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ANNUAL REPORT 2022

BOARD OF DIRECTORS

YVES DES GROSEILLERS Chairman of the Board

MARIE-BERTHE DES GROSEILLERS

President and Chief Executive Officer of the Company

ANDRÉ BÉRARD/*

Lead Director of the Company and Director of companies

GENERAL INFORMATION

AUDITORS

PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l.

CORPORATE SECRETARY

Michèle Des Groseillers [email protected]

LEGAL ADVISORS

Fasken Martineau DuMoulin LLP ("Fasken")

Davis Ward Phillips & Vineberg LLP (''Davies'')

LUCIEN BOUCHARD/*

Partner

Davies Ward Phillips & Vineberg LLP (Law firm)

CHARLES DES GROSEILLERS

Director

ANNE-MARIE LECLAIR**

Partner and Vice President LG2 (Advertising agency)

BANKERS

National Bank of Canada and Desjardins

REGISTRAR AND TRANSFER AGENT

Computershare Investor Services Inc. The Direct Registration System (DRS) allows your securities to be held in "book-entry" form without having a physical security certificate issued as evidence of ownership. Instead, your securities are held in your name and registered electronically in our records, which are maintained by our transfer agent Computershare. If you are a registered holder of units and wish to convert physical securites to DRS, go to: www.computershare.com/investorcentrecanada.

GABRIEL CASTIGLIO/**

Executive Vice President Chief Legal Officer and Corporate Secretary Fiera Capital (Investment management company)

STOCK LISTING

Common shares are listed on the Toronto Stock Exchange under the symbol GBT.TO and CUSIP number 05561N208.

ANNUAL SHAREHOLDER'S MEETING

TONY FIONDA/**

Senior Vice President Remcorp Inc. (Investment company)

The annual meeting of shareholders will be held on June 9th, 2022, at 3:00 p.m., at the offices of Fasken at 800 Victoria Square, 35th, floor in Montreal in the province of Quebec.

HEAD OFFICE

Member of the Audit Committee

8500 Place Marien Montréal-Est (Quebec) H1B 5W8

** Member of the Human Resources and Corporate Governance Committee

*** Member of the Investment Committee

Groupe BMTC Inc.

BMTC Group Inc. (the "Company"), is a Company incorporated in accordance with Article 140 of the Business Corporations Act (Quebec). Its Common Shares are listed on the Toronto Stock Exchange.

Through its subsidiaries, Ameublements Tanguay Inc., Le Corbusier-Concorde S.E.C. and its two divisions, Brault & Martineau and EconoMax, the Company manages and operates one of the largest furniture and household and electronic appliance retail sales networks in Quebec.

FINANCIAL HIGHLIGHTS

For the years ended January 31, 2022, 2021, 2020 and 2019

(in thousands of Canadian dollars, except per share data)

Operations	Jan. 31, 2022 $	Jan. 31, 2021 $	Jan. 31, 2020 $	Jan. 31, 2019
				$

Revenue Net earnings Financial position	819 445 81 931	649 056 54 842	720 169 36 034	742 474 45 165
Cash, bank overdraft and investments Total assets Equity Per-share information	237 326 549 926 387 866
		175 092	123 985	106 788

		450 207	382 040	367 624

		270 708	216 624	244 742


Net earnings Dividends Carrying amount Stock market value Year high Year low Number of shares outstanding Common shares	2,43 0,34 11,60 16,28 10,50 33 423 000
		1,61	1,05	1,29

		0,29	0,28	0,28

		7,99	6,35	7,09


		13,02	15,68	16,97
		5,69	9,89	12,58


		33 880 000	34 088 000	34 540 000

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MANAGEMENTS RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS AND THE OTHER FINANCIAL INFORMATION

The accompanying consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (IFRS), and the other financial information provided in the Annual Management Report, which is consistent with the consolidated financial statements, are the responsibility of management and have been approved by the Board of Directors.

The consolidated financial statements include some amounts that are based on management's best estimates and judgments and, in their opinion, present fairly, in all material respects, the Company's financial position, financial performance and changes in its cash flows.

The Company's procedures and internal control systems are designed to provide reasonable assurance that accounting records are reliable and to safeguard the Company's assets. The Audit Committee is responsible for reviewing the consolidated financial statements and Annual Management Report and recommending their approval to the Board of Directors. In order to fulfill its responsibilities, the Audit Committee meets with management and external auditors to discuss internal control over the financial reporting process, significant accounting policies, other financial matters and the results of the audit by the independent auditors.

These consolidated financial statements have been audited by the external auditors PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l., a firm of chartered professional accountants, and their report is included herein.

(s) Marie-Berthe Des Groseillers

Marie-Berthe Des Groseillers President and Chief Executive Officer April 25, 2022

Annual Management Report *

Caution regarding forward-looking statements

This Annual Management Report contains certain forward-looking statements with respect to the Company. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", expect", "intend", "may", "plan", "predict", "project", "will", "would", as well as the opposites of these terms and similar terminology, including references to assumptions.

Forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, which the Company has identified in the 2022 Annual Information Form under "Narrative Description of the Business - Risk Factors", and other risks detailed from time to time in the Company's continuous disclosure documents.

The reader is cautioned that the factors we refer to above are not exhaustive of the factors that may affect any of the Company's forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to put undue reliance on forward-looking statements.

The Company made a number of assumptions in making forward-looking statements in this Annual Management Report. The Company considers the assumptions on which these forward-looking statements are based to be reasonable.

These statements reflect current expectations regarding future events and operating performance and speak only as of the date of release of this Annual Management Report, and represent the Company's expectations as of that date. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.

Non-International Financial Reporting Standards (IFRS) financial measures

The Company discloses adjusted net earnings, which includes or excludes certain amounts that are not considered representative of the performance measures and financial recurrence of the Company. Management believes that this measure is useful in understanding and analyzing the operational performance of the Company and that it can provide additional information.

Adjusted net earnings as well as same-store revenues are not an earnings measure recognized by IFRS and do not have a standardized meanings prescribed by IFRS. Therefore, adjusted net earnings and same-store revenues as discussed in this Annual Management Report may not be compared to similar measures presented by other issuers. These measures of performance should not be considered as alternatives to indicators of performance calculated according to IFRS, but rather as a source of additional information.

The Company discloses in this Annual Management Report under the section "Results" a reconciliation between net earnings and adjusted net earnings.

* The financial information, unless otherwise indicated, is in Canadian dollars and has been prepared in accordance with the International Financial Reporting Standards (IFRS).

Results

For the year ended January 31, 2022, the Company's revenues increased by $170,389,000 to $819,445,000 compared to $649,056,000 recorded for the year ended January 31, 2021, a 26.3% increase. Net earnings for the year ended January 31, 2022 amounted to $81,931,000 compared to $54,842,000 recorded for the year ended January 31, 2021. Basic net earnings per share amounted to $2.43 compared to $1.61 recorded for the year ended January 31, 2021.

For the year ended January 31, 2022, the share repurchase program contributed to an increase in basic earnings of $0.02 per share, whereas during the year ended January 31, 2021, it contributed to an increase of $0.01 on basic net earnings per share.

The Company met the eligibility criteria for the Canadian Emergency Wage Subsidy (CEWS) during the quarter ended April 30, 2021. The Company received $1,441,000 after-tax which contributed to an increase of $0.04 on basic net earnings per share compared to $5,759,000 $ after-tax for the year ended January 31, 2021 which contributed to an increase of $0.17 on basic net earnings per share.

The Company has chosen to provide readers in this annual management report the results for the years ended January 31, 2020, and 2019 in addition to those of January 31, 2021. Management believes that the results for the year ended January 31, 2021 are not representative of the normal course results of the company. The impact of COVID-19 on the year ended January 31, 2021, makes it difficult to compare and analyze the results.

The variation in adjusted net earnings would be $31,407,000 or $0.93 per basic share for the year ended January 31, 2022, as well as the comparable years ended of January 31, 2021, 2020 and 2019 are explained as follows:

($ in thousands)

		($ in	thousands)
Net earnins	Jan. 31, 2022 81 931	Jan. 31, 2021 54 842	Jan. 31, 2020 Jan. 31, 2019 36 034 45 165
g Gain on disposal of fixed assets (after-tax) Variation in cost of options (after-tax) CEWS (after-tax) Adjusted net earnings Minus: Adjusted net earnings for the previous period	- - (1 441)	- - (5759)	(1 048) (4 522) (87) (226) - - 34 899 40 417 40417 49 513
	80 490 49 083	49 083 34899

Variation	31 407	14 184	(5 518) (9 096)

The variations in net adjusted earnings is allocated throughout the quarters as follows for the years ended January 31, 2022, 2021, 2020 and 2019:

($ in thousands)

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Increase
Increase Increase (decrease)
(decrease) (decrease) in adjusted
in retail operations in investment net earnings
As at April 30, 2021 5 733 15 929 21 662
As at July 31, 2021 7 524 1 580 9 104
As at Oct 31, 2021 340 2 724 3 064
As at Jan. 31, 2022 1 419 (3 842) (2 423)
Total 15 016 16 391 31 407
As at April 30, 2020 784 (9 695) (8 911)
As at July 31, 2020 1 707 4 416 6 123
As at Oct 31, 2020 7 897 (1 616) 6 281
As at Jan. 31, 2021 4 905 5 786 10 691
Total 15 293 (1 109) 14 184
As at April 30, 2019 (5 586) 1 924 (3 662)
As at July 31, 2019 (1 681) (1 772) (3 453)
As at Oct 31, 2019 (3 249) 2 333 (916)
As at Jan. 31, 2020 230 2 283 2 513
Total (10 286) 4 768 (5 518)
As at April 30, 2018 1 934 (1 815) 119
As at July 31, 2018 1 870 1 095 2 965
As at Oct 31, 2018 (6 242) 231 (6 011)
As at Jan. 31, 2019 (6 367) 198 (6 169)
Total (8 805) (291) (9 096)
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Annual financial information

($ in thousands, except for per share amounts)

January 31, 2022 January 31, 2021 January 31, 2020 January 31, 2019

Revenue Net earnings Total assets Net earnings per share basic and diluted	$ $ $ $
	819 445 649 056 720 169 742 474 81 931 54 842 36 034 45 165 549 926 450 207 382 040 367 624 2,43 1,61 1,05 1,29
Dividends per share	0,34 0,29 0,28 0,28

Financial position and dividends

Cash, net of the bank overdraft, and investments increased by $62,234,000 during the year ended January 31, 2022. Investments consist of treasuries bearing interest, government and corporate bonds and common shares, which at the close of the year had a market value of $237,326,000 (including cash net of bank overdraft).

