BMTC Group Inc.

==> picture [456 x 208] intentionally omitted <==

QUARTERLY MANAGEMENT REPORT AS AT OCTOBER 31st, 2022

Notice related to the review of interim financial statements

The consolidated interim financial statements for the period ended October 31st, 2022 and 2021 have not been reviewed by the auditors of the Company.

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)

TONY FIONDA/**

Senior Vice President Remcorp Inc. (Investment company)

STOCK LISTING

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

HEAD OFFICE

8500 Place Marien Montréal-Est (Quebec) H1B 5W8 Tel: (514) 648-5757

Member of the Audit Committee
** Member of the Human Resources and Corporate Governance Committee
*** Member of the Investment Committee

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 nine month periods ended October 31, 2022 and 2021

(Unaudited and in thousands of dollars, except per share amounts)

Operations	October 31, 2022 $	October 31,2021
		$
Revenue Net earnings Financial position	570 157 28 900	622 787 59 351
Cash, bank overdraft and investments Total assets Equity Per-share information	231 424 550 545 407 109	251 139 528 798 321 159
Net earnings Carrying amount Stock market value Period high Period low Number of shares outstanding Common shares	0,87 12,27 16,00 12,35 33 172 000	1,76 9,55 16,28 10,50 33 635 400

Quarterly Management Report *

Caution regarding forward-looking statements

This Quarterly 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 Quarterly 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 Quarterly 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 Quarterly 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 MD&A 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 third quarter ended October 31, 2022, the Company's revenues decreased by $52,630,000 to $570,157,000 compared to $622,787,000 recorded for the third quarter ended October 31, 2021, a 8.5% decrease. Net earnings for the third quarter ended October 31, 2022, amounted to $28,900,000 compared to $59,351,000 recorded for the third quarter ended October 31, 2021. Basic net earnings per share amounted to $0.87 compared to $1.76 recorded for the third quarter ended October 31, 2021.

For the third quarter ended October 31, 2022, the share repurchase program contributed to an increase of $0.02 on basic net earnings per share, whereas during the third quarter ended October 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 first quarter ended April 30, 2021. The Company received $1,439,000 after-tax which contributed to an increase of $0.04 on basic net earnings per share.

The variation in adjusted net earnings would be ($29,012,000) or ($0.87) per basic share for the third quarter ended October 31, 2022, as well as the comparable period ended October 31, 2021, are explained as follows:

Net earnings CEWS (after-tax) Adjusted net earnings Minus: Adjusted net earnings for 2021 Variation	October 31, 2021 28 900 59 351 - (1 439) 28 900 57 912 57 912 (29 012) (Unaudited and $ in thousands) October 31, 2022	October 31, 2021 28 900 59 351 - (1 439) 28 900 57 912 57 912 (29 012) (Unaudited and $ in thousands) October 31, 2022
		59 351 (1 439)
		57 912

The variations in net adjusted earnings is allocated as follows :

(Unaudited and $ in thousands)	(Unaudited and $ in thousands)
Increase
Increase Increase (decrease) (decrease) (decrease) in adjusted in retail operations in investment net earnings
	1 670 (10 098) (8 428)
As at April 30, 2022
As at July 31, 2022 As at Oct. 31, 2022 Total	(6 428) (8 009) (6 091) (56) (10 849) (18 163) (29 012) (6 147) (14 437)

Annual financial information

($ in thousands, except for per share amounts)

Revenue Net earnings Total assets Net earnings per share basic and diluted Dividends per share	January 31, 2022 January 31, 2021 $ $
	819 445 649 056 81 931 54 842 549 926 450 207 2,43 1,61 0,34 0,29

Financial position and dividends

Cash and investments decreased by $5,902,000 during the third quarter ended October 31, 2022. Investments consist of treasuries bearing interest, government and corporate bonds and common shares, which at the close of the quarter had a market value of $231,424,000 (including cash).

As at October 31, 2022, the working capital showed a surplus of $24,286,000 an increase of $24,655,000 compared to the year ended January 31, 2022. The Company's shareholders' equity increased from $387,866,000 as at January 31, 2022, to $407,109,000 as at October 31, 2022. As at October 31, 2022, the book value per share stood at $12.27, compared to $11.60 as at January 31, 2022.

Pursuant to the normal course issuer-bid put in place on April 15, 2021, and renewed on April 15, 2022, accordingly, 251,000 common shares were repurchased and cancelled by the Company. As a result of this change, the Company had as at October 31, 2022, 33,172,000 common shares issued and outstanding.

