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
Accounts receivable 1,208
Inventory 4,465
Prepaid expenses and other 396
Deferred tax asset 330
Property, plant and equipment
4,084
Intangible assets
Distribution network 1,562
Brand name 743
Order backlog 363
Goodwill 3,614
Bank indebtedness (1,035)
Long-term debt (382)
Accounts payable and accrued liabilities (2,752)
Customer deposits (134)
Deferred tax liability (1,188)
Purchase consideration transferred 11,274
The fair value of the trade receivables amounts to $1,208. The gross amount of trade
receivables is $1,408.
The goodwill of $3,614 comprises the value of expected synergies arising from the
acquisition and the values included in the workforce of the new subsidiary. The goodwill
balance is allocated to Mepu and certain North American divisions' CGUs because
management is expecting sales synergies from a wider product line and complementary
distribution networks. None of the goodwill recognized is expected to be deductible for
income tax purposes.
From the date of acquisition, Mepu has contributed to the 2010 results $11,089 of revenue and
$850 to the net profit before tax of the Company. If the combination had taken place as at
January 1, 2010, revenue from continuing operations would have increased by $2,378 and the
profit from continuing operations for the Company would decrease by $1,631.
$
74