ADF Group Inc. — Interim / Quarterly Report 2022

Jun 9, 2021

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QUARTERLY REPORT

Management’s Discussion & Analysis of the Financial Position and Operating Results First Quarter Ended April 30, 2021

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Toronto Stock Exchange: TSX : DRX
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1[st] Quarter Ended: April 30, 2021 Page: i

Management’s Discussion and Analysis of the Financial Situation and Operating Results Table of Contents

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1.	General ......................................................................................................................................................................................................................... 1
2.	Forward-Looking Statements ........................................................................................................................................................................................ 1
3.	General Overview ......................................................................................................................................................................................................... 1
4.	Commercial Positioning ................................................................................................................................................................................................ 1
5.	Market Trends .............................................................................................................................................................................................................. 2
6.	Significant Event of the Three-Month Period Ended April 30, 2021............................................................................................................................. 2
7.	COVID-19 ...................................................................................................................................................................................................................... 2
8.	Exchange Rate ............................................................................................................................................................................................................... 2
9.	Non-GAAP Measures .................................................................................................................................................................................................... 3
10.	Analysis of Operating Results For the Three-Month Period Ended April 30, 2021 ....................................................................................................... 4
11.	Comparative Information For the Last Eight Quarters .................................................................................................................................................. 6
12.	Cash Flow and Financial Position .................................................................................................................................................................................. 7
13.	Capital Stock ................................................................................................................................................................................................................. 8
14.	Stock Option Plan .......................................................................................................................................................................................................... 8
15.	Share-Based Compensation .......................................................................................................................................................................................... 9
16.	Dividend ...................................................................................................................................................................................................................... 10
17.	Order Backlog ............................................................................................................................................................................................................. 10
18.	Financial Position ........................................................................................................................................................................................................ 10
19.	Current Economic Environment .................................................................................................................................................................................. 11
20.	External Factors to Which the Corporation’s Performance is Exposed ....................................................................................................................... 11
21.	Financial Instruments .................................................................................................................................................................................................. 12
22.	Controls and Procedures ............................................................................................................................................................................................. 12
23.	Significant Accounting Policies, Estimation Uncertainty and Critical Accounting Judgements ................................................................................... 12
24.	Human Resources ....................................................................................................................................................................................................... 12
25.	Outlook ....................................................................................................................................................................................................................... 12
26.	Additional Information................................................................................................................................................................................................ 13

1[st] Quarter Ended: April 30, 2021 Page: 1 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

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1. GENERAL

The purpose of this management’s discussion and analysis of the financial position and operating results ("MD&A") is to provide the reader with an overview of the changes in the financial position of ADF Group Inc. ("ADF", "ADF Group" or "the Corporation") between February 1, 2021 and April 30, 2021. It also compares the operating results and cash flows for the three-month period ended April 30, 2021 to those of the same period of the previous fiscal year. This MD&A covers all major events that occurred between February 1, 2021 and June 8, 2021, on which date ADF Group Inc.’s Board of Directors approved the unaudited interim condensed consolidated financial statements, as well as the MD&A for the threemonth period ended April 30, 2021.

This MD&A should be read in conjunction with the Corporation’s Unaudited Interim Condensed Consolidated Financial Statements and the notes thereto for the three-month period ended April 30, 2021, as well with the Audited Consolidated Financial Statement and Management’s Discussion and Analysis of the Financial Position and Operating Results Report for the fiscal year ended January 31, 2021. The unaudited interim condensed consolidated financial statements and the comparative information for the three-month period ended April 30, 2021, have been prepared in accordance with the International Financial Reporting Standard ("IFRS") as issued by the International Accounting Standards Board ("IASB") and applicable to interim financial reports, including International Accounting Standard 34 Interim Financial Reporting The summary of significant accounting policies applied by the Corporation in accordance with IFRS is presented in Note 2 to the Unaudited Interim Condensed Consolidated Financial Statements for the Three-Month Period Ended April 30, 2021.

The Corporation reports its results in Canadian dollars. All amounts in this MD&A are expressed in Canadian dollars, except where otherwise indicated.

2.

FORWARD-LOOKING STATEMENTS

In order to provide shareholders and potential investors with additional information regarding ADF, in particular Management’s assessment of future plans and operations, certain statements in this MD&A are forward-looking statements subject to risks, uncertainties and other important factors that could cause the Corporation’s actual performance to differ from those expressed in or implied by these forward-looking statements.

Such factors include, but are not limited to the impact of economic conditions in Canada and the United States; industry conditions including amendments in laws and regulations; increased competition; potential shortfall of qualified personnel or managers; availability and fluctuations in commodity prices; foreign exchange or interest rate fluctuations; stock market volatility; and the impact of accounting policies issued by Canadian, U.S. and international standard setters. Some of these factors are further discussed under Section 20 "External Factors to Which the Corporation’s Performance is Exposed" in this MD&A. It should be noted that the list of factors that may affect future growth, results and performance, provided in this MD&A, is not exhaustive. The reader should not place undue reliance on forward-looking statements.

The expectations expressed by the forward-looking statements are based on information available to the Corporation on the date such statements were made. However, there can be no assurance that such estimates will prove to be correct. All subsequent forward-looking statements made, whether written or verbally, by the Corporation or persons acting on its behalf, are expressly qualified in their entirety by the caveats referred to above. Unless otherwise required by applicable securities legislation, the Corporation expressly disclaims any intention, and assumes no obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

3.

GENERAL OVERVIEW

From a blacksmith shop founded in 1956, ADF Group has become over the years a North American leader in the design and engineering of connections, fabrication, including industrial coating, and installation of complex steel structures, heavy steel built-ups, as well as miscellaneous and architectural metalwork. The Corporation’s products and services are intended for the following five principal segments of the non-residential construction industry: office towers and high-rises, commercial and recreational buildings, airport facilities, industrial complexes and transport infrastructure. The Corporation uses the latest technologies in its industry and operates two state-of-the-art fabrication plants and two cuttingedge paint shops. ADF Group’s complex located in Canada houses the Corporation’s head office, the 58,530-square-metre (630,000-square-foot) fabrication plant, which includes the 3,900 square-meter (42,000 square feet) paint shop. ADF’s complex in the United-States is home to the 9,290-square-metre (100,000 square feet) fabrication plant, the 60-acre pre-assembly yard and the 4,460-square-meter (48,000 square feet) dualpurpose building, adjacent to the fabrication plant, housing a 2,323-square-meter (25,000 square feet) paint and blast zone, and a 2,137-squaremeter (23,000 square feet) area for preparation and detailing work.