During the third quarter ended October 31, 2022, no options were granted. The Company may still grant pursuant to the Plan a total of 5,710,864 options, representing 17.22% of the issued and outstanding shares of the Company.

A semi-annual eligible dividend of $0.18 per Common Share has been declared to holders registered at the close of business on December 22, 2022, which will be paid on January 5, 2023.

Company pension plans

The pension expense for all plans for the three month and nine month periods ended October 31, 2022, amounted to $1,775,000 and $5,384,000 (compared to $1,735,000 and $5,195,000 for the three month and nine month periods ended October 31, 2021).

Contributions paid by the Company for all plans for the three month and nine month periods ended October 31, 2022, amounted to $924,000 and $3,524,000 (compared to $1,330,000 and $3,979,000 for the three month and nine month periods ended July 31, 2021).

Related party transactions

The Company is bound by leases expiring in December 2024, for which a lease liability of $1,235,000 is recorded as at October 31, 2022.

For the third quarter ended October 31, 2022, depreciation of $396,000 relating to the right-of-use asset and a $46,000 interest expense were recognized in earnings in connection with these leases.

Lease liability

Payments due by period

(Unaudited and $ in thousands)

	(Unaudited and $ in thousands)
Lease liability	Carrying Contractual amount cash flows Under 1year 2 - 5years After 5years
	9 721 10 434 3 902 5 771 761

Accounting policies and accounting estimates

The accounting policies used in preparing the unaudited interim consolidated financial statements are described in Note 3 to the unaudited interim 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 unaudited interim consolidated financial statements as at October 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 unaudited interim consolidated financial statements as of October 31, 2022. The Company holds no hedging contracts or any other type of derivative products.

Quarterly results

(Unaudited and $ in thousands, except for per share amounts)

	April 30, April 30, 2022 2021	July 31, July 31, 2022 2021
Revenue Net earnings Net basic earnings per share	$ $ 175 659 177 208 807 10 479 0,02 0,31	$ $ 218 939 231 624 14 246 28 683 0,43 0,85
Revenue Net earnings Net basic earnings per share	October 31, October 31, 2022 2021 $ $ 175 559 213 955 13 847 20 189 0,42 0,60	January 31, January 31, 2022 2021
		$ $ 196 658 178 286 22 580 26 915 0,67 0,79

For the three month period ended October 31, 2022, the Company's revenues decreased by $38,396,000 to $175,559,000, compared to $213,955,000 recorded for the corresponding 2021 period, a 18% decrease. Net earnings for the three month period ended October 31, 2022, amounted to $13,847,000 compared to $20,189,000 recorded for the corresponding 2021 period. Basic net earnings per share decreased to $0.42 compared to $0.60 for the corresponding 2021 period.

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

The Company met the eligibility criteria for the Canadian Emergency Wage Subsidy (CEWS) during the first quarter ended October 31, 2021. The Company received $195,000 after-tax.

The variation in adjusted net earnings would be ($6,147,000) or ($0.19) per basic share for the three month period ended October 31, 2022, as well as the comparable period October 31, 2021, are explained as follows:

Net earnings CEWS (after-tax) Adjusted net earnings Minus: Adjusted net earnings for 2021 Variation	13 847 20 189 - (195) 13 847 19 994 19 994 (6 147) (Unaudited and $ in thousands) October 31, 2022 October 31,2021	13 847 20 189 - (195) 13 847 19 994 19 994 (6 147) (Unaudited and $ in thousands) October 31, 2022 October 31,2021
		20 189 (195)
		19 994

Operations

BMTC Inc.

On September 12th, 2022, the Company started the migration of a single IT system for all of its banners. We are pleased to announce that the IT system implementation and integration process, including its e-commerce platform, was successfully completed on December 5th, 2022 and is fully operational. We are very proud of our IT employees who delivered ahead of schedule, as was reported in our last management report roll out was planned by the end of the year. All of our employees have received complete training on our new system and in this very short period of time of being fully operational, we can already notice important value added as well as time and cost efficiencies.

This IT standardisation has allowed the Company to create significant operational synergies. We have now completed the merged of our administrative and operational services of Brault & Martineau, EconoMax and Tanguay banners and therefore created broad and diversified teams that are better able to cope with the realities of business today. During the next few months of operating with only one IT system and e-commerce platform, we will continue to review our administrative and operational services and we believe we will be able to improve our efficiency and be even more cost effective.