As at January 31, 2022, the working capital showed a deficit of $369,000, a decrease of $34,237,000 compared to the year ended January 31, 2021. The Company's shareholders' equity increased from $270,708,000 as at January 31, 2021, to $387,866,000 as at January 31, 2022. As at January 31, 2022, the book value per share stood at $11.60, compared to $7.99 as at January 31, 2021.

Pursuant to the normal course issuer-bid put in place on April 15, 2020, and renewed on April 15, 2021, accordingly, 457,000 common shares were repurchased and cancelled by the Company. As a result of this change, the Company had as at January 31, 2022, 33,423,000 common shares issued and outstanding.

During the year ended January 31, 2022, no options were granted. The Company may still grant pursuant to the Plan a total of 5,710,864 options, representing 17.09% of the issued and outstanding shares of the Company.

During the fiscal year ended January 31, 2022, the Company paid eligible dividends totalling $0.34 per common share to holders.

Company pension plans and treatment of future actuarial gains and losses

As at January 31, 2022, the Company established the accounting cost of pension benefits according to IFRS.

The accounting cost of pension benefits earned by employees is determined by actuarial calculations based on management's best estimate assumptions.

In accordance with IFRS, a discount rate of 3.50% for the supplementary pension plan (SPP) and 3.45% for the additional supplemental pension plan (APP) was used as at January 31, 2022, whereas a discount rate of 2.80% and 2.65% was used respectively as at January 31, 2021. The discount rates must reflect the rate of return of high-quality corporate bonds, which cash flows match those of the pension plans.

According to IFRS, the plans presented a surplus of $41,767,100 as at January 31, 2022. As at January 31, 2021, the deficit was $27,719,000. The financial position of the pension plans has improved over the last year. This change is mainly due to the decrease of the present value of obligations arising from the increase in the discount rates.

For the period between February 1, 2021 and January 31, 2022, the pension expense (including the defined contribution component) amounted to $8,482,000 while contributions made by the Company for all plans combined amounted to $5,289,300, of which the totality was for current service (compared to a pension expense of $8,394,000 for the period ended January 31, 2021).

The current IFRS result in a relatively predictable pension expense. For the year ending January 31, 2023, the pension expense is estimated to be between $4,800,000 and $5,800,000.

An actuarial valuation for funding purposes of the SPP as at December 31, 2018, revealed a surplus on a going-concern basis of $54,200,000 and a deficit on a solvency basis of $5,600,000. The Company has no special payments to make, since there is a surplus on a going-concern basis and the stabilization provision is fully funded. The next actuarial valuation for funding purposes, will be completed as at December 31, 2021.

As at January 1, 2016, the SPP was modified in a way that any eligible employee hired after December 31, 2015 is solely entitled to defined contribution benefits.

Related party transactions

For the year ended January 31, 2022, the Company paid management fees of $1,705,000 (compared to $1,665,000 for the year ended January 31, 2021), to Gestion Maurice Tanguay, a corporation controlled by Mrs. Jacques Tanguay. The management contract ensures the management of the affairs of Ameublements Tanguay Inc., including the management of personnel, the supervision of purchases and ensuring the growth of revenues. The contract is renewed annually for a 12 month period unless notice to the contrary is given by either party to the agreement.

The Company is bound by leases expiring in December 2024, for which a lease liability of $1,636,000 is recorded as at January 31, 2022.

For the year ended January 31, 2022, depreciation of $528,000 relating to the right-of-use asset and a $79,000 interest expense were recognized in earnings in connection with these leases.

Lease liability

Payments due by period

Lease liability	Carrying Contractual amount cash flows Under 1year 2 - 5years After 5 years ($ in thousands)
	12 733 13 771 4 421 8 132 1 218

Accounting policies and accounting estimates

The accounting policies used in preparing the consolidated financial statements are described in Note 3 to the consolidated financial statements.

The main estimates discuss allowances on inventories and supplier rebates receivable. Inventory allowances are taken for obsolete and/or damaged products as well as for slow inventory turnover items. The allowances are based on many years of historic experience. As for supplier rebates, a reasonable estimate of accrued amounts receivable is determined based on existing agreements with the Company’s suppliers. Rebates for unsold merchandise are deducted from the value of the inventories at the date of the unaudited interim consolidated financial statements.

Financial instruments

The Company operates retail outlets in 30 locations across Quebec. A significant portion of the Company's sales are realized through the offering of financing solutions, by third-party credit providers, to the Company's customers. The cost of financing these sales is assumed by the Company, and is expensed, as the associated sales are realized. The Company assumes no credit risk in these transactions. The Company's working capital is composed primarily of accounts receivable, customer deposits, inventory and cash, while its short-term liabilities are towards suppliers of goods and services, as well as the debt relating to the stock option plan. The change in working capital reflects the associated fluctuations in all of the constituent accounts incurred during the normal course of the Company's activities. The Company has a positive cash position, which is invested in various financial instruments.

The Company records its investments at market value as indicated in Note 3 and Note 7 to the consolidated financial statements as at January 31, 2022. The Company has no hedges against its investments in US funds and assumes 100% of any fluctuations in the markets for these investments. Furthermore, the Company assumes the risks interest rate fluctuations have on its fixed-income investments, as well as the risks stock market fluctuations have on the value of investments in publicly traded companies.

The Company owns most of its stores and distribution centers, such that commitments regarding leasing contracts and lease liabilities are relatively insignificant with regard to its overall activities as detailed in Note 9 of the consolidated financial statements as of January 31, 2022. The Company holds no hedging contracts or any other type of derivative products.

Quarterly results

($ in thousands, except for per share amounts)

	April 30 April 30 April 30 April 30 2021 2020 2019 2018
Revenue Net (loss) earnings Net (loss) earnings per share Basic and diluted	177 208 100 445 150 310 162 754 10 479 (12 427) (3 455) 4 806 0,31 (0,36) (0,10) 0,13 July 31 July 31 July 31 July 31 2021 2020 2019 2018
Revenue Net earnings Net earnings per share Basic and diluted	231 624 175 973 215 067 220 368 28 683 19 579 13 480 16 933 0,85 0,57 0,39 0,48

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October 31 October 31 October 31 October 31
2021 2020 2019 2018
Revenue 213 955 194 352 183 312 184 718
Net earnings 20 189 20 775 10 649 11 613
Net earnings per share
Basic and diluted 0.67 0.61 0.31 0.34
January 31 January 31 January 31 January 31
2022 2021 2020 2019
Revenue 196 658 178 286 171 480 174 634
Net earnings 22 580 26 915 15 360 11 813
Net earnings per share
Basic and diluted 0.67 0.79 0.45 0.34
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For the three month period ended January 31, 2022, the Company's revenues increased by $18,372,000 to $196,658,000, compared to $178,286,000 recorded for the corresponding 2021 period, a 10.3% increase. Net earnings for the three month period ended January 31, 2022, amounted to $22,580,000 compared to $26,915,000 recorded for the corresponding 2021 period. Basic net earnings per share decreased to $0.67 compared to $0.79 for the corresponding 2021 period.

For the three month period ended January 31, 2022, the share repurchase program contributed to an increase in basic earnings of $0.01 per share where during the corresponding 2021 period, it had no impact on basic net earnings or losses per share.

The Company determined that it met the eligibility criteria and applied for the Canadian Emergency Wage Subsidy (CEWS) during the quarter ended January 31, 2021. The Company received $1,912,000 after-tax which contributed to an increase of $0.06 on basic net earnings per share.

The variation in adjusted net earnings would be ($2,423,000) or ($0.07) per basic share for the three month period ended January 31, 2022, as well as the comparable periods ended of 2021, 2020 and 2019 are explained as follows:

		($ in thousands)	($ in thousands)
Net earnings Gain on disposal of fixed assets (after-tax) Variation in cost of options (after-tax) CEWS (after-tax) Adjusted net earnings Variation Minus: Adjusted net earnings for the previous period	Jan. 31, 2022 22 580 - - -	Jan. 31, 2021 26 915 - - (1912)	Jan. 31, 2020 Jan. 31, 2019 15 360 11 813 (1 048) - - (14) - - 14 312 11 799 11 799 17968 2 513 (6 169)
	22 580 25 003	25 003 14312
	(2 423)	10 691

Operations

Brault & Martineau Division

The Brault & Martineau store, at 500 boulevard Le Corbusier in Laval, ceased its operations on December 5, 2021. As announced earlier this year, the company entered into a partnership agreement for the development of this property into several residential rental towers. The real estate development will begin in the year 2022.

Risk factors and market tendencies

The Company operates a furniture, electronic and household appliance retail business, and is therefore subject to many risk factors such as:

Sensitivity to general economic conditions
Reliance on key personnel
Investment portfolio risks
Third-party credit providers for financing solutions to clients
Labour relations with employees, some of whom are unionized
Maintaining profitability and managing growth
Highly competitive nature of the retail industry
Effectiveness of its marketing programs
Capacity to anticipate changes in fashion trends and consumer tastes
Retention of senior management

The Company is also dependent on its management information systems, its distribution operations, and its suppliers.

For a number of years, we have seen an increasing presence of strong competitors operating on a national and international level. Furthermore, the Company has witnessed a deflationary trend in many products that it sells, forcing it to innovate by bringing new products to market.

The majority of sales are realized using financing solutions offered by third-party credit providers. A significant increase in interest rates or a tightening of credit conditions could have a significant impact on the Company's sales. There are no guarantees the Company will be able to continue procuring such advantageous financing solutions for its customers, which in the past has permitted the Company to maintain its growth.

It is impossible to isolate and measure the importance of each individual risk to which the Company is exposed. In the past, the Company has managed to adapt to these changes and maintain its market share notably by aggressive marketing campaigns and efficient management.