A pioneer in the development and implementation of innovative solutions, the Corporation is recognized for its engineering expertise, its project management, its important fabrication capacity and its skills in two specialized market niches: the fabrication of steel superstructures with a high level of architectural and geometric complexity, and projects subject to fast-track schedules. ADF Group’s commitment to deliver every project in accordance with the industry’s highest quality standards constitutes a core aspect of the Corporation’s mission.

4.

COMMERCIAL POSITIONING

ADF Group serves a diversified client base in the non-residential construction market in Canada and the United States:

• General contractors;

• Project owners;

• Engineering firms and project architects;

• Structural steel erectors, and

• Other steel structure fabricators.

1[st] Quarter Ended: April 30, 2021 Page: 2 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

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5. MARKET TRENDS

The non-residential construction industry includes the products and services related to the construction of commercial, institutional and industrial buildings, such as office towers, commercial buildings, hotels, sports complexes, museums, recreational complexes, as well as manufacturing plants and other industrial facilities. This sector also encompasses public works, including the construction and renovation of infrastructures and buildings, notably, hydroelectric dams, airports, bridges and overpasses. It should be noted that the demand in this sector is related to business cycles. Generally, there are more private projects in a bull cycle, whereas government projects take over in a bear cycle.

According to Management, approximately half of the non-residential projects use structural steel as a structural component, while the other half primarily uses concrete. Generally, structural steel accounts for about 10% to 20% of a project’s total cost, depending on the project’s nature. Structural steel offers a number of advantages when compared to other materials, which explains its increasing use in the construction of complex structures. These advantages include durability, speed of installation, greater flexibility in fast-track projects, lower installation and maintenance costs, as well as its high strength/weight ratio as a result of improved alloys.

Generally, there are more complex steel structure projects in the United States than in Canada, which can result in a certain dependence of the Corporation on the U.S. market.

The general improvement with regard to the pandemic situation is reflected in the economic environment of the markets served by ADF. As we reported in our previous quarterly MD&A Reports, the number of bids in negotiation and in the final phase of negotiation, remains high. Recent investment projects announced by the different government levels will also generate private investments. All of these measures, and the lifting of the various confinement measures, both in Canada and the United States, are indeed positive news for ADF, and should allow the Corporation to continue to grow its order backlog.

6. SIGNIFICANT EVENT OF THE THREE-MONTH PERIOD ENDED APRIL 30, 2021

Dividend

On April 7, 2021, the Corporation’s Board of Directors approved a semi-annual dividend of $0.01 per share, paid on May 17, 2021 to shareholders of record as at April 30, 2021.

7. COVID-19

Since March 2020, the COVID-19 pandemic has spread to North America. The markets served by ADF have, of course, not been spared by the many waves.

A number of Canadian provinces and U.S. states, including Quebec and Montana, have instituted confinement periods or have introduced certain restrictions to contain the spread of the virus, except for essential services. Since the beginning of this pandemic and at the time of this MD&A Report, all of ADF’s facilities, including all of its job sites, remained open and operational.

The Corporation has taken steps to care for its employees, including allowing them to work remotely and implementing strategies to support appropriate social distancing techniques for employees who cannot work remotely. The Corporation has also taken precautions with regard to the hygiene of employees, facilities and offices, as well as the implementation of significant travel restrictions. The Corporation is also evaluating its business continuity plans for all of its operations in the context of this pandemic. This situation is evolving rapidly and the Corporation will continue to monitor and mitigate developments affecting its staff, suppliers, customers and the general public as much as it can.

So, although for the moment the impact of COVID-19 on ADF’s operations is limited, the extent to which the virus can have an impact on its results will depend on future developments, including new information that may emerge. We will continue to monitor the announcements and measures from Public Health Authorities wherever our Corporation operates, including reopening measures which are starting to be announced.

8.

EXCHANGE RATE

The Corporation is subject to foreign currency fluctuations from the translation of revenues, expenses, assets and liabilities of its foreign operations and from commercial transactions denominated in foreign currencies. Average monthly rates (considered a reasonable approximation to actual rates at the date of transactions) are used to translate revenues (except for foreign exchange forward contracts) and expenses for the periods mentioned, while closing rates translate assets and liabilities.

During the three-month period ended April 30, 2021, and during each of the four quarters of the previous fiscal year, the Corporation used the following exchange rates between the Canadian and U.S. dollars:

(CA$/US$)	Consolidated Statements of Income and Comprehensive Income	Consolidated Statements of Financial Position
First quarter (April 30, 2020) Second quarter (July 31, 2020) Third quarter (October 31, 2020) Fourth quarter (January 31, 2021)	1.3784 1.3664 1.3222 1.2866	1.3910 1.3404 1.3318 1.2780 1.2285
Firstquarter(April 30, 2021)	1.2585

The Canadian dollar gained value against the U.S. currency during the periods analyzed. This trend, which began in the second quarter of the previous fiscal year, puts some pressure on the Corporation’s results, given the number of contracts signed south of the border.

1[st] Quarter Ended: April 30, 2021 Page: 3 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

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However, in order to mitigate this pressure and in accordance with its internal policy, the Corporation enters, from time to time, into foreign exchange contracts to cover foreign exchange risk. These exchange rate variations had a minimal impact on gross margin during the three-month period ended April 30, 2021, and generated a $0.1 million foreign exchange loss on the consolidated statement of income during the same period.

