separately.
A gain or loss on the disposal or retirement of an item of property, plant and equipment, which is the difference between the proceeds from the
disposal and the carrying amount of the asset, is recognized in profit or loss as other gains/losses.
17

(audited)
Depreciation is calculated using the following depreciation methods over the estimated useful life of each component or at the following rates:
Depreciation Useful lives
Categories methods or rates
Land and buildings
Land - -
Parking declining balance 10%
Buildings declining balance 3%
and straight-line 25 to 40 years
Leasehold improvements straight-line Lease term

Machinery and equipment
Machinery and equipment declining balance 10% to 20%
and straight-line from 3 to 40 years
Laboratory equipment declining balance 10%
and straight-line 5 years

Other
Office furniture declining balance 20%
and straight-line from 3 to 10 years
Automotive equipment declining balance 15% and 20%
Computer equipment declining balance 30%

Depreciation methods, estimated useful lives, rates and residual values are reviewed at the end of each year, with the effect of any changes in
estimates accounted for on a prospective basis.
An item of property, plant and equipment in progress is not depreciated until it can be operated in the manner intended by management.
3.14 Leases
The Company accounts for a leased asset as a finance lease when substantially all of the risks and rewards of ownership of the asset have
been transferred to the Company. The transfer of ownership of the asset may or may not occur at the end of the lease term. The asset is initially
recognized at the lower of the fair value of the leased asset at the inception of the lease and of the present value of the minimum lease payments.
The corresponding debt owed to the lessor appears on the consolidated statement of financial position as a financial liability in long-term debt.
Lease payments are allocated between financial expenses and repayment of the lease liability so as to achieve a constant rate of interest on
the principal amount outstanding. Assets held under finance leases are depreciated over their expected useful life on the same basis as owned
assets or, where shorter, the lease term.
All other leases are classified as operating leases. Rent is recognized in profit or loss on a straight-line basis over the corresponding lease term.
18

(audited)
3.15 Government grants

Government grants are recognized only when the Company has reasonable assurance that it meets the conditions and will receive the grants.
Government grants related to assets, including investment tax credits, are recognized in the consolidated statement of financial position as a
deduction from the carrying amount of the related asset. They are then recognized in profit or loss over the useful life of the depreciable asset
that the grants were used to acquire, as a deduction from the depreciation expense.
Other government grants are recognized in profit or loss as a deduction from the related expenses.
3.16 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a
substantial period of time to get ready for their intended use, are added to the cost of these assets until the assets are in the condition necessary
for them to be capable of operating in the manner intended by management. In instances where the Company does not have borrowings directly
attributable to the acquisition of qualifying assets, the Company uses the weighted average of the borrowing costs. The borrowing costs thus
added to the qualifying assets will not exceed the borrowing costs incurred during the corresponding period.
Investment revenues earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets are deducted
from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in profit or loss in the period in which they are incurred.
3.17 Other intangible assets

Other intangible assets consist of identifiable intangible assets acquired in a business combination and of intangible assets acquired separately.
3.17.1 Identifiable intangible assets acquired in a business combination:

Identifiable intangible assets acquired in a business combination are recognized separately from goodwill if they meet the definition
of intangible asset and if their fair value can be measured reliably. The cost of these intangible assets equals their acquisition-date
fair value. After initial recognition, identifiable intangible assets acquired in a business combination are recognized at cost less
accumulated amortization, if they are amortizable, and less accumulated impairment losses.
3.17.2 Intangible assets acquired separately:

Intangible assets acquired separately are recognized at cost less accumulated amortization and accumulated impairment losses.
Other intangible assets are amortized on a straight-line basis over the following estimated useful lives:
Categories Useful lives

Technologies and software 3 to 15 years
Trademarks and trade name 20 years
Client relationships 5 to 15 years
Certifications 10 years
Non-compete agreements 5 years
Estimated useful lives and the amortization method are reviewed at the end of each year, with the effect of any changes in estimates accounted
for on a prospective basis.
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(audited)
3.18 Impairment of property, plant and equipment and other intangible assets
On each reporting date, the Company reviews the carrying amounts of property, plant and equipment and other intangible assets for any
indication that these assets have lost value. If there is such an indication, the recoverable amount of the asset is estimated in order to
determine the amount of any impairment loss. If the recoverable amount of the individual asset cannot be estimated, the Company estimates the
recoverable amount of the cash-generating unit (CGU) to which the asset belongs. Where a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual CGUs; otherwise, they are allocated to the smallest CGU group for which a reasonable
and consistent basis of allocation can be identified.
Recoverable amount is the higher of fair value less cost to sell and value in use. To measure value in use, the estimated future cash flows are
discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the estimated recoverable amount of an asset or of a CGU is less than its carrying amount, the carrying amount of the asset or of the CGU is
reduced to its recoverable amount. An impairment loss is immediately recognized in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset or of the CGU is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognized for the asset or the CGU in prior years. Reversals of impairment losses are immediately recognized in profit
or loss.
3.19 Business combinations and goodwill

Business combinations are accounted for using the acquisition method. Acquisition cost, which is the consideration transferred in a business
combination, is measured at fair value, which is calculated as the acquisition-date fair values of the assets transferred. For each business
combination, the Company has chosen to measure non controlling-interests at either fair value or the proportionate share in the acquiree’s net
identifiable assets. Costs related to business combinations are recognized in profit or loss as incurred.
On the acquisition date, the identifiable assets acquired and liabilities assumed as well as identifiable contingent liabilities are accounted for at
fair value on that date. Deferred tax assets and liabilities are measured in accordance with IAS 12 Income Taxes. The acquiree’s earnings are
included in the Company’s consolidated profit or loss as of the acquisition date.
Goodwill is measured as the excess of the acquisition cost over the Company’s share in the fair value of all the identified assets and liabilities.
If, on the acquisition date, the net balance of the identifiable assets acquired and liabilities assumed exceeds the acquisition cost, this excess
amount is immediately recognized in profit or loss as a gain on a bargain purchase business combination.
Goodwill is allocated to the Company’s subsidiaries, that is, the CGUs that benefit from the synergies of the business combination. Goodwill is
initially recognized at cost as an asset and is subsequently measured at cost less accumulated impairment losses.
Goodwill is not amortized but is tested for impairment annually or more frequently whenever events or circumstances indicate that it may have
lost value. The Company looks for impairment by determining whether the carrying amount of the CGU to which the goodwill is related exceeds
its recoverable amount. If impairment is identified, the impairment loss is initially attributed to goodwill and any excess amount is attributed
proportionally to the carrying amount of the CGU’s assets. Any impairment of goodwill is recognized in profit or loss in the period in which it is
identified. Goodwill impairment losses are not reversed in subsequent periods.
3.20 Provisions
Provisions are recognized when the Company has a present obligation, legal or constructive, as a result of a past event, if it is more likely than
not that the Company will be required to settle the obligation, and if a reliable estimate of the obligation amount can be made.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date,
taking into account the risks and uncertainties related to the obligation. If the effect of the time value of money is material, the provisions are
measured at their present value.
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(audited)
A provision for onerous contracts is measured and recognized when the Company has concluded a contract for which the unavoidable costs of
meeting the obligations under the contract exceed the economic benefits expected to be received from the contract.
3.21 Post-employment benefits

3.21.1 Defined contribution plans
Defined contribution plans include pension plans offered by the Company and state plans, namely, pension plans established by
governments. The Company recognizes the contributions paid under defined contribution plans in profit or loss in the period in
which the employees rendered service entitling them to the contributions. The Company has no legal or constructive obligation to
pay additional amounts other than those set out in the plans.
3.21.2 Defined benefit plans

The pension cost of defined benefit plan benefits earned by employees is actuarially determined using the projected unit credit
method based on management’s best estimate assumptions on the discount rate, the defined benefit obligation, the expected
rate of return on assets, the expected rate of compensation increase, the indexation rate of pensions paid and the mortality table.
Actuarial valuations are performed by independent actuaries on each reporting date of the annual financial statements.
Actuarial gains and losses are charged to other comprehensive income and are recognized in the retained earnings in the
consolidated statement of shareholders’ equity.
Past service cost and changes to defined benefit plans are recognized immediately in profit or loss to the extent that the benefits
are already vested; otherwise, they are amortized on a straight-line basis over the average period remaining until the benefits
become vested.
The net defined benefit asset/liability recognized in the consolidated statement of financial position corresponds to the fair value
of the defined benefit plan asset net of the past service cost and changes to the pension plans not recognized in profit or loss and
net of the defined benefit obligation. Any asset resulting from this calculation is limited to the past service cost not recognized in
profit or loss plus the present value of available refunds and reductions in future contributions payable to the plan.
3.22 Financial instruments

3.22.1 Financial assets and liabilities
A financial instrument is any contract that gives rise to a financial asset for one entity and a financial liability or equity instrument
for another entity. As a general rule, financial instruments in the form of financial assets and financial liabilities are generally
presented separately. Financial assets and financial liabilities, including derivatives, are recognized on the consolidated statement
of financial position when the Company becomes party to the contractual provisions that create and define the financial instrument.
On initial recognition, all financial instruments are measured at fair value.
3.22.2 Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are offset and the net amount is presented in the consolidated statement of financial
position when the Company has a legally enforceable right to set off the recognized amounts and intends to settle on a net basis,
i.e., to realize the assets and settle the liabilities simultaneously.
3.22.3 Financial instruments classifications

A financial instrument or its component parts are classified upon initial recognition as a financial asset or liability or as an equity
instrument according to the substance of the contractual arrangement. The appropriate classification is determined at the time of
initial recognition and is not usually changed thereafter unless the terms of the instrument change.
The Company has made the following classifications:
• Cash and cash equivalents, investments, and accounts receivable are classified as loans and receivables and are measured at
amortized cost using the effective interest rate method;
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(audited)
• Derivative financial instruments not designated in hedge accounting relationships are assets and liabilities held for trading,
classified at fair value through profit or loss, and are measured at fair value. Gains and losses arising from periodic
remeasurement are recognized in profit or loss in other gains/losses;
• Bank overdraft, bank indebtedness, accounts payable and accrued liabilities as well as long-term debt are classified as other
financial liabilities and are measured at amortized cost using the effective interest rate method; and
• Retractable financial instruments and the participating loans are designated as financial liabilities at fair value through profit or
loss and measured at fair value. Gains and losses resulting from periodic remeasurement are recognized in profit or loss.
3.22.4 Non-interest-bearing debt

Non-interest-bearing debt is measured at amortized cost using the effective interest rate method. When a non-interest-bearing
loan is obtained, to the extent that it was received as a grant related to an asset, the difference between the fair value of the loan
and the consideration received is accounted for by deducting the grant from the carrying amount of the corresponding asset; if
not, the difference is recognized in profit or loss.
3.22.5 Transaction costs directly attributable to arranging financing

Transaction costs that are directly attributable to arranging financing that is not designated at fair value through profit or loss
are recognized as a reduction to the carrying value of the corresponding financial liability and amortized over the term of the
financing agreement using the effective interest rate method. However, transaction costs that are directly attributable to arranging
a revolving operating line of credit are recognized as non-current assets in the consolidated statement of financial position and
amortized on a straight-line basis over the term of the operating line of credit.
3.22.6 Transaction costs directly attributable to the issuance of shares

Transaction costs directly attributable to a share issuance are recognized as a reduction to the proceeds of the corresponding
shares issued.
3.22.7 Participating loans

The participating loans are unsecured borrowings that entitle the holders to the residual interest of the assets of the Company’s
U.S. subsidiary after all liabilities are deducted.
Participating loans are initially measured at the present value of the expected redemption amount. In subsequent periods, gains
and losses resulting from changes in fair value attributable to the change in the estimate of the ultimate liability or the passage of
time (together with the impact of any change in the discount rate) are recognized in profit or loss as financial expenses.
3.22.8 Retractable financial instruments

A retractable financial instrument is a financial instrument that gives the holder the right to put the instrument back to the issuer
for cash or another financial asset or is automatically put back to the issuer on the occurrence of an uncertain future event or the
death or retirement of the instrument holder.
Retractable financial instruments are initially measured at the present value of the expected redemption amount. In subsequent
periods, gains and losses resulting from changes in fair value attributable to the change in the estimate of the ultimate liability
or the passage of time (together with the impact of any change in the discount rate) are recognized in profit or loss as financial
expenses.
3.22.9 Derivative financial instruments and hedge accounting

The Company uses certain derivative financial instruments to eliminate or reduce the risks related to exchange rate fluctuations
that have an influence on its purchases of raw materials and packaging, its acquisitions of property, plant and equipment and
its business acquisition investment denominated in foreign currencies, to eliminate or reduce the risks related to interest rate
fluctuations that affect interest expense and to reduce the risk of fluctuations in certain raw materials prices. Management is
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(audited)
responsible for establishing levels of acceptable risk and does not use derivative financial instruments for speculative purposes.
The Company uses these financial instruments solely for purposes of hedging highly probable future transactions and existing
commitments or obligations.
The Company uses certain derivative financial instruments to eliminate or reduce the risks related to exchange rate fluctuations
that have an influence on its purchases of raw materials and packaging, its acquisitions of property, plant and equipment and
its business acquisition investment in foreign currencies, to eliminate or reduce the risks related to interest rates fluctuations
that affect interest expense and to reduce the risk of fluctuations in certain raw materials prices. Management is responsible for
establishing standards of acceptable risk and does not use derivative financial instruments for speculative purposes. The Company
uses these financial instruments solely for purposes of hedging highly probable future transactions and existing commitments or
obligations.
The Company uses hedge accounting when it deems that such treatment has a strong probability of meeting the rules for
compliance with hedge accounting standards. The Company formally documents all relationships between hedging instruments
and hedged items as well as its risk management objectives and strategy for undertaking various hedge transactions. This process
includes linking all derivatives to specific assets and liabilities in the consolidated statement of financial position or to specific
future transactions. The Company also systematically determines, at the inception of the hedge and thereafter, whether the
derivatives used in the hedging transactions are effective in offsetting changes in the cash flows of the hedged items.
The Company uses hedge accounting for its purchases of raw materials and packaging, its acquisitions of property, plant and
equipment and its expected business acquisition investments denominated in foreign currencies. The change in fair value related
to the effective portion of the hedge of derivative financial instruments denominated in foreign currencies used as a cash flow
hedge is recognized in other comprehensive income and reported as an adjustment to the hedged item, whereas the ineffective
portion is immediately recognized in profit or loss in other gains/losses.
When a hedging relationship ceases to be effective, the corresponding gains and losses presented in the hedging reserve are
recognized in profit or loss in the period in which the underlying hedge transaction was recognized. If a hedged item is sold,
extinguished or matures before the end of the related derivative instrument, the corresponding gains or losses presented in the
hedging reserve are recognized in profit or loss of the current period.
Derivative financial instruments that are economic hedges but that do not qualify for hedge accounting are measured at fair value.
Gains and losses arising from periodic remeasurements are recognized in profit or loss in other gains/losses.
3.22.10 Embedded derivatives