Management discussion and outlook for the future of the Company

On March 11th, 2020, the World Health Organization declared COVID-19 a global pandemic. The financial impact of COVID-19 began to manifest itself by a decrease in store traffic and consequently store revenues in the early weeks of March 2020. Following the rapid rise of COVID-19 cases in the province of Quebec, our priority during this difficult period remains at all times the health and safety of our employees and clients. In order to protect the Quebec population and to prevent the spread of COVID-19 by encouraging social distancing initiatives recommended by both levels of government, the Company decided on March 18th, 2020, to temporarily close its retail sales network, namely our Ameublements Tanguay subsidiary in the Quebec City area and the Brault & Martineau and EconoMax banners in the Montreal area. On March 23rd, 2020, the Quebec government announced, for the same reason, the closure of all non-essential retail stores across the province.

In order to address the devastating effects of COVID-19 and to assure its short and long-term financial health, the Company decided to maintain its operations at a strict minimum level while preserving its presence in our market and controlling its working capital position. The following actions were undertaken by the Company during these last weeks in order to support its operating and working capital objectives:

• Following the closure of our retail sales network on March 18[th] , 2020, the Company temporarily laid off approximately 75% of its personnel, the vast majority stemming from our retail stores.

• The online and delivery services remained operational across Quebec to ensure the population in confinement the ability to rely on essential goods while respecting government-mandated security protocols. We modified our services to offer contactless home delivery.

• During this period, the Company introduced several measures and protocols in preparation for the reopening of our stores across our sales network to ensure and protect the health and security of our employees and our clients. These new measures and protocols will be in effect until the end of the COVID-19 pandemic.

• The Company has also made technological and operational improvements to its sales network. These modifications will allow us to reduce our fixed costs and will contribute to our initiatives of effective cost controls.

• The Company applied and was granted the Canadian Emergency Wage Subsidy from the Government of Canada (CEWS).

During the first quarter of 2020, the Company had all of its 32 points of sale closed for a period of 43 consecutive days, leaving only online sales operational. The loss of revenues arising from the store closures during this period amounted to $52,029,000. During the second quarter of 2020, the Company had 15 points of sale closed for a period of 25 consecutive days, leaving only online sales operational. The loss of revenues arising from the store closures during this period amounted to $25,465,000.

The Company has proactively aligned its cost structure in order to mitigate the loss of revenues incurred during the last fiscal year due to the store closures. The Company intends to maintain these measures throughout the fiscal year 2022, in order to protect the Company's viability and preserve its working capital during these highly uncertain times. Thanks to these new measures the Company believes it will be able to produce positive operating results.

The Company continues to focus on online sales, which experienced a record increase since the start of the pandemic, by actively pursuing the improvement of its digital platforms, its live chat initiative with online customers as well as the improvement of our telephone sales department for all of the BMTC Group Inc. banners.

It is also Management’s opinion that the digital platforms of our banners are essential in order to allow the Company to increase its market shares as well as to allow customers to start their shopping experience online to then complete their purchases in one of our stores with the help of our sales representatives.

The Company was able to increase significantly it's revenues during the year ended January 31, 2022 compared to results during the corresponding 2021 period as well as the corresponding 2020 and 2019 periods. In fact, the Company recorded one of the highest revenues in its history. This is partly due to improvements in marketing and strategic measures implemented, our extensive store network and the strength of digital platforms, which have enabled the Company to increase its market share in Quebec.

Since mid-June 2021, the Company has had issues with its supply logistics. Many of the Company's suppliers, who have also been affected by the consequences of COVID-19, are unable to honour and deliver placed orders. This problem seems widespread in our industry and is not unique to the Company.

On May 5, 2021, the Canadian federal government imposed important tariffs on upholstered furniture imported from Vietnam and China while not allowing any grace period either for orders in production or for products already in transit to Canada, which can take up 3 to 4 months to reach our ports.

Complaints about unfairly priced Chinese and Vietnamese-made products have been a long simmering issue in the furniture business. Although, when the Canadian federal government announced it was seeking to level the playing fields with tariffs, everyone in the industry was expecting tariffs in the range of 10 to 20 per cent, similar to what the U.S. recently implemented.

It is difficult to predict the future level of consumer spending, although it is quite possible that the Company's future results may not reflect the performance of the last two years. The high level of inflation combined with gas prices will have an impact on consumer spending. Also, management is aware that the increase in the last two years was partly due to the fact that the Company benefited from a transfer of consumer spending related to the restrictions imposed by the various levels of government due to COVID-19 pandemic, more precisely the restrictions related to travel, the closure of restaurants and all other forms of entertainment in the cultural and sporting world. Since these restrictions are no longer in place, we expect consumer spending could transfer back to these types of di

Management is confident that the Company's operational efficiency during this crisis, its market leadership and solid financial position will allow us to emerge a stronger organization despite these difficult market conditions and maintain its objectives increasing its market share and profitability in Quebec.

Disclosure controls and procedures (DCPs) and internal controls over financial reporting (ICRF)

The Company's management evaluated, as at January 31, 2022, the effectiveness of the design and operation of its DCPs and ICFR, as defined under National Instrument 52-109 - Certification of Disclosure in Issuers' Annual and Interim Filings. The evaluation was performed under the supervision of the Company's President and Chief Executive Officer (CEO) as well as the Chief Financial Officer (CFO). Based on such evaluation of ICFR, the President and CEO and CFO have concluded that the Company's DCPs and ICFR were effective as at January 31, 2022.

No changes were made in the Company's ICFR during the period beginning on November 1, 2021 and ended January 31, 2022, which have materially affected, or are reasonably likely to materially affect, the Company's ICFR.

Other information

This Annual Management Report for the year ended January 31, 2022 provides an analysis of the consolidated results of operations, financial position, and cash flows of the Company and its subsidiaries.

Additional information relating to the Company is available on the Company's website at www.bmtc.ca as well as on SEDAR at www.sedar.com.

This Annual Management Report is intended to assist in the understanding and assessment of significant changes and trends, as well as risks and uncertainties, related to the results of operations and financial position of the Company.

(s) Marie-Berthe Des Groseillers

Marie-Berthe Des Groseillers President and Chief Executive Officer April 25, 2022

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Independent auditor’s report

To the Shareholders of Groupe BMTC Inc.

Our opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Groupe BMTC Inc. and its subsidiaries (together, the Company) as at January 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS).

What we have audited

The Company’s consolidated financial statements comprise:

the consolidated statements of earnings and other comprehensive income for the years ended January 31, 2022 and 2021;
the consolidated statements of changes in shareholders’ equity for the years then ended;
the consolidated statements of cash flows for the years then ended;
the consolidated statements of financial position as at January 31, 2022 and 2021; and
the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l. 1250 René-Lévesque Boulevard West, Suite 2500, Montréal, Quebec, Canada H3B 4Y1 T: +1 514 205 5000, F: +1 514 876 1502

“PwC” refers to PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l., an Ontario limited liability partnership.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended January 31, 2022. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

Inventory valuation

Refer to note 3 – Summary of accounting policies to the consolidated financial statements.

The carrying amount of inventory in the consolidated financial statements of the Company amounted to $113.8 million as at January 31, 2022. Inventory is valued at the lower of cost and net realizable value. Cost is determined by the weighted average method. The cost of inventories comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. The net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. A high degree of judgment is used when estimating the effect of certain factors on the net realizable value of inventory, such as obsolescence and damages. We considered this a key audit matter due to the high degree of judgment used by management in estimating the effect of certain factors on the determination of the net realizable value of inventory. This has resulted in a high degree of subjectivity in performing audit procedures related to these judgments made by management.

How our audit addressed the key audit matter

Our approach to addressing the matter included the following procedures, among others:

Tested the mathematical accuracy of the weighted average cost calculation for a sample of inventory purchases.
Tested the acquisition cost of a sample of inventory by comparing it against purchase invoices.
Observed the inventory counting process for a sample of stores and warehouses, executed independent inventory counting tests and assessed if inventory selected for each test is damaged.
Tested how management determined the net realizable value of inventory, in particular:
Evaluated the appropriateness of the determination method of the net realizable value of inventory;
Tested the mathematical accuracy of the calculation of the net realizable value of inventory;
Tested the underlying data used in the calculation of the net realizable value of inventory; and
Evaluated the reasonableness of the factors used by management to determine the effect of obsolescence and damages on the net realizable value of inventory by taking into account the Company’s sales price history.

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Key audit matter	How our audit addressed the key audit matter	How our audit addressed the key audit matter
	●	Performed a retrospective analysis of the net
		realizable value of inventory determined at
		the end of the previous year, on a sampling
		basis, by comparing it to the actual realized
		price of the current year less costs necessary
		to make the sale.
	●	Compared the net realizable value of a
		sample of inventory as at January 31, 2022
		to the most recent unit selling price less costs
		necessary to make the sale.

Other information

Management is responsible for the other information. The other information comprises the Management’s Discussion and Analysis and the information, other than the consolidated financial statements and our auditor’s report thereon, included in the annual report.

Our opinion on the consolidated financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is Sonia Boisvert.

/s/PricewaterhouseCoopers LLP[1]

Montréal, Quebec April 25, 2022

1 FCPA auditor, FCA, public accountancy permit No. A116853

BMTC Group Inc.

Consolidated Statements of Earnings and Other Comprehensive Income For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

Revenue Cost of sales Gross profit Other (expenses) income Selling expenses Administrative expenses Operating earnings	Notes January 31, 2022 January 31,2021	Notes January 31, 2022 January 31,2021	Notes January 31, 2022 January 31,2021
	$ #### #### #### (1) 4 #### 4 #### ####	$ $ 819 445 ## (495 754) ## 323 691 ## (28) ## (199 522) ## (41383) ## 82 758 ##	$ 649 056 (387955)
			261 101 45 (156 451) (37858)
			66 837
Gains (losses) on disposals of property, plant
and equipment		132 #	38
		20 972 ## 3 996 ## 107 858 ## (25 927) ## 81 931 ## 72 673 (19 259) 53 414 # 135 345 ## 2,43 ##	2 791 3233
			72 899 (18 057)
			54 842
			15 267 (4 045)
			11 222
			66 064
			1,61

The accompanying notes are an integral part of the consolidated financial statements.