9. NON-GAAP MEASURES

The financial information in this MD&A has been prepared in accordance with IFRS, with the exception of certain financial indicators that do not have standardized meaning as prescribed by IFRS and therefore are considered non-GAAP (Generally Accepted Accounting Principles). When such indicators are used, they are defined and the reader is informed. The Corporation uses the following non-GAAP indicators to measure its operating performance and the achievement of objectives:

	3-Month Periods Ended April 30, 12-Month Periods Ended January 31,	3-Month Periods Ended April 30, 12-Month Periods Ended January 31,	3-Month Periods Ended April 30, 12-Month Periods Ended January 31,
	2021	2020	2021 2020
Working capital(in thousands of dollars) Current ratio Long-term debt to shareholders’ equity ratio(1) Total debt, net of liquidities(in thousands of dollars) (1) Total credit facilities and long-term debt, net of cash and cash equivalents, to shareholders’ equity ratio(1) Liabilities to shareholders’ equity ratio Earnings before interest, tax, depreciation and amortization (EBITDA)(in thousands of dollars) EBITDA margin(as a percentage of revenues) Book value per share(in dollars) Return on shareholders’ equity	$39,089 1.55: 1 0.24: 1 $567 0.01: 1 0.96: 1 $6,122 12.1% $3.13 10.9%	$28,474 1.47: 1 0.37: 1 $24,707 0.26: 1 0.92: 1 $2,967 6.5% $2.94 (3.8)%	$38,548 $29,313 1.62:1 1.58:1 0.26:1 0.43:1 $7,775 $36,181 0.08:1 0.38:1 0.91:1 0.84:1 $16,341 $5,225 9.5% 2.9% $3.05 $2.89 6.9% (2.3)%

(1) Includes current and non-current portions of the lease liabilities.

Refer to Section 10 "Non-GAAP Measures” of the Management’s Discussion and Analysis of the Financial Position and Operating Results for the Fiscal Year Ended January 31, 2021, for the definition of the financial indicators in the above table, except for article 9.1 below.

9.1. EBITDA and EBITDA Margin

EBITDA shows the extent to which the Corporation generates profits from operations, without considering the following items:

• Net financial expenses;

• Income tax expense (recovery);

• Foreign exchange (gains) losses, and

• Depreciation and amortization of property, plant and equipment, intangible assets and right-of-use assets.

Net income is reconciled with EBITDA in the table below:

Three-Month Periods Ended April 30,	2021	2020
(In thousands of dollars) Net income	$ 4,395	$ 68
Income tax expense (recovery) Net financial expenses Amortization Foreign exchange loss	101 293 1,215 108	(628) 481 1,227 1,819
EBITDA — As a % of revenues	6,112 12.1%	2,967 6.5%

1[st] Quarter Ended: April 30, 2021 Page: 4 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

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10. ANALYSIS OF OPERATING RESULTS FOR THE THREE-MONTH PERIOD ENDED APRIL 30, 2021

10.1. Revenues and Gross Margin

Revenues and Gross Margin
Three-Month Periods Ended April 30,	2021	2020	Changes 2021/2020
(In thousands of dollars and in percentages) Revenues Cost ofgoods sold	$ 50,387 42,615	$ 45,797 40,960	$ % 4,590 10.0 1,655 4.0
Gross margin — As a % of revenues	7,772 15.4%	4,837 10.6%	2,935 60.7 4.8

a) Revenues

Revenues during the three-month period ended April 30, 2021, totalled $50.4 million, up by $4.6 million compared with the same period ended April 30, 2020.

Revenues are recognized progressively based on costs incurred to date relative to the total estimated costs at completion on the various projects executed during the periods concerned.

The increase in revenues stems for the most part from the execution of projects in the backlog. As previously explained (see Section 7 COVID19) ADF’s fabrication, industrial coatings and steel erecting (installation) operations were not impacted by the pandemic, at least during the quarter ended April 30, 2021.

The change in the foreign exchange rate during the three-month period ended April 30, 2021, had a limited impact on revenues.

In terms of economic dependency, 81% of the Corporation’s revenues during the three-month period ended April 30, 2021, were realized with four (4) clients, each having represented 10% or more of the Corporation’s revenues for respective amounts of $7.1 million and $5.4 million from Canada, and $19.7 million and $8.6 million from the United States, one of whom was also part of the revenue concentration for the quarter ended April 30, 2020.

For the quarter ended April 30, 2020, 64% of the Corporation’s revenues, were realized with three (3) clients for respective amounts of $14.4 million, $8.3 million and $6.5 million, all from the United States, and who each accounted for 10% or more of the Corporation’s revenues.

Although the Corporation attempts to limit the concentration of its revenues, given the nature of its activities and market, its revenues are likely to remain concentrated among a restricted number of clients in upcoming quarters.

b) Gross Margin

The gross margin, in dollar value, increased by $2.9 million during the three-month period ended April 30, 2021, compared with the same period of the previous fiscal year. As a percentage of revenues, the gross margin went from 10.6% during the three-month period ended April 30, 2020, to 15.4% during the same period ended April 30, 2021.

Gross margin for the three months ended April 30, 2021, includes a $1.6 million subsidy from Canada emergency wage subsidy ("CEWS") program. Excluding this subsidy, gross margin, as a percentage of revenues, for the three months ended April 30, 2021, would have been 12.2%. As indicated in Section 32 "Outlook" of our MD&A Report for the fiscal year ended January 31, 2021, some pressure on margins was anticipated at the beginning of the year given the fabrication start of certain projects signed at lower prices.

As described in Section 17 "Order Backlog", the fabrication hours are not only the Corporation’s core activity, but are also its most valueadded activity. To that effect, the revenues during the three-month period ended April 30, 2021, were comprised of 35% of fabrication hours, compared with 28% of revenues for the three-month period ended April 30, 2020.

Increases or decreases in raw material (mainly steel) prices do not generally have a material impact on the gross margin since in some of the contracts in hand, the clients supply the steel to be transformed by ADF, whereas protection clauses with regard to price changes are usually included in contracts where ADF supplies the steel. In addition, the natural hedge attributable to revenues and the purchase of raw materials in U.S. dollars mitigates the impact of exchange rate fluctuations.

It should be noted that for the quarter ended April 30, 2021, and as of the date of this MD&A Report, the pandemic did not have an impact on ADF's operations relatively to the supply or cost of raw materials, mainly steel.

10.2. Selling and Administrative Expenses

Selling and Administrative Expenses
Three-Month Periods Ended April 30,	2021	2020	Changes 2021/2020
(In thousands of dollars and in percentages) Selling and administrative expenses — As a % of revenues	$ 2,875 5.7%	$ 3,097 6.8%	$ % (222) (7.2) (1.1)

During the three-month period ended April 30, 2021, selling and administrative expenses amounted to $2.9 million, down $0.2 million compared with the same period ended April 30, 2020.

1[st] Quarter Ended: April 30, 2021 Page: 5 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

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This slight decrease reflects the aforementioned "CEWS", reducing the selling and administrative expenses by $0.3 million together with the decrease in travel costs following the implementation of the various pandemic-related confinement measures, significantly limiting travel since the end of the first quarter ended April 30, 2020.