Derivatives embedded in non-derivative host contracts that are not financial instruments under IAS 39 Financial Instruments:
Recognition and Measurement, are treated as separate derivatives if their risks and characteristics are not closely related to those
of the host contracts and if the host contracts are not measured at fair value through profit or loss.
3.23 Contingent liabilities and contingent assets

Contingent liabilities and contingent assets are unlikely possible obligations or assets resulting from past events and the existence of which will
be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company.
Contingent assets and contingent liabilities, if any, are disclosed in the notes under the “Commitments and Contingencies” heading and
presented at fair value or present value at the reporting date.
3.24 Segment disclosures

A segment is a distinguishable component of the Company that is engaged either in the sale of products or provision of related services
(business segment) or selling products or providing services within a particular economic environment (geographic segment), including revenues
and expenses that relate to transactions with any of the Company’s other components. Segment disclosures are provided for the Company’s
business and geographic segments. The Company’s primary format for segment reporting is based on business segments. The business
23

(audited)
segments are determined based on the Company’s management and internal reporting structure. All operating segments’ operating results are
regularly reviewed by the Company’s management committee to make decisions on resources to be allocated to the segment and to assess its
performance, and for which separate financial information is available.
The Company’s operations are reported in one segment, i.e., the development, manufacturing and sale of a wide range of fruit and vegetable
juices and drinks. The reporting structure reflects how the Company manages the business and how it classifies its operations for planning and
measuring performance. Accordingly, the Company manages its business segment as a single strategic operating unit.
3.25 Accounting judgments and sources of estimation uncertainty

In preparing consolidated financial statements in accordance with IFRS, management must exercise judgment when applying accounting policies
and use assumptions and estimates that have an impact on the amounts of the assets, liabilities, sales and expenses reported in these
consolidated financial statements and on the contingent liability and contingent asset information provided. The actual results of items subject
to assumptions and estimates may differ from these assumptions and estimates.
Main assumptions and estimates are presented below:
3.25.1 Measurements of sales

Sales are presented net of trade marketing costs. Rebate and allowance amounts are determined using assumptions based on
estimates prepared using the Company’s past history and experience.
3.25.2 Measurements of defined benefit assets and liabilities

The Company’s measurement of defined benefit plan assets and liabilities requires the use of statistical data and other parameters
used to anticipate future changes. These parameters include the discount rate, the defined benefit obligation, the expected rate of
return on assets, the expected rate of compensation increase, the indexation rate of pensions paid, and the mortality table. If the
actuarial assumptions are found to be significantly different from the actual data subsequently observed, it could lead to substantial
changes to the amount of the pension cost recognized in profit or loss, the actuarial gains and losses recognized directly in other
comprehensive income, and the net assets or net liabilities related to these obligations presented in the consolidated statement
of financial position.
Refer to Note 27 to learn more about the assumptions used.
3.25.3 Measurements of assets

When applying the future discounted cash flows model to determine the fair value of groups of CGUs to which goodwill is allocated,
certain parameters must be used, including estimates of future cash flows, discount rates and other variables; a high degree of
judgment must therefore be exercised. Impairment tests on property, plant and equipment and other intangible assets are also
based on assumptions. Any future deterioration of market conditions or poor operational performance could translate into an
inability to recover the current carrying amounts of property, plant and equipment and other intangible assets.
Refer to Note 19 to learn more about the goodwill impairment test.
3.25.4 Fair value measurement of financial instruments classified in Level 3

The Company must make assumptions and use estimates to determine the fair value of participating loans and retractable
financial instruments. The main assumptions made and estimates used include, among others, the discount rate, the future
operating profit before amortization (EBITDA), and the net indebtedness of Clement Pappas based on expected free cash flows.
The Company therefore exercises a high degree of judgment. If the assumptions and estimates made differ significantly from
subsequently observed data, the difference would have an impact on the Company’s profit or loss and the amount recognized as
other long-term liabilities in the consolidated statement of financial position.
Refer to Note 11 to learn more about the assumptions used.
24

(audited)
3.25.5 Business combinations

For business combinations, the Company must make assumptions and estimates to determine the purchase price allocation of the
business being acquired. To do so, the Company must determine the acquisition-date fair value of the identifiable assets acquired
and liabilities assumed. Goodwill is measured as the excess of the acquisition cost over the Company’s share in the fair value of all
the identified assets and liabilities. These assumptions and estimates have an impact on the asset and liability amounts recorded
in the consolidated statement of financial position on the acquisition date. In addition, the estimated useful lives of the acquired
property, plant and equipment, the identification of other intangible assets and the determination of indefinite or finite useful lives
of other intangible assets acquired will have an impact on the Company’s profit or loss.
Refer to Note 5 to learn more about the assumptions and estimates used.
Note 4. Future Accounting Changes
a) IFRS 9 Financial Instruments

IFRS 9 Financial Instruments was issued in November 2009 and contains requirements for financial assets. It addresses classification and
measurement of financial assets and replaces the multiple category and measurement models in IAS 39 Financial Instruments: Recognition
and Measurement for debt instruments with a new mixed measurement model that has only two categories: amortized cost and fair value
through profit or loss. IFRS 9 also replaces the models for measuring equity instruments, and such instruments are either recognized at fair
value through profit or loss or at fair value through other comprehensive income. Where such equity instruments are measured at fair value
through other comprehensive income, dividends are recognized in profit or loss to the extent not clearly representing a return on investment;
however, other gains and losses (including impairments) associated with such instruments remain in accumulated other comprehensive
income indefinitely.
In October 2010, the IASB amended IFRS 9 Financial Instruments, which replaced IFRS 9 Financial Instruments and IFRIC 9 Reassessment
of Embedded Derivatives. This amendment provides guidance on classification, reclassification and measurement of financial liabilities and
on the presentation of gains and losses, through profit or loss, of financial liabilities designated as measured at fair value.
The requirements for financial liabilities, added in October 2010, largely replicate the requirements of IAS 39 Financial Instruments:
Recognition and Measurement, except with respect to changes in fair value attributable to credit risk for liabilities designated as measured
at fair value through profit or loss, which would generally be recognized in other comprehensive income.
This new standard applies to fiscal years beginning on or after January 1, 2015. Early application is permitted.
b) IFRS 10 Consolidated Financial Statements

In May 2011, the IASB issued IFRS 10 Consolidated Financial Statements, which establishes principles for the preparation and presentation
of consolidated financial statements when an entity controls one or more other entities. IFRS 10 provides a single consolidation model that
identifies control as being the basis for consolidation. The new standard describes how to apply the principle of control to identify situations
when a company controls another company and must therefore present consolidated financial statements. IFRS 10 also provides disclosure
requirements for the presentation of consolidated financial statements. IFRS 10 cancels and replaces IAS 27 Consolidated and Separate
Financial Statements and SIC-12 Consolidation – Special Purpose Entities.
c) IFRS 12 Disclosure of Interests in Other Entities

In May 2011, the IASB issued IFRS 12 Disclosure of Interests in Other Entities. IFRS 12 incorporates, in a single standard, guidance on
disclosing interests in subsidiaries, joint arrangements, associates and structured entities. The objective of IFRS 12 is to require disclosures
that enable users of financial statements to evaluate the basis of control, any restrictions on consolidated assets and liabilities, exposures
to risks arising from interests in non-consolidated structured entities and the share of minority interests in the activities of consolidated
entities.
25

(audited)
d) IFRS 13 Fair Value Measurement

In May 2011, the IASB issued a guide to fair value measurement providing note disclosure requirements. The guide is set out in IFRS 13 Fair
Value Measurement, and its objective is to provide a single framework for measuring fair value under IFRS. It does not provide additional
opportunities to use fair value.
e) IAS 1 Presentation of Financial Statements

In June 2011, the IASB amended IAS 1 Presentation of Financial Statements requiring entities preparing financial statements in accordance
with IFRS to group together items of other comprehensive income (OCI) that potentially may be reclassified to the profit or loss section of
the income statement and to separately group items that will not be reclassified to the profit or loss section of the income statement. The
amendments also reaffirm existing requirements that profit or loss and OCI be presented as either a single statement or two consecutive
statements.
The amended version of this standard applies to fiscal years beginning on or after July 1, 2012. Early application is permitted.
f) IAS 19 Employee Benefits

In June 2011, the IASB amended IAS 19 Employee Benefits to improve the accounting for pensions and other post-employment benefits.
The amendments make important improvements by:
• Eliminating the option to defer the recognition of gains and losses, known as the “corridor method” or the “deferral and
amortization approach”;
• Simplifying the presentation of changes in assets and liabilities arising from defined benefit plans, including requiring
remeasurements to be presented in other comprehensive income, thereby separating those changes from changes frequently
perceived to be the result of day-to-day operations; and
• Enhancing the disclosure requirements for defined benefit plans, thereby providing better information about the characteristics
of defined benefit plans and the risks to which entities are exposed through their participation in those plans.
The amended version of this standard applies to fiscal years beginning on or after January 1, 2013. Early application is permitted.
g) IFRS 7 Financial Instruments: Disclosures and IAS 32 Financial Instruments: Presentation

In December 2011, the IASB amended IFRS 7 Financial Instruments: Disclosures (IFRS 7) and IAS 32 Financial Instruments: Presentation
(IAS 32) as part of its offsetting financial assets and financial liabilities project. IFRS 7 was amended to harmonize the disclosure
requirements with those of the Financial Accounting Standards Board (FASB), while IAS 32 was amended to clarify certain items and
address inconsistencies encountered upon practical application of the standard.
The amended versions of IFRS 7 and IAS 32 apply retrospectively to fiscal years beginning on or after January 1, 2013 and on or after
January 1, 2014, respectively. Early application is permitted.
The Company is assessing the impact of adopting these new standards on its consolidated financial statements and will determine whether it
will opt for early application.
26

(audited)
Note 5. Business Combination
5.1 Description of the business combination

On August 12, 2011, a 70.7%-owned subsidiary of the Company acquired 100% of the share capital of Clement Pappas and Company, Inc.
(Clement Pappas).
Clement Pappas is a manufacturer of store brand ready-to-drink fruit juices and drinks in the United States and a producer of cranberry juices,
drinks and sauces. Clement Pappas was founded in 1942 and is headquartered in Carneys Point, New Jersey. It operates five production
facilities located in Seabrook, New Jersey; Ontario, California; Mountain Home, North Carolina; Springdale, Arkansas and Baltimore, Maryland.
It also runs a cranberry receiving station in Carver, Massachusetts.
On June 17, 2011, the Company entered into an Agreement and Plan of Merger (Merger Agreement) with inter alia Clement Pappas and
representatives of the shareholders of Clement Pappas. The Merger Agreement provided for the merger, effective at closing of the transaction,
under the laws of New Jersey, U.S.A. of Clement Pappas with a newly formed U.S. subsidiary of the Company and the exchange of the shares
held by the former shareholders of Clement Pappas and members of the Pappas family for cash representing the consideration for the Clement
Pappas acquisition.
This business combination brings together two leading fruit juice and drink manufacturers. The two companies are complementary and, together,
have a balanced business and well-diversified product offering. This business combination will be able to better serve the current and future
needs of customers.
5.2 Acquisition: sources and uses of funds as at the acquisition date

As at
Notes August 12, 2011
$
Sources:
Operating line of credit 23.1.2 24,325
Term loan 23.1.1 227,217
Retractable financial instruments (Pappas family) 5.2.1 30,774
Non-controlling interest (3346625 Canada Inc.) 5.2.2 15,918
Cash 111,505
409,739
Uses:
Cash consideration at fair value 395,287
Acquisition-related costs 4,885
Costs of arranging the operating line of credit 924
Costs of arranging the term loan 8,485
Prepaid expenses 158
409,739
27

(audited)
5.2.1 Retractable financial instruments

Some members of the Pappas family reinvested $30,774,000 (US$31,107,000) in cash in the subsidiary holding 100% of
Clement Pappas’ share capital for a beneficial ownership of 19.3% of Clement Pappas’ equity. Between year 4 and year 10
following the Clement Pappas acquisition, members of the Pappas family may request the purchase of their shares, subject to
certain limitations. The per share redemption price shall be calculated as follows: 6.4 times the average annual EBITDA of Clement
Pappas for the two full fiscal years preceding the redemption less outstanding debt plus cash on hand divided by the number of
shares outstanding of Clement Pappas. At the closing of the business acquisition, the present value of the retractable financial
instruments approximated the consideration paid by the Pappas family members.
Following initial recognition, the change in value of the retractable financial instruments will be recognized in profit or loss as
financial expenses.
5.2.2 Non-controlling interest

3346625 Canada Inc. has invested $15,918,000 (US$16,090,000) in cash in the subsidiary holding 100% of Clement Pappas’
share capital for a beneficial ownership of 10.0% of Clement Pappas’ equity. This investment, measured at the proportionate
share in the Clement Pappas net identifiable assets, is recorded as a non-controlling interest in the Company’s shareholders’
equity.
5.3 Acquisition and financing costs

As at December 31,2011, the total acquisition- and financing-related costs are as follows:
Acquisition-related costs i) 7,380

Costs of arranging the operating line of credit ii) 980
Costs of arranging the term loan iii) 9,038
17,398
i)
Recognized in selling and administrative expenses in the consolidated statement of income.
ii)
Recognized in other long-term assets in the consolidated statement of financial position and amortized on a straight line basis over the
five-year term of the operating line of credit.
iii)
Recognized as a reduction to the carrying value of the term loan and amortized over the six-year term of the term loan using the
effective interest rate method.
28

(audited)
5.4 Assets acquired and liabilities recognized at the acquisition date

The preliminary fair value allocation of assets acquired and liabilities assumed at the acquisition date is as follows, based on the purchase price:
As at
August 12, 2011
$
Assets
Cash and cash equivalents 2,377
Accounts receivable 28,766
Inventories 52,627
Prepaid expenses 2,399
Property, plant and equipment 85,200
Other intangible assets 134,146
Other long-term assets 185
Deferred tax assets 207
Goodwill 115,773
421,680

