DMN Notes June 29-2013

8/16/2019 DMN Notes June 29-2013

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DOMINION CITRUS INCOME FUNDCONSOLIDATED FINANCIAL STATEMENTS

SIX MONTHS ENDED JUNE 29, 2013 AND JUNE 30, 2012(Unaudited and not reviewed by external auditors)

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

[signed]W. Ash

President and Chief Executive OfficerDominion Citrus Limited(Administrator for the Fund)Dated: August 08, 2013

Under National Instrument 51 ‐102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a reviewof the interim financial statements, they must be accompanied by a notice indicating that the financialstatements have not been reviewed by an auditor.

The accompanying unaudited interim financial statements of Dominion Citrus Income Fund ("the Fund")have been prepared by and are the responsibility of the Fund’s management. The Fund’s independentauditor has not performed a review of these financial statements in accordance with the standardsestablished by the Canadian Institute of Chartered Accountants for a review of interim financialstatements by an entity’s auditor.

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DOMINION CITRUS INCOME FUNDCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

SIX MONTHS ENDED JUNE 29, 2013 AND JUNE 30, 2012EXPRESSED IN CANADIAN DOLLARS

(Unaudited and not reviewed by external auditors)

2013 2012Notes $ $

Revenue 11 38,850,000 36,372,000 Cost of goods sold 5 31,881,000 29,733,000 Gross profit 6,969,000 6,639,000

Warehouse and delivery 3,899,000 3,789,000 Selling 870,000 900,000 General and administrative 2,240,000 1,609,000

7,009,000 6,298,000 Operating income (loss) (40,000) 341,000

Gain (loss) on sale or disposal of property, plant and equipment (5,000) (9,000)

Gain (loss)

on

foreign

exchange

contracts 16,000

(8,000)

Interest expense 12 (67,000) (65,000) Interest income 12 2,000 2,000 Restructuring expenses 16 ‐ (15,000) Income (loss) before tax from continuing operations (94,000) 246,000

Income tax recovery (expense) ‐ (3,000) Net income (loss) from continuing operations (94,000) 243,000 Net income (loss) from discontinued operations 6 ‐ (61,000) Total comprehensive income (loss) for the period attributable to unitholders of the Fund (94,000) 182,000

Income (loss) per unit basic and dilutedFrom continuing operations 13 (0.00) 0.01 From discontinued operations 13 0.00 (0.00)

(0.00) 0.01

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DOMINION CITRUS INCOME FUNDCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED JUNE 29, 2013 AND JUNE 30, 2012EXPRESSED IN CANADIAN DOLLARS


2013 2012Notes $ $

Revenue 11 18,399,000 18,702,000 Cost of goods sold 5 15,070,000 15,333,000 Gross profit 3,329,000 3,369,000

Warehouse and delivery 1,955,000 1,856,000 Selling 449,000 446,000 General and administrative 1,078,000 787,000

3,482,000 3,089,000 Operating income (loss) (153,000) 280,000

Gain (loss) on sale or disposal of property, plant and equipment (5,000) (9,000)

Gain (loss)

on

foreign

exchange

contracts 1,000

8,000

Interest expense 12 (62,000) (61,000) Interest income 12 ‐ 1,000 Restructuring expenses 16 ‐ (15,000) Income (loss) before tax from continuing operations (219,000) 204,000

Income tax recovery (expense) ‐ ‐ Net income (loss) from continuing operations (219,000) 204,000 Net income (loss) from discontinued operations 6 ‐ (29,000) Total comprehensive income (loss) for the period attributable to unitholders of the Fund (219,000) 175,000

Income (loss) per unit basic and dilutedFrom continuing operations 13 (0.01) 0.01 From discontinued operations 13 0.00 (0.00)

(0.01) 0.01

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DOMINION CITRUS INCOME FUNDCONSOLIDATED STATEMENTS OF CASH FLOWS



2013 2012

Notes $ $

Operating activitiesTotal comprehensive income (loss) for the period (94,000) 182,000

Non‐cash adjustments to reconcile income (loss) from operations to net cash flows:

Depreciation of property, plant and equipment 246,000 253,000

Accretion of asset retirement obligation 9 13,000 3,000

Loss (gain) on sale of property plant and equipment 5,000 9,000

170,000 447,000 Working capital adjustments

(Increase)/Decrease in inventories (300,000) (11,000)

(Increase)/Decrease in trade and other receivables 573,000 1,458,000

(25,000) (113,000)

Increase/(Decrease) in trade and other payables (1,469,000) (2,429,000)

Increase/(Decrease) in provisions 9 70,000 ‐ Increase/(Decrease) in interest payable on preference shares 58,000 57,000 Increase/(Decrease) in income tax payable ‐ (140,000)

Net cash inflows (outflows) from operating activities (923,000) (731,000)

Investing activitiesPurchase of property, plant and equipment (142,000) (131,000)

Net cash outflows from investing activities (142,000) (131,000)

Financing activitiesRepayment of long‐term debt ‐ (23,000)

Repayment of finance lease obligations (31,000) (42,000)

Net cash outflows from financing activities (31,000) (65,000)

Net increase (decrease) in cash and cash equivalents (1,096,000) (927,000)

Cash and cash equivalents at beginning of period 1,825,000 1,344,000

Cash and cash equivalents at end of period 729,000 417,000

Supplementary disclosure of cash flow informationAmount of interest paid during the period 9,000 8,000

(Increase)/Decrease in prepaid expenses and advances

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DOMINION CITRUS INCOME FUNDNOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1 General business description

3 Summary of significant accounting policies

3.1 Basis of preparation

The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues andexpenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount, event or actions, actualresults ultimately may differ from those estimates. Significant estimates made include provisions for legal settlements, contingencies and provisions.

The accounting policies set out below have been applied consistently by all of the Fund’s subsidiaries, unless otherwise stated.

The consolidated financial statements, which are presented in Canadian Dollars, rounded to the nearest thousand (unless otherwise stated), have beenprepared under the historical cost convention, as modified by the measurement at fair value of certain financial assets and financial liabilities includingavailable for sale financial assets and derivative financial instruments. Share options and share awards granted to employees and third parties arerecognized at fair value at the date of grant.

2 Going concern

Dominion Citrus Income Fund (the "Fund") provides an integrated suite of services for fresh produce. The Fund is publicly traded and is head quartered at165 The Queensway, Unit 302, Toronto, Ontario, M8Y 1H8, Canada.

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have beenconsistently applied to all the periods presented, unless otherwise stated.

Effective January 1, 2006, pursuant to a Plan of Arrangement (the “Arrangement”) under the laws of the Province of Ontario, Dominion Citrus Income

Fund (the “Fund”) acquired all the issued and outstanding common shares of Dominion Citrus Limited (the "Company") in exchange for units ("Units") of the Fund, on a one ‐for ‐one basis. The Units are listed on the TSX under the symbol DOM.UN. The Series A Preference shares continue to be listed on theTSX under the symbol DMN.PR.A. Readers are directed to the document, Management Information Circular with respect to a Plan of Arrangementproviding for the creation of Dominion Citrus Income Fund, dated November 23, 2005 that is available at www.sedar.com.

