Q1 Financial Report - 2011

Ag Growth International Inc.
NOTES TO UNAUDITED INTERIM CONSOLIDATED
FINANCIAL STATEMENTS
[in thousands of Canadian dollars, except where otherwise noted and per share data]
March 31, 2011
impact in the first quarter of 2010 on the goodwill balance, as all business combinations in 2010
were completed subsequent to March 31, 2010. Transaction costs, however, related to business
combinations in the amount of $288 were recorded in the first quarter under Canadian GAAP in
prepaid expenses, in addition to the $86 as at January 1, 2010, and therefore resulted in an IFRS
adjustment of $374 at March 31, 2010.
3. Translation of Foreign Operations
Under Canadian GAAP, until December 31, 2009 the Company had classified all business units as
integrated operations and therefore used the Canadian dollar as the functional currency for all
foreign entities. As at January 1, 2010, the Company determined that its foreign operations
Hi Roller, Union Iron and Applegate had more characteristics of self-sustaining operations than
integrated foreign operations. Accordingly, the Company adopted the current rate method of
foreign currency translation for these foreign operations, resulting in using the local currency of
these foreign operations as their functional currency under Canadian GAAP, applied on a
prospective basis. In accordance with IAS 21, for IFRS purposes every entity of the Company has
to be individually reviewed for the determination of its functional currency and this has to be
performed retrospectively as of the IFRS transition date. Therefore, for IFRS purposes, Hi Roller,
Union Iron and Applegate were classified as U.S. dollar functional currency entities as of the
transition date of January 1, 2010, whereas under Canadian GAAP they were still Canadian dollar
functional currency entities. This change in the functional currency had the following impacts on
the Company's assets, liabilities and retained earnings:
[1] Goodwill decrease of balance by $150
[2] Property, plant and equipment increase of balance by $177
[3] Intangible assets decrease of balance by $582
[4] Deferred tax liability: decrease of balance by $128
[5] Retained earnings: decrease of balance by $427
138