Liabilities
Accounts payable and accrued liabilities 25,453
Finance lease obligations 940
26,393
Net identifiable assets acquired 395,287
5.5 Determination of fair value

The fair value of assets acquired and liabilities recognized at the acquisition date was determined based on the Company’s assumptions and
estimates. The purchase price allocation is preliminary and the net identifiable assets acquired are subject to change until recognition of the
business combination has been finalized.
5.5.1 Accounts receivable

Receivables were recognized at their fair value, which is not substantially different from their gross contractual value and expected
receipts.
5.5.2 Property, plant and equipment

The Company has appointed a third party to assist in the valuation of the acquired property, plant and equipment (PP&E). There
are three generally accepted approaches to developing an opinion of fair value: cost, sales comparison and income capitalization.
All three approaches were considered in the estimate of the fair value of the PP&E and in the determination of useful lives. The
Company assigned a fair value of $85,200,000 to PP&E based on the report of the third party appraiser.
29

(audited)
5.5.3 Other intangible assets

The Company has appointed a third party to assist in the valuation of the other intangible assets acquired. A royalty rate method
on net revenue attributable to the trademarks has been the basis for the valuation of the Clement Pappas’ trade name and
trademarks. A comparative business valuation method was used to assess developed technologies and certifications, and
non‑compete agreements. After considering the contribution of all other assets to the realization of cash flows, a multi-period
excess earnings method was used to derive the value of client relationships. The royalty rate method, the comparative business
valuation method and the multi-period excess earnings method are all primarily based upon expected discounted cash flows
according to currently available information, such as Clement Pappas’ historical and projected revenues, customer attrition rates,
and certain other relevant assumptions.
Estimated As at
useful lives August 12, 2011
Years $

Other intangible assets
Client relationships 15 64,484
Trademarks and trade name 20 49,547
Technologies and certifications 10-15 19,819
Non-compete agreements 5 296
134,146
5.6 Goodwill arising on from the business combination

As at
August 12, 2011
$

Cash consideration transferred 395,287
Less:
Assets acquired and liabilities assumed at the acquisition date (279,514)
Goodwill 115,773

With the acquisition of Clement Pappas, the Company will raise its critical mass, helping it to support its national clients in North America, unite
logistical, distribution and purchasing operations, and achieve economies of scale.
Goodwill recognized as part of the business combination is tax deductible on a straight-line basis over 15 years.
5.7 Impact of the business combination on the Company’s financial performance

The Company’s consolidated profit for the year ended December 31, 2011 includes sales amounting to $178,563,000 and profit of $893,000
generated from Clement Pappas’ business in the United States.
If the business combination had been completed on January 1, 2011, the Company’s consolidated sales from continuing operations would have
stood at $1,003,882,000 and consolidated profit from operations for the year ended December 31, 2011 would have been $41,745,000. The
Company considers the pro forma figures to be an approximate measurement of the financial performance of the combined business over a
twelve-month period and that they provide a baseline against which to compare the financial performance of future periods.
30

(audited)
To determine the Company’s pro forma consolidated sales and profit if Clement Pappas had been acquired on January 1, 2011, the Company:
• calculated depreciation of property, plant and equipment acquired and amortization of other intangible assets acquired based on the
fair value arising from initial recognition of the business combination rather than the carrying amounts recognized in the pre‑acquisition
financial statements;
• calculated the borrowing costs on the Company’s net indebtedness after the business combination; and
• excluded the acquisition-related costs that were recognized in profit or loss.
Note 6. Sales
Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Revenues from product sales 751,305 535,013
Revenues from delivery services i) 7,945 -
Other revenues 1,008 1,232
760,258 536,245
i)
The shipping fees related to these revenues, totalling $7,125,000 (nil for the year ended December 31, 2010), are presented in selling
and administrative expenses in the consolidated statement of income.
Note 7. Additional Information on Income
Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Write-down of inventories included in cost of sales 2,662 1,852
Depreciation included in:
Cost of sales 14,030 11,933
Selling and administrative expenses 4,044 2,677
Amortization included in selling and administrative expenses 4,999 1,859
Expense related to minimum operating lease payments 5,985 4,766
Employee benefits expense 117,761 90,573
Research and development expense 640 891
Research and development tax credit (114) (334)

The cost of sales presented in the consolidated statement of income equals the cost of inventories expensed for the years ended December 31, 2011
and 2010.
31

(audited)
Note 8. Financial Expenses
Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Interest on long-term debt 11,257 4,701
Amortization of non-cash financial expenses 1,072 259
Interest and other bank expenses 666 181
Change in fair value of financial instruments designated as financial liabilities
at fair value through profit or loss 1,361 -
14,356 5,141

Financial revenues (428) (524)
13,928 4,617
Note 9. Other (Gains) Losses
Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Loss on disposal of property, plant and equipment 49 11
Exchange (gain) loss (495) 238
Change in fair value of derivative financial instruments held for trading 587 -
(Gain) loss on the ineffective portion of the cash flow hedge (108) 129
33 378
Note 10. Income Tax Expense
10.1 Income taxes recognized in profit or loss

Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $
Current tax
Current tax expense for the year 13,857 10,762
Adjustment related to previous years 41 275
13,898 11,037

Deferred tax
Deferred tax expense (recovery) expense for the year (1,908) 2,615
Deferred tax adjustment attributable to changes in the tax rate and tax legislation (194) (310)
Adjustment related to previous years 8 (130)
(2,094) 2,175
11,804 13,212
32

(audited)
Reconciliation between the income tax expense and profit before income taxes:
Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Profit before income taxes 46,386 45,188
Income tax expense

Income tax expense at 28.4% (29.9% in 2010) i) 13,173 13,511
Variance in the tax rate resulting from the different tax rates of subsidiaries (276) (146)
Earnings from investments in subsidiaries (1,768) -
Tax impact on non-deductible or non-taxable items 680 122
Impact of changes in tax rates on deferred tax (194) (310)
Tax adjustment related to previous years 49 145
Other 140 (110)
11,804 13,212
i)
The lower tax rate is a result of the lower federal statutory tax rate.
10.2 Deferred tax

As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $
Deferred tax assets
Recoverable within 12 months 3,854 1,281 1,574
Recoverable in more than 12 months 15,661 1,404 1,328

Deferred tax liabilities
Due within 12 months (1,671) - -
Due in more than 12 months (32,478) (19,389) (17,686)
(14,634) (16,704) (14,784)
Change in deferred tax assets (liabilities):

Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Balance as at January 1 (16,704) (14,784)
Deferred tax recovery (expense) for the year recognized in profit or loss 2,094 (2,175)
(Expense) deferred tax recovery for the year related to other comprehensive income (631) 255
Income tax recovery recognized directly in shareholders’ equity 494 -
Deferred tax asset created upon the business combination 207 -
Exchange difference (94) -
(14,634) (16,704)
33

(audited)
Reconciliation of deferred tax assets (liabilities) by temporary difference category recognized in the consolidated statement of financial position:
Derivative Property,
financial plant and Intangible Pension Share Long-term
instruments equipment i) assets ii) plans iii) issuance costs debt Other iv) Total
$ $ $ $ $ $ $ $
Balance as at January 1, 2010 1,572 (15,490) (394) (702) - 357 (127) (14,784)
Deferred tax (expense) recovery
for the year recognized in
profit or loss 36 (1,895) 172 (702) - (51) 265 (2,175)
Deferred tax recovery (expense)
for the year related to other
comprehensive income (536) - - 791 - - - 255
Balance as at December 31, 2010 1,072 (17,385) (222) (613) - 306 138 (16,704)
Deferred tax recovery (expense)
34
for the year recognized in
profit or loss 81 (424) (1,816) (2,407) - (48) 6,708 2,094
Deferred tax (expense) recovery
for the year related to other
comprehensive income (2,085) - - 1,454 - - - (631)
Income tax recovery recognized
directly in shareholders’ equity - - - - 398 - 96 494
Deferred tax asset created upon
the business combination - (13,018) 13,225 - - - - 207
Exchange difference - (406) 478 - - - (166) (94)
Balance as at December 31, 2011 (932) (31,233) 11,665 (1,566) 398 258 6,776 (14,634)
i)
Property, plant and equipment.
ii)
Other intangible assets and goodwill.
iii)
Defined benefit pension plans.
iv)
Includes unused tax losses (a deferred tax asset of $1,813,000 as at December 31, 2011, of $275,000 as at December 31, 2010 and of nil as at January 1, 2010), research and development tax
credits, and acquisition-related costs.
The Company has unused capital losses as at December 31, 2011 and 2010 totalling $8,080,000 in respect of which the Company has not recognized any tax benefit.

(audited)
Note 11. Financial Instruments
11.1 Classification
The classification, carrying value and fair value of financial instruments are as follows:
As at December 31, 2011

Other Derivatives Total
Loans and financial used as carrying
receivables FVTPL i) liabilities hedges value Fair value
$ $ $ $ $ $
Financial assets
Accounts receivable 96,999 - - - 96,999 96,999
Investment 2,036 - - - 2,036 2,036
Derivative instruments - 24 - 4,113 4,137 4,137
99,035 24 - 4,113 103,172 103,172
Financial liabilities
Bank overdraft - - 7,987 - 7,987 7,987
Bank indebtedness - - 15,710 - 15,710 15,710
Accounts payable and accrued
liabilities - - 117,858 - 117,858 117,858
Derivative instruments - 612 - 228 840 840
Long-term debt ii) - - 319,286 - 319,286 318,114
Participating loans - 5,091 - - 5,091 5,091
Retractable financial instruments - 32,916 - - 32,916 32,916
- 38,619 460,841 228 499,688 498,516
i)
Assets (liabilities) at fair value through profit or loss. This category includes assets and liabilities held for trading and financial
instruments designated as financial liabilities at fair value through profit or loss.
ii)
Includes the current portion of long-term debt.
35

(audited)

Derivatives Total
Loans and Other financial used as carrying
$ $ $ $ $ $
Financial assets
Cash and cash equivalents 40,937 - - - 40,937 40,937
Investment 2,000 - - - 2,000 2,000
100,871 - - - 100,871 100,871
Accounts payable and
accrued liabilities - - 65,996 - 65,996 65,996
Derivative instruments - - - 3,863 3,863 3,863
Long-term debt ii) - - 80,581 - 80,581 80,581
- - 146,577 3,863 150,440 150,440
i)
ii)
As at January 1, 2010
Derivatives Total
Loans and Other financial used as carrying
$ $ $ $ $ $

Financial assets
Cash and cash equivalents 20,512 - - - 20,512 20,512
Derivative instruments - - - 88 88 88
68,504 - - 88 68,592 68,592

accrued liabilities - - 60,015 - 60,015 60,015
Derivative instruments - - - 5,740 5,740 5,740
Long-term debt ii) - - 80,214 - 80,214 80,214
- - 140,229 5,740 145,969 145,969
i)
ii)
36

(audited)
11.2 Fair Value

The fair value of a financial instrument is the amount of consideration for which the instrument could be traded in a transaction between willing
parties under arm’s-length conditions. It is established based on market information available at the date of the consolidated statement of
financial position. In the absence of an active market for a financial instrument, the Company uses the valuation methods described below
to determine the fair value of the instrument. To make the assumptions required by certain valuation models, the Company relies mainly on
external, readily observable market inputs. Assumptions or inputs that are not based on observable market data are used in the absence of
external data. These assumptions or factors represent management’s best estimates of the assumptions or factors that would be used by
market participants for these instruments. The credit risk of the counterparty and the Company’s own credit risk have been taken into account
in estimating the fair value of all financial assets and financial liabilities, including derivatives.
The following valuation assumptions and/or methods were used to estimate the fair value of financial instruments:
• The fair value of cash and cash equivalents, accounts receivable, bank overdraft, bank indebtedness, and accounts payable and
accrued liabilities is approximately equal to their carrying values due to their short-term maturity;
• The fair value of long-term debt, including finance lease obligations, is determined based on the discounted cash flow method and
calculated using current interest rates for instruments with similar terms and remaining maturities that the Company could have
obtained on the market at the measurement date;
• The fair value of the Company’s derivative instruments, including foreign exchange forward contracts and interest rate swaps, is
determined using valuation techniques and calculated as the present value of estimated future cash flows using an appropriate
interest rate yield curve and exchange rate, adjusted for Company and counterparty credit risk. Assumptions are based on market
conditions prevailing at the end of each reporting period. Derivative instruments reflect the estimated amounts that the Company
would receive or pay to settle the contracts at the end of each reporting period;
• The fair value of participating loans is estimated using the present value of the expected future redemption price, which is calculated
as follows: 3% of 6.5 times the EBITDA of Clement Pappas for the four quarters preceding the redemption less outstanding debt plus
cash on hand; and
• The fair value of the retractable financial instruments granted to certain members of the Pappas family is estimated using the present
value of the expected future per share redemption price, which is calculated as follows: 6.4 times the average annual EBITDA of
Clement Pappas for the two full fiscal years preceding redemption less outstanding debt plus cash on hand divided by the number of
shares outstanding of Clement Pappas.
Financial instruments recorded at fair value are classified using a hierarchy that reflects the significance of the inputs used in making the
measurements.
The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified in the lowest
level of the hierarchy for which a significant input has been considered in measuring fair value.
All financial instruments measured at fair value in the consolidated statements of financial position must be classified according to a hierarchy
comprising three levels:
• Level 1: valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities;
• Level 2: valuation based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar
instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable; and inputs
that are derived mainly from or corroborated by observable market data using correlation or other forms of relationship;
• Level 3: valuation techniques based on a significant portion of inputs not observable in the market.
During the years ended December 31, 2011 and 2010, no financial instruments were transferred between levels 1 and 2.
37

(audited)
The following tables present the financial instruments measured at fair value on a recurring basis, classified using the hierarchy described above:

Level 1 Level 2 Level 3 Total
$ $ $ $
Financial assets
Derivative financial instruments:
Held for trading - 24 - 24
Designated as hedges - 4,113 - 4,113
- 4,137 - 4,137

Derivative financial instruments:
Held for trading - 612 - 612
Designated as hedges - 228 - 228
Participating loans - - 5,091 5,091
Retractable financial instruments - - 32,916 32,916
- 840 38,007 38,847

$ $ $ $
Derivative financial instruments designated as hedges - 3,863 - 3,863
$ $ $ $
Financial assets
Derivative financial instruments designated as hedges - 88 - 88

Derivative financial instruments designated as hedges - 5,740 - 5,740
38

(audited)
11.3 Change in the fair value of financial instruments classified in Level 3

The following table presents the change in fair value of financial instruments classified in Level 3 for the year ended December 31, 2011.