These consolidated financial statements have been prepared assuming the Fund will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the six months ended June 29, 2013, the Fund had a net loss of $94,000(June 30, 2012 ‐ a net income of $182,000). As at June 29, 2013, the Fund had an accumulated deficit of $4,733,000 (December 31, 2012 ‐ $4,639,000)and a working capital deficiency of $1,898,000 (December 31, 2012 ‐ $1,887,000). The ability of the Fund to continue as a going concern is dependent onthe ability to attain future profitable operations which create the cash required to finance existing operations.

These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessaryshould the Fund be unable to continue as a going concern.

The consolidated financial statements of the Fund for the period ended June 29, 2013 were authorized for issue in accordance with a resolution of theBoard of Trustees on August 8, 2013.

The Fund had an operating loss of $40,000 for the six months ended June 29, 2013 (June 30, 2012 ‐ an operating profit $341,000).

The interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting on a basis consistent with theaccounting policies disclosed in the audited consolidated financial statements for the fiscal year ended December 31, 2012. Certain information andfootnote disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), asissued by the International Accounting Standards Board (“IASB”) have been omitted or condensed. These unaudited interim consolidated financialstatements should be read in conjunction with the audited 2012 annual consolidated financial statements.

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Buildings 20 – 25 years (straight ‐line)Leasehold improvements Over the term of the leaseTransportation equipment 3 years (straight ‐line)Manufacturing equipment 5 – 15 years (straight ‐line)Manufacturing equipment under finance lease 5 – 15 years (straight line or over the term of the lease)Computer equipment 3 – 5 years (straight line or declining balance)Other equipment and furniture 5 – 10 years (straight line or declining balance)Other 8 – 33% (straight line)

Basis of consolidation

Useful lives and residual values are reassessed annually.

3.3 Summary of significant accounting policies

3.2 Statement of compliance

Depreciation is provided so as to write off the cost less residual value of each item of property, plant and equipment during its expected useful life usingthe straight ‐line method or declining balance method using the following periods:

Property, plant and equipment are shown at cost less depreciation and any impairment. The cost of property, plant and equipment comprises itspurchase price and any directly attributable costs. When property, plant and equipment include significant components with different useful lives, theyare recorded and depreciated separately.

Inventories are valued at the lower of cost and net realizable value. Cost is calculated based on first ‐in, first ‐out (FIFO). Cost includes raw materials, directlabour expenses and related production and other overheads. Net realizable value is the estimated selling price, in the ordinary course of business, lesscosts to completion and appropriate selling and distribution expenses. In the case of manufactured inventories, costs include an appropriate share of production overheads based on normal operating capacity.

A) Inventories

The consolidated financial statements of the Fund include the accounts of the Company and its wholly owned limited partnerships. The Companyundertakings are included in the consolidated financial statements from the date on which control over the operating and financial policies is obtained,

and cease to be consolidated from the date on which control is transferred out of the Fund. Control exists when the Fund has the power, directly orindirectly, to govern the financial and operating policies of an entity so as to obtain economic benefits from its activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered in determining the existence of control. All inter ‐company transactions,balances and unrealized gains on transactions between the Fund and the Company and limited partnerships are eliminated on consolidation inaccordance with IAS 27, Consolidated and Separate Financial Statements. Unrealized losses are also eliminated except where they provide evidence of impairment.

B) Property, plant and equipment

The consolidated financial statements of the Fund have been prepared in accordance with IFRS and their interpretations as issued by the InternationalAccounting Standards Board (IASB).

3.1 Basis of preparation (continued)

The accounting policies applied in the preparation of the consolidated financial statements for the periods ended June 29, 2013 and June 30, 2012 are setout below.

The carrying amounts of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carryingamounts may not be recoverable. When the carrying amount exceeds the estimated recoverable amount, the assets are written down to theirrecoverable amount.

Subsequent costs incurred relating to specific assets are included in an asset’s carrying amount or recognized as a separate asset, as appropriate, onlywhen it is probable that future economic benefits associated with the item will flow to the Fund and the cost of the item can be measured reliably. Allother costs are charged to the consolidated statement of comprehensive income (loss) during the financial period in which they are incurred.

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Finance Leases

Operating Leases

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. On acquisition, goodwill is allocated to cash ‐generating units ("CGU's") expected to benefit from the combination’s synergies, where a CGU is defined as the smallest identifiable group of assetswhich can generate cash inflows independently from other assets or groups of assets. Goodwill is tested annually for impairment or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Any impairment is recognized immediately in the consolidatedstatement of comprehensive income (loss).

The recoverable amount of property, plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use,estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time valueof money and the risks specific to the asset. Impairment losses are recognized in the consolidated statement of comprehensive income (loss).

D) Sale and finance leaseback arrangements

C) Leases

Goodwill represents the excess of the cost of an acquisition over the fair value of the Fund’s share of the identifiable net assets of the acquired subsidiaryat the date of acquisition. Any excess of the fair value of the net assets acquired over the cost of the acquisition (i.e. discount on acquisition) is credited tothe consolidated statement of comprehensive income (loss) in the period of acquisition.

An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist ormay have decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there hasbeen a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If that is the case, thecarrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have beendetermined, net of depreciation, had no impairment loss been recognized for the asset in prior periods. Such reversal is recognized in the consolidatedstatement of comprehensive income (loss). Following the recognition or reversal of an impairment loss, the depreciation charge applicable to the asset isadjusted prospectively in order to systematically allocate the revised carrying amount, net of any residual value, over the remaining useful life.

E) Goodwill

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All otherleases are classified as operating leases.

Payments made under operating leases, net of incentives received from the lessor, are charged to the consolidated statement of comprehensive income(loss) on a straight ‐line basis over the period of the lease. Income earned from operating leases is credited to the consolidated statement of comprehensive income (loss) when earned. Incentives received from the lessor are recognized as a reduction of the rental expense over the lease term.

Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased item and the present value of the minimum leasepayments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant interest charge on the finance balanceoutstanding. The corresponding rental obligations, net of finance charges, are included in interest ‐bearing loans and borrowings, allocated betweencurrent and non ‐current as appropriate. The interest element of the finance cost is charged to the consolidated statement of comprehensive income(loss) over the lease period. Assets held under finance leases are depreciated over the shorter of their expected useful lives or the lease term, taking intoaccount the time period over which benefits from the leased assets are expected to accrue to the Fund.

The Fund has entered into certain sale and finance leaseback transactions whereby the risks and rewards of ownership of the assets concerned have notbeen substantially transferred to the lessor. In accordance with IAS 17, Leases, the assets subject to these sale and finance leaseback transactions havebeen retained on the consolidated balance sheet and the proceeds of sale are included within finance lease obligations. Lease payments are apportionedbetween the reduction of the lease liability and finance charges in the consolidated statement of comprehensive income (loss) so as to achieve a constantrate of interest on the remaining balance of the liability.

Gains or losses on the disposal of property, plant and equipment represent the difference between the net proceeds and the carrying value at the date of sale.

3.3 Summary of significant accounting policies (continued)

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A provision for impairment of trade receivables is established when there is objective evidence that the Fund will not be able to collect all amounts dueaccording to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy orfinancial reorganization, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The amount of theprovision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effectiveinterest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognized in theconsolidated statement of comprehensive income (loss). When a trade receivable is uncollectible, it is written off against the allowance account for trade

receivables.

I) Provisions

Loans and receivables are non ‐derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are includedin current assets, except for maturities greater than 12 months after the end of the reporting period. The Fund’s loans and receivables are comprised of trade receivables and other receivables, and at fair value through profit or loss category is comprised of cash in the consolidated balance sheet.