BMTC Group Inc. Consolidated Statements of Changes in Shareholders' Equity For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars)

Notes	Capital stock	Retained earnings	Total shareholders' equity
11 11 17	$ 2683 (36) - - (36) - - - 2 647	$ 268 025 - (6 716) (11 435) (18 151) 81 931 53 414 135 345 385 219	$ 270 708 (36) (6 716) (11 435)
			(18 187)
			81 931 53 414
			135 345
			387 866

Notes	Capital stock	Retained earnings	Total shareholders' equity
11 11 17	$ 2697 (14) - - (14) - - - 2 683	$ 213 927 - (2 119) (9 847) (11966) 54 842 11 222 66 064 268 025	$ 216 624 (14) (2 119) (9 847)
			(11980)

			54 842
			11 222
			66 064
			270 708

The accompanying notes are an integral part of the consolidated financial statements.

BMTC Group Inc. Consolidated Statements of Cash Flows For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars)

Notes January 31, 2022 January 31,2021	Notes January 31, 2022 January 31,2021	Notes January 31, 2022 January 31,2021
$ ## 6 ## 6 ## ## ## ## ## 8 ## 8 ## 4 ## 4 ## ## 11 ## ## 9 ## 17 ## ## ## ## ##	$ $ 107 858 ### (9 512) ### (9 478) - (26 642) - 62 226 ###	$ 72 899 7 443
		12 587
		(8 976)
		83 953
	(27 178) ### 7 716 ### (2 245) - 172 - 626 ### 3 370 ### (17539) ###	(104 730)
		60 113
		(21 754)
		153
		566
		2667
		(62985)
	(6 752) - (550) ### (3 773) -	(2 133) (707) (3 963) (9 847)
	(11 435) ###
	(22510) ###	(16 650)
	22 177 ### (3 194) ### 18 983 ###	4 318 (7512)
		(3 194)

The accompanying notes are an integral part of the consolidated financial statements.

BMTC Group Inc. Consolidated Statements of Financial Position

As at January 31, 2022 and 2021

(In thousands of Canadian dollars)

Notes	2022	2021
7 8 8 13 5 10 12 9 13 9 5 11	$ 18 983 5 334 113 818 1 023 139 158 218 343 1 749 148 915 41 761 - 410 768 549 926 - 130 843 4 007 4 677 139 527 - 8 726 13 807 22 533 162 060 2 647 385 219 387 866 549 926	$ 5 792 3 624 95 411 770
		105 597
		178 286 - 158 751 - 7 573
		344 610
		450 207
		8 986 119 986 3 718 7 513
		140 203
		27 719 11 577 -
		39 296
		179 499
		2 683 268 025
		270 708
		450 207

The accompanying notes are an integral part of the consolidated financial statements.

The consolidated financial statements for the year ended January 31, 2022 (including comparatives) were approved and authorized for publication by the Board of Directors on April 25, 2022. On behalf of the Board,

(s) Yves Des Groseillers (s) Marie-Berthe Des Groseillers Director Director

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

1. GOVERNING STATUTES AND NATURE OF OPERATIONS

BMTC Group Inc. (hereinafter "Company") is a company governed the Business Companies Act (Quebec) . Its registered office and principal place of business is located at 8500 Place Marien, Montréal East, Quebec, H1B 5W8. Its common shares are listed on the Toronto Stock Exchange. The Company, through its subsidiaries Ameublements Tanguay Inc., Le Corbusier-Concorde S.E.C. and its two divisions Brault & Martineau and EconoMax (collectively designated as the "Company"), manages and operates a retail network of furniture, household appliances and electronic products, in Quebec.

2. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRS

These consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as published by the International Accounting Standards Board (IASB).

The consolidate financial statements have been prepared on the historical cost basis, except for certain financial instruments and the liability relating to share-based payments, which are established at fair value, and post-employment benefit assets or liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets, less an adjustment to reflect application of the asset limit.

3. SUMMARY OF ACCOUNTING POLICIES

The accounting policies specified below have been applied consistently throughout all periods presented in the consolidated financial statements.

3.1 Basis of consolidation

The consolidated financial statements include the accounts of BMTC, and those of the wholly-owned subsidiaries Ameublements Tanguay Inc. and Le Corbusier-Concorde S.E.C. The accounting policies of the parent company, subsidiaries are consistent with those adopted by BMTC.

Asset and liability balances and revenues and expenses from transactions between group companies, including unrealized gains and losses on transactions between consolidated entities, are eliminated in preparing the consolidated financial statements.

3.2 Foreign currency translation

The consolidated statement of financial position is presented in Canadian dollars, which is also the functional currency of the Company.

Foreign currency transactions are translated into the Company’s functional currency, using the exchange rates prevailing at the dates of the transactions. Foreign currency monetary assets and liabilities are translated into the functional currency using the exchange rates in effect at the reporting date. Other foreign currency non-monetary financial assets that are measured at fair value are translated into the functional currency using the exchange rate in effect on the date of determination of fair value. Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items at the reporting date are recognized in earnings.

The realized and unrealized appreciation of other financial assets classified at fair value through profit or loss recognized directly in profit or loss includes the related exchange component.

Non-monetary items measured at historical cost are translated using the exchange rates at the date of the transaction.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

3.3 Segment reporting

In accordance with IFRS 8, Operating Segments , the Company presents and discloses information that is regularly reviewed by the President and the Board of Directors in assessing performance. The Company considers its retail activities as a single operating segment.

3.4 Revenue recognition

Revenue from merchandise sales is measured at the amount of the consideration for which the Company expects to receive in exchange for the merchandise and is presented in earnings net of estimated returns and rebates, and excluding sales taxes. Revenue is recognized when the control of the goods has been transferred to the customer, i.e. upon delivery.

Revenue from extended service contracts is recognized at the time of the sale at the net amount of costs incurred by the Company with the service suppliers, who will provide the services required by the Company's customers.

Investment income is recognized using the accrual basis of accounting, as follows:

Interest is recognized based on the number of days the investment was held during the year and is calculated using the effective interest method;
Dividends on listed share investments are recognized when the right to receive the payment is established.

3.5 Income taxes

Income tax expense comprises the sum of deferred tax and current tax. Income tax is recognized in earnings except to the extent it relates to items recognized in other comprehensive income or directly in shareholders' equity.

Current income tax assets or liabilities comprise those obligations to, or claims from, tax authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable income, which differs from earnings in the consolidated financial statements. The calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or of an asset or liability unless the related transaction is a business combination or affects tax or accounting income.

Deferred tax assets and liabilities are calculated, without discounting, based on tax rates and tax laws that have been enacted or substantively enacted at the end 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 is settled. Deferred tax assets are recognized to the extent that it is probable that they will be able to be utilized against future taxable income. Deferred tax liabilities are always provided for in full.

Deferred tax assets and liabilities are offset only when the Company has a right and intention to set off current tax assets and liabilities levied by the same taxation authority.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense, except where they relate to items that are recognized in other comprehensive income or directly in shareholders' equity, in which case the related deferred tax is also recognized in other comprehensive income or shareholders' equity, respectively.

3.6 Inventory

Inventory, which is composed almost exclusively of finished goods for retail sale, is valued at the lower of cost and net realizable value. Cost is determined by the weighted average method.

The cost of inventories comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. The net realizable value is estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.

3.7 Vendor rebates

Cash considerations received from vendors are a reduction of the price of the vendors’ products and are accounted for as a reduction of cost of sales and related inventory, respectively, in the Company’s consolidated statement of earnings and comprehensive income and consolidated statements of financial position.

Rebates are recognized when they are considered probable and can be reasonably estimated.

3.8 Property, plant and equipment

Property, plant and equipment are carried at acquisition cost less any accumulated depreciation and any accumulated impairment losses. Items of property, plant and equipment with different useful lives are depreciated separately. Depreciation commences when an item of property, plant and equipment is available for use using the straight-line method over the following periods, in order to depreciate its cost less the residual value over its estimated useful life.

		Periods
Land	Not depreciated
Parking lots		20 years
Buildings		2 to 50 years
Signs		5 years
Leasehold improvements		2 to 5 years
Automotive equipment		7 to 15 years
Computer equipment		2 to 5 years
Furniture and equipment		5 years
Leased property		1 to 10 years
Leased automotive equipment		5 years

The depreciation method, useful lives and residual values are reviewed annually.

3.9 Leases, lease liability and right-of-use asset

The company records a right-of-use asset and a lease liability on the date when a leased asset becomes available.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

Right-of-use asset is equal to the cost of the initial lease liability, rent payments paid on or before the commencement date, initial direct costs incurred and restoration costs, less any incentive received. The Company includes its right-of-use assets with its property, plant and equipment in Note 8.

The lease liability corresponds to the present value of lease payments discounted at the implicit interest rate in the lease or the Company incremental borrowing rate. The Company’s incremental borrowing rate is based on its credit rating, allowing it to obtain an asset of a similar value with similar security.

The Company has elected to apply the exemption provision relating to short-term leases and leases of lowvalue, and associated costs, such as maintenance and insurance, are expensed as incurred.

3.10 Impairment of property, plant and equipment

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at a cash-generating-unit level.

Individual assets or assets combined into cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

3.11 Shareholders' equity

Capital stock is the amount received on issuance and is presented net of the initial share issue income on redeemed shares.

Retained earnings include all current and prior period retained profits, net of share redemption premiums, dividends paid and the costs of share issuances.

Dividends payable to shareholders are included in other payables when they have been declared before the reporting date.

3.12 Share-based remuneration

The Company has a share-based remuneration plan for certain directors and officers. According to the plan, an option holder can choose, at any time at the holder’s sole discretion, to receive, from the Company, a cash payment equal to the number of shares for which the option is exercised, multiplied by the amount for which the market value of the share exceeds the exercise price, or to subscribe to a number of shares for which the option is exercised. The rights relating to the options are vested at the date of grant, and their maximum life is 10 years.

At the time of the award, these options are compound financial instruments; accordingly, the fair value is the total fair values of the debt and equity components. The Company first measures the fair value of the debt component and then the fair value of the equity component.

The Company recognizes the debt component, i.e. the stock appreciation rights, at fair value, determined using the Black-Scholes model, and the fair value is measured on each reporting date. A corresponding remuneration cost is recognized in net earnings under administrative expenses.

At the time of the award, the fair value of the equity component is measured at zero. Accordingly, the fair value of the compound financial instrument is the same as the fair value of the debt component.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

At the date of settlement, the Company must remeasure the liability to its fair value. If the Company issues equity instruments on settlement rather than paying cash, the liability is transferred directly to equity, as consideration for the equity instruments issued. If, on settlement, the Company pays in cash rather than by issuing equity instruments, that payment is applied to settle the liability in full.