2011
$
Fair value as at January 1 -

Issuances 35,774
Change in fair value recognized in profit or loss i) 2,233
Fair value as at December 31 38,007
i)
Includes the impact of exchange rate fluctuations, revisions to assumptions made, and the passage of time.
11.4 Sensitivity analysis of the level 3 inputs

The fair value of the participating loans and retractable financial instruments granted to certain members of the Pappas family is estimated using
valuation techniques based on a significant portion of inputs not observable in the market. The fair value is estimated using the present value
of the expected redemption price of the shares. The factors that most influence this valuation are the discount rate, expected future EBITDAs
reflecting that includes a growth rate based on the historical trends of the acquiree, and the expected free cash flows of Clement Pappas.
All other factors being equal, a reasonably possible increase of 1% in the discount rate would have resulted in a $1,616,000 decrease in the
fair value of other long-term liabilities, while a 1% decrease would have increased the fair value of other long-term liabilities by $1,707,000.
A reasonably possible increase of 5% in expected future EBITDAs over and above the expected growth would have increased the fair value of
other long-term liabilities by $2,429,000. A 5% decrease in EBITDA compared to expected future levels would have had the opposite impact on
the fair value of other long-term liabilities.
The sensitivities of each key assumption have been calculated independently of any changes in other assumptions. Actual results may cause
changes in a number of key assumptions simultaneously. Changes in one factor may result in changes in another, which could amplify or reduce
the impact of such assumptions.
Note 12. Accounts Receivable
As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $

Trade accounts receivable i) 91,288 56,405 47,602
Discounts receivable 5,711 1,529 390
96,999 57,934 47,992
i)
Trade accounts receivable have been pledged as collateral to certain lenders.
39

(audited)
Note 13. Inventories
As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $

Raw materials and supplies 100,711 48,815 53,267
Finished goods 65,997 43,018 47,985
166,708 91,833 101,252

The carrying amount of inventories recorded at fair value less costs to sell is $21,626,000. Inventories have been pledged as collateral to certain
lenders.
Note 14. Investment

Progressive term deposit receipt issued in October 2010, redeemable annually on the anniversary dates without penalty, maturing in October
2013 and bearing interest at an annual rate of 1.8% the first year, 2.1% the second year and 3.2% the last year.
Note 15. Other Current Assets
As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $
Sales tax receivable 4,264 3,736 3,161

Income tax recoverable 2,214 1,013 -
Prepaid expenses 5,888 2,092 1,689
Other 3,791 3,060 1,652
16,157 9,901 6,502
Note 16. Non-Current Assets Held for Sale

On November 17, 2011, the Company put a production plant located in Ruthven, Ontario up for sale, The assets held for sale are the land and
building. The production equipment will be transferred to the Company’s other plants early in 2012. The production plant was active in apple
and tomato processing.
On December 23, 2011, the Company received a purchase proposal subject to conditions to be validated in 2012. The purchaser is expected
to take possession no later than June 1, 2012. As at December 31, 2011, the Company had received a $350,000 deposit from the purchaser.
The value of the non-current assets held for sale reported in the consolidated statement of financial position is equal to the net carrying value of
the land and building before these assets were classified as held for sale. No gains or losses were recognized in the Company’s profit or loss.
40

(audited)
Note 17. Property, Plant and Equipment
17.1 Net carrying value

As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $
Cost 400,141 302,172 283,669

Accumulated depreciation and impairment losses (162,655) (152,329) (139,233)
237,486 149,843 144,436
17.2 Reconciliation table

Land and Machinery and
buildings equipment Other Total
$ $ $ $
Cost
Balance as at January 1, 2010 70,188 194,809 18,672 283,669
Acquisitions 7,843 10,882 1,393 20,118
Disposals (220) (975) (420) (1,615)
Reclassification (20) 52 (32) -
Balance as at December 31, 2010 77,791 204,768 19,613 302,172
Acquisitions 4,109 12,863 1,623 18,595
Acquisitions through a business combination 43,093 39,889 2,218 85,200
Reclassified long-term assets held for sale (1,024) (1,219) - (2,243)
Disposals (147) (5,866) (250) (6,263)
Reclassification (76) 124 (48) -
Exchange difference 1,352 1,258 70 2,680
Balance as at December 31, 2011 125,098 251,817 23,226 400,141

Accumulated depreciation and impairment losses
Balance as at January 1, 2010 (16,246) (107,997) (14,990) (139,233)
Depreciation (1,772) (11,314) (1,524) (14,610)
Disposals 163 949 402 1,514
Reclassification 2 (29) 27 -
Balance as at December 31, 2010 (17,853) (118,391) (16,085) (152,329)
Depreciation (3,283) (13,276) (1,515) (18,074)
Reclassified as held for sale 419 1,219 - 1,638
Disposals 101 5,761 247 6,109
Reclassification 3 (13) 10 -
Exchange difference - 1 - 1
Balance as at December 31, 2011 (20,613) (124,699) (17,343) (162,655)

41

(audited)
17.3 Government grants

In 2011, the Company recognized the following government grants as a reduction to the cost of property, plant and equipment meeting certain
eligibility criteria :
a) Investment credit in the amount of $649,000 ($558,000 in 2010); and

b) Government grant in the amount of $84,000 (nil in 2010)
17.4 Property, plant and equipment pledged as collateral

As at December 31, 2011, the net carrying value of property, plant and equipment pledged as collateral to the lenders was $196,947,000
($114,416,000 as at December 31, 2010).
17.5 Additional information on property, plant and equipment

Land and Machinery and
buildings equipment Other Total
$ $ $ $
Property, plant and equipment in progress
included in the cost 451 4,581 62 5,094
Net carrying value of property, plant and
equipment held under finance leases - 1,925 995 2,920

included in the cost 550 4 13 567
equipment held under finance leases - 2,117 - 2,117

included in the cost 560 77 17 654
equipment held under finance leases - 2,310 - 2,310
Note 18. Other Intangible Assets

As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $

Cost 157,925 19,283 19,500
Accumulated amortization and impairment losses (14,476) (9,468) (7,957)
143,449 9,815 11,543

42

(audited)

Trademarks
Technologies and trade Client Non-compete
and software name relationships Certifications agreement Total
$ $ $ $ $ $
Cost
Balance as at January 1, 2010 4,525 6,231 5,844 2,900 - 19,500
Acquisitions 123 8 - - - 131
Disposals - (348) - - - (348)
Balance as at December 31, 2010 4,648 5,891 5,844 2,900 - 19,283
Acquisitions 279 - - - - 279
Acquisitions through a business
combination 9,959 49,547 64,484 9,860 296 134,146
Exchange difference 313 1,558 2,027 310 9 4,217
Balance as at December 31, 2011 15,199 56,996 72,355 13,070 305 157,925

Accumulated amortization and impairment losses
Balance as at January 1, 2010 (2,623) (1,953) (2,787) (594) - (7,957)
Amortization (404) (297) (868) (290) - (1,859)
Disposals - 348 - - - 348
Balance as at December 31, 2010 (3,027) (1,902) (3,655) (884) - (9,468)
Amortization (654) (1,255) (2,398) (670) (22) (4,999)
Exchange difference (1) (1) (5) (1) (1) (9)
Balance as at December 31, 2011 (3,682) (3,158) (6,058) (1,555) (23) (14,476)
Note 19. Goodwill

As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $

Cost 125,189 5,776 5,776
Accumulated impairment losses - - -
125,189 5,776 5,776

2011 2010
$ $

Balance as at January 1 5,776 5,776
Acquisitions through a business combination 115,773 -
Exchange difference 3,640 -
Balance as at December 31 125,189 5,776
43

(audited)
19.3 Goodwill impairment test

The Company conducted an annual goodwill impairment test during the fourth quarter of 2011 in accordance with the methods described in
Note 3. The estimated fair value of all CGUs, less costs to sell, exceeded their carrying amount. Accordingly, no impairment loss was recognized
on goodwill for years ended December 31, 2011 and 2010.
The Company has not changed the valuation method used for goodwill impairment testing since the test conducted upon initial adoption of IFRS.
19.4 Goodwill allocation

Goodwill has been allocated to the following CGUs:
As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $
A. Lassonde Inc. 24,328 3,680 3,680

Lassonde Specialties Inc. 2,096 2,096 2,096
Clement Pappas and Company, Inc. 98,765 - -
125,189 5,776 5,776
Management’s main assumptions about projected cash flows when determining value in use are as follows:
• The Company bases its growth and profitability assumptions on the business plan approved by management and the Board of
Directors. The business plan covers a 5-year period. At the end of this term, the Company will evaluate the CGU’s terminal value.
• The discount rate is based on pre-tax rates that reflect the current market assessments, taking the time value of money and the risks
specific to the CGU into account.
For the CGUs, management’s main assumptions are as follows:
Discount rate 16%

Growth in operating profit 2%
Note 20. Bank Indebtedness

As at December 31, 2011 and 2010, the Company’s Canadian subsidiaries had access to various authorized credit facilities, the amount of which
could not exceed C$70,150,000. The Canadian subsidiaries may, among other things, use revolving credit facilities up to a maximum amount
of US$65,000,000. They may also use forward financial instruments for a maximum risk-equivalent amount of C$50,000,000 (US$25,000,000
as at December 31, 2010 that can be raised to C$50,000,000 under certain conditions). Furthermore, they may convert a portion of these credit
facilities into a non-revolving term credit facility not exceeding C$5,000,000.
With respect to bank indebtedness, an amount of $15,710,000 was drawn as at December 31, 2011 (no amount had been drawn as at
December 31, 2010 and as at January 1, 2010). In addition, as at December 31, 2011 and 2010 and as at January 1, 2010, the Canadian
subsidiaries are committed under foreign exchange forward contracts, the risk-equivalent of which reduces the credit facilities that can be
used. The bank indebtedness bears interest at the bank’s prime rate for advances in C$ (or the bank’s U.S. base rate for advances in US$)
or at the bankers’ acceptance rates prevailing on the markets plus a margin not exceeding 0.75% and stamping fees of between 1.00% and
2.00% established based on the Company’s debt ratio, excluding Clement Pappas. As at December 31, 2011 and 2010, the bank’s prime rate
was 3.00%.
The authorized credit facilities are renewable annually during the fourth quarter and are secured by trade accounts receivable and the inventories
of the Company’s Canadian subsidiaries. The credit facilities contain restrictive covenants that require the Company to maintain a financial ratio.
As at December 31, 2011 and 2010 and as at January 1, 2010, the Company was in compliance with this financial ratio.
44

(audited)
Note 21. Accounts Payable and Accrued Liabilities
As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $

Suppliers 52,825 22,825 20,976
Trade marketing costs payable 25,535 22,135 19,797
Accrued expenses 19,723 7,970 7,767
Salaries, deduction at source and accrued vacation payable 19,732 13,026 11,448
Other 43 40 27
117,858 65,996 60,015
Note 22. Other Current Liabilities
As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $

Current tax 550 - 980
Note 23. Long-Term Debt
As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $

Term loan, bearing interest at a rate of LIBOR plus 5.25% with a LIBOR
floor of 1.25%, non-recourse to the parent company and its Canadian
subsidiaries, collateralized by security interests on the assets of U.S.
subsidiary, totalling US$230,000,000, payable in quarterly principal
instalments of US$575,000 starting in September 2011 through
August 2017. The Company is also required annually to pay 75%
of its subsidiary’s excess cash flows established as at
December 31 of each year. i) ii) 218,908 - -

Operating line of credit, variable rate plus a margin that varies based on
the level of use, non-recourse to the parent company and its Canadian
subsidiaries, collateralized by a first rank security interest on the
accounts receivables and inventories of the U.S. subsidiary and a
second rank security interest on the other assets of the U.S. subsidiary.
The U.S. subsidiary can use this revolving operating line of credit up to
a maximum amount of US$50,000,000. 10,297 - -

45

(audited)
Loan, 8.5% unsecured, payable in 4 equal annual instalments

of $2.5 million starting in September 2015 through to
September 2018. The interest is payable semi-annually starting
in March 2012. 9,582 - -

Loan, 5.8%, secured by a movable and immovable hypothec on
certain equipment and buildings, payable through 2029 by the
following monthly principal instalments starting in July 2014:
1 instalment of $140,000, 59 instalments of $100,000,
60 instalments of $141,000 and 60 instalments of $175,000.
The rate is renewable on July 23, 2024. ii) iii) iv) v) 25,000 25,000 25,000

following monthly principal instalments starting in August 2014:
48 instalments of $79,750, 48 instalments of $135,000,
48 instalments of $203,000, 35 instalments of $40,000 and
one final instalment of $48,000. The rate is renewable on
August 23, 2021. ii) iii) iv) v) 21,500 21,500 21,500

29 instalments of $112,000, 30 instalments of $194,000
and 40 instalments of $222,200. The rate is renewable
on September 23, 2014. ii) iii) iv) v) 17,956 17,956 17,956

Loan, 5.5%, secured by a movable and immovable hypothec
on certain equipment and buildings, payable through 2020
by the following monthly principal instalments starting in
July 2014: 23 instalments of $50,760, 24 instalments of
$93,000 and 29 instalments of $120,000. The rate is
renewable on May 23, 2015. ii) iii) iv) v) 6,880 6,880 6,880

23 instalments of $25,920, 24 instalments of $40,000 and
32 instalments of $51,000. The rate is renewable on
May 23, 2014. ii) iii) iv) v) 3,188 3,188 3,188

Loan, non-interest-bearing, payable starting in 2012 in five equal
annual instalments through 2016. The effective interest rates
are 7.65% and 7.9%. ii) 1,784 1,655 1,535

Obligation related to the acquisition of equipment, 5.5%, payable
starting in December 2010 in eight equal annual blended
instalments of $262,212 through 2017. 1,310 1,490 -

46

(audited)
Obligation related to the acquisition of equipment, non-interest-bearing,

payable in eight equal annual instalments of $182,025 through 2012.
The effective interest rate is 7.8%. 169 325 471

Obligation related to the acquisition of equipment, non-interest-bearing,
payable in eight equal annual instalments of $81,387 through 2015.
The effective interest rate is 7.55%. 292 354 410

Obligation under a finance lease for production equipment, 5.5%,
payable starting in December 2009 in six equal annual blended
instalments of $500,850, through 2014. 1,351 1,756 2,139