The Fund classifies its financial liabilities as other financial liabilities. Management determines the classification of its financial liabilities at initialrecognition. Other financial liabilities are recognized initially at fair value and subsequently measured at amortized cost using the effective interest ratemethod.

F) Financial assets

Financial assets are de ‐recognized when the contractual rights to the cash flows from the financial asset expire or when the contractual rights to thoseassets are transferred.

The Fund classifies its financial assets into two categories: at fair value through profit or loss and loans and receivables. The classification depends on thepurpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

Other financial liabilities include trade and other payables, finance lease obligations, long ‐term debt and preference shares. Trade payables areobligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

G) Financial liabilities

Loans and receivables are initially recognized at fair value plus transaction costs and subsequently carried at amortized cost using the effective interestmethod.

Financial liabilities are classified as current liabilities if payment is due within one year or less. If not, they are presented as non ‐current liabilities.

H) Equity instrumentsEquity instruments issued by the Fund are recorded at the proceeds received net of direct issue costs.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligation as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligationmay be small.

Provisions are recognized when the Fund has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

Where the Fund expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset, but only when the

reimbursement is virtually certain. The expense relating to any provision is presented in the consolidated statement of comprehensive income (loss) netof any reimbursement.


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Deferred tax liabilities:

Deferred tax assets:

Tax expense comprises current and deferred tax. Tax is recognized in the consolidated statement of comprehensive income (loss) except to the extent itrelates to items recognized in other comprehensive income or directly in equity.

I) Provisions (continued)


A contingent liability is disclosed where the existence of an obligation will only be confirmed by future events, or where the amount of the obligationcannot be measured with reasonable reliability. Contingent assets are not recognized, but are disclosed where an inflow of economic benefits is

probable.

• are not recognized on temporary differences that arise from goodwill which is not deductible for tax purposes.

Deferred tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carryingamounts in the consolidated balance sheet. Deferred tax is calculated using tax rates and laws that have been enacted or substantively enacted at theend of the reporting period, and which are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability issettled.

• are recognized for taxable temporary differences arising on investments in subsidiaries except where the reversal of the temporary difference canbe controlled and it is probable that the difference will not reverse in the foreseeable future; and

J) Asset retirement obligations

K) Taxation

Asset retirement obligations are measured at the present value of management’s best estimate of expenditure required to settle the present obligationat the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money andthe risks specific to the liability.

Provision is made for the estimated cost of any asset retirement obligations when the Fund has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisionsare not recognized for future operating losses. Asset retirement obligation expense is capitalized in the relevant asset category unless it arises from thenormal course of production activities.

• are generally recognized for all taxable temporary differences;

Current income tax

Deferred tax

Current tax expense is based on the results for the period as adjusted for items that are not taxable or not deductible. Current tax is calculated using taxrates and laws that were enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in taxreturns with respect to situations in which applicable tax regulation is subject to interpretation. Provisions are established where appropriate on the basisof amounts expected to be paid to the tax authorities.

• are recognized to the extent it is probable that taxable profits will be available against which the deductible temporary differences can be utilized;and• are reviewed at the end of the reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be availableto allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are not recognized in respect of temporary differences that arise on initial recognition of assets and liabilities acquiredother than in a business combination.

L) Revenue recognitionRevenue represents the fair value of the sale of goods and rendering of services to external customers, net of trade discounts and value added tax in theordinary course of the Fund’s activities. Revenue from the sale of goods is recognized when significant risks and rewards of ownership of the goods aretransferred to the buyer, it is probable that the economic benefits will flow to the Fund and the amount of revenue can be measured reliably, whichgenerally arises on delivery or in accordance with specific terms and conditions agreed with customers. Revenue from the rendering of services includingprocessing, repacking, grading, and warehousing is recognized in the period in which the services are rendered on the basis of services provided. Salesincentives include various rebate programs with the Fund’s customers, primarily rebates based on achievement of specified volume levels. When theFund acts in the capacity of an agent; revenues are recognized at the amount net of expenses incurred by the Fund.

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A defined contribution plan is a pension plan under which the Fund pays fixed contributions into a separate defined contribution scheme. Obligations forcontributions to defined contribution pension plans are recognized as an expense in the consolidated statement of comprehensive income (loss) asemployee service is received. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments isavailable.


The Fund operates in a single class of business within Canada and therefore does not report segmental information.

Actuarial gains and losses are recognized, in full, in the consolidated statement of income (loss) in the period in which they occur.

The interest element of the defined benefit cost represents the change in present value of plan obligations resulting from the passage of time, and isdetermined by applying the discount rate to the opening present value of the benefit obligation taking into account material changes in the obligationduring the period. The expected return on plan assets is based on an assessment made at the beginning of the period of long ‐term market returns onplan assets, adjusted for the effect on the fair value of plan assets of contributions received and benefits paid during the period. The expected return onplan assets and the interest cost is recognized in the consolidated statement of comprehensive income (loss) as finance income and cost respectively.

N) Retirement benefit plans

M) Employee benefits

The cost of providing benefits under the Fund’s defined benefit plans is determined separately for each plan, using the projected unit credit method, by

professionally qualified actuaries and arrived at using actuarial assumptions based on market expectations at the balance sheet date. These valuationsattribute entitlement benefits to the current period (to determine current service cost) and to the current and prior periods (to determine the presentvalue of defined benefit obligations). Past service costs are recognized in the consolidated statement of comprehensive income (loss) on a straight ‐linebasis over the vesting period, or immediately if the benefits have vested. When a settlement (eliminating all obligations for benefits already accrued) or acurtailment (reducing future obligations as a result of a material reduction in the plan membership or a reduction in future entitlement) occurs, theobligation and related plan assets are re ‐measured using current actuarial assumptions and the resultant gain or loss is recognized in the consolidatedstatement of comprehensive income (loss) during the period in which the settlement or curtailment occurs.

Defined Benefit Pension Plans

Wages, salaries, bonuses, social security contributions, paid annual leave and sick leave are accrued in the period in which the associated services arerendered by the employees of the Fund. Termination benefits are payable when employment is terminated by the Fund before the normal retirement

date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Fund recognizes termination benefits when it isdemonstrably committed to either terminating the employment of current employees according to a detailed formal plan without the possibility of withdrawal, or providing termination benefits as a result of an offer made to encourage voluntary redundancy.

Defined Contribution Pension Plans

P) Segmental reporting

The individual financial statements of each consolidated entity are measured in the currency of the primary economic environment in which the entityoperates (the functional currency). The consolidated financial statements are presented in Canadian Dollars, which is the Fund’s functional andpresentation currency.

The defined benefit pension asset or liability in the consolidated balance sheet comprises the total, for each plan, of the present value of the definedbenefit obligation (using a discount rate based on high quality corporate bonds), less any past service cost not yet recognized, less the fair value of planassets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is thepublished bid price. The value of a net pension benefit asset is the present value of any economic benefit the Fund reasonably expects to recover by wayof refund of surplus from the plan at the end of the plan’s life or reduction in future contributions to the plan.

O) Foreign currency

Items included in the financial statements of each consolidated entity are measured using the currency of the primary economic environment in whichthe entity operates (the "functional currency"). Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translationof monetary assets and liabilities not denominated in the functional currency of an entity are recognized in the consolidated statement of comprehensiveincome (loss).