Given the increase in revenues during the three-month period ended April 30, 2021 and the reduction in expenses, selling and administrative expenses, as a percentage of revenues, stand at 5.7% during that same quarter, compared with 6.8% a year ago.

10.3. Amortization

In accordance with IFRS standards, amortization expense is included in cost of goods sold and selling and administrative expenses. However, Management considers it appropriate to continue separately commenting on the trend in amortization expense since it is considered a significant, although non-cash, component in the analysis of the Corporation’s profit margins.

Three-Month Periods Ended April 30,	2021	2020	Changes 2021/2020
(In thousands of dollars and in percentages) Amortization — As a % of revenues	$ 1,215 2.4%	$ 1,227 2.7%	$ % (12) (1.0) (0.3)

The amortization expense during the three-month period ended April 30, 2021, was relatively similar to that of the three-month period ended April 30, 2020, in light of the capital expenditure over the past year.

The amortization expense for the analysed periods was distributed as follows:

Three-Month Periods Ended April 30,	2021	2020	Changes 2021/2020
(In thousands of dollars and in percentages) Amortization expense included in cost of goods sold Amortization expense included in selling and administrative expenses	$ 902 313	$ 935 292	$ % (33) (3.5) 21 7.2
Total amortization	1,215	1,227	(12) (1.0)

10.4. Net Financial Expenses

Net Financial Expenses
Three-Month Periods Ended April 30,	2021	2020	Changes 2021/2020
(In thousands of dollars and in percentages) Net financial expenses — As a % of revenues	$ 293 0.6%	$ 481 1.1%	$ % (188) (39.1) (0.5)

Net financial expenses for the three-months ended April 30, 2021, standing at $0.3 million, were $0.2 million less than for the same quarter a year earlier, in line with the average debt balance, including the use of credit facilities, for the respective periods.

10.5. Foreign Exchange Loss

Foreign Exchange Loss
Three-Month Periods Ended April 30,	2021	2020	Changes 2021/2020
(In thousands of dollars and in percentages) Foreign exchange loss — As a % of revenues	$ 108 0.2%	$ 1,819 4.0%	$ % (1,711) Neg. (3.8)

In accordance with its internal policy, and in order to reduce the impact of foreign exchange fluctuations on US-denominated contracts in the order backlog, the Corporation occasionally enters into foreign exchange contracts to cover this foreign exchange risk. In doing so, as required by accounting policies, foreign exchange gains or losses resulting from the valuation of the foreign exchange contracts at their fair values at the end of each presentation period are included in the foreign exchange loss, which partly explains the variation in the quarter.

As such, the foreign exchange loss recorded during the quarter ended April 30, 2021, includes a $0.8 million foreign exchange loss on ongoing operations and a $0.7 million realized and not realized foreign exchange gain relating to the fair value of financial derivatives. During the threemonth period ended April 30, 2021, a $1.4 million foreign exchange loss on the translation of foreign subsidiaries was recorded in Comprehensive Income.

As such, the foreign exchange loss recorded during the quarter ended April 30, 2020, includes a $1.4 million foreign exchange gain on ongoing operations and a $3.2 million realized and not realized foreign exchange losses relating to the fair value of financial derivatives. During the threemonth period ended April 30, 2020, a $1.9 million foreign exchange gain on the translation of foreign subsidiaries was recorded in Comprehensive Income.

The Corporation is exposed to exchange rate fluctuations between the Canadian and U.S. dollars since a significant portion of its revenues is usually generally recorded in U.S. dollars.

1[st] Quarter Ended: April 30, 2021 Page: 6 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

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During the three-month periods ended April 30, 2021 and 2020, the portion of revenues realized in U.S. dollars was 74% and 93% respectively. Considering the improvement in U.S. markets and our facilities in Great Falls, Montana, the Corporation expects that the percentage of its revenues in U.S. dollars should remain at a fairly high level in the fiscal year ending January 31, 2022.

10.6. Income Tax Expense (Recovery)

Three-Month Periods Ended April 30,	2021	2020	Changes 2021/2020
(In thousands of dollars and in percentages) Income tax expense (recovery) — As a % of revenues	$ 101 0.2%	$ (628) (1.4)%	$ % 729 Pos. 1.6

Once again, the effective tax rates during the analyzed periods are hard to compare with the Corporation’s Canadian effective rate, which is 27%.

The income tax expense for the quarter ended April 30, 2021, stems primarily from the mix in profits or losses of ADF’s various subsidiaries, according to their respective legal and tax jurisdictions. In addition, and as discussed in previous MD&A Reports, and in light of the tax assets write-off recorded in the fiscal year ended January 31, 2018, the Corporation recognizes progressively some of these previously written off tax assets based on the pre-tax earnings level of its U.S. subsidiaries, virtually eliminating any income tax expense from the Corporation’s US subsidiaries.

As at April 30, 2021, the Corporation had operating tax losses estimated at $32.5 million in the United States available for carry forwards, for which no deferred tax benefit has been recorded in the Corporation’s Consolidated Statements of Income. This will have a favourable impact on future cash outflows of the Corporation, which will not have to pay future income tax until the full amount of available tax attributes has been used in the different jurisdictions where the Corporation executes contracts.

10.7. Net Income, Basic and Diluted Earnings per Share

Net Income, Basic and Diluted Earnings per Share
Three-Month Periods Ended April 30,	2021	2020
(In thousands of dollars and dollars per share) Total net income — As a % of revenues Total basic and diluted earningsper share	$ 4,395 8.7% 0.13	$ 68 0.1% 0.00

The variation in net income during the quarter ended April 30, 2021, compared with the same period a year ago is for the most part explained by the elements previously mentioned, but mainly by the improvement in gross margin and the impact from $1.9 million subsidy under Canada’s Emergency Wage Subsidy ("CEWS") Program.

11. COMPARATIVE INFORMATION FOR THE LAST EIGHT QUARTERS

The trends observed in the analysis of quarterly results do not necessarily represent those of the future results of the Corporation. ADF’s fabrication activities are not, as such, subject to seasonal fluctuations. However, the non-residential construction market in which the Corporation is active goes through upward and downward cycles.

Overall, quarterly fluctuations in the following indicators result mainly from the changes in the revenue mix and the costs recognized on different projects underway and for each given period, together with the lags between the recognition of costs and revenues, where appropriate, that could result from the use of estimates based on the percentage-of-completion method.