Obligation under finance leases, implicit interest rate ranging from
4.0% to 19.9%, payable in equal monthly blended instalments,
through April 2015. 708 - -
Obligation under a finance lease for distribution equipment, 9.7%,

payable starting in November 2011 in eleven equal semi-annual
blended instalments of $44,998, through November 2016. 350 - -

Obligation related to the acquisition of a vehicle, non-interest-bearing,
payable in equal monthly instalments of $530 through
August 2013. 11 - -
Matured loans - 477 1,135

319,286 80,581 80,214
Current portion of long-term debt (6,835) (1,028) (1,381)
312,451 79,553 78,833
i)
The Company may also make prepayments, without penalty, reducing the established excess by the same amount.
ii)
These loans are subject to restrictive covenants requiring the Company or its U.S. subsidiary to maintain certain financial ratios. As at
December 31, 2011 and 2010 and as at January 1, 2010, they were in compliance with these ratios.
iii)
These loans include a payment holiday of principal instalments for 60 months, having started in July and August 2009.
iv)
The Company has the option to reimburse, without penalty, up to a maximum of 15% of the balance of the loan on each anniversary
date.
v)
The Company may not assign or pledge as security certain trademarks without the prior consent of the lending institution.
47

(audited)
23.1 Long-term debt obtained in 2011

23.1.1 Term loan
During the third quarter of 2011, the Company obtained, through one of its subsidiaries, a term loan facility totalling $227,217,000
(US$230,000,000) with a syndicate of banks and other institutional lenders bearing interest at the London Inter-Bank Offered Rate
(LIBOR) plus 5.25% with a LIBOR floor of 1.25%, and maturing in August 2017.
The loan is non-recourse to the parent company and its Canadian subsidiaries and is collateralized by security interests on the
assets of Clement Pappas and its subsidiaries. It is subject to certain covenants and restrictions including:
• Mandatory prepayments in specified circumstances such as sales of assets, equity issuances and excess cash flow;
• Hedging of the risk of interest rate fluctuations for at least three years and a minimum of 50% of the term loan;
• Limitations on indebtedness, liens, investments and loans, mergers, asset sales, business acquisitions and distributions,
except those permitted under the Term Loan Agreement; and
• Compliance with prescribed financial ratios.
To meet its obligation to provide interest rate protection on at least 50% of the term loan, during the third quarter of 2011 the
Company entered into forward-starting interest rate swap agreements commencing in September 2012 and maturing in August
and September 2015 to cover the impacts of future interest rate fluctuations on the Company’s cash flows. The forward-starting
swap agreements provide for the Company to receive interest at the 3-month LIBOR rate in exchange for payments at a weighted
average fixed rate of 1.14%, on a notional principal amount of US$150,000,000, reduced by US$387,500 per quarter.
Transaction costs for arranging this term loan facility totalling $9,038,000 were recorded as a reduction to the carrying amount of
the loan facility and are amortized over the six-year term of the loan facility using the effective interest rate method.
Required principal payments amount to US$575,000 per quarter. The Company is required annually to pay 75% of its subsidiary’s
excess cash flows established as at December 31 of each year. The Company may also make prepayments, without penalty,
reducing the established excess by the same amount.
23.1.2 Operating line of credit

During the third quarter of 2011, the Company obtained, through one of its subsidiaries, a US$50,000,000 operating line of credit
from a syndicate of banks and other institutional lenders. This revolving facility has a term of five years and is not guaranteed by
the parent company and its Canadian subsidiaries.
Interest rates of the operating line of credit vary based on the level of use. Base rate loans bear interest at U.S. Prime Lending Rate
plus a margin ranging from 0.75% to 1.25% while Eurodollar loans bear interest at LIBOR plus a margin ranging from 1.75% to
2.25%. A rate of 0.375% is applied to the unused portion of the operating line of credit.
Drawings under this facility are subject to availability thresholds determined on the basis of fixed percentages of eligible accounts
receivable and inventories. The facility is subject to covenants and restrictions similar to those applicable to the term loan facility
described above. Lenders have a first rank security interest on Clement Pappas’ accounts receivables and inventories and a
second rank security interest on Clement Pappas’ other assets.
Transaction costs for arranging this operating line of credit, totalling $980,000, were recognized in other long-term assets and are
amortized on a straight-line basis over the term of the operating line credit.
48

(audited)
23.1.3 Conventional loan

On October 26, 2011, the Company obtained a $10 million unsecured conventional loan provided by two Canadian financial
institutions to a subsidiary of the Company. The conventional loan has a term of seven years with repayment of principal in
four equal annual instalments of $2.5 million starting in September 2015 through September 2018 and bears interest at a rate
of 8.5%. Interest is payable semi-annually starting in March 2012. The proceeds of the loan have been used to reduce the
Company’s operating line of credit.
Transaction costs for arranging this conventional loan, totalling $430,000, were recorded as a reduction to the carrying amount
and are amortized over the seven-year term of the conventional loan using the effective interest rate method.
23.1.4 Finance leases assumed

As part of the acquisition of Clement Pappas, the Company assumed finance lease obligations on rolling stock used primarily for
production and storage activities, computer equipment and office equipment. These leases expire at different dates from January
2012 to April 2015. As the fair value of the assets is higher, the leases were initially recognized at the present value of the
minimum lease payments using their implicit interest rates ranging from 4.0% to 19.9%. The Company’s obligations under the
finance leases are secured by the lessors’ rights over the leased assets. The finance leases on the rolling stock used primarily for
production and storage activities generally include a $1 option to purchase the assets at the end of the lease term. The Company’s
obligations under finance leases are secured by the lessors’ rights over the leased assets.
23.1.5 Finance lease

During the fourth quarter, the Company entered into a finance lease with respect to distribution equipment. This obligation is
payable starting in November 2011 in eleven equal semi-annual blended instalments of $44,998 through November 2016. As
the fair value of the assets is higher, the lease was initially recognized at the present value of the minimum payments using the
lease’s implicit interest rate of 9.7%. The Company’s obligations under finance leases are secured by the lessors’ rights over the
leased assets.
23.2 Long-term debt obtained in 2010

On July 29, 2010, the Company had obtained $1,661,000 in financing from a supplier to acquire equipment.
23.3 Principal payments
The principal payments on long-term debt in each of the following years, taking into account the principal payment holiday, and the minimum
payments required under the finance lease, are as follows:

Loans, obligations and
purchase price balance Obligations under finance leases Total principal
Principal Principal Interest payments
$ $ $ $
2012 7,626 1,102 224 8,728

2013 2,851 891 160 3,742
2014 5,017 854 103 5,871
2015 9,767 304 53 10,071
2016 20,459 319 33 20,778
2017 and thereafter 279,123 249 14 279,372
Total 324,843 3,719 587 328,562
The Company’s finance leases do not generally include conditional rent payments, renewal clauses or indexation clauses.
49

(audited)
Note 24. Other Long-Term Liabilities
As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $
Participating loans 5,091 - -

Retractable financial instruments i) 32,916 - -
38,007 - -
i)
Refer to Note 5.2.1 for a description of this item.
24.1 Participating loans

On October 26, 2011, the Company obtained $5 million in unsecured participating loans issued by two Canadian financial institutions to one of
its subsidiaries.
The participating loans are tied to the performance of Clement Pappas and are repayable at the option of the lenders after three years or at the
option of the Company after seven years. The amount repayable as principal of the participating loan is equal to 3% of 6.5 times the EBITDA of
Clement Pappas for the four quarters preceding repayment, less the debt, plus cash on hand. If demand for repayment is made by the lenders
and could cause the Company to default on its other borrowings, the Company will have the option of repaying the participating loan through the
issuance of Class A subordinate voting shares at 95% of the market price at that time.
Note 25. Share Capital
25.1 Authorized share capital

An unlimited number of first and second rank preferred shares, non-voting, issuable in one or several series, the attributes of which will be
determined by the directors before their issuance. First preferred shares rank prior to second preferred shares with respect to the payment of
dividends and reimbursement of capital, without par value.
An unlimited number of Class A subordinate voting shares, 1 vote per share, without par value
An unlimited number of Class B multiple voting shares, 10 votes per share, without par value
25.2 Share capital issued and paid

As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $

Class A shares 42,878 12,687 12,807
Class B shares 5,986 5,986 5,986
48,864 18,673 18,793

50

(audited)
25.3 Number of shares outstanding

Class A Class B
(in units) (in units)
Balance as at December 31, 2010 2,816,300 3,752,620

Issuance of shares 420,000 -
Repurchase of shares (1,000) -
Balance as at December 31, 2011 3 235,300 3,752,620
Balance as at January 1, 2010 2,843,000 3,752,620

Repurchase of shares (26,700) -
Balance as at December 31, 2010 2,816,300 3,752,620
25.4 Issuance of shares

On August 5, 2011, the Company sold, by way of private placement, 420,000 subscription receipts, at a price of $75 each for total gross
proceeds of $31,500,000. Each subscription receipt was automatically exchanged for one Class A subordinate voting share of the Company,
without any further action on the part of the holder and without payment of any additional consideration, upon closing of the acquisition of
Clement Pappas, on August 12, 2011. The issuance costs of $1,798,000 less the related taxes of $494,000 were recorded as a reduction to
total gross proceeds of the share issuance.
25.5 Dividend per share

During the year ended December 31, 2011, the Company declared and paid a cumulative dividend of $1.19 per share ($1.14 per share during
the year ended December 31, 2010) to the holders of Class A and B shares.
On February 17, 2012, the Company declared a dividend of $0.30 per share to the holders of Class A and B shares registered as at
February 29, 2012. The dividend totalling $2,096,000 was payable on March 15, 2012.
25.6 Subsequent share repurchase

Since the end of the year and until March 27, 2012, the Company did not repurchase any Class A subordinate voting shares.
25.7 Stock option plan

The Company established a stock option plan pursuant to which it may grant stock options for Class A shares to its employees and those of its
subsidiaries. The exercise price of each stock option is equal to the closing price of the Company’s shares on the day preceding the grant date.
These stock options generally vest at the annual rate of 20% and expire five to six years following the grant date. As at December 31, 2011 and
2010 and as at January 1, 2010, 150,000 stock options for Class A shares were available under the stock option plan, but none were granted.
25.8 Earnings per share

For the years ended December 31, 2011 and 2010, there were no dilutive items.
51

(audited)
Note 26. Additional Cash Flow Information
26.1 Change in non-cash operating working capital items

Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Accounts receivable (8,608) (9,278)
Inventories (20,477) 9,419
Other current assets i) (2,350) (2,386)
Accounts payable and accrued liabilities 23,862 5,956
(7,573) 3,711
i)
Includes the changes in other current assets except for to income tax recoverable
26.2 Cash and cash equivalents
In the consolidated statements of cash flows, cash and cash equivalents include cash, cash equivalents, and bank overdraft.
As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $

Cash - 6,757 14,497
Cash equivalents - 34,180 6,015
Bank overdraft 7,987 - -
7,987 40,937 20,512
26.3 Non-cash transactions

The Company carried out the following investing transactions that had no effect on cash and are therefore not reflected in the consolidated
statements of cash flows:
a) Acquisition of property, plant and equipment, for which an amount of $5,252,000 was unpaid as at December 31, 2011 ($5,890,000
as at December 31, 2010);
b) Government grant recievable of $84,000 (nil as at December 31, 2010) related to investments in property, plant and equipment; and
c) Investment tax credit recievable of $999,000 ($644,000 as at December 31, 2010), related to investments in property, plant and
equipment. During the year, the Company received $294,000 of the receivable investment tax credit as at December 31, 2010.
52

(audited)
Note 27. Post-Employment Benefits
27.1 Defined contribution plans

The Company has several defined contribution plans. These plans include retirement benefit plans offered by the Company and state plans,
namely, pension plans established by governments. Most of the Company’s retirement benefit plans are contributory plans whereby the Company
makes a contribution that varies based on the employee contribution in accordance with the rules specific to each plan.
The Company’s U.S. subsidiary sponsors a money purchase pension plan for certain union employees and a profit sharing 401(k) plan for certain
non-union employees subject to U.S. federal tax limitations and provides voluntary employees with salary deduction contributions. Contributions
to the pension plan are based on 4% of eligible employee compensation. Profit sharing contributions are made based on a specified percentage
of employee contributions. The Company makes annual contributions to the plans in accordance with the provisions of each plan.
The assets of the defined contribution plans are held by trustees on behalf of the employees. The contributions paid by the Company to the
pension fund become the immediate property of the employees. No liability is recorded in the Company’s consolidated statement of financial
position.
The pension cost of these plans is as follows:
Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $
Defined contribution plans i) 3,042 2,579

State plans ii) 3,216 2,470
6,258 5,049
i)
The Company paid an equal amount.
ii)
The Quebec Pension Plan (QPP), the Canada Pension Plan (CPP) and, as of the third quarter of 2011, U.S. Social Security.
27.2 Defined benefit plan and supplemental executive retirement plan

The Company offers three defined benefit plans and a supplemental executive retirement plan.
The three defined benefit plans provide retirement benefits that are calculated based on years of service and a pay rate that varies according
to the terms of each of the plans. For two of the three plans, retirement benefits are indexed. One of the plans was terminated in 2011 and a
curtailment gain was recognized in consolidated profit, as was a plan amendment loss. The impact of the total settlement of the plan will be
recognized once the plan has been fully settled following approval by government authorities.
The supplemental executive retirement plan is a defined benefit plan that provides for an annual annuity payment of 1.25% or 2.50%, as the
case may be, of the final salary of the executive multiplied by the vested credited years of service with the Company less the deemed annuity of
the basic defined contribution plan. For years of service prior to May 1, 2010 (for enrolments before January 1, 2010), the final salary is equal to
the annual pre-retirement base salary excluding bonuses. For years of service since May 1, 2010, or since January 1, 2010 for new enrolments,
the final salary is equal to the average annual salary of the last three years and includes bonuses. During retirement, the annuity payable under
the plan will be indexed annually based on 50% of the increase in the consumer price index for the credited years vested since May 1, 2010 or
January 1, 2010 for new enrolments. This annual indexing is subject to a maximum of 3.00%.
53

(audited)
Combined information relating to the defined benefit plans is as follows:
Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $
Change in defined benefit obligation

Balance at beginning 20,353 15,406
Current service cost 2,415 1,676
Interest cost of the defined benefit obligation 1,185 1,010
Benefits paid (726) (704)
Contributions from plan members 14 13
Past service cost 202 -
Curtailment (1,123) -
Actuarial losses 4,531 2,952
Balance at end 26,851 20,353