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Allowance for doubtful accounts

The key sources of estimation uncertainty that have a significant risk of causing material adjustment to the amounts recognized in the consolidatedfinancial statements are:

The Fund makes allowance for doubtful accounts based on an assessment of the recoverability of receivables. Allowances are applied to receivableswhere events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analyzed historical baddebts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgmentto evaluate the adequacy of the allowance for doubtful accounts. Where the expectation is different from the original estimate, such difference willimpact the carrying value of receivables.


Useful lives of property, plant and equipment

Deferred tax asset

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affectthe reported amounts of assets, liabilities and contingent liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and judgments are continuously evaluated and are based on management’s experienceand other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes candiffer from these estimates.

Provisions for taxes are made using the best estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. TheFund reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liabilitycould result from audits by taxation authorities. Where the final outcome of these tax ‐related matters is different from the amounts that were initiallyrecorded, such differences will affect the tax provisions in the period in which such determination is made. The estimate involves the use of losses thatare probable and thus have been set up as a deferred asset.

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value lesscosts to sell and its value in use. The fair value less costs to sell calculation is based on available data from binding sales transactions in an arm’s lengthtransaction of similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on adiscounted cash flow model. The cash flows are derived from the budget, generally, for the next five years and do not include restructuring activities thatthe Fund is not yet committed to or significant future investments that will enhance the asset’s performance of the cash generating unit being tested.The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash inflows andthe growth rate used for extrapolation purposes.

Impairment of non ‐financial assets

Q) RestructuringA provision for restructuring is recognized when the Fund has approved a detailed and formal restructuring plan, and the restructuring either hascommenced or has been announced publicly. Future operating losses are not provided for.

The Fund periodically uses forward contracts to hedge its exposure to foreign exchange risk in accordance with its treasury policy. The Fund does nothold or issue forward contracts for trading purposes. However, forward contracts are accounted for as trading instruments, as they do not qualify forhedge accounting. Forward contracts are recognized initially at cost. Subsequent to initial recognition, forward contracts are stated at fair value. Thegain or loss on remeasurement to fair value is recognized immediately in profit or loss.

R) Forward contracts

S) Cash and Cash EquivalentsCash and cash equivalents consist of cash deposited at a chartered bank and other short ‐term highly liquid investments that are readily convertible intoknown amounts of cash.

3.4 Significant accounting estimates and assumptions

The Fund estimates the useful lives of property, plant and equipment based on the year over which the assets are expected to be available for use. Theestimated useful lives of property, plant and equipment are reviewed periodically and are updated if expectations differ from previous estimates due tophysical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the relevant assets. In addition, the estimation of theuseful lives of property, plant and equipment are based on internal technical evaluation and experience with similar assets. It is possible, however, thatfuture results of operations could be materially affected by changes in the estimates brought about by changes in factors mentioned above. The amountsand timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in the estimated usefullives of the property, plant and equipment would increase the recorded expenses and decrease the non ‐current assets.

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3.5 Recent accounting pronouncements

IFRS 9, ‘Financial Instruments’ was issued in November 2009 as the first step in its project to replace IAS 39 ‘Financial Instruments: Recognition andMeasurement’. IFRS 9 introduces new requirements for classifying and measuring financial assets that must be applied starting January 1, 2015, withearly adoption permitted. The IASB intends to expand IFRS 9 during the intervening period to add new requirements for classifying and measuringfinancial liabilities, de ‐recognition of financial instruments, impairment and hedge accounting. The Fund does not expect the new requirements to have amaterial impact on its consolidated financial statements.

Certain new standards, interpretations, amendments and improvements to existing standards were issued by the IASB or International FinancialReporting Interpretations Committee (“IFRIC”) that are mandatory for accounting periods beginning after January 1, 2013 or later periods. The standardsimpacted that are applicable to the Fund are as follows:

The estimated fair value of financial assets and liabilities, by their very nature, are subject to measurement uncertainty. Trade and other receivables arestated after evaluation as to their collect ability and an appropriate allowance for doubtful accounts is provided where considered necessary. The fairvalue of trade and other payables and long ‐term liabilities is not considered to be materially different from the carrying amount. The fair value of therestructuring provision is based on the management's best estimate.

Amendments to IFRS 7 Financial Instruments: Disclosures and IAS 32 Financial Instruments: Presentation were issued in December 2011 to provideadditional information about offsetting of financial assets and financial liabilities. The amendments are effective for annual periods beginning on or afterJanuary 1, 2013, with earlier application permitted. The Fund does not expect the new requirements to have a material impact on its consolidatedfinancial statements.

On June 16, 2011 the IASB issued amendments to IAS 1 Financial Statement Presentation. These amendments improve how companies presentcomponents of other comprehensive income. The Financial Accounting Standards Board ("FASB") issued equivalent requirements on the same day. Thenew requirements are effective for annual periods beginning on or after July 1, 2012. The Fund does not expect the new requirements to have a materialimpact on its consolidated financial statements.

On May 13, 2011 the IASB issued IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests in OtherEntities. IFRS 10 provides a single consolidation model that identifies control as the basis for consolidation for all types of entities. IFRS 10 replaces IAS27 Consolidated and Separate Financial Statements and SIC‐12 Consolidation— Special Purpose Entities. IFRS 11 Joint Arrangements establishesprinciples for the financial reporting by parties to a joint arrangement. IFRS 11 supersedes IAS 31 Interests in Joint Ventures and SIC ‐13—JointlyControlled Entities–Non ‐monetary Contributions by Venturers. IFRS 12 combines, enhances and replaces the disclosure requirements for subsidiaries, joint arrangements, associates and unconsolidated structured entities. The IASB also issued amended and retitled IAS 27 Separate Financial Statementsand IAS 28 Investments in Associates and Joint Ventures. The new requirements are effective for annual periods beginning on or after January 1, 2013,with earlier application permitted. The Fund does not expect the new requirements to have a material impact on its consolidated financial statements.

Fair value of financial instruments

On June 28, 2012 the IASB issued amendments to IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, and IFRS 12 Disclosure of Interests in Other Entities. These amendments provide additional transition relief by limiting the requirement to provide adjusted comparativeinformation to only the preceding comparative period. Also, amendments to IFRS 11 and IFRS 12 eliminate the requirement to provide comparativeinformation for periods prior to the immediately preceding period. The new requirements are effective for annual periods beginning on or after January1, 2013. The Fund does not expect the new requirements to have a material impact on its consolidated financial statements.

On May 13, 2011 the IASB issued IFRS 13 Fair Value Measurement. IFRS 13 defines fair value, sets out in a single IFRS a framework for measuring fairvalue and requires disclosures about fair value measurements. IFRS 13 applies when other IFRSs require or permit fair value measurements. It does notintroduce any new requirements to measure an asset or a liability at fair value, change what is measured at fair value in IFRSs or address how to presentchanges in fair value. The new requirements are effective for annual periods beginning on or after January 1, 2013, with earlier application permitted.The Fund does not expect the new requirements to have a material impact on its consolidated financial statements.

On June 16, 2011 the IASB issued amendments to IAS 19 Employee Benefits. The amendments will improve the recognition and disclosure requirementsfor defined benefit plans. The new requirements are effective for annual periods beginning on or after January 1, 2013, with earlier applicationpermitted. This completed one of the IASB's narrower ‐scope Memorandum of Understanding projects. The Fund does not expect the new requirementsto have a material impact on its consolidated financial statements.