More specifically, and in light of the results for the last eight (8) quarters presented hereinafter, the variations from one quarter to the other are mostly explained by the respective fabrication schedules of the various projects announced by the Corporation. Considering that revenues are recognized progressively based on incurred costs to date compared to the total estimated cost at completion on these different projects carried out by the Corporation, revenues and operating results can differ significantly from quarter to quarter because of these execution schedules.

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Management’s Discussion and Analysis of the Financial Situation and Operating Results

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Fiscal Years	2022	2021	2020
Three-Month Periods Ended	1stQuarter (04.30.2021)	4thQuarter (01.31.2021) 3rdQuarter (10.31.2020) 2ndQuarter (07.31.2020) 1stQuarter (04.30.2020)	4thQuarter (01.31.2020) 3rdQuarter (10.31.2019) 2ndQuarter (07.31.2019)
(In thousands of dollars and in dollars per share) Revenues Gross margin — As a % of revenues EBITDA(1) — As a % of revenues Income before income tax expense (recovery) — As a% of revenues Net income (loss) — Basic and dilutedper share	$ 50,387 7,772 15% 6,112 12% 4,496 9% 4,395 0.13	$ $ $ $ 37,142 47,158 42,496 45,797 6,453 7,507 7,407 4,837 17% 16% 17% 11% 3,777 5,020 4,577 2,967 10% 11% 11% 6% 2,263 3,421 3,895 (560) 6% 7% 9% (1)% 2,108 2,579 2,112 68 0.06 0.08 0.06 0.00	$ $ $ 46,342 42,103 54,119 3,992 992 5,753 9% 2% 11% 1,618 (2,424) 3,012 3% (6)% 6% (484) (3,978) 1,176 (1)% (9)% 2% (110) (4,059) 419 (0.00) (0.12) 0.01

(1) See Section 9 "Non-GAAP Measures" for the definition of EBITDA.

12.

CASH FLOW AND FINANCIAL POSITION

Despite the impact from the pandemic, the Corporation has a sound financial position and is on a solid footing to address its financial needs. Taking into account its cash and cash equivalents position, its credit facilities and the level of planned capital spending, the Corporation does not expect any liquidity risk in a foreseeable future.

On April 30, 2021, cash and cash equivalents totalled $24.2 million, up by $6.4 million compared with January 31, 2021. In addition, the Corporation did not use its credit facilities during both periods analyzed, being as at April 30, 2021 and January 31, 2021.

Management believes that these available funds are sufficient to support the execution of its order backlog in hand on April 30, 2021, and to meet its financial commitments for the 2022 fiscal year.

Furthermore, the Corporation continually appraises the opportunities to use part of its liquidities to finance certain projects that could provide additional long-term competitive advantages. It also looks at opportunities for accelerated payments discounts negotiated with suppliers.

12.1. Operating Activities

During the three-month period ended April 30, 2021, the Corporation generated cash flows from its operating activities and assigned it as follows:

Three-Month Periods Ended April 30,	2021	2020
(In thousands of dollars) Net income adjusted for non-cash items	$ 8,885	$ 1,434
Changes in non-cash operating working capital items: Accounts receivable Holdbacks on contracts Contract assets Inventories Prepaid expenses and other current assets Accounts payable and other current liabilities Contract liabilities Other	577 1,406 (2,668) (4,433) (1,383) 5,080 5,054 (703)	4,853 (1,085) (3,514) 1,277 (201) 420 8,866 (3)
	2,930	10,613
Cash flows from operatingactivities	11,815	12,047

Net income adjusted for non-cash items, totalling $8.9 million during the three-month period ended April 30, 2021, is $7.5 million higher than that of the same period ended April 30, 2020. This difference is mainly explained by increase in net income, the change in non-cash foreign exchange gain or loss, and the impact of the $1.9 million subsidy from Canada's Emergency Wage Subsidy ("CEWS") Program, not cashed as at April 30, 2021.

The change in non-cash working capital generated $2.9 million in the three months ended April 30, 2021. The cash inflow was mainly due to higher accounts payable and other current liabilities ($5.1 million) and contract liabilities ($5.1 million), net of inventory growth ($4.4 million). These changes are related to the increase in the level of activity as a April 30, 2021, compared to the same date a year earlier.

1[st] Quarter Ended: April 30, 2021 Page: 8 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

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During the three-month period ended April 30, 2020, changes in non-cash operating working capital items generated cashflow of $10.6 million. This cash inflow is mostly explained by the decrease in accounts receivable ($4.9 million) and in inventories ($1.3 million) and by the increase in contract liabilities ($8.9 million), net of the increase in holdbacks on contracts ($1.1 million) and contract assets ($3.5 million). These variations are in line with the activity level as at April 30, 2020, compared with the same date a year ago.

12.2. Investing Activities

The Corporation’s investing activities are summarized as follows:

Investing Activities The Corporation’s investing activities are summarized as follows:
Three-Month Periods Ended April 30,	2021	2020
(In thousands of dollars) Acquisition of property, plant and equipment Acquisition of intangible assets Increase in other non-current assets	$ (284) (140) (3,332)	$ (118) (73) 28
Cash flows used in investingactivities	(3,756)	(163)

During the three-month period ended April 30, 2021, a total of $3.8 million in liquidities were required, mostly related to the increase in other non current assets.

During the three-month period ended April 30, 2020, a total of $0.2 million in liquidities were required mostly for the acquisition of property, plant and equipment and intangible assets.

The Corporation estimates capital expenditures for fiscal 2022 of approximately $5.0 million, mainly to maintain production equipment current at both of ADF’s plants in Terrebonne, Quebec, and Great Falls, Montana.

12.3. Financing Activities

The Corporation’s financing activities were as follows:

Financing Activities The Corporation’s financing activities were as follows:
Three-Month Periods Ended April 30,	2021	2020
(In thousands of dollars) Variation in credit facilities Repayment of long-term debt Repayment of lease liabilities Interestpaid	$ — (476) (238) (252)	$ (4,200) (483) (243) (407)
Cash flows used in financingactivities	(966)	(5,333)

During the three-month period ended April 30, 2021, financing activities used liquidities of $1.0 million, compared with cash outflows of $5.3 million for the same quarter the previous year, which came from the repayment in credit facilities.