Change in fair value of plan assets
Balance at beginning 20,304 17,793
Employer contributions i) ii) 7,738 2,449
Employee contributions 14 13
Benefits paid (726) (704)
Expected return on plan assets iii) 848 719
Actuarial (losses) gains iii) (892) 34
Balance at end 27,286 20,304

Net asset (liability) recognized in the financial statements
Net defined benefit (liability) asset at beginning (49) 2,387
Employer contribution i) ii) 7,738 2,449
Total expense recognized in profit or loss (1,831) (1,967)
Other comprehensive income (5,423) (2,918)
Net defined benefit asset (liability) at end 435 (49)
i)
The Company paid an equal amount.
ii)
Includes the regular employer contribution and contribution to cover the plan deficit.
iii)
The expected return on assets consists of the projected increase in the fair value of plan assets attributable to the return on investments. The
effective return on assets consists of the sum of the expected return and actuarial gains (losses). For the year ended December 31, 2011,
the effective return on plan assets was a loss of $44 ($753 gain in 2010).
Amounts recognized in the following items:
As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $
Net defined benefit asset 1,069 819 2,692

Net defined benefit liability (634) (868) (305)
Net defined benefit asset (liability) 435 (49) 2,387
54

(audited)
27.2.1 Expense recognized in profit or loss

Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $
Current service cost, net of employee contributions 2,415 1,676

Interest cost of the defined benefit obligation 1,185 1,010
Expected return on plan assets (848) (719)
Past service cost 202 -
Curtailment (1,123) -
1,831 1,967
27.2.2 Other comprehensive income

Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Experience losses on plan obligations (4,531) (2,952)
Experience (gains) losses on plan assets (892) 34
(5,423) (2,918)
27.2.3 Accumulated other comprehensive income

Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Balance of actuarial losses as at January 1 2,918 -
Net actuarial losses during the year 5,423 2,918
Balance of actuarial losses as at December 31 8,341 2,918
27.2.4 Historical data

As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
$ $ $

Value of the defined benefit obligation (26,851) (20,353) (15,406)
Value of plan assets 27,286 20,304 17,793
Surplus (deficit) 435 (49) 2,387
55

(audited)
27.2.5 Composition of plan assets

As at As at As at
Dec. 31, 2011 Dec. 31, 2010 Jan. 1, 2010
% % %

Bonds 18.5 22.9 20.5

Shares 32.3 29.5 27.0
Mutual funds 3.4 4.6 4.7
Treasury bills 9.9 5.0 4.1
Deposits in trust i) 35.9 38.0 43.7
100.0 100.0 100.0
Deposits in trust prescribed by the Canada Revenue Agency for funded supplemental employee retirement plans are non-
i)
interest-bearing.
Plan assets are invested in accordance with the trustee’s obligation, i.e., to ensure adequate benefit services and minimize the
long-term contributions that the Company will have to pay into the pension fund. As at December 31, 2011 and 2010, there were
no Lassonde Industries Inc. securities held in the assets of the Company’s retirement benefit plans.
27.2.6 Contributions
In 2012, the Company expects to contribute approximately $7,077,000 to all of its plans in accordance with its normal funding
policy.
27.2.7 Actuarial assumptions

The significant actuarial assumptions used by the Company to measure its defined benefit obligations are as follows:
As at As at
Dec. 31, 2011 Dec. 31, 2010
% %

Defined benefit obligations
Discount rate 4.7 5.3
Expected rate of compensation increase 4.5 4.8
Indexation rate of pensions paid 1.0 1.4

Costs of benefits for the current period
Discount rate 5.3 6.1
Expected rate of return on assets 3.8 4.0
Expected rate of compensation increase 4.8 4.7
Indexation rate of pensions paid 1.4 1.4

Mortality table UP94 table projected to 2020
27.2.8 Discount rate

The discount rate was selected based on a review of current market interest rates of high-quality, fixed-rate debt securities
adjusted to reflect the duration of expected future cash outflows for retirement benefit payments.
56

(audited)
27.2.9 Expected rate of return on assets

The Company must make assumptions about the expected long-term rate of return on plan assets, but there is no assurance
that a plan will be able to earn the assumed rate of return. In determining the long-term rate of return assumption, the Company
considers historical returns, input from investment advisors and its actuary’s simulation model of expected long-term rates of
return on the Company’s retirement plans investment portfolio, assuming the target asset allocation of the Company’s portfolio
is maintained.
27.2.10 Measurement date

The defined benefit obligations, the fair value of plan assets and the composition of retirement plan assets are measured at the
date of the annual consolidated financial statements. The dates of the most recent actuarial valuations for pension plan funding
purposes as well as the anticipated dates for the next actuarial valuations are as follows:
Dates of the most recent Anticipated dates for the next

actuarial valuations actuarial valuations
December 31, 2007 December 31, 2011

January 1, 2009 January 1, 2012
December 31, 2009 December 31, 2011
September 30, 2011 September 30, 2012
Note 28. Managing Financial Risk Arising From Financial Instruments
In the normal course of business, the Company is exposed to a range of financial risks arising from financial instruments: credit risk, liquidity risk
and market risk (including foreign exchange risk, interest rate risk and price risk). The Company’s overall financial risk management program
aims to minimize the negative effects of these risks on its profit or loss. The Company uses derivative financial instruments to hedge certain risks.
Risk management is conducted by the corporate treasury department and Management Committee, acting in compliance with policies approved
by the Board of Directors. They identify, assess and hedge the financial risks in close cooperation with the business units. The Board of Directors
provides the guidelines for the overall risk management of specific risks, namely, foreign exchange risk, interest rate risk, credit risk, the use of
derivative and non-derivative financial instruments and investments of excess cash.
The following analysis provides a measure of the Company’s financial risks arising from financial instruments as at the date of the consolidated
statements of financial position, i.e., December 31, 2011 and 2010.
28.1 Credit risk

Credit risk is the risk of a counterparty failing to meet its commitments. The Company’s credit risk comes mainly from cash and cash equivalents,
accounts receivable, investments and derivative instrument assets. Since cash and cash equivalents, the investment and derivative instrument
assets are held in reputable financial institutions, management deems the risk of loss to be negligible. The credit risk of accounts receivable is
the potential inability of clients to meet their obligations. Accounts receivable amounts are presented on the consolidated statement of financial
position net of the allowance for doubtful accounts, which is estimated by the Company’s management based on past experience and its
assessment of current economic conditions. The Company may also be exposed to credit risk when it has significant discounts receivable from
certain suppliers.
Upon acquisition of Clement Pappas in the third quarter of 2011, the Company’s trade accounts receivable credit risk changed substantially, as
its client portfolio grew and became more diversified both in terms of geography and product offering. As at December 31, 2011, three clients
accounted for 43.4% (69.2% as at December 31, 2010, 69.0% as at January 1, 2010) of the trade accounts receivable balance.
57

(audited)
During the year ended December 31, 2011, three clients accounted for 37.7% of the Company’s sales (three clients accounted for 51.4% of
sales for the year ended December 31, 2010). If the Clement Pappas acquisition had been completed on January 1, 2011, the dilutive effect of
the economic dependence on a limited number of clients would have been greater. Based on the pro forma sales indicated in Note 5, a single
client would have accounted for over 10% of the Company’s consolidated sales.
The Company regularly examines and reviews the financial positions of existing clients and applies rigorous procedures to assess the
creditworthiness of new clients. It sets specific credit limits per client and regularly reviews those limits. The Company manages credit risk as
follows:
• Credit limits are established and examined by internal credit specialists based on information collected from relevant sources and on
the Company’s experience with its clients;
• The Company’s Canadian subsidiaries take out credit insurance on sales made outside Canada;
• The terms of credit may vary depending on the client’s credit risk.
As at December 31, 2011, approximately 96% of trade accounts receivable were aged less than 61 days (95% as at December 31, 2010 and
96% as at January 1, 2010). The table below shows the Company’s accounts receivable aging net of the allowance for doubtful accounts.

More than
0 to 30 days 31 to 60 days 61 to 90 days 90 days Total
$ $ $ $ $
Trade accounts receivable

Within the term 78,786 6,715 - - 85,501
Past due - 464 1,750 3,573 5,787
78,786 7,179 1,750 3,573 91,288

More than
$ $ $ $ $

Within the term 50,518 2,508 - - 53,026
Past due - 638 525 2,216 3,379
50,518 3,146 525 2,216 56,405
More than
$ $ $ $ $

Within the term 43,065 2,066 - - 45,131
Past due - 469 624 1,378 2,471
43,065 2 ,535 624 1,378 47,602
58

(audited)
The Company recognizes an allowance for doubtful accounts when management believes that the expected recoverable amount is lower than
the actual amount of the trade account receivable. The Company generally considers trade accounts receivable to be past due when they exceed
45 to 90 days of the credit conditions applicable to the client. As at December 31, 2011 and 2010 and as at January 1, 2010, the allowance
for doubtful accounts was not significant.
As at December 31, 2011 and 2010 and as at January 1, 2010, the Company’s maximum exposure to credit risk corresponds to the carrying
amount of the cash and cash equivalents, the accounts receivable, the investment, and the positive fair value of the derivative instruments
presented on the consolidated statement of financial position.
28.2 Liquidity risk

Liquidity risk refers to the possibility of the Company not being able to meet its financial obligations when they become due. The Company has
contractual and fiscal obligations as well as financial and derivative instrument liabilities and is therefore exposed to liquidity risk. Such risk can
result, for example, from a market disruption or a lack of liquidity.
The Company manages this risk by maintaining detailed financial forecasts as well as long-term operating and strategic plans. Managing
consolidated liquidity requires constant monitoring of projected cash inflows and outflows using forecasts of the Company’s consolidated
financial position to ensure an adequate and effective use of cash resources. Liquidity adequacy is established by geographic segment based
on historical volatility and seasonal requirements as well as on planned investments and the debt maturity profile. Implementation of new credit
facilities, loan agreements and the issuance or repurchase of shares is handled by the corporate treasury department. Day-to-day management
is conducted within geographic segments.
The Company has credit facilities that are renewed annually to ensure that sufficient funds are available to meet its financial requirements.
The Company has various authorized credit facilities at its disposal, the amount of which may at no time exceed $70,150,000 as at
December 31, 2011 ($70,150,000 as at December 31, 2010). During the third quarter of 2011, the Company obtained, through one of its
subsidiaries, a US$50,000,000 operating line of credit from a syndicate of banks and other institutional lenders. This revolving facility has a
term of five years.
The following tables present a maturity analysis, up to the contractual due dates, of the Company’s financial liabilities according to projected
contractual cash flows. The cash flows from derivative instruments, presented as derivative assets or liabilities, are included because the
Company manages its derivative contracts based on gross amounts. The amounts correspond to the undiscounted contractual cash flows. All
contractual amounts denominated in foreign currencies are converted into Canadian dollars based on the spot rate at the end of the period,
unless otherwise indicated.
59

(audited)

Carrying Contractual From 0 to From 13 to From 37 to
value cash flows 12 months 36 months 60 months Thereafter
$ $ $ $ $ $
Non-derivative financial liabilities
Bank overdraft 7,987 7,987 7,987 - - -
Bank indebtedness 15,710 15,710 15,710 - - -
accrued liabilities 117,858 117,858 117,858 - - -
Long-term debt i) ii) 319,286 328,562 8,728 9,613 30,849 279,372
Interest payments ii) 126,763 20,366 39,696 37,757 28,944
Participating loans iii) 5,091 7,447 425 850 3,299 2,873
Retractable financial
instruments iii) 32,916 30,631 - - 15,316 15,315
498,848 634,958 171,074 50,159 87,221 326,504

Derivative financial instruments
Foreign exchange forward contracts: iv) (3,885)
Cash outflows 116,294 116,294 - - -
Cash inflows (119,764) (119,764) - - -
Interest rate swaps, net v) 612 579 189 573 222 (405)
Total return swap vi) (24) (24) (24) - - -
(3,297) (2,915) (3,305) 573 222 (405)
495,551 632,043 167,769 50,732 87,443 326,099
i)
Contractual cash flows do not include transaction costs recognized as a reduction to the long-term debt and the impact of discounting
non-interest-bearing loans.
ii)
Payment of contractual principal and interest. When future interest cash flows are not fixed, they are calculated using interest rates
prevailing at the end of the reporting period.
iii)
Future cash flows from participating loans and retractable financial instruments were allocated to the earliest period during which the
Company could be liable to pay.
iv)
Includes foreign exchange forward contracts that are designated as part of a cash flow hedging relationship whether presented as
derivative financial instrument liabilities or assets. Contractual cash inflows and outflows are converted into Canadian dollars based on
the contractual forward exchange rates.
v)
Includes interest rate swaps, whether presented as derivative financial instrument liabilities or assets. Future cash flows from floating
interest rate swaps are calculated using forward interest rates.
vi)
Includes total return swaps on frozen orange juice concentrates, whether presented as derivative liabilities or assets.
60

(audited)

Carrying Contractual From 0 to From 13 to From 37 to
value cash flows 12 months 36 months 60 months Thereafter
$ $ $ $ $ $
Non-derivative financial liabilities
accrued liabilities 65,996 65,996 65,996 - - -
Long-term debt i) ii) 80,581 81,199 1,028 2,697 8,633 68,841
Interest payments ii) 46,158 4,671 9,244 8,790 23,453
146,577 193,353 71,695 11,941 17,423 92,294

Derivative financial instruments
Foreign exchange forward contracts: iii) 3,863
Cash outflows 168,799 168,799 - - -
Cash inflows (163,784) (163,784) - - -
3,863 5,015 5,015 - - -
150,440 198,368 76,710 11,941 17,423 92,294
i)
Contractual cash flows do not include transaction costs recognized as a reduction to the long-term debt and the impact of discounting
non-interest-bearing loans.
ii)
Payment of contractual principal and interest. When future interest cash flows are not fixed, they are calculated using interest rates
prevailing at the end of the reporting period.
iii)
Includes foreign exchange forward contracts that are designated as part of a cash flow hedging relationship whether presented as
derivative financial instrument liabilities or assets. Contractual cash inflows and outflows are converted into Canadian dollars based on
the contractual forward exchange rates.
28.3 Market risk