3.4 Significant accounting estimates and assumptions (continued)

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2013 2012 January 1, 2010$ $ $

Trade receivables 4,766,000 5,129,000 6,033,000

Other 167,000 374,000 241,000

Less: allowance for doubtful accounts (26,000) (23,000) (36,000)

As at June 29, 2013 and December 31, 2012 4,907,000 5,480,000 6,238,000

Individually Collectively Total$ $ $

As at January 1, 2012 (25,000) (11,000) (24,000)Charge for the year ‐ (3,000) (11,000)Utilized 8,000 ‐ 7,000

Unused amounts reversed 6,000 ‐ 5,000

As at December 31, 2012 (11,000) (14,000) (23,000)Charge for the period (1,000) (10,000) (3,000)As at June 29, 2013 (11,000) (24,000) (26,000)

As at June 29, 2013 and December 31, 2012 the aging analysis of trade receivables is as follows:

Total Neither past due nor impaired

31‐60 days 61 ‐90 days > 90 days

$ $ $ $ $2013 4,766,000 3,970,000 795,000 9,000 (8,000)2012 5,129,000 4,709,000 346,000 3,000 71,000

Past due

The following table shows the movement in the allowance for doubtful accounts of trade receivables:

Trade receivables are non‐interest bearing and are generally on 21

‐30 day terms. As at June 29, 2013 trade receivables at initial value of $26,000(December 31, 2012 ‐ $23,000) were impaired and fully provided for.

On June 27, 2013 the IASB issued an amendment to IAS 39 Financial Instruments: Recognition and Measurement. This amendment make it clear thatthere is no need to discontinue hedge accounting if a hedging derivative is novated, provided certain criteria are met. A novation indicates an eventwhere the original parties to a derivative agree that one or more clearing counterparties replace their original counterparty to become the newcounterparty to each of the parties. In order to apply the amendments and continue hedge accounting, novation to a central counterparty (CCP) musthappen as a consequence of laws or regulations or the introduction of laws or regulations. The Fund does not expect these changes to have a materialimpact on its consolidated financial statements.

On May 29, 2013 the IASB issued an amendment to IAS 36 Impairment of Assets. This amendment covers Recoverable Amount Disclosures for Non ‐Financial Assets and reduces the circumstances in which the recoverable amount of assets or cash ‐generating units is required to be disclosed, clarifiesthe disclosures required, and introduces an explicit requirement to disclose the discount rate used in determining impairment (or reversals) whererecoverable amount (based on fair value less costs of disposal) is determined using a present value technique. The Fund does not expect these changesto have a material impact on its consolidated financial statements.

4 Trade and other receivables

On October 31, 2012 the IASB issued amendments to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities, and IAS27 Separate Financial Statements. These amendments: a) provide investment entities an exemption from the consolidation of particular subsidiaries andinstead require that an investment entity measure the investment in each eligible subsidiary at fair value through profit or loss in accordance with IFRS 9Financial Instruments or IAS 39 Financial Instruments: Recognition and Measurement; b) require additional disclosure about why the entity is consideredan investment entity, details of the entity's unconsolidated subsidiaries, and the nature of relationship and certain transactions between the investmententity and its subsidiaries; c) require an investment entity to account for its investment in a relevant subsidiary in the same way in its consolidated andseparate financial statements (or to only provide separate financial statements if all subsidiaries are unconsolidated). The Fund does not expect thesechanges to have a material impact on its consolidated financial statements.

3.5 Recent accounting pronouncements (continued)

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Six months Six months Three months Three months ended June 29, ended June 30, ended June 29, ended June 30,

2013 2012 2013 2012

$ $ $ $Opening inventory 1,316,000 1,311,000 1,327,000 1,131,000

Add: Purchases 31,248,000 28,773,000 14,962,000 15,109,000

Add: Provision 24,000 22,000 15,000 11,000

Less: Closing Inventory (1,616,000) (1,322,000) (1,616,000) (1,322,000) Cost of inventory sold 30,972,000 28,784,000 14,688,000 14,929,000

Labour cost 822,000 864,000 341,000 370,000

Delivery cost 87,000 85,000 41,000 34,000

Cost of goods sold 31,881,000 29,733,000 15,070,000 15,333,000

Proceeds 390,000 Less: Closing costs (27,000)

363,000 Less: Land and buildings (371,000)

Loss recognized on sale of assets (8,000)

Discontinued Operations$ $ $

Delta DC Juice TotalWarehouse and delivery (expense) recovery ‐ ‐ ‐Net income (loss) after tax ‐ ‐ ‐

$ $ $Delta DC Juice Total

Warehouse and delivery (expense) recovery ‐ ‐ ‐Net income (loss) after tax ‐ ‐ ‐

As at June 29, 2013 the carrying amount of inventory at net realizable value, instead of cost, included with the total inventory balance was $88,000(December 31, 2012 ‐ $342,000).

6 Assets classified as held for sale and discontinued operations

The amount of inventories recognized as an expense for the six months ended June 29, 2013 was $30,972,000 (June 30, 2012 ‐ $28,784,000) and for thethree months ended June 29, 2013 was $14,688,000 (June 30, 2012 ‐ $14,929,000) which is recognized in direct cost. Included in the cost of purchases isa foreign exchange gain of $364,000 for the six months ended June 29, 2013 (June 30, 2012 ‐ a gain of $407,000) and a gain of $229,000 for the threemonths ended June 29, 2013 (June 30, 2012 ‐ a gain of $209,000).

None of the above carrying amounts have been pledged as security for liabilities entered into by the Fund. The amount of write ‐downs of inventoriesrecognized as an expense in the six months ended June 29, 2013 was $24,000 (June 30, 2012 ‐ $22,000) and in the three months ended June 29, 2013was $15,000 (June 30, 2012 ‐ $11,000).

The Fund's strategic decision ‐making process resulted in the sale of the Delta Foods operations and the Apple Valley Juice ("DC Juice") operations inprevious years. The sale of certain assets, property and undertaking relating to the businesses were completed April 8, 2008 for Delta Foods and June 22,2009 for DC Juice. These two operations have been presented as Assets Held for Sale and Discontinued Operations.