Cash flows used in financing activities during the quarter ended April 30, 2021, include the reimbursement of the long-term debt and related interest, as well as lease liabilities.

12.4. Contractual Obligations

No significant change has occurred in contractual obligations since the publication of the tables summarizing the information relating to contractual obligations in Section 15.6 of the Corporation’s Annual Management’s Discussion and Analysis Report for the fiscal year ended January 31, 2021.

12.5. Debt Covenants

As at April 30, 2021, the Corporation respected all of the covenants with its lenders, and still did at the date hereof. Management expects it will continue to respect its commitments during the fiscal year 2022.

13. CAPITAL STOCK

As at April 30, 2021 and January 31, 2021, the Corporation had 32,635,206 shares outstanding for a total amount of $68.1 million, of which 18,292,099 for subordinate voting shares totalling $52.1 million, and 14,343,107 multiple voting shares for a total of $16.0 million. At the date hereof, the number of shares outstanding remained unchanged.

14. STOCK OPTION PLAN

The number of stock options issued and outstanding remained unchanged at 5,000 options as at April 30, 2021, compared to January 31, 2021. These 5,000 options, which had a weighted average life of 1.12 year before maturity, had a weighted average exercise price of $1.21 as at April 30, 2021.

1[st] Quarter Ended: April 30, 2021 Page: 9 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

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15. SHARE-BASED COMPENSATION

15.1. Deferred Share Units (DSU)

a) External Directors

This deferred compensation plan allows every external director, who wants to participate, to defer in whole or in part his/her director’s compensation (including fees and attendance fees), by electing to receive a percentage of this compensation in the form of DSU, which will be bought back in cash by the Corporation on the date the external director ceases to be a director of the Corporation by reason of death, retirement or loss of function as director.

When a director elects to participate in this plan, the Corporation credits the account of the director for a number of units equal to the deferred compensation divided by the market value of the subordinate voting shares, which is established using the average closing price during the five (5) trading days preceding the date of grant. DSU are not convertible into shares of the Corporation and do not result in a dilution to shareholders.

In addition, and independently to DSU that can be granted to external directors for the purposes of deferring their directors’ compensation, the DSU plan also allows the Corporation’s Board of Directors to award, at its discretion, DSU to any external director, executive officer and key employee. If it sees fit, the Board of Directors can attach conditions related to time and/or to the Corporation’s performance to the vesting of these DSU.

When the Corporation pays dividends on subordinate and multiple voting shares, the accounts of the Directors, Executive Officers and key employees (see Section 15.1 b) below) are credited for the amount in the form of additional units using the same basis of calculation previously described.

The DSU are re-evaluated at fair value at the end of each reporting period until the vesting date, using the market price of the Corporation’s subordinate voting shares.

During the three-month period ended April 30, 2021, DSU compensation to External Directors recorded in the Consolidated Statement of Income amounted to a non material expense (a recovery of $0.2 million for the three-month period ended April 30, 2020), including the impact of the change in the market price of the Corporation’s share, which amounted to an immaterial amount for the three-month period ended April 30, 2021 (a recovery of $0.2 million for the three-month periods ended April 30, 2020).

The fluctuation in DSU for External Directors was as follows:

ended April 30, 2021 (a recovery of $0.2 million for the three-month periods ended April 30, The fluctuation in DSU for External Directors was as follows:	2020).
Three-Month Periods Ended April 30,	2021	2020
(In number of deferred share units) Outstanding, at the beginning of period Granted	Number 619,521 4,013	Number 464,467 5,489
Outstandingand vested,at the end ofperiod	623,534	469,956

The carrying amount and the intrinsic value of the liabilities related to the External Directors vested DSU amounted to $1.0 million as at April 30, 2021 and as at January 31, 2021.

b) Executive Officers and Key Employees

As set forth in the DSU Plan, the Corporation may grant DSU, on a discretionary basis, Executive Officers and key employees. These DSU usually vest gradually over a 2 to 5-year period, at a rate of 20% to 50% per year. The vested DSU will be bought back in cash by the Corporation on the date its holder ceases to be an officer or employee of the Corporation by reason of death, retirement or loss of function as officer or employee.

The DSU are progressively expensed as incurred over the vesting period and their costs is determined using a valuation model based on the market price of the Corporation’s subordinate voting shares.

During the three-month period ended April 30, 2021, the DSU compensation for executive officers and key employees amounted to an immaterial expense (a recovery of $0.1 million during the three-month period ended April 30, 2020), including the impact of the change in the market price of the Corporation’s share, which amounted to an immaterial amount for the three-month period ended April 30, 2021 (a recovery of $0.1 million for the three-month periods ended April 30, 2020).

The fluctuation in DSU for the Executive Officers and key employees was as follows:

ecovery of $0.1 million for the three-month periods ended April 30, 2020). The fluctuation in DSU for the Executive Officers and key employees was as follows:
Three-Month Periods Ended April 30,	2021	2020
(In number of deferred share units) Outstanding, at the beginning of period Granted	Number 293,460 1,306	Number 198,208 1,939
Outstanding,at the end ofperiod	294,766	200,147
Vested, at the end ofperiod	175,431	165,989

1[st] Quarter Ended: April 30, 2021 Management’s Discussion and Analysis of the Financial Situation and Operating Results Page: 10 of 13

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The carrying amount of the liabilities related to Executive Officers and key employees’ DSU, amounting to $0.4 million as at April 30, 2021 and as at January 31, 2021, and of which $0.3 million correspond to the intrinsic value of vested DSU as at April 30, 2021 and as at January 31, 2021.

15.2. Performance Share Units Plan (PSU)

As part of its long-term compensation plan, the Corporation may issue PSU to its Executive Officers and key employees. PSU are not convertible into shares of the Corporation and do not result in dilution for shareholders. The acquired PSU are only redeemable in cash by the Corporation upon the expiration of three (3) years after their grant (the "PSU Settlement Date"), subject to the achievement of financial targets. PSU tranches whose vesting conditions have not been met on the applicable vesting date are canceled, without compensation.

PSU also entitle holders to receive additional units each time dividends are paid on the Corporation’s subordinate voting shares.

Compensation expense is recognized in the Consolidated Statement of Income over the vesting period and the counterpart is recognized in current liabilities in the Consolidated Statement of Financial Position. Changes in fair value between the grant date and the valuation date result in a change in liability and compensation expense.