Market risk is the Company’s exposure to increases or decreases in financial instrument values caused by fluctuations in market prices, whether
due to factors specific to the financial instruments or their issuer, or by factors affecting all financial instruments of that category that are traded
on the market. The Company is primarily exposed to interest rate risk, foreign exchange risk and raw materials price risk.
28.3.1 Interest rate risk

Interest rate risk is the Company’s exposure to increases or decreases in financial instrument values caused by fluctuations in
interest rates. The Company is exposed to cash flow risk due to the interest rate fluctuations in its floating-rate interest-bearing
financial obligations and cash balances and fair value risk from its fixed-rate financial obligations.
The Company strives to maintain an appropriate combination of fixed- and floating-rate financial obligations in order to reduce the
impact of interest rate fluctuations. The derivative financial instruments used to synthetically convert interest rate exposures are
mainly interest rate swaps.
With respect to its floating-rate financial obligations, a negative impact on cash flows would occur if there were an increase in the
reference rates such as the rate of bankers’ acceptances (CDOR), LIBOR and prime rate; the impact would be positive in relation
to its cash balances and interest rate swap. A decrease in these same rates would have an opposite impact of similar magnitude.
Long-term debts are used mainly in relation to the business’s long-term obligations stemming from acquisitions of long-term
assets and business combinations. Bank indebtedness and the revolving and operating line of credit are used to finance the
Company’s working capital and fluctuate according to seasonal factors specific to the Company.
As at December 31, 2011, the Company has forward-starting interest rate swap agreements to cover the effect of future
fluctuations in interest rates (LIBOR), tied to the term loan facility, on the Company’s cash flows. Forward-starting interest rate
swaps are not designated in a hedging relationship.
61

(audited)
The data in the following table are in units:
Notional
Start date End date Type Fixed rate Floating rate amount i)
% US$
September 2012 August 2015 Fixed rate payer 1.220 3-month LIBOR 35,000,000
Septembre 2012 Septembre 2015 Fixed rate payer 1.119 3-month LIBOR 115,000,000
i)
The notional amount of the forward-starting interest rate swap agreements decreases by US$300,000 per quarter as of the
end of September 2012 and by an additional US$87,500 per quarter as of the end of November 2012.
Sensitivity analysis for interest rate risk
a) Long-term debt
Prior to the acquisition of Clement Pappas in the third quarter of 2011, the Company’s long-term debt was primarily at fixed
rates. As part of this acquisition, the Company obtained a term loan totalling US$230,000,000 bearing interest at the LIBOR
rate plus 5.25%, subject to a LIBOR floor of 1.25%. As the 6-month LIBOR rate was 0.81% as at December 31, 2011, the
interest rate on this term loan is fixed at the LIBOR floor of 1.25%. All other factors being equal, an increase or decrease in
interest rates up to the LIBOR floor would not have an impact on the Company’s profit or loss. Any additional 1.0% increase
in the interest rate over and above an initial increase to the LIBOR floor would have decreased the Company’s profit or loss by
$905,000.
b) Forward-starting interest rate swaps
All other factors being equal, a 1% upward shift in the interest rate curve applicable to the forward-starting interest rate swap
would have had a $4,142,000 favourable impact on the Company’s profit or loss. A 1% downward shift in the interest rate
curve would have had a $4,096,000 unfavourable impact on the Company’s profit or loss.
c) Bank indebtedness and operating line of credit
The bank indebtedness and operating line of credit bear interest at floating rates. They amounted to $26,007,000 as at
December 31, 2011 (nil as at December 31, 2010 and as at January 1, 2010).
All other factors being equal, a reasonably possible 1.0% increase or decrease in the interest rate applicable to the daily
balances of the Company’s bank indebtedness, operating line of credit and cash would not have had a significant impact on
profit or loss for the years ended December 31, 2011 and 2010.
28.3.2 Foreign exchange risk

Foreign exchange risk is the Company’s exposure to decreases or increases in financial instrument values caused by fluctuations
in exchange rates. The Company is mainly exposed to foreign exchange risk on its raw materials purchases (concentrates,
fruit juices and packaging) as well as on purchase of equipment denominated in foreign currencies. In addition, the Company
concludes sales denominated in foreign currencies. The Company’s foreign operations are self-sustaining and use the U.S. dollar
as functional currency. The Company’s exposure to foreign exchange risk stems mainly from cash and cash equivalents, other
working capital items and the financial obligations of its foreign operations.
The Company employs various strategies to mitigate this risk, including the use of derivative financial instruments and natural
hedge management techniques. Under its foreign exchange policy, the Company must identify, by geographic segment, any actual
or potential foreign exchange risk arising from its operations. The corporate treasury department provides the strategy to cover
these risks. Foreign exchange risks are managed in accordance with the Company’s foreign exchange risk management policy.
The objective of the foreign exchange policy is to mitigate the impact of foreign exchange rate fluctuations on the Company’s
consolidated financial statements. The policy also prohibits speculative foreign exchange transactions.
62

(audited)
As at December 31, 2011, the amounts in Canadian dollars of accounts receivable and payable denominated in currencies
other than the entity’s functional currency totalled $6,113,000 and $19,101,000, respectively ($3,423,000 and $9,577,000,
respectively, as at December 31, 2010 and $5,213,000 and $5,577,000, respectively, as at January 1, 2010).
As at December 31, 2011, foreign exchange forward contracts used to hedge exchange rate fluctuations with respect to future
purchases denominated in foreign currencies amounted to C$116,294,000 (C$168,799,000 as at December 31, 2010).

Foreign exchange contracts Type Rate Contractual amounts
C$
From 1 to 12 months Purchase 0.9575 to 1.0322 US$114,700,000
From 1 to 12 months Purchase 1.3447 to 1.3709 €2,361,000

Foreign exchange contracts Type Rate Contractual amounts
C$
From 1 to 24 months Purchase 1.0044 to 1.0390 US$162,606,000
From 1 to 12 months Purchase 1.3250 to 1.3622 €1,544,000
Foreign exchange forward contracts are contracts whereby the Company is committed to purchase foreign currencies at
predetermined rates.
The Company’s foreign exchange hedging program is usually not affected by changing economic conditions since the related
derivative financial instruments are generally held to maturity, in accordance with the foreign exchange rate-setting objective for
hedged items.
The estimated pre-tax net amount of existing gains and losses reported in the hedging reserve that the Company expects to
recognize during the next 12 months totals $3,777,000. Changes in future market rates (foreign exchange rates and/or interest
rates) will have an impact on the presentation of this amount.
Sensitivity analysis for foreign exchange risk

All other factors being equal, a reasonably possible 0.05 rise in foreign currency exchange rates per Canadian dollar would have
had a favourable impact of $267,626 ($46,000 as at December 31, 2010) on profit or loss and a favourable impact of $3,619,000
($5,540,000 as at December 31, 2010) on other comprehensive income. A reasonably possible 0.05 decline in foreign currency
exchange rates per Canadian dollar would have had the opposite impact on profit or loss and other comprehensive income as at
December 31, 2011 and 2010.
63

(audited)
28.3.3 Raw materials price risk

Raw materials price risk stems from transactions on global markets to ensure sourcing of orange concentrate, apple concentrate,
polyethylene terephthalate (PET) plastic and other raw materials required to manufacture the Company’s products.
The Company negotiates the price of its raw materials on an ongoing basis and tries to find alternative sources of supply and
diversify its production to reduce its dependence on certain raw materials. To mitigate the effect of price fluctuations, the Company
may periodically purchase derivatives to be used as hedges.
As at December 31, 2011, the Company held a total return swap on frozen orange juice concentrate to hedge the impact
of changes in future market prices. The total return swap on frozen orange juice concentrate is not designated in a hedging
relationship.
Transaction date End date Raw material Fixed price Quantity

US$/Solid pound Solid pound

Frozen orange
December 12, 2011 June 15, 2012 juice concentrate 1.655 750,000
Sensitivity analysis for raw materials price risk
All other factors being equal, a reasonably possible increase or decrease of 10% in the price of frozen orange concentrate would
not have had a significant impact on the fair value of the total return swap for frozen orange juice concentrate and therefore on
the Company’s profit for the years ended December 31, 2011 and 2010.
Note 29. Capital Management
The Company’s capital is defined as shareholders’ equity as presented in the Company’s consolidated statement of financial position plus total
debt as defined below.
The Company’s main objectives for managing capital are as follows:
• Manage capital in order not to exceed, all other factors being equal, a percentage of the Company’s debt to capital (debt-to-capital
ratio) of 55% while keeping the business’s capital cost competitive with its peers;
• Maintain financial flexibility so that opportunities may be seized when they arise;
• Support business growth while maintaining a dividend payment level of approximately 25% of previous year profit or loss before
certain unusual items, subject to approval by the Company’s Board of Directors.
The Company manages its capital structure and can adjust it in light of changes in economic conditions. The share redemption plan and usage
of long-term debt are the main tools that the Company uses to adjust its capital level and the relationship between shareholders’ equity and
debt levels.
The Company monitors its capital using the debt-to-capital ratio. To calculate this ratio, total debt is defined as long-term debt, the current
portion of long-term debt, and bank indebtedness.
As at December 31, 2011, the debt to capital ratio was 54.5% (28.6% as at December 31, 2010). The objectives, policies and procedures for
managing capital have not changed since the previous period.
Dividends paid over the last three quarters of 2011 and declared during the first quarter of 2012 represent, on an annualized basis, approximately
25% of the 2010 profit or loss.
64

(audited)
Note 30. Commitments and Contingencies
30.1 Commitments
Amount of Company’s commitments by period is as follows:
2017 and
2012 2013 2014 2015 2016 thereafter
$ $ $ $ $ $

Operating leases i) 4,076 3,517 2,735 1,928 972 4,914
Service and marketing agreements 1,988 1,347 845 352 319 319
Commitments to purchase property,
plant and equipment ii) 3,551 - - - - -
Commitments to purchase raw
materials iii) 162,035 44,719 2 085 2,502 5,004 -
171,650 49,583 5,665 4,782 6,295 5,233
i)
The Company is committed under operating leases for equipment and office space.
ii)
Property, plant and equipment to be delivered in 2012.
iii)
Certain raw material purchase commitments were established based on market prices as at December 31, 2011. They are therefore
subject to future fluctuations.
30.2 Letters of credit

As at December 31, 2011, the Company has letters of credit outstanding totalling $1,777,000 ($86,000 as at December 31, 2010).
30.3 Proceedings and claims

In the ordinary course of business, the Company is exposed to various proceedings and claims. The Company contests the validity of these
proceedings and claims. Provisions are made whenever a penalty seems probable and a reliable estimate can be made of the amount.
Management believes that any settlement arising from these claims will not have a significant effect on the Company’s current consolidated
financial position or on profit or loss.
Note 31. Segmented Information
After reviewing its operations, the Company has determined that it has only one reportable operating segment, i.e., the development,
manufacturing and sale of a wide range of fruit and vegetable juices and drinks. This single reportable operating segment generates revenues
from the sale of fruit and vegetable juices and drinks and other specialty food products.
Sales are attributed to the geographic segment based on the location of the client. The geographic segment of the non-current assets and
goodwill are based on the locations of the assets.
65

(audited)
31.1 Sales by geographic segment
Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Canada 539,589 495,776
United States 211,630 32,746
Other 9,039 7,723
760,258 536,245
31.2 Certain non-current assets and goodwill by geographic segment

Canada United States Total
$ $ $

Property, plant and equipment 151,223 86,263 237,486
Other intangible assets 24,037 119,412 143,449
Goodwill 5,776 119,413 125,189
181,036 325,088 506,124

$ $ $

Property, plant and equipment 149,843 - 149,843
Other intangible assets 9,815 - 9,815
Goodwill 5,776 - 5,776
165,434 - 165,434
$ $ $

Property, plant and equipment 144,436 - 144,436
Other intangible assets 11,543 - 11,543
Goodwill 5,776 - 5,776
161,755 - 161,755
66

(audited)
Note 32. Related Party Transactions
As at December 31, 2011, the Company was controlled by 3346625 Canada Inc., which was holding 0.42% of the Class A shares, 100% of the
Class B shares, and 92.10% of the voting rights of the Company (as at December 31, 2010: 0.48% of the Class A shares, 100% of the Class B
shares, and 93.05% of the voting rights of the Company). The remaining shares and voting rights were being held by multiple shareholders,
none of whom held a significant number of voting rights.
Key management personnel includes the members of the Board of Directors and Audit Committee as well as the Chief Executive Officer and
the executive vice-presidents who are members of the Management Committee. Other related parties include close family members of the key
management personnel and entities controlled by the key management personnel.
Details on transactions and balances between the Company and its related parties are presented below.
32.1 Transactions and balances between related parties

The Company carried out the following transactions with related parties:
Year ended December 31, 2011

Key Other
3346625 management related
Canada inc. personnel parties Total
$ $ $ $
Transactions
Dividends paid 4,482 41 - 4,523
Employee benefits expense - 8,524 260 8,784
Professional fees expense - 8 - 8
Purchase of inventories 7 - 190 197
Account balance
Accounts payable and accrued liabilities 3 166 26 195
67

(audited)
Year ended December 31, 2010

Key Other
3346625 management related
Canada inc. personnel parties Total
$ $ $ $

Transactions
Dividends paid 4,293 39 - 4,332
Employee benefits expense - 7,788 289 8,077
Professional fees expense - 31 - 31
Purchase of inventories 7 - 254 261

Account balance
Accounts payable and accrued liabilities 3 436 48 487
In the ordinary course of business, the Company purchases raw materials and contracts services from entities controlled by key management
personnel and employs close family members of key management personnel. All of these transactions are carried out under market terms and
conditions.
The dividends paid are approved by the Company’s Board of Directors. A dividend amount is set for each class of share.
The accounts payable and accrued liabilities balance as at December 31, 2011 and 2010 consists mainly of termination benefits paid to a
former member of the Company’s key management personnel.
32.2 Key management personnel compensation

The following table presents the compensation of the key management personnel:
Years ended
Dec. 31, 2011 Dec. 31, 2010
$ $

Short-term employee benefits i) 6,529 5,261
Post-employment benefits 1,995 1,563
Termination benefits - 964
8,524 7,788
i)
Short-term employee benefits include directors’ fees.
68

(audited)
Note 33. Basis of Consolidation
The following table presents the Company’s subsidiaries as at December 31:
Companies Country % of ownership Consolidation method