3.13 Post-employment benefits

The Company provides post-employment benefits through defined benefit pension plans as well as defined contribution pension plans.

Contributions to the defined contribution plans are recognized as an expense in the period that relevant employee services are rendered.

The Company accrues its obligations under its defined benefit pension plans and the related costs, net of plan assets, as the services are rendered. The Company has adopted the following accounting policies:

The Company’s defined benefit plan obligations are measured individually, estimating the amount of future benefits earned by employees for services provided in the current and prior periods. The actuarial valuation of defined benefit obligations uses the projected unit credit method. This determination incorporates management's best estimate of future salary levels, retirement ages of employees, mortality rates and other actuarial assumptions.
The discount rate for defined benefit obligations is determined by reference to the market yield, at yearend, on high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability.
Remeasurements, which include actuarial gains and losses on benefit obligations, the return on plan assets in excess of interest income, the effect of the asset ceiling, and the impact of minimum funding requirements, are recognized in other comprehensive income and retained earnings immediately without any reclassification to net earnings.
The defined benefit plan amount presented in the consolidated statement of financial position is the difference between the present value of the defined benefit plan obligations and the fair value of the plan assets at the reporting date. The economic benefit available is calculated as the difference between the present value of the accounting value of the current service cost of the employer and the current services cost of the employer on a funded basis. This value cannot, however, be negative. When there is a defined benefit plan asset, the amount of the asset recognized cannot be greater than the present value of any future economic benefit available as a future plan reimbursement or decrease in future plan contributions. Any minimum funding requirements applicable to the Company’s plans are taken into account to calculate the present value of economic benefits.
An additional liability is recognized in the amount of the minimum funding requirement for defined benefit plans when the Company does not have an unconditional right to the surplus.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

3.14 Provisions and contingent liabilities

Provisions are recognized when present obligations as a result of a past event will probably lead to an outflow of economic resources from the Company and when amounts can be estimated reliably. The timing or amount of the outflow may still be uncertain. A present obligation arises from the presence of a legal or constructive commitment that has resulted from past events, for example, product warranties granted, legal disputes or onerous contracts.

Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable evidence available at the reporting date, including the risks and uncertainties associated with the present obligation.

All provisions are reviewed at each reporting date and are adjusted to reflect the current best estimate.

In those cases where the possible outflow of economic resources as a result of present obligations is considered improbable or remote, no liability is recognized.

3.15 Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument.

Financial assets and financial liabilities are measured initially at fair value plus transactions costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value.

Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognized when it is extinguished, discharged, cancelled or expires.

For the purpose of subsequent measurement, financial assets of the Company are classified into the following categories upon initial recognition:

Amortized cost;
Financial assets at fair value through profit or loss.

The following table summarizes the financial instrument classification and valuation methods.

Item	Classification method
Cash	Amortized cost
Trade and other receivables	Amortized cost
Other financial assets	Fair value through profit or loss
Bank overdraft	Amortized cost
Trade and other payables*	Amortized cost

Excluding employee benefits payable, which are not financial instruments.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

The category determines subsequent measurement and whether any resulting income and expense is recognized in net earnings or in other comprehensive income.

All financial assets except for those at fair value through profit or loss are tested for impairment at least at each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired.

All income and expenses relating to financial assets that are recognized in net earnings are presented within realized and unrealized gains on financial assets at fair value or finance income, except for any impairment of trade and other receivables which is presented within administrative expenses.

Financial assets at amortized cost

A financial asset must be measured at amortized cost if the two following conditions are met: the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The Company recognizes a loss allowance for expected credit losses on financial assets measured at amortized cost. The amount of expected credit losses is updated on each reporting date to take into account changes in credit risk since the initial recognition of the respective financial instrument.

The Company recognizes lifetime expected credit losses on the financial assets measured at amortized cost. Lifetime expected credit losses correspond to expected credit losses that result from all possible default events over the expected life of a financial instrument. The measurement of expected credit losses reflects reasonable and supportable information on past events, current conditions and forecasts of events and economic conditions and takes into account factors specific to receivables, general economic conditions and an assessment of the current and forecast direction of the conditions at the reporting date, including the time value of money, as applicable.

Financial assets at fair value through profit or loss

Investments presented as other financial assets have been classified at fair value through profit or loss because they are part of a portfolio included in management reports and are measured at fair value by management. Consequently, realized and unrealized gains and losses on these assets are recognized through profit or loss. Transaction costs related to held-for-trading financial assets are expensed as incurred.

Financial liabilities

Financial liabilities are subsequently measured at amortized cost using the effective interest method.

3.16 Government grants

Government grants are recognized when there is reasonable assurance that the eligibilty requirements are met and that the grant will be received. The Company recognizes grants, as a reduction of expenses, in the same period in wich the expenses are incurred unless the conditions for obtaining them are met after the expenses have been recognized. In these cases, the grant is recognized when it becomes receivable.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

3.17 Judgment, estimates and assumptions

The World Health Organization confirmed, on March 11, 2020, COVID-19 a global pandemic. It is difficult to predict the future level of consumer confidence and its possible impact on the Company's results. Faced with this uncertainty, the Company regularly review estimates, judgments and key assumptions made that could have a significant impact on its consolidated financial statements.

When preparing the consolidated financial statements, management undertakes a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results are likely to differ from the judgments, estimates and assumptions made by management, and will seldom equal the estimated results. Information about the significant judgments, estimates and assumptions that have the most significant effect on the recognition and measurement of assets, liabilities, income and expenses is provided below.

Inventory valuation

The Company uses a high degree of judgment when estimating the effect of certain factors on the net realizable value of inventory, such as obsolescence and damages. The quantity, age and condition of inventory is measured and evaluated regularly during the period.

Estimated returns and vendor rebates

In determining the probability and estimation of returns and vendor rebates receivable, the Company uses actual purchases during the period, the degree of achievement of sales forecasts and contractual terms and conditions.

Useful lives of property, plant and equipment

Management reviews the useful lives of property, plant and equipment at each reporting date based on the expected utility of the assets. Actual results may, however, vary due to technical obsolescence, particularly for software and IT equipment.

Fair value of financial instruments

Management uses valuation techniques in measuring the fair value of financial instruments, where active market quotes are not available, that is for banker’s acceptances and discount notes.

The carrying amounts of these instruments and a price sensitivity analysis of other financial instruments are presented in Note 16. In applying the valuation techniques, management makes maximum use of observable data, and uses estimates and assumptions that are, as far as possible, consistent with data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses the best information available. These estimates may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

Provisions and contingent liabilities

Judgment is required to determine whether a past event has led to a liability that should be recognized in the consolidated financial statements or presented as a contingent liability. Judgment and estimates are applied to quantify such liabilities and are based on a variety of factors, such as the nature of the claim or conflict, legal proceedings, the potential amount payable, the advice of legal counsel, prior experience and the likelihood of a loss. Refer to Note 14 for details on the carrying amount and other information on provisions and contingent liabilities.

Defined benefit pension plan cost and obligations

Management estimates the defined benefit obligations annually with the assistance of independent actuaries; however, the actual outcome may vary due to estimation uncertainties. The defined benefit obligations estimate is based on standard rates of inflation, mortality rates and the Company’s specific anticipation of future salary increases. Estimation uncertainties exist particularly with regard to the assumptions, which may vary significantly in future valuations of the Company's defined benefit obligations. Refer to Note 13 for details on the carrying amount and other information on defined benefit pension plan cost and obligations.

4. ADDITIONAL INFORMATION ON CONSOLIDATED STATEMENTS OF EARNINGS AND OTHER COMPREHENSIVE INCOME

4. *ADDITIONAL INFORMATION ON CONSOLIDATED STATEMENTS OF EARNINGS AND OTHER* *COMPREHENSIVE INCOME*	*LIDATED STATEMENTS OF EARNINGS AND OTHER*	*LIDATED STATEMENTS OF EARNINGS AND OTHER*	*LIDATED STATEMENTS OF EARNINGS AND OTHER*
Employee benefits expense $ $ $ $ Salaries 26 919 106 251 23 598 86 910 Defined benefit pension plans expenses(note 13) 2 926 6 960 3 426 7 152 Defined contribution pension plan expense(note 13) 361 1 522 300 1 242 Total employee benefits expense 30 206 114 733 27 324 95 304 January 31, 2022* January31,2021	January 31, 2022 January31,2021
	$	$ $ 106 251 23 598 6 960 3 426 1 522 300 114 733 27 324	$ 86 910 7 152 1 242
			95 304

* Salaries for the year ended January 31, 2022 include the Canada Emergency Wage Subsidy (CEWS) of $ 1,960 compared to $7,836 for the corresponding period of 2021.
Other elements of revenues and expenses Depreciation of property, plant and equipment Losses (gains) on disposals of financial assets Investment income On financial assets at fair value through profit or loss Interest Dividends On financial assets at amortized cost Interest	January 31, 2022 January31,2021
	$ $ $ $ 3 007 11 468 3 187 10 317 - (377) (170) (619) January 31, 2022 January31,2021
	$ 90 755 76 921	$ $ 326 116 3 370 632 300 59 3 996 807	$ 282 2 667 284
			3 233
			32

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

5. The income tax expense is detailed as follows: Total current tax expense (recovery) for the period Total deferred tax expense (recovery) INCOME TAXES*	January 31, 2022 January31,2021	January 31, 2022 January31,2021	January 31, 2022 January31,2021
	$ 7 035 851 7 886	$ $ 22 960 5 506 2 967 1 921 25 927 7 427	$ 16 741 1 316
			18 057

In 2022 and 2021, the deferred tax liability includes only the impact of changes in temporary differences.

The Company's effective income tax rate differs from the combined statutory income tax rate. This difference arises from the following items:

Income tax expense (recovery) for the period $ $ $ $ based on combined tax rate (federal and provincial) (of 26.50% in 2022 and 2021) 15 197 28 581 - 19 318 Non-taxable dividends (224) (436) - (375) Non-taxable capital gains (944) (2 791) - (370) Non-deductible expenses 49 69 - 37 Other 504 504 - (553) 14 582 25 927 - 18 057 January 31, 2022 January31,2021	January 31, 2022 January31,2021	January 31, 2022 January31,2021	January 31, 2022 January31,2021
		$ $ 28 581 - (436) - (2 791) - 69 - 504 - 25 927 -	$ 19 318 (375) (370) 37 (553)
			18 057

The income tax recovery (expense) related to other comprehensive income is as follows:

Current tax recovery (expense) Deferred tax recovery (expense)*	Janu	ary 31, 2022 $ (846) (18 413)	Ja	nuary31,2021
				$ (493) (3 552)
		(19 259)		(4 045)

In 2022 and 2021, the deferred tax liability includes only the impact of changes in temporary differences.