The fair value of a PSU at any given date (for example, its grant date, vest date or PSU settlement date, etc.) is equal to the market value of the subordinate voting shares of the Corporation on that date, calculated using the average closing price subordinate voting shares of the Corporation on the Toronto Stock Exchange during the five (5) trading days immediately preceding that date.

During the three-month period ended April 30,2021, PSU compensation for Executive Officers and key employees amounted to an immaterial expense (no amount for the three-month period ended Aril 30, 2020) including the impact of the variation in the Corporation's share price, which amounted to an immaterial amount during the three-month period ended April 30,2021.

Fluctuations in PSU for Executive Officers and key employees were as follows:

amounted to an immaterial amount during the three-month period ended April 30,2021. Fluctuations in PSU for Executive Officers and key employees were as follows:
Three-Month Periods Ended April 30,	2021	2020
(In number of performance share units) Outstanding, at the beginning of period Granted	Number 346,248 822	Number — —
Outstanding,at the end ofperiod	347,070	—
Vested, at the end ofperiod	127,770	—

As at April 30, 2021 and January 31, 2021, the carrying amount of the liabilities related the Executive Officers and key employees’ PSU, amounted to $0.5 million, including an amount of $0.2 million, which corresponds to the intrinsic value of the vested PSU as at April 30, 2021 and as at January 31, 2021.

16. DIVIDEND

On April 7, 2021, the Corporation’s Board of Directors approved the payment of a semi-annual dividend of $0.01 per share that was paid on May 17, 2021, to shareholders of record as at April 30, 2021.

17. ORDER BACKLOG

ADF Group’s order backlog totalled $394.9 million on April 30, 2021, compared with $343.3 million on the same date a year earlier and $436.2 million on January 31, 2021. This variation is attributable to the execution of contracts net of newly signed contracts and contractual changes.

As at April 30, 2021, 34% of the order backlog consisted of fabrication hours – the Corporation’s core business and most value-added activity – identical percentage as at January 31, 2021. Most of the contracts on hand as at April 30, 2021, will be progressively executed between now and the end of the fiscal year ending January 31, 2023.

18. FINANCIAL POSITION

As at April 30, 2021, the Corporation had a sound financial position. The Corporation’s solid Consolidated Statement of Financial Position allowed it to obtain, when required, the necessary bonding for the award of large-scale contracts. This represents a major advantage for ADF within its markets.

The following table provides details on the major changes in the Consolidated Statement of Financial Position between January 31, 2021 and April 30, 2021.

1[st] Quarter Ended: April 30, 2021 Page: 11 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

1. EXTERNAL FACTORS TO WHICH THE CORPORATION’S PERFORMANCE IS EXPOSED

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Sections	Changes	Explanatory Notes
Cash and cash equivalents	(In millions of dollars) 6.4	See Section 12 "Cash Flow and Financial Position" hereinabove.
Accounts receivable	(2.4)	Decrease in billing, in line with the activity level and progress schedules.
Holdbacks on contracts	(1.7)	In accordance with the activity level and the billing schedule for contracts on hand.
Contract assets, net of contract liabilities	(1.6)	Net difference between work progress and progressive revenue billing. The decrease reflects the level of activity during the period.
Inventories	4.3	According to the level of activities and fabrication schedules of recently signed contracts.
Property, plant and equipment, intangible assets and right-of-use assets	(2.3)	Change coming from acquisitions ($0.4 million), net of amortization ($1.2 million) and the impact from the foreign exchange rate ($1.5 million)
Accounts payable and other current liabilities	4.9	In line with the activity level at April 30, 2021.
Long-term debt and lease liabilities (including current portions)	(0.8)	Change resulting from reimbursements of long-term debt ($0.5 million) and lease liabilities ($0.2 million), and the foreign exchange rate impact ($0.1 million).
Accumulated other comprehensive income	(1.4)	Variation mostly caused by the impact of the variation in the foreign exchange rates on the translation of foreign operations.

19.

CURRENT ECONOMIC ENVIRONMENT

Although the trends are improving in certain markets served by the Corporation, a degree of uncertainty remains regarding the economic context. In times of economic uncertainty, the Corporation is faced with the following challenges:

• Its business segment is strongly dependent on project owners’ capacity to finance their projects. For lack of financing, certain projects can be delayed or simply abandoned. Although the Corporation strives to mitigate this risk by focusing its marketing efforts on projects whose financing is most likely to materialize, it has no control over financial market trends, and

• Certain project owners who secured financing on the start-up of projects could be forced to cease the work pursuant to the withdrawal of financing, due to a lack of capital of either the project lender or the owner. The Corporation mitigates this risk by ensuring that amounts due are diligently collected and, insofar as possible, maintaining at all times a positive cash flow for every project. Moreover, the Corporation does business with owners who are financially solid. At the date hereof, no project of the Corporation is subject to such constraints.

From a financing point of view, the Corporation has a sound financial position and currently respects all its financial covenants. It expects it will continue to do so during the next 12 months. Capital expenditures are subject to very close monitoring by Management. The Corporation does not anticipate any liquidity problems, in particular since its principal credit facility is issued by a Canadian chartered bank with a solid credit rating, and the Corporation’s major clients are leaders in their respective fields. Based on the foregoing, the Corporation maintains its short-term prospects (see Section 25 "Outlook") and does not currently foresee any short-term elements that could compromise its course of business.

That being said, and in light of the fact that the Corporation does not enjoy all the visibility from which it normally benefits in its markets, the Corporation will continue to use caution and will closely monitor the situation (see Sections 7 "COVID-19", 20 "External Factors to Which the Corporation’s Performance is Exposed" and 25 "Outlook").

20.1. Global Pandemic

A pandemic outbreak, as COVID-19 demonstrates, must now be considered in external factors that may influence ADF’s performance. Although the type of pandemic or future variant is innumerable, and the impacts of these pandemics on the sector in which our Corporation operates can be multiple, the Corporation will now have to monitor this new risk. The measures taken by ADF to minimize the impacts of COVID-19 on all operations will serve as the basis for future years and will need to be adjusted, if necessary, according to the potential impacts of future pandemics.

20.2. Exchange Rate

The exchange rate fluctuation between the Canadian and U.S. dollars has an impact on the Corporation’s results. Thus, a $0.1 million foreign exchange loss was recorded during the three-month period ended April 30, 2021, compared with foreign exchange loss of $1.8 million for the three-month period ended April 30, 2020.