2011 2010
A. Lassonde Inc. Canada 100% 100% Fully consolidated

Luxlas Fund Limited Partnership Canada 100% - Fully consolidated
Lassonde Luxembourg SARL Luxembourg 100% - Fully consolidated
Lassonde Specialties Inc. Canada 100% 100% Fully consolidated
Arista Wines Inc. Canada 100% 100% Fully consolidated
Arista Wines (USA) Inc. Canada 100% 100% Fully consolidated
Zurban Beverages Inc. Canada 100% 100% Fully consolidated
4186575 Canada Inc. Canada 100% 100% Fully consolidated
Fiducie Financière Lassonde Canada 100% 100% Fully consolidated
Lassonde Financial G.P. Canada 100% 100% Fully consolidated
7925271 Canada Inc. Canada 100% - Fully consolidated
2733-1719 Québec Inc. Canada 100% 100% Fully consolidated
Lassonde (U.S.A.) Inc. Canada 100% - Fully consolidated
Pappas Lassonde Holdings, Inc. United States 70.7% - Fully consolidated
Pomona Holdings, Inc. United States 100% - Fully consolidated
Clement Pappas and Company, Inc. United States 100% - Fully consolidated
Pappas Foods, L.L.C. United States 100% - Fully consolidated
Delsea Farms, Inc. United States 100% - Fully consolidated
Pappas Properties CA, LLC United States 100% - Fully consolidated
Pappas Properties, LLC United States 100% - Fully consolidated
CPC Juice, Inc. United States 100% - Fully consolidated
CP Maryland, LLC United States 100% - Fully consolidated
Clement Pappas NC, Inc. United States 100% - Fully consolidated
Note 34. Transition to IFRS
As indicated in Note 2, these consolidated financial statements are the Company’s first annual consolidated financial statements prepared in
accordance with IFRS.
The accounting policies described in Note 3 have been applied to prepare:
• The consolidated financial statements for the year ended December 31, 2011;
• The comparative figures for the year ended December 31, 2010; and
• The opening consolidated statement of financial position as at January 1, 2010 (the Company’s transition date).
To prepare its opening consolidated statement of financial position under IFRS, the Company had to adjust amounts previously presented in its
Canadian GAAP consolidated financial statements. Furthermore, the Company applied certain exemptions and exceptions available under IFRS 1
to prepare its opening consolidated statement of financial position. The following tables and accompanying notes provide explanations on how
the transition from previous GAAP to IFRS impacted the Company’s financial position, financial performance and cash flows.
69

(audited)
Reconciliation of the consolidated statement of financial position as at January 1, 2010:
Notes Canadian GAAP Reclassifications Adjustments IFRS

$ $ $ $
Assets
Current
Cash and cash equivalents 20,512 - - 20,512
Accounts receivable i 52,805 (4,813) - 47,992
Inventories 101,252 - - 101,252
Prepaid expenses i 1,689 (1,689) - -
Other current assets i - 6,502 - 6,502
Deferred tax assets i 1,445 (1,445) - -
Derivative instruments 88 - - 88
177,791 (1,445) - 176,346

Property, plant and equipment b 144,628 - (192) 144,436
Other intangible assets 11,543 - - 11,543
Net defined benefit asset d 5,482 305 (3,095) 2,692
Goodwill 5,776 - - 5,776
345,220 (1,140) (3,287) 340,793

Liabilities
Current
accrued liabilities i 60,015 - - 60,015
Current tax i 980 (980) - -
Other current liabilities i - 980 - 980
Derivative instruments 5,740 - - 5,740
Current portion of long-term debt 1,381 - - 1,381
68,116 - - 68,116

Net defined benefit liability d - 305 - 305
Long-term debt 78,833 - - 78,833
Deferred tax liabilities e, i 16,253 (1,445) (24) 14,784
163,202 (1,140) (24) 162,038

Share capital 18,793 - - 18,793
Contributed surplus 1,386 - - 1,386
Hedging reserve (3,756) - - (3,756)
Retained earnings 165,595 - (3,263) 162,332
182,018 - (3,263) 178,755
345,220 (1,140) (3,287) 340,793
70

(audited)
Reconciliation of the consolidated statement of financial position as at December 31, 2010:

$ $ $ $
Assets
Current
Cash and cash equivalents 40,937 - - 40,937
Accounts receivable i 64,730 (6,796) - 57,934
Income tax recoverable i 1,013 (1,013) - -
Inventories 91,833 - - 91,833
Prepaid expenses i 2,092 (2,092) - -
Other current assets i - 9,901 - 9,901
Investment 2,000 - - 2,000
Deferred tax assets i 1,134 (1,134) - -
203,739 (1,134) - 202,605

Property, plant and equipment b 150,125 - (282) 149,843
Other intangible assets 9,815 - - 9,815
Net defined benefit asset d 5,595 819 (5,595) 819
Goodwill 5,776 - - 5,776
375,050 (315) (5,877) 368,858

Liabilities
Current
accrued liabilities i 65,996 - - 65,996
Other current liabilities i - - - -
Derivative instruments 3,487 - - 3,487
Current portion of long-term debt 1,028 - - 1,028
70,511 - - 70,511

Derivative instruments 376 - - 376
Net defined benefit liability d - 819 49 868
Long-term debt 79,553 - - 79,553
Deferred tax liabilities e, i 18,686 (1,134) (848) 16,704
169,126 (315) (799) 168,012

Share capital 18,673 - - 18,673
Contributed surplus 1,382 - - 1,382
Hedging reserve h (2,674) - 93 (2,581)
Retained earnings 188,543 - (5,171) 183,372
205,924 - (5,078) 200,846
375,050 (315) (5,877) 368,858
71

(audited)
Reconciliation of the consolidated statement of comprehensive income for the year ended December 31, 2010:

$ $ $ $

Sales 536,245 - - 536,245

Cost of sales and operating
expenses before depreciation
and amortization i 469,962 (469,962) - -
Depreciation and amortization i 16,379 (16,379) - -
Cost of sales b, i - 376,812 67 376,879
Selling and administrative expenses b, d, i - 109,529 (346) 109,183
486,341 - (279) 486,062
Operating profit 49,904 - 279 50,183

Financial expenses i 4,866 (249) - 4,617
Other (gains) losses h, i - 249 129 378
Profit before income taxes 45,038 - 150 45,188

Income tax expense b, d, h 13,281 - (69) 13,212
Profit 31,757 - 219 31,976
Other comprehensive income (loss):

Net change in cash flow hedge
Losses on financial instruments
designated as hedges h (4,291) - 129 (4,162)
Reclassification of losses on
financial instruments
designated as hedges 5,873 - - 5,873
Taxes h (500) - (36) (536)
1,082 - 93 1,175

Actuarial gains and losses on defined benefit plans
Actuarial losses resulting from
defined benefit plans d - - (2,918) (2,918)
Taxes d - - 791 791
- - (2,127) (2,127)

Total other comprehensive income (loss) 1,082 - (2,034) (952)

Comprehensive income 32,839 - (1,815) 31,024
72

(audited)
Notes to the reconciliation tables:
a) Business combinations
Prior to the transition to IFRS, and as permitted under IFRS 1, the Company elected not to retrospectively apply IFRS 3 Business Combinations.
As a result, the Company did not have to restate business combinations made prior to January 1, 2010. Application of this exemption had
no impact on its consolidated financial statements.
b) Property, plant and equipment

IFRS 1 permits first-time adopters to apply the fair value or to retrospectively apply IAS 16 Property, Plant and Equipment to establish the
cost of its property, plant and equipment on the transition date. The Company elected to retrospectively apply IAS 16.
When retrospectively applying IAS 16, the Company identified different components for some of its property, plant and equipment and
therefore adjusted its depreciation methods to reflect the consumption pattern of these components.
c) Other intangible assets

IFRS 1 permits first-time adopters to apply the fair value or to retrospectively apply IAS 38 Intangible Assets to establish the cost of its other
intangible assets on the transition date. The Company elected to retrospectively apply IAS 38, and the application of this standard had no
impact on its consolidated financial statements.
d) Employee benefits
IFRS 1 permits first-time adopters to recognize unamortized actuarial gains or losses as an adjustment to opening retained earnings on
the transition date. The Company elected to apply this exemption and therefore recognized unamortized actuarial gains and losses as an
adjustment to opening retained earnings on the transition date.
IAS 19 Employee Benefits differs from Canadian GAAP in the treatment of the initial transitional obligation, past service cost, and the
attribution period applicable to salary increases until retirement.
• The balance of unamortized transitional obligations was recognized in opening retained earnings, since it results from changes to
accounting standards under Canadian GAAP and no longer meets the definition of an asset under IFRS.
• Under IAS 19, the cost of changes to defined benefit plans must be recognized in profit or loss when these changes represent
employee vested benefits. Given that the changes to the Company’s plans that were not amortized under previous GAAP arise
from changes made to pension plans before January 1, 2010 and that these changes were vested when IFRS came into effect, the
unamortized balance was recognized in retained earnings in the opening consolidated statement of financial position.
• Under Canadian GAAP, the attribution period applicable to salary increases could reach the age of retirement. Under IAS 19, the
attribution period must end on the date when further service by the employee will lead to no material amount of further benefits under
the plan.
e) Deferred tax
Deferred tax related to other intangible assets and goodwill is recognized differently under IFRS than it is under Canadian GAAP when the
intangible assets are acquired in a business combination. At initial recognition of a business combination, a deferred tax liability must be
recognized when a difference exists between the fair value of the above-mentioned assets and their tax base according to corporate tax
law. The Company has therefore adjusted deferred tax liabilities on the opening consolidated statement of financial position to reflect this
requirement, and the offsetting entry to the adjustment was recognized in retained earnings.
The Company has also adjusted deferred tax liabilities on the transition date to eliminate that portion of deferred tax related to the following
items, which were adjusted in retained earnings as discussed above:
• Additional depreciation recognized following the change made to the useful life and depreciation method for certain components;
• Unamortized actuarial gains and losses;
• Changes to unamortized defined benefit plans;
• Unamortized transitional obligations; and
73

(audited)
• Attribution period.
The Company has adjusted deferred tax expense for the year ended December 31, 2010 related to the following items:
• Additional depreciation recognized following the change made to the useful life and depreciation method for certain components; and
• Attribution period.
f) Borrowing costs
As permitted under IFRS 1, the Company elected to apply IAS 23 Borrowing Costs to new acquisitions of qualifying assets beginning
January 1, 2010. No adjustment has been made for earlier acquisitions of qualifying assets. Application of IAS 23 had no impact on the
consolidated financial statements.
g) Leases
The Company elected to apply the exemption regarding application of IFRIC 4 Determining Whether an Arrangement Contains a Lease for
all arrangements subject to an analysis similar to that discussed in IFRIC 4, meaning all arrangements entered into after January 1, 2005.
Furthermore, IFRIC 4 must be applied to all arrangements not subject to such an analysis, that is, arrangements signed before January 1, 2005
and still in effect as at January 1, 2010. The Company identified no such arrangements.
h) Hedging
Under Canadian GAAP, if certain conditions were met, the short-cut method or critical-terms-match method could be used to assess
hedge effectiveness. These methods are qualitative assessment methods that allow entities to assume zero ineffectiveness at the time
the hedging relationship is recognized. IAS 39 does not permit the use of these methods and requires a quantitative method be used
to measure ineffectiveness. As such, as at December 31, 2010, the Company applied the exception set out in IFRS 1 and recognized
an amount of $129,000 in profit or loss for the ineffective portion of hedge accounting less $36,000 for the related deferred tax, and it
adjusted, as an offsetting entry, other comprehensive income.
i) Reclassifications
The Company has reclassified certain comparative figures of 2010 to conform to the requirements of IFRS:
• The Company has chosen to present the consolidated statements of income using the “expenses by function” method, which requires
reclassifications of information that differs from Canadian GAAP.
• As for the consolidated statements of financial position, the Company reclassified short-term deferred tax assets to long-term deferred
tax liabilities, because IAS 12 Income Taxes does not allow deferred tax assets or liabilities to be presented as short-term.
j) Use of estimates
Hindsight is not used to create or revise estimates. Estimates that the Company previously made under Canadian GAAP were not revised
upon the application of IFRS, unless doing so was necessary to reflect differences between the two accounting methods or unless objective
evidence showed these estimates to be erroneous.
k) Cash flows
Reconciliations of the consolidated statement of cash flows were not presented for the year ended December 31, 2010, as the transition
from previous GAAP to IFRS did not require any significant adjustments.
74

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Lassonde Industries Inc.

Message to Shareholders (Continued)

Message to Shareholders (Continued)

Lassonde Industries Inc.

Rougemont, Quebec, Canada

Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Consolidated Statements of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Consolidated Statements of Comprehensive Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Consolidated Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Consolidated Statements of Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Independent Auditor’s Report

To the Shareholders of Lassonde Industries Inc.

Management’s Responsibility for the Consolidated Financial Statements

March 29, 2012

Consolidated Statements of Income

Additional information on income is presented in Notes 7 and 27.

Consolidated Statements of Comprehensive Income

Consolidated Statements of Financial Position

Property, plant and equipment 17 237,486 149,843 144,436

Approved by the Board

Consolidated Statements of Shareholders’ Equity

Additional information on shareholders’ equity is presented in Note 25.

Consolidated Statements of Cash Flows

Additional cash flow information is presented in Note 26.

Notes to the Consolidated Financial Statements

Note 1. Description of the Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Notes to the Consolidated Financial Statements

Note 1. Description of the Business

Note 2. Statement of Compliance

Note 3. Accounting Policies

3.1 Basis of preparation

3.2 Functional and presentation currency

Notes to the Consolidated Financial Statements

3.3 Foreign currency translation

3.4 Method of consolidation

3.5 Recognition of sales

• The amount of the sale can be measured reliably;

3.5.2 Revenues from delivery services

Notes to the Consolidated Financial Statements

3.6 Research and development costs

3.7 Income tax expense

3.7.2 Deferred tax

• Taxable temporary differences resulting from the initial recognition of goodwill.

3.8 Earnings per share

Notes to the Consolidated Financial Statements

3.9 Cash and cash equivalents

3.12 Non-current assets held for sale

3.13 Property, plant and equipment

Notes to the Consolidated Financial Statements

Notes to the Consolidated Financial Statements

3.15 Government grants

3.16 Borrowing costs

3.17 Other intangible assets

3.17.1 Identifiable intangible assets acquired in a business combination:

3.17.2 Intangible assets acquired separately:

Categories Useful lives

Notes to the Consolidated Financial Statements

3.19 Business combinations and goodwill

Notes to the Consolidated Financial Statements

3.21 Post-employment benefits

3.21.2 Defined benefit plans