The tax effects of significant components of temporary differences that give rise to the Company's deferred tax assets are as follows:

Recognized amounts Net unrealized gain (loss) on other financial assets Liability (asset) defined benefit plans Property, plant and equipment	Balance as at February 1, 2021	Recognized in earnings	Recognized in other Balance as at comprehensive January 31, income 2022	Recognized in other Balance as at comprehensive January 31, income 2022
	$ (594) 7 395 772	$ (2 775) - (192) (2 967)	$ - (18 413) -	$ (3 369) (11 018) 580
	7 573		(18 413)	(13 807)

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

5. INCOME TAXES (Continued)

5. *INCOME TAXES (Continued)*
Recognized amounts Net unrealized gain (loss) on other financial assets Liability (asset) defined benefit plans Property, plant and equipment	Balance as at February 1, 2020	Recognized in earnings	Recognized in other comprehensive income	Balance as at January 31, 2021
	$ (390) 10 957 1 874	$ (204) (10) (1 102) (1 316)	$ - (3 552) -	$ (594) 7 395 772
	12 441		(3 552)	7 573

6. CASH FLOW ADJUSTMENTS AND CHANGES IN WORKING CAPITAL

Adjustments are detailed as follows:

January 31, 2022 January31,2021	January 31, 2022 January31,2021	January 31, 2022 January31,2021
$	$ $ 11 468 3 187 3 193 - (3 996) (807) (20 595) (9 121) (132) (4) 550 167 (9 512) (6 578)	$ 10 317 1 862 (3 233) (2 172) (38) 707
3 007 1 977 (921) (4 729) (4) 129 (541)
		7 443

The net change in working capital is detailed as follows:

Trade and other receivables Inventory Prepaid expenses Trade and other payables excluding accrued charges of construction in progress	January 31, 2022 January31,2021	January 31, 2022 January31,2021	January 31, 2022 January31,2021
	$ (1 500) (831) 1 354 (32 669) (33 646)	$ $ (1 710) - (18 407) - (253) - 10 892 - (9 478) -	$ 704 (12 176) 652 23 407
			12 587

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(In thousands of Canadian dollars, except per share data)

7. OTHER FINANCIAL ASSETS

At fair value through profit or loss Liquidities bearing interest from 0.30 % to 0.50 %, maturing no later than 2022 Government and corporate bonds Shares of Canadian companies Shares of U.S. companies Total at fair value through profit or loss Total other financial assets	January 31, 2022	January 31, 2022
	Fair value	Cost
	$ 68 074 27 627 55 503 67 139	$ 68 074 26 804 42 993 54 279
	218 343 218 343	192 150
		192 150

At fair value through profit or loss Liquidities bearing interest from 0.30% to 0.50%, maturing no later than 2021 Government and corporate bonds Shares of Canadian companies Shares of U.S. companies Total at fair value through profit or loss Total other financial assets		January31,2021	January31,2021
		Fair value	Cost
		$ 64 884 26 047 35 243 52 112	$ 64 884 25 142 34 267 48 742
		178 286	173 035
		178 286	173 035

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

8. PROPERTY, PLANT AND EQUIPMENT

Gross carrying amount Balance as at February 1, 2021 Additions Disposals Balance as at January 31, 2022 Depreciation and impairment Balance as at February 1, 2021 Disposals Depreciation Balance as at January 31, 2022 Carrying amount as at January 31, 2022 Gross carrying amount Balance as at February 1, 2020 Additions Disposals Balance as at January 31, 2021 Balance as at February 1, 2020 Disposals Depreciation Balance as at January 31, 2021 Carrying amount as at January 31, 2021	Parking lots Leasehold Automotive Computer Furniture and Leased Leased Land and buildings Signs mprovements equipment equipment equipment property automotive Total equipment
	$ $ $ $ $ $ $ $ $ $ 57 440 157 875 539 9 719 3 244 8 662 6 686 21 221 1 525 266 911 - 482 - - 898 393 437 1 211 - 3 421 (1 749) (5 642) - - (166) - - - - (7 557)
	55 691 152 715 539 9 719 3976 9 055 7 123 22 432 1 525 262 775
	- 73 826 436 9 583 2 293 7 991 5 709 7 697 625 108 160 - (5 642) - - (126) - - - - (5 768) - 6 678 25 45 335 322 323 3 400 340 11 468
	- 74 862 461 9 628 2 502 8 313 6 032 11 097 965 113 860
	55 691 77 853 78 91 1 474 742 1 091 11 335 560 148 915
	57 522 139 239 457 9 719 3 436 8 309 6 503 21 211 1 318 247 714 - 19 681 82 - 244 404 183 10 207 20 811 (82) (1 045) - - (436) (51) - - - (1 614)
	57 440 157 875 539 9 719 3 244 8 662 6 686 21 221 1 525 266 911
	- 69 742 410 9 537 2 442 7 563 5 358 3 989 301 99 342 - (1 045) - - (403) (51) - - - (1 499) - 5 129 26 46 254 479 351 3 708 324 10 317
	- 73 826 436 9 583 2 293 7 991 5 709 7 697 625 108 160
	57 440 84 049 103 136 951 671 977 13 524 900 158 751

Carrying amount as at January 31, 2022 includes capital assets for which an amount of $416 is included in accrued expenses. During the year ended January 31, 2022, the Company disposed of financial assets in the amount of $172, which resulted in a gain of $132. In addition, the Company transferred to other assets an amount of $1 749, following a change of usage of a piece of land.

Carrying amount as at January 31, 2021 includes capital assets for which an amount of $451 is included in accrued expenses. During the year ended January 31, 2021, the Company disposed of financial assets in the amount of $153, which resulted in a gain of $38.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021 (in thousands of Canadian dollars, except per share data)

9. LEASE LIABILITY

The Company is commited under long-term leases for stores, wharehouses and leased automotive equipment, for which a lease liability is recorded. The reconciliation of the lease liability is detailed as follows:

Opening balance Additions Interest Payments Closing balance	Jan.31, 2022	Jan.31,2021
		19 041 217 707 (4670)
	15 295

	1 211
	550
	(4 323)
		15 295
	12 733

The principal payments to be made are detailed as follows:

	Less than one year $	From 1 to 5 years $	More than 5 years Total $ $
January 31, 2022	4 007	7 555	1 171 12 733
January 31, 2021	3 718	9 789	1 788 15 295

The Company is commited under long-term leases, for which additional payments for taxes and maintenance, not taken into account in the lease liability obligation, are required. During the year ended January 31, 2022, a rental charge of $1,353 was recognized in earnings ($1,743 for the corresponding period of 2021) in connection with these additional payments.

For the year ended Januajry 31, 2022 and 2021, there were no low value or short-term contracts recorded in earnings.

==> picture [505 x 31] intentionally omitted <==

10. BANK BORROWINGS

The Company has an unsecured line of credit in the amount of $30,000, repayable on demand, bearing interest at the prime rate. The company is subject to certain restrictive covenants, for the year ended January 31, 2022, the company was not in default.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

11. CAPITAL STOCK

Authorized

Unlimited number of shares without par value First preferred shares, issuable in series.

Second preferred shares, issuable in series.

Issued and fully paid 33,423,000 common shares (33,880,000 as at January 31, 2021) Issued and fully paid Beginning of period Share redemption Issued and fully paid, end of period Shares authorized for the share option plan Total shares authorized	January 31, 2022	January 31,2021
	$ 2 647 January 31, 2022	$ 2 683
		January 31,2021
	33 880 000 (457 000) 33 423 000 5 710 864 39 133 864	34 088 000 (208 000)
		33 880 000 5710 864
		39 590 864

During the year ended January 31, 2022, the Company redeemed 457,000 common shares for a total cash consideration of $6,752. The redemption premium of $6,716 for the shares was recognized in retained earnings.

During the year ended January 31, 2021, the Company redeemed 208,000 common shares for a total cash consideration of $2,133. The redemption premium of $2,119 for the shares was recognized in retained earnings.

None of the parent's shares were held by any of the Company’s subsidiaries.

Share option plan

The Company has a share option plan for certain directors and employees, which provides for the purchase of common shares under certain circumstances up to a maximum number of 10,729,106 issuable common shares. As at January 31, 2022, a total of 5,710,864 common shares (5,710,864 common shares as at January 31, 2021) remained authorized for issuance under the Company’s share option plan.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

12. TRADE AND OTHER PAYABLES

The following table analyzes trade and other payables recognized in the consolidated statements of financial position:

financial position:
Trade accounts payable Accrued expenses Accrued expenses construction in progress Employee benefits Customer deposits	$ 30 846 19 226 451 12 562 56 901 119 986 72888 130 843 January 31, 2022 January 31,2021 $ 29 009 14 046 416 14 484

13. POST-EMPLOYMENT BENEFITS

Description of benefit plans

The Company has two funded pension plans, which provide most of its employees retirement benefits. The supplemental pension plan (SPP) contains a defined benefit component and a defined contribution component, while the additional supplemental pension plan (APP) is a defined benefit plan. The benefits under the defined benefit component of the SPP are based on the indexed average career salary, whereas the APP is based on final average salary.

There are no other benefit plans available to employees.

Since the SPP is registered with Retraite Québec, the governance of the pension plan falls to the Pension Committee (the Committee). The Committee may delegate some of its functions and, or use of experts, as needed, such as actuaries, custodians and trustees. The SPP is also registered with the Canada Revenue Agency (CRA).

The investment of the pension fund of the defined benefit component of the SPP and the selection and monitoring of investment performance has been delegated to the Company under the leadership of the Investment Committee, which is a sub-committee of the Board of Directors of the Company. The Company has a responsibility to establish and review the investment policy of the pension plan, where applicable, and monitor on a regular basis the performance of investment managers. The responsibilities of the Company with respect to the defined contribution component is limited to the selection of investment options offered and the monitoring of the performance of investment managers, as investment decisions fall within the responsibility of the participants. The Company uses experienced professionals to assist it in performing its functions and reports its observations and actions to the Investment Committee.