Six months ended June 29, 2013

Three months ended June 29, 2013

On January 21, 2011, land and building, being held for sale, was sold for gross proceeds of $390,000 less transactional costs. The 20,000 square footfacility had been used to store and produce maple syrup products by Delta Foods in Brockville prior to the sale of the division in 2008. This completed theclosing of all the operations related to Delta Foods. The loss on the sale was calculated as follows:

5 Inventories

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Discontinued Operations$ $ $

Delta DC Juice TotalWarehouse and delivery (expense) recovery ‐ (61,000) (61,000)Net income (loss) after tax ‐ (61,000) (61,000)

$ $ $Delta DC Juice Total

Warehouse and delivery (expense) recovery ‐ (29,000) (29,000)Net income (loss) after tax ‐ (29,000) (29,000)

Land

Building and

Leasehold

Improvements Transportation

Equipment Manufacturing

Equipment

Manufacturing

Equipment UnderFinance Lease

Other Equipment,

Computers &

Furniture Total

$ $ $ $ $ $ $

CostAt January 1, 2012

275,000 2,662,000 446,000 4,409,000 816,000 1,007,000 9,615,000

Additions 29,000 164,000 194,000 85,000 ‐ 67,000 539,000

Disposals ‐ (15,000) (142,000) (2,000) ‐ (93,000) (252,000)At December 31, 2012

304,000 2,811,000 498,000 4,492,000 816,000 981,000 9,902,000

Additions ‐ 12,000 ‐ 94,000 ‐ 36,000 142,000

Disposals ‐ (3,000) ‐ (35,000) ‐ (3,000) (41,000)As at June 29,

2013 304,000 2,820,000 498,000 4,551,000 816,000 1,014,000 10,003,000 Depreciation & impairmentAt January 1, 2012

‐ 1,161,000 340,000 3,653,000 454,000 859,000 6,467,000

Charge ‐ 170,000 50,000 162,000 72,000 49,000 503,000 Disposals ‐ (12,000) (134,000) (2,000) ‐ (84,000) (232,000)

At December 31, 2012

‐ 1,319,000 256,000 3,813,000 526,000 824,000 6,738,000

Charge ‐ 85,000 25,000 73,000 36,000 27,000 246,000 Disposals ‐ (3,000) ‐ (30,000) (3,000) (36,000)

As at June 29, 2013 ‐ 1,401,000 281,000 3,856,000 562,000 848,000 6,948,000

Net book valueAt December 31, 2012 304,000 1,492,000 242,000 679,000 290,000 157,000 3,164,000

As at June 29, 2013 304,000 1,419,000 217,000 695,000 254,000 166,000 3,055,000

7 Property, plant and equipment

Six months ended June 30, 2012

6 Assets classified as held for sale and discontinued operations (continued)

Three months ended June 30, 2012

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2013 2012 January 1, 2010$ $ $

Current

Trade payables

2,191,000

6,651,000

6,466,123

Accrued expenses 3,517,000 500,000 2,077,877

5,708,000 7,151,000 8,544,000

Asset retirement obligations Other Total

$ $ $

As at January 1, 2012 130,000 652,000 782,000

Arising during the year:Utilized (128,000) ‐ (128,000)Amounts charged 22,000 49,000 71,000

At December 31, 2012 24,000 701,000 725,000

Arising during the six months ended June 29, 2013:Utilized (13,000) ‐ (13,000) Amounts charged ‐ 70,000 70,000

As at June 29, 2013 11,000 771,000 782,000

Analysis of provisions:Asset retirement

obligations Other Total$ $ $

Current 24,000 701,000 725,000

Non ‐current ‐ ‐ ‐

At December 31, 2012 24,000 701,000 725,000

Current 11,000 771,000 782,000

Non ‐current ‐ ‐ ‐

As at June 29, 2013 11,000 771,000 782,000

Pension plan adjustment of $70,000 was included in the restructuring provision for the period ended June 29, 2013 (December 31, 2012 ‐ $49,000). Anasset retirement obligation was undertaken regarding the remediation of the effluent ponds at the Clarksburg property. The current balance of the assetretirement obligation for the period ended June 29, 2013 is $11,000 (December 31, 2012 ‐ $24,000).

8 Trade and other payables

9 Provisions

Trade payables are non ‐interest bearing and are normally settled on 28‐35 day terms.

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2013 2012 02‐Jul‐05$ $ $

Series A Preference sharesLong term portion ‐ ‐

Current portion 2,297,000 2,297,000 2,297,000 As at June 29, 2013 and December 31, 2012 2,297,000 2,297,000 2,390,000

Credit facilities

On February 28, 2013, the Fund and the Company announced the terms of a proposed settlement (the “Settlement”) with a significant holder of outstanding Series “A” Preference Shares (the “Preference Shares”) of the Company. The Company intended to seek the approval of the holders of Preference Shares by way of special resolution (the “Settlement Resolution”) so as to incorporate the terms of the Settlement into the articles of thePreference Shares and make the terms of the Settlement binding upon all holders. The Settlement would have the effect of eliminating the current cashretraction date of April 1, 2013 applicable to the Preference Shares, waiving a portion of the accrued dividends, future dividend rights and substitutingrepayment of the cash retraction amount over a six (6) year period at which time the Preference Shares woud be redeemed.

The provisions in the constating documents regarding the retraction payment being satisfied by the issuance of common shares of the Company are no longer operable as such securities are no longer publicly ‐listed. The Company confirmed that the Preference Shares continue to have retraction rights because the terms of the Settlement would not be implemented before April 1, 2013. There is no assurance that any Preference Shares tendered for retraction will be retracted by the Company in accordance with the constating documents thereof. In the event that the terms of the Settlement would be approved by securityholders, the Company intended to make the retraction payments over a six (6) year period in accordance with the terms of the Settlement.

The Series A Preference shares are redeemable at the option of the Fund at any time pro rata from the holders at $2.25 per share plus any accruedunpaid dividends (the “Redemption Price”). The Series A Preference shares are retractable at the option of the holders effective April 1, 2013 forpayment on April 15, 2013 with the notice period effective from January 1, 2013 to March 31, 2013. The Fund can elect to pay in cash or in shares at theRedemption Price with the share retraction price being 95% of the average of the closing prices for the 20 trading days immediately prior to April 1, 2013.As of June 29, 2013 and December 31, 2012 there were 1,021,150 Series A Preference shares issued and outstanding.

The Series A Preference shares have a stated value of $2.25 and a cumulative dividend calculated using the bank prime rate on January 1st and July 1stplus 2%, subject to a minimum rate of 4% per annum and a maximum rate of 8% per annum payable semi ‐annually on January 20th and July 20th. Therate at June 29, 2013 was 5.00% per annum (December 31, 2012 ‐ 5.0%).

As at June 29, 2013, the Series A Preference shares have $500,000 (December 31, 2012 ‐ $442,000) of accrued but undeclared dividends for the dividendpayment periods ended June 30, 2009, December 31, 2009, June 30, 2010, December 31, 2010, June 30, 2011, December 31, 2011, June 30, 2012,December 31, 2012, and June 30, 2013. The dividends on the Series A Preference shares are cumulative. Given that nine consecutive dividendspayments have not been declared, the Series A Preference shares as per their terms become voting shares of Dominion Citrus Limited. This remains ineffect until such time as the outstanding number of dividend payments is reduced below four.

Series A Preference Shares

10 Long -term debt

During the first quarter in 2011, the Fund had a demand credit facility of $1,500,000 which was collateralized by all present and future assets, propertiesand undertakings of the Fund except for certain land and building subject to the mortgage. The credit facility contained covenants concerning certainfinancial ratios and restrictions on the declaration and payment of dividends and other distributions. The credit facility was governed by a borrowing basewhich was calculated by a prescribed formula. At the end of the first quarter in 2011 the Fund was not in compliance with all covenants, and afterdiscussions with its Bank the Fund closed the credit facility. The Fund had no outstanding amounts under any credit facility as at June 29, 2013 andDecember 31, 2012.