1[st] Quarter Ended: April 30, 2021 Page: 12 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

1. CONTROLS AND PROCEDURES

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In order to minimize the impact of exchange rate fluctuations on its results, the Corporation implemented the following protective measures:

• Issuance of new debts in U.S. dollars;

• When advantageous, the raw material (steel) and welding products required for fabrication are purchased in U.S. dollars, and

• A foreign exchange policy to protect a portion of the net risk between the U.S-denominated cash inflows and outflows.

20.3. Risks and Uncertainties Related to the Corporation’s Operations

ADF’s markets are subject to several risk and uncertainty factors, which could have an impact on its business, financial position and operating results. These risks and uncertainties include, but are not limited to the following factors, which are further detailed in the Section 24 "External Factors to Which the Corporation’s Performance is Exposed" in the MD&A for the fiscal year ended January 31, 2021:

• Uncertainties relating to the world economy;

• Bonding capacity and irrevocable letters of credit, and

• Operational risks and uncertainties that could have an impact on the Corporation’s financial position and operating results.

21. FINANCIAL INSTRUMENTS

A significant number of items in the Corporation’s Consolidated Statement of Financial Position include financial instruments. The Corporation’s financial assets consist of cash, cash equivalents, accounts receivable, holdbacks on contracts, contract assets, as well as derivative financial instruments, whose fair market value is positive. Financial liabilities include credit facilities, accounts payable and other current liabilities, contract liabilities, long-term debt and derivative financial instruments, whose fair market value is negative.

As at April 30, 2021, the carrying amount of these financial instruments did not significantly differ from the fair market value, either because of their forthcoming maturity date (in the case of cash, cash equivalents, accounts receivable, holdbacks on contracts, contract assets and liabilities, credit facilities, and accounts payable and other current liabilities), or because the Corporation believed it could obtain similar conditions and schedules (in the case of the long-term debt) or since they are re-evaluated at their fair value at the end of every period (in the case of derivative financial instruments) (see Note 8 "Financial Instruments" in the Unaudited Interim Condensed Consolidated Financial Statements for the ThreeMonth Period Ended April 30, 2021).

Derivative financial instruments are typically used to manage the Corporation’s foreign exchange and interest rate risk exposure. They are generally comprised of foreign exchange forward contracts.

The Corporation is mostly exposed to credit, liquidity and market risks, including exchange rate and interest rate risks, when using financial instruments. A description of how the Corporation manages these risks is included in Note 27 "Financial Risk Management" in the Corporation’s Audited Consolidated Financial Statements for the Fiscal Year Ended January 31, 2021, and has remained unchanged for the interim period ended April 30, 2021.

In accordance with National Instrument 52-109, Certification of Disclosure in Issuers’ Annual and Interim Filings, disclosure controls and procedures have been designed to provide reasonable assurance that the information that must be presented in the Corporation’s interim and annual reports is accumulated and communicated to management on a timely basis, including the Chief Executive Officer and the Chief Financial Officer, so that appropriate decisions can be made regarding disclosure. Internal control over financial reporting has also been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS.

During the three-month period ended April 30, 2021, no changes were made to the internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls and procedures.

23.

SIGNIFICANT ACCOUNTING POLICIES, ESTIMATION UNCERTAINTY AND CRITICAL ACCOUNTING JUDGEMENTS

The unaudited interim condensed consolidated financial statements have been prepared using the same accounting policies as the ones used in the preparation of the Corporation’s audited consolidated financial statements for the fiscal year ended January 31, 2021.

Refer the Corporation’s audited consolidated financial statements for the fiscal year ended January 31, 2021, and the unaudited interim condensed consolidated financial statements for the quarter ended April 30, 2021, for more information about the significant accounting policies, estimation uncertainty, as well as the critical accounting judgements used to prepare the financial statements.

24. HUMAN RESOURCES

As at April 30, 2021, the Corporation employed a total of 600 people across its head office, fabrication complex and paint shop in Terrebonne, Quebec, and its office, fabrication plant and paint shop in Great Falls, Montana, U.S.A., and as well as the various construction sites in United States.

25. OUTLOOK

Excluding a slight decrease in the last quarter of the fiscal year ended January 31, 2021, the Corporation revenues continued to increase, exceeding $50 million for the three-months ended April 30, 2021. In the same quarter, ADF received COVID-19-related grants from the Canadian government totaling $1.9 million, increasing the gross margin by $1.6 million, representing 3.2% of revenues.

1[st] Quarter Ended: April 30, 2021 Page: 13 of 13

Management’s Discussion and Analysis of the Financial Situation and Operating Results

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Standing at 12.2%, adjusted gross margin is still up from the margin recorded during the first quarter ended April 30, 2020, but is down from last quarter’s margins. This pressure on margins, which was announced in our MD&A Report for the year ended January 31, 2021, is temporary and is attributable to the fabrication start of recently signed projects with lower selling prices, in line with the type of structure of these same projects. Given the upcoming fabrication mix in the coming quarters, the Corporation now expects margins to stabilize, and even show an upward trend for the coming quarters.

The number of projects currently under negotiation continues to be very attractive and allows Senior Management to see the continued growth of its order backlog, which will continue to put some pressure on ADF's liquidities. However, we are in a good financial position to absorb this pressure and continue to grow revenues and generate liquidities in an orderly manner.

26. ADDITIONAL INFORMATION

The Corporation regularly discloses information through press releases, quarterly and annual reports and the Annual Information Form, available on the Corporation’s website at www.adfgroup.com and the SEDAR (System for Electronic Document Analysis and Retrieval) website at www.SEDAR.com.

Mr. Jean-Francois Boursier , CPA, CA

Ms. Marise Paschini

/ Signed /

Chief Financial Officer

/ Signed /

Executive Vice-President, Treasurer and Corporate secretary

Terrebonne, Quebec, Canada, June 8, 2021

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The electronic version of this document is also available ADF GROUP INC. at www.adfgroup.com and at www.sedar.com. 300 Henry-Bessemer Terrebonne, Quebec, Canada J6Y 1T3 Ce document est aussi disponible en français. T. (450) 965-1911 / 1 800) 263-7560 infos@adfgroup.com / www.adfgroup.com Toronto Stock Exchange: TSX: DRX*