The APP is only registered with CRA. Governance of the APP falls to the Company. A refundable tax account is registered with CRA for a portion of the assets of the plan. The other portion is invested, and the responsibilities of the Company in this regard are similar to those outlined above for the SPP.

BMTC Group Inc. Notes to the Consolidated Financial Statements

For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

13. POST-EMPLOYMENT BENEFITS (Continued)

Defined benefit pension plans

The most recent actuarial valuations of the pension plans for funding purposes were performed as at December 31, 2018 (SPP) and as at December 31, 2021 (APP). The next valuations will be performed as at December 31, 2021 for the SPP and as at December 31, 2022 for the APP.

Obligations for defined benefit pension plans

Accrued benefit obligations: Balance, beginning of period Current service costs Employee contributions Interest cost Benefits paid Actuarial losses (gains) Losses (gains) due to changes in financial assumptions Experience losses (gains) Balance, end of period Breakdown of accrued benefit obligations: Active participants Retired participants Participants with deferred benefits Voluntary contributions Payables Total Fair value of plan assets: Balance, beginning of period Interest income Actual return on plan assets, excluding amounts in interest income Employer contributions Employees contributions Benefits paid Balance, end of period Plan assets for defined benefit pension plans	Jan.31, 2022 $ 326 508 6 064 974 9 101 (10 438) (42 197) 2871 292 883 Jan.31, 2022	Jan.31,2021
		$ 328 764 5 965 933 8 748 (8 865) (8 170) (867)
		326 508
		Jan.31,2021
	$ 208 301 63 182 21 016 345 39 292 883 Jan.31, 2022	$ 239 984 63 802 22 370 318 34
		326 508
		Jan.31,2021
	$ 298 789 8 205 33 347 3 767 974 (10 438) 334 644	$ 287 640 7 561 6 230 5 290 933 (8 865)
		298 789

BMTC Group Inc. Notes to the Consolidated Financial Statements

For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

13. POST-EMPLOYMENT BENEFITS (Continued)

Composition of plan assets

Composition of plan assets
Asset category: Equity instruments - Canadian shares - Foreign shares Fixed income instruments Other* CRA refundable tax account Total	% $ 37 123 998 25 84 456 14 47 403 17 57 740 7 21047 100 334 644 January 31, 2022	31janvier 2021
	% 37 25 14 17 7 100	% $ 33 98 349 22 67 136 27 81 705 10 29 241 8 22358 100 298 789

Other includes short-term investments and liquidity.

All assets were listed on an active market, with the exception of the refundable tax account with the CRA.

Reconciliation of the funding situation of pension plans to amounts recognized in the consolidated statements of financial position:

Fair value of plan assets Accrued benefit obligations Plan surplus (deficit) and assets (liabilities) recognized in the consolidated statement of financial position	Jan.31, 2022	Jan.31,2021
	$ 334 644 292 883 41 761	$ 298 789 326 508
		(27 719)

Pension expense recognized in consolidated net earnings:

Current service costs Net interest expense (income) Pension expense recognised in consolidated net earnings		Jan.31, 2022	Jan.31,2021
		$ 6 064 896 6 960	$ 5 965 1 187
			7 152

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

13. POST-EMPLOYMENT BENEFITS (Continued)

Amounts recognized in other comprehensive income:

Amounts recognized in other comprehensive income:
Actuarial losses (gains) Losses (gains) due to changes in financial assumptions Experience losses (gains) Return on plan assets (excluding amounts included in interest income Remeasurements of the net defined benefit liability (asset)	Jan.31, 2022	Jan.31,2021
	$ (42 197) 2 871 ) (33 347) (72 673)	$ (8 170) (867) (6230)
		(15 267)

Principal assumptions used to evaluate the benefit obligations are as follows:

Accrued benefit obligations Discount rate (SPP) Discount rate (APP) Escalation rate on credited annuity payments	Jan.31, 2022 Jan.31,2021
	3,50% 2.80% 3,45% 2.65% 2,00% 2.00%

The assumption regarding future mortality has been established using the CPM mortality tables, private sector, generationally projected using the B, as published by the Canadian Institute of Actuaries. This translates into an average life expectancy in years for a pensioner retiring at the age of 65 years:

Retirement at the end of the current year - Male - Female Retirement in 20 years after the end of the current year - Male - Female	Jan.31, 2022 Jan.31,2021
	22 21 24 24 Jan.31, 2022 Jan.31,2021
	23 23 25 25

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

13. POST-EMPLOYMENT BENEFITS (Continued)

Other demographic assumptions used include the age of retirement and rates of retirement. Concerning the retirement age, the age at which participants must receive an unreduced pension was used for the two pensions. For the retirement rate, a variable rate table depending inversely on the age of the participant was used. As the pension benefit, in the case of retirement, is equal to the value of service costs of the member, in each of the pensions, the effect of this assumption is minimal.

The sensitivity of the accrued benefit obligations to changes in significant assumptions is shown below:

Discount rate Escalation rate on credited annuity payments Life expectancy Discount rate Escalation rate on credited annuity payments Life expectancy		January 31, 2022
	Change in assumption 0.5% 0.5%	Increase in the Decrease in the assumption assumption Decrease Increase of 8.4% of 10.0% Increase Decrease of 1.4% of 1.4% Increase in the Decrease in the assumption by assumption by oneyear oneyear Increase Decrease of 2.9 % of 3.0% January 31,2021
	Change in assumption 0.50% 0.50%	Increase in the Decrease in the assumption assumption Decrease Increase of 8.7% of 10.4% Increase Decrease of 1.8% of 1.8% Increase in the Decrease in the assumption by assumption by oneyear oneyear Increase Decrease of 2.9 % of 3.0%

BMTC Group Inc. Notes to the Consolidated Financial Statements

For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

13. POST-EMPLOYMENT BENEFITS (Continued)

Sensitivity analyses were determined on the basis of reasonable modifications to existing assumptions that would occur at the end of the period. Each sensitivity analysis disclosed is based on the modification of the single assumption, while all other assumptions remain unchanged. In reality, there is expected to be certain interrelationships between assumptions. The analysis above does not take into account the interrelationships between assumptions. The projected credit units method has been used in the sensitivity analysis for changes in significant actuarial assumptions used in the calculation of the benefit obligation.

The defined benefit plan entails certain risks for the Company. The most significant risks are described below:

– Asset volatility:

Plan obligations are calculated using a discount rate based on yields of corporate bonds. If the asset underperforms compared to this yield a deficit, is created.

Plan assets include a significant proportion of equity instruments, which are assumed to obtain a higher return than corporate bonds in the long term, but cause some risk and volatility in short-term performance.

Nevertheless, given that the plan obligations are rather long-term, the Company believes that a certain level of investment in equity instruments is an appropriate element of its strategy to manage the long-term plan. Plan assets are invested in a diversified mix to minimize the risk of volatility.

– Change in yield of corporate bonds:

Because the discount rate assumption is based on the yield of corporate bonds, a decrease of the yield may cause an increase in the plan obligations. However, this increase would be partially offset by an increase in the value of corporate bonds held by the plan.

– Life expectancy:

The majority of corporate bonds held by the plan are to establish the life expectancy of the participant, so any increase in life expectancy will cause an increase in plan obligations.

The latest mortality tables are used to minimize this risk.

Based on the most recent actuarial valuation of the SPP as at December 31, 2018, shows that the plan has a surplus of $54,200 under the going-concern basis and a $5,600 deficit using a solvency basis. There is no past service contributions required, since the plan shows a surplus under the goingconcern basis and the stabilization provision is fully funded. The solvency deficit no longer requires funding. The contributions for current service cost of the Company including the stabilization provision, is equivalent to 393% of employee contributions. The Company pays the minimum required to ensure the plans are fully funded on a minimum funding basis.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

13. POST-EMPLOYMENT BENEFITS (Continued)

The employer contribution is estimated to be $5,400 for the 2022 fiscal year for all plans.

The following is a maturity analysis of the pension benefits:

The following is a maturity analysis of the pension benefits:
Less than one year Between 1 and 2 years Between 3 and 5 years More than five years		Jan.31, 2022 Jan.31,2021
		$ $ 6 180 6 205 7 998 6 843 27 374 25 458 537 477 532 499 579 029 571 005

Defined contribution (DC) pension plan

The total cost of the DC plan for the period between February 1, 2021 and January 31, 2022 was $1,522 ($1,242 for 2021).

14. PROVISIONS AND CONTINGENT LIABILITIES

The Company is party to claims and lawsuits in the normal course of business. Management believes that the resolution of these claims and lawsuits will not have a materially adverse effect on the Company’s financial position.

15. RELATED PARTIES

The Company is commited under leases with a corporation controlled by officers, which expires in December 2024, for wich a lease obligation totaling $1,636 is recorded as at January 31, 2022.

For the year ended January 31, 2021, depreciation of $528 relating to the right-of-use and a $79 interest expense were recognized in the earnings in connection with these leases.

The following transactions were concluded with a company controlled by officers. Unless otherwise indicated, none of the transactions have any special clauses, conditions and no guarantees have been given or received.

Rent Management fees	January 31, 2022 January 31,2021
	$ 655 1 665 45 $ 642 1 705

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

15. RELATED PARTIES (Continued)

The services of certain senior officers and staff of the subsidiary are provided through a management company controlled by these officers. The management agreement provides for management of subsidiary's activities, in particular, personnel management, purchasing supervision and ensuring sales growth. The agreement is renewed for an additional 12 month period on maturity each year unless either party provide, a notice to the contrary.

Compensation of the key officers and directors includes the following expenses:

Short-term benefits Share-based payments Management fees	January 31, 2022 January 31,2021	January 31, 2022 January 31,2021
	$ 2 597 761 1 705 5 063	$ 2 372 594 1665
		4 631

16. FINANCIAL INSTRUMENTS

The carrying amounts presented in the consolidated statement of financial position relate to the following categories of financial assets and liabilities:

Financial assets Financial assets at fair value through profit and loss Other financial assets Financial assets at amortized cost Cash Trade and other receivables Financial liabilities Financial liabilities at amortized cost Bank overdraft Trade (excluding employee benefits) and other payables	Jan.31, 2021	Jan.31,2020
	$ 218 343 18 983 5 334 24 317 - 116 359 116 359	$ 178 286
		5 792 3 624
		9 416
		8 986 107 424
		116 410

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

16. FINANCIAL INSTRUMENTS (Continued)

The following table presents financial assets and financial liabilities measured at fair value in the consolidated statement of financial position in accordance with the fair value hierarchy. This hierarchy groups financial assets and financial liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and financial liabilities.