On March 26, 2013, the Fund and the Company announced the Company had adjourned the special meeting of shareholders (which included the holders of Preference Shares) to consider and vote on the Settlement, originally scheduled for March 26, 2013, to April 26, 2013. The Company’s shareholder meeting (which includes the holders of Preference Shares) was rescheduled for immediately after a special meeting of the Fund’s unitholders. The Fund was ordered by the Ontario Court to convene the special meeting of unitholders as a result of an application by a securityholder, which was heard on March 22, 2013. The Court mandated adjournment of the Company’s shareholder meeting results in securityholders of Dominion Citrus not having an opportunity to vote in respect of the Settlement until April 26, 2013. Given that the Company’s current constating documents contemplate an April 1, 2013 mandatory retraction date and a payment date of April 15, 2013, the Company may not be permitted, under applicable corporate legislation, to make the necessary retraction payments in cash.

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Six months Six monthsended June 29, ended June 30,

2013 2012$ $

Sale of goods 38,643,000 36,263,000

Rendering of Services 207,000 109,000

38,850,000 36,372,000

Three months Three monthsended June 29, ended June 30,

2013 2012$ $

Sale of goods 18,279,000 18,647,000

Rendering of Services 120,000 55,000

18,399,000 18,702,000

Six months Six months

ended June

29,

ended

June

30,

2013 2012

$ $Interest ExpenseInterest on bank overdrafts and loans 2,000 2,000

Interest on mortgages ‐ 1,000

Interest on obligations under finance leases 8,000 5,000 Interest on Series A Preference shares 57,000 57,000

67,000 65,000

Interest IncomeInterest income on bank deposits 2,000 2,000


2013 2012$ $

Interest ExpenseInterest on bank overdrafts and loans 1,000 1,000

Interest on mortgages ‐ ‐

Interest on obligations under finance leases 4,000 3,000 Interest on Series A Preference shares 57,000 57,000

62,000 61,000

Interest IncomeInterest income on bank deposits ‐ 1,000

11 Revenue

12 Interest expense, interest income and other income

On April 10, 2013 the Company and the Fund adjourned the special meeting of shareholders/unitholders (the “Meetings”) scheduled for April 26, 2013. The Company and the Fund decided to adjourn the Meetings in order to permit the Company’s Board of Directors and the Fund’s Board of Trustees to further assess the situation with their financial advisors and respective independent legal advisors, consider their advice anddetermine the appropriate course of action under the circumstances.

On May 16, 2013 the Company and the Fund convened annual general meetings of shareholders/unitholders. At these meetings, shareholders/ unitholders received audited financial statements, approved the re appointment of the auditor and elected directors/trustees. The Company’s Board of Directors and the Fund’s Board of Trustees continue to asses the situation with their financial advisors and respective independent legal advisors, consider their advice and determine the appropriate course of action under the circumstances.

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2013 2012

$ $ (94,000) 182,000

‐ (61,000) (94,000) 243,000

21,186,412 21,186,412

(0.00) 0.01 0.00 (0.00)

(0.00) 0.01

2013 2012$ $

(219,000) 175,000

‐ (29,000) (219,000) 204,000

21,186,412 21,186,412

(0.01) 0.01 0.00 (0.00)

(0.01) 0.01

% equity interest

Name Province of Incorporation 2013 2012

Ontario 100% 100%Quebec 100% 100%Ontario 100% 100%Ontario 100% 100%

Total comprehensive income (loss) for the period used in the calculation of total basic income (loss) per unit

Income (loss) used in the calculation of basic income (loss) per unit from continuing operations

Income (loss) used in the calculation of basic income (loss) per unit from continuing operations

From continuing operations

Weighted average number of units for the purposes of basic income (loss) per unit (all measures)

Income (loss) per unit basic and diluted

From discontinued operations

From continuing operations

Nature of Business

From discontinued operations

The principal related party relationships requiring disclosure in the consolidated financial statements under IAS 24 Related Party Disclosures pertain tothe existence of subsidiaries and associates and transactions with these entities entered into by the Fund and the identification and compensation of keymanagement personnel as addressed in greater detail below.

OpCo GP Limited

The principal subsidiary and related undertakings are as follows:

Discontinued Operations

The income (loss) and weighted average number of ordinary shares used in the calculation of basic and diluted income (loss) per unit for the six monthsended June 29, 2013 and June 30, 2012 are as follows:

14 Related party disclosure

Dominion Citrus Juice LP

Less: Income (loss) for the period from discontinued operations used in the calculation of basic income (loss) per unit from discontinued operations

The income (loss) and weighted average number of ordinary shares used in the calculation of basic and diluted income (loss) per unit for the threemonths ended June 29, 2013 and June 30, 2012 are as follows:

Total comprehensive income (loss) for the period used in the calculation of total basic income (loss) per unit

13 Income per ordinary unit

Dominion Citrus Limited

Weighted average number of units for the purposes of basic income (loss) per unit (all measures)

Income (loss) per unit basic and diluted

Bo‐Fruits LPDistribution of fresh fruit & vegetablesDistribution of fresh fruit & vegetables

General Partner of Limited Partnerships

Less: Income (loss) for the period from discontinued operations used in the calculation of basic income (loss) per unit from discontinued operations

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Terms and conditions of transactions with subsidiaries

Compensation of key management personnelThe remuneration of Trustees and other members of key management personnel during the period were as follows:

Six months Six months

ended June 29, ended June 30, 2013 2012

$ $Employee salaries 426,000 426,000

Cash Bonuses 168,000 317,000 Other compensation 14,000 15,000

608,000 758,000


2013 2012$ $

Employee salaries 213,000 213,000

Cash Bonuses 37,000 12,000 Other compensation 7,000 10,000

257,000 235,000

A) Capital risk management

During the period, the Fund did not make any advances to the Company.

As per the Arrangement, 100% of the common shares of the Company are held by the Fund (for further information see Plan of Arrangement Note 1).

• To maintain balance sheet strength, ensuring the Fund’s strategic objectives are met, while retaining an appropriate amount of leverage.

• To provide an appropriate return to unitholders relative to the risk of the Fund’s underlying assets.

The Fund manages its capital structure within guidelines approved by the Board of Trustees. The Fund makes adjustments to its capital structure basedon changes in economic conditions and the Fund’s planned requirements. The Fund has the ability to adjust its capital structure by issuing new equity ordebt, selling assets to reduce debt, controlling the amount it distributes to unitholders, and making adjustments to its capital expenditure program. TheFund is not exposed to any externally imposed capital requirements. The credit facility covenant violation occurred during the first quarter of 2011, andsince then the Fund has closed the credit facility and has no outstanding obligations.

14 Related party disclosure (continued)

15 Financial instruments

The Fund defines its capital as the total of its unitholders’ deficiency and interest bearing debt. The objectives set by the Board of Trustees whenmanaging capital are:

In general, sales to and purchases from other related parties are on terms equivalent to those that prevail in arm’s length transactions. The outstandingbalances included in receivables and payables at the balance sheet date in respect of transactions with related parties are unsecured and interest free,and settlement arises in cash.

• As at June 29, 2013 the capital was $4,349,000 (December 31, 2012 ‐ $4,443,000).

During the normal course of business for the six months ended June 29, 2013, the Company administered expenses of the Fund including trustee fees,insurance, professional fees, listing and transfer agent fees and other administration costs in the amount of $149,000 (June 30, 2012 ‐ $145,000) and$83,000 for the three months ended June 29, 2013 (June 30, 2012 ‐ $66,000). Expenses have been agreed to by the parties.

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B) Financial Risk Management Objectives and Policies

Fair value

Interest rate risk

Credit risk

15 Financial instruments (continued)

The fair value of long ‐term liabilities is not considered to be materially different from the carrying amount. The fair value of the Series A Preferenceshares is not readily determinable as the repayment terms are uncertain. Foreign exchange contracts are classified as level 2 in the fair value hierarchy.

Level 2 uses inputs other than quoted prices which are included in level 1 that are observable for the asset or liability either directly or indirectly.

Foreign exchange risk The Fund has operating subsidiaries that purchase a significant portion of US Dollar denominated produce commodities. These commodities are then soldprimarily to Canadian customers in Canadian Dollars. Fresh produce pricing is relatively liquid and incorporates foreign exchange rates in the pricescharged to customers. The Fund’s subsidiaries are nonetheless exposed to foreign exchange fluctuations, and associated gains and losses, between thetime when a commodity is purchased, translated on the balance sheet at period end, and ultimately paid. Given the relatively short time exposure andthe ability to pass fluctuations through to customers, the foreign exchange purchasing program is set to buy frequent, consistent amounts of US Dollarsat spot rates. Forward contracts are used periodically to lock in supply costs when necessitated by customer requests.

The Fund will also experience non ‐cash gains or losses due to translation of balance sheet liabilities at period end foreign exchange rates. These amountsare recorded as unrealized foreign exchange gains or losses. A change of $0.01 in the value of the Canadian dollar relative to the U.S. dollar would resultin the Fund recognizing an unrealized loss (if the Canadian dollar weakens) or an unrealized gain (if the Canadian dollar strengthens) of approximately$8,000 in its consolidated statement of comprehensive income (loss) as at June 29, 2013 (June 30, 2012 ‐ $11,000).

As at June 29, 2013 the Fund has an aggregate of $234,000 USD of purchased forward contracts for the period from July 31, 2013 through September 30,2013 at a rate of C$0.9961 for the product purchases of a specific customer (June 30, 2012 ‐ $303,000). As at June 29, 2013 the Fund has $526,000 in USdollars payable (June 30, 2012 ‐ $769,000).

The Fund may periodically use derivative financial instruments, such as forward foreign exchange contracts, to manage risks related to fluctuations inexchange rates in the ordinary course of business. The derivative financial instruments, pertaining to working capital items, are recognized at fair value onthe consolidated balance sheet. Any changes in fair value are charged to income during the period.

The Fund’s activities expose it to a variety of financial risks including foreign currency risk, interest rate risk, credit risk, liquidity risk and price risk. Thesefinancial risks are managed by the Fund under policies approved by the Board of Trustees. The principal financial risks are actively managed by the Fund’s

finance department. This department operates within strict Board approved policies and guidelines. On an ongoing basis, the finance department activelymonitors market conditions with a view to minimizing the exposure of the Fund to changing market factors while at the same time limiting the fundingcosts of the Fund.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instruments. Theseestimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.Changes in assumptions could significantly affect the estimates.

The carrying value of trade and other receivables, cash, trade and other payables are considered to be representative of their respective values due totheir short ‐term nature.

The Fund is exposed to credit risk on accounts receivables from its customers. Management has adopted credit monitoring policies to manage its creditrisk. The Fund does not have a significant concentration risk with any one customer and its maximum exposure relating to accounts receivable credit riskis the carrying value of its receivables. As at June 29, 2013, approximately $796,000 (December 31, 2012 ‐ $420,000) of the Fund's receivables were pastdue the average credit period of 30 days.

The dividend payments on the Series A Preference shares, when declared, are calculated at the prime rate of interest plus 2.00% with the total rate notto exceed 8% and not to be below 4%. An increase or decrease of 1% would result in a loss or gain of $23,000 in its consolidated statement of comprehensive income (loss) (December 31, 2012 ‐ $23,000).

The Fund’s principal exposure to interest rate fluctuations is with respect to its revolving bank overdraft and mortgages, which bear interest at floatingrates. The Fund manages its exposure to changes in interest rates by fixing the rate of interest on certain debt instruments where applicable.

24

8/16/2019 DMN Notes June 29-2013





Liquidity

As at June 29, 2013

Financial liabilities < 1 year 1 ‐ 2 years 3 ‐ 5 years > 5 years$ $ $ $

Trade and other payables 5,708,000 ‐ ‐ ‐Long‐term debt ‐ ‐ ‐ ‐Finance lease obligations 58,000 80,000 75,000 ‐Preference shares 2,297,000 ‐ ‐ ‐

8,063,000 80,000 75,000 ‐

Commitments under operating and finance leases

2013 2012$ $

Within one year 852,000 796,000

After one year but not more than five years 1,166,000 857,000 More than five years 75,000 ‐

2,093,000 1,653,000

Restructuring expenses

Six months Six monthsended June 29, ended June 30,

2013 2012 2010Restructuring expenses $ $ $

Terminations and severance costs ‐ 15,000 #REF!Pension adjustments ‐ ‐ ‐

‐ 15,000 #REF!

The Fund's financial performance is dependent upon the cost of various commodity inputs, including fresh fruits and vegetables which are determined byrelatively volatile market forces of supply and demand over which the Fund has limited or no control. The Fund currently does not use any derivativefinancial contracts in the management of its commodity risk exposure. The majority of the commodities in which the Fund trades have liquid pricingmarkets in which much or all of the price fluctuations are passed through to customers.

Commodity price risk

Future minimum rentals payable under non ‐cancelable operating and finance leases as at June 29, 2013 and December 31, 2012 are as follows:

16 Commitments and contingencies

The Fund maintains cash management processes to ensure it has sufficient available funds to meet current and foreseeable financial requirements, alsowhen considering the seasonality of its business units.

Restructuring expenses for the six months ended June 29, 2013 were nil (June 30, 2012 ‐ $15,000) and nil for the three months ended June 29, 2013(June 30, 2012 ‐ $15,000). The following table provides a break ‐down of the total restructuring expenses:

As at June 29, 2013, no one customer accounted for more than 10% of the Fund's consolidated revenues (December 31, 2012 ‐ no one customeraccounted for more than 10% of the Fund's consolidated revenues).

15 Financial instruments (continued)

25

8/16/2019 DMN Notes June 29-2013






2013 2012 2010Restructuring expenses $ $ $

Terminations and severance costs ‐ 15,000 #REF!Pension adjustments ‐ ‐ ‐

‐ 15,000 #REF!

Standby letters of credit

Litigation

General

Foreign exchange contractsThe Fund enters into foreign exchange contracts to lock in supply costs for certain key customers and pass through the contract costs to these customers.As at June 29, 2013, the notional amount of contracts was $234,000 USD (June 30, 2012 ‐ $303,000 USD).

On March 5, 2010 the Fund received a Statement of Claim against it in the amount of $1,492,000 plus cost indemnity for unjustified termination of aformer employee. The Fund believes it has a strong defense and filed a counter claim on April 6, 2010. As at June 29, 2013 the Fund had accrued$771,000 (December 31, 2012 ‐$701,000) in Provisions based on management's best estimate of the amount expected to be paid to settle the claim.

In the ordinary course of business activities, the Fund is a party in certain litigation and other claims. Management believes that the resolution of suchlitigation and claims will not have a material adverse effect on the consolidated financial position of the Fund.

16 Commitments and contingencies (continued)

The Fund's obligations for standby letters of credit totaled $15,000 as at June 29, 2013 (December 31, 2012 ‐ $15,000).

Documents

DMN Notes June 29-2013