The fair value hierarchy has the following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The level within which the financial asset or financial liability is classified is determined based on the lowest level of significant input to the fair value measurement. The financial assets and financial liabilities measured at fair value in the consolidated statements of financial position and financial instruments measured at amortized cost for which fair value is presented are grouped according to the fair value hierarchy is as follows:

fair value hierarchy is as follows:
Financial assets at fair value Liquidities bearing interest Government and corporate bonds Shares of Canadian companies Shares of U.S. companies		January 31, 2022
	Level 1 $ 68 074 27 627 55 503 67 139	Level 2 Level 3 $ $

Financial assets at fair value Liquidities bearing interest Government and corporate bonds Shares of Canadian companies Shares of U.S. companies		January 31, 2021
	Level 1 $ 64 884 26 047 35 243 52 112	Level 2 Level 3 $ $

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

16. FINANCIAL INSTRUMENTS (Continued)

Fair value measurement

The methods and valuation techniques used for the purpose of measuring fair value are unchanged compared to the previous reporting period.

The fair value of a financial instrument is generally the consideration for with the instrument would be exchanged in an arm's length transaction, between knowledgeable, willing parties who are under no compulsion to act.

The existence of published price quotations in an active market is the best evidence of fair value. The fair value of shares and bonds is established based on the most recent closing date market price, based on the bid price at the period-end. If a security is not actively traded, the fair value is determined by a valuation technique using observable market date to the extent possible.

$ Gains (losses) on assets held at the close of the reporting period 4 729 Gains (losses) on assets not held at the close of the reporting period Gains (losses) realized and unrealized on financial assets, fair value 4 729 Janu	ary 31, 2022 January 31,2021
	$ $ $ 20 595 9 121 2 172 377 170 619 20 972 9 291 2 791

Financial instrument risks

The Company's manages the risks arising from financial instruments, in close cooperation with the Board of Directors. The objectives are to ensure the availability of sufficient amounts of cash flow in the short and medium term of the company by reducing the exposure to financial markets. Long-term financial instruments are managed to generate lasting returns.

The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options.

Market risk

Market risk encompasses many types of risk. The variation of the types of risk, such as interest rate risk and other factors impacting all similar publicly traded financial instruments, has an impact on the fair value of the financial assets classified at fair value through profit or loss. To minimize market risk, the Company ensures that the type of investments and individual investments in its investment portfolio are diversified. Additionally, a significant portion of its investments is in financial instruments with short maturity dates, in particular banker’s acceptances and discount notes.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

16. FINANCIAL INSTRUMENTS (Continued)

Price risk sensitivity

The following table illustrates the sensitivity of income and equity in regards to changes in the market price all other things being equal. It assumes a ± 5 % change of the market price for the years ended January 31, 2022 and 2021.

Variation Income for the period and equity	January 31,2021 January 31, 2022
	$ $ 6 518 4 919

Exchange risk and foreign currency sensitivity

The Company is exposed to exchange risk, because a part of its purchases of inventory is made in currencies other than Canadian dollars. The Company also owns U.S. dollar equity investments in U.S. companies.

The Company does not enter into foreign exchange forward contracts to mitigate the exposure to foreign currency risk.

Foreign currency denominated financial assets and financial liabilities which expose the Company to currency risk are disclosed below. The amounts are translated into Canadian dollars at the closing rate:

Shares of U.S. companies Trade and other payables in U.S. dollars Total exposure	January 31, 2022	January 31,2021
	$ 67 139 (3 190) 63 949	$ 52 112 (2 400)
		49 712

The following table illustrates the sensitivity of income and equity in regards to the Company's financial assets and financial liabilities and the U.S. dollar/Canadian dollar exchange rate all other things being equal. It assumes a ± 5% change of the Canadian dollar exchange rate for the years ended January 31, 2022 and 2021.

Variation Income for the period and equity	January 31,2021 January 31, 2022
	$ $ 2 795 2 172

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

16. FINANCIAL INSTRUMENTS (Continued)

Credit risk

Credit risk is the risk that a party to a financial instrument will fail to discharge an obligation towards the Company. The Company is exposed to this risk as a result of various financial instruments, for example, its deposits, investments in bonds, etc. The Company’s maximum credit risk exposure is limited to the carrying amount of certain financial assets recognized on the reporting date, as summarized in the following table:

Financial asset categories – carrying amounts Cash Trade and other receivables	January 31, 2022 January 31,2021	January 31, 2022 January 31,2021
		$ $ 18 983 5 792 5 334 3 624 24 317 9 416

The Company’s management considers that the credit quality of the above financial assets that are not impaired or in default at the reporting date is good. As of January 31, 2022, none of the significant customers and other debtors, unimpared, are in default.

Credit risk in respect of cash, banker’s acceptances and discount notes, amounts receivable on credit and debit cards is considered negligible because the counterparties are reputable banks with quality external credit ratings.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations. The Company manages its liquidities by monitoring forecasted cash receipts and disbursements in the course of daily activities. Net cash requirements are compared with available cash, investments and credit facility to ascertain if they are sufficient for the period in question. The Company also considers expected cash resources from sales and its financial assets in managing the liquidity risk.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

(in thousands of Canadian dollars, except per share data)

16. FINANCIAL INSTRUMENTS (Continued)

Future payments to be made under its contractual obligations are allocated as follows:

	Carrying Contractual amount cash flows	January 31, 2022
		More than Under 1year 2 - 5 ans 5years

	$ $	$ $ $
Trade and other payables excluding customer deposits Lease liability

	57 955 57 955	57 955 - -
	12 733 13 771	4 421 8 132 1 218
	70 688 71 726	62 376 8 132 1 218

	Valeur Contractual comptable cash flows	January 31,2021
		More than Under 1year 2 - 5 ans 5years

	$ $	$ $ $
Trade and other payables excluding customer deposits Lease liability

	63 085 63 085	63 085 - -
	15295 16 896	4 282 10718 1896
	78 380 79 981	67 367 10 718 1 896

Capital management

The Company's capital management objectives are to safeguard its assets, while maximizing the Company's growth and providing an adequate return to its shareholders. In addition to a conservative approach with respect to safeguarding the financial position, the Company achieves its objective through sound management of internally generated capital and through using capital when necessary to finance its growth initiatives. The Company's capital corresponds to equity.

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021 (in thousands of Canadian dollars, except per share data)

17. EARNINGS PER SHARE AND DIVIDENDS

The following table presents the calculation of basic net earnings per share:

$ Net earnings 22 580 Weighted average number of shares to calculate basic and diluted net earnings per share Net earnings per share Basic and diluted 0,67 Ja	nuary 31, 2022 January 31,2021	nuary 31, 2022 January 31,2021
	$ $ 81 931 26 915 33 723 642 2,43 1,61	$ 54 842
		33 992 799
		1,61

During the year ended January 31, 2021, BMTC paid $11,435 or $0.34 per common share in dividends to its shareholders ( $9,847 or $0.29 as at January 31, 2021).

18. SUBSEQUENT EVENT

No adjusting or significant non-adjusting event occurred between the reporting date and the date of authorization of the consolidated financial statements.

AI assistant

BMTC Group Inc. — Annual Report 2022

43306_rns_2022-04-29_a0d04751-a035-4e1f-a775-1ea48af6456b.pdf

ANNUAL REPORT 2022

BOARD OF DIRECTORS

MARIE-BERTHE DES GROSEILLERS

ANDRÉ BÉRARD/*

GENERAL INFORMATION

AUDITORS

CORPORATE SECRETARY

LEGAL ADVISORS

LUCIEN BOUCHARD/*

CHARLES DES GROSEILLERS

ANNE-MARIE LECLAIR**

BANKERS

REGISTRAR AND TRANSFER AGENT

GABRIEL CASTIGLIO/**

STOCK LISTING

ANNUAL SHAREHOLDER'S MEETING

TONY FIONDA/**

HEAD OFFICE

Groupe BMTC Inc.

FINANCIAL HIGHLIGHTS

For the years ended January 31, 2022, 2021, 2020 and 2019

MANAGEMENTS RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS AND THE OTHER FINANCIAL INFORMATION

(s) Marie-Berthe Des Groseillers

**Annual Management Report ***

Caution regarding forward-looking statements

Non-International Financial Reporting Standards (IFRS) financial measures

Results

Annual financial information

Financial position and dividends

Company pension plans and treatment of future actuarial gains and losses

Related party transactions

Lease liability

Accounting policies and accounting estimates

Financial instruments

Quarterly results

Operations

Brault & Martineau Division

Risk factors and market tendencies

Management discussion and outlook for the future of the Company

Disclosure controls and procedures (DCPs) and internal controls over financial reporting (ICRF)

Other information

(s) Marie-Berthe Des Groseillers

Independent auditor’s report

Our opinion

What we have audited

Basis for opinion

Independence

Key audit matters

Key audit matter

Inventory valuation

How our audit addressed the key audit matter

Other information

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements

/s/PricewaterhouseCoopers LLP[1]

BMTC Group Inc.

Consolidated Statements of Earnings and Other Comprehensive Income For the years ended January 31, 2022 and 2021

BMTC Group Inc. Consolidated Statements of Changes in Shareholders' Equity For the years ended January 31, 2022 and 2021

BMTC Group Inc. Consolidated Statements of Cash Flows For the years ended January 31, 2022 and 2021

BMTC Group Inc. Consolidated Statements of Financial Position

As at January 31, 2022 and 2021

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

1. GOVERNING STATUTES AND NATURE OF OPERATIONS

2. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE WITH IFRS

3. SUMMARY OF ACCOUNTING POLICIES

3.1 Basis of consolidation

3.2 Foreign currency translation

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

3.3 Segment reporting

3.4 Revenue recognition

3.5 Income taxes

BMTC Group Inc. Notes to the Consolidated Financial Statements For the years ended January 31, 2022 and 2021

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

3.6 Inventory

3.7 Vendor rebates

3.8 Property, plant and equipment

BMTC Group Inc. Annual Report 2022

Annual Management Report *