These important changes comes at an opportune time for the Company. The difficulty of obtaining skilled labour, the retail trade that is constantly changing and evolving, the competition that is now spread across Canada and the United States of America and the shift of consumer spending towards e- commerce means that this change will allow the Company to be much more agile in its business decisions. We believe that the IT standardisation as well as the organisational and structural changes will enable the Company to maintain its leadership in its market, as well as significantly improve its profitability and financial structure and continue its objectives of increasing its market share in Quebec.

The company entered into a partnership agreement for the development of its property at 500 boulevard Le Corbusier in Laval into several residential rental towers. The Company created a new subsidiary, Le Corbusier-Concorde S.E.C. for this real estate project on January 31st, 2022. We are still negotiating and waiting for permits with the city of Laval for this project. Once we obtain the green light form the city of Laval, we will therefore be able to disclose the full extent of this real estate development.

The Company has entered into an agreement for the sale of its distribution centre in Montreal for an amount of $66,500,000 resulting in an after-tax gain of $50,962,000. The Company has proceeded with a lease back agreement for 2 years and with an option of renewing the lease. The closing of this transaction is subject to certain customary conditions and is expected to occur in February 2023.

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

The Company continues to focus on online sales, which experienced a record increase since the start of the pandemic in 2020, 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.

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.

It is difficult to predict the future level of consumer spending, although we are now seeing that the Company's results in the last quarter are not reflecting the performance of the last two years. This downward trend continued in subsequent months. We can therefore expect a significant drop, around 20% if the trend continues. This is partly explained by the high rate of inflation in terms of the cost of food, the cost of gas and the rise in interest rates, which has a direct 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, consumer spending has in part transfer back to these f di

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 August 1, 2022 and ended October 31, 2022, which have materially affected, or are reasonably likely to materially affect, the Company's ICFR.

Other information

This Quarterly Management Report ended October 31, 2022 provides an analysis of the unaudited consolidated results of operations, financial position, and cash flows of BMTC Group Inc. 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 Quarterly 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 December 14, 2022

BMTC Group Inc. Consolidated Statements of Earnings

For the three month and nine month periods ended October 31, 2022 and 2021 (Unaudited and 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 October	Notes October	31, 2022	October	31,2021
	4 4 8 14 4 5 15	3 month	9 month	3 month	9 month
		$ 175 559 (106 172)	$ 570 157 (351 839)	$ 213 955 (130 302)	$ 622 787 (384 415)
		69 387 1 (45 268) (9 146)	218 318 57 (145 730) (31 336)	83 653 (41) (50 911) (9 295)	238 372 (27) (150 186) (30 213)
		14 974	41 309	23 406	57 946
Gains (losses) on disposals of property, plant and equipment		27	44	127	128
Realized and unrealized change in fair value of financial assets, at fair value Investment income Net earnings before income tax expense Income tax recuperation (expense) Net earnings and comprehensive income Net earnings per share Basic and diluted				2 306 1 046	16 243 3 075
		1 571	(6 357)
		1 809	4 944
		18 381 (4 534)	39 940 (11 040)	26 885 (6 696)	77 392 (18 041)
		13 847	28 900	20 189	59 351
		0,42	0,87	0,60	1,76

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

BMTC Group Inc. Consolidated Statements of Changes in Shareholders' Equity For the nine month periods ended October 31, 2022 and 2021

(Unaudited and in thousands of Canadian dollars)

Notes	Capital stock	Retained earnings	Total shareholders' equity
11 11 17 Notes	$ 2 647 (19) - - (19) - 2 628 Capital stock	$ 385 219 - (3 640) (5 998) (9 638) 28 900 404 481 Retained earnings	$ 387 866
			(19) (3 640) (5 998)
			(9 657)
			28 900
			407 109
			Total shareholders' equity
11 11 17	$ 2 683 (19) - - (19) - 2 664	$ 268 025 - (3 482) (5 399) (8 881) 59 351	$ 270 708
			(19) (3 482) (5 399)
			(8 900)

			59 351
		318 495	321 159

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

BMTC Group Inc. Consolidated Statements of Cash Flows

For the three month and nine month periods ended October 31, 2022 and 2021

(Unaudited and in thousands of Canadian dollars)

Notes	October 31, 2022	October 31,2021
6 6 8 8 4 4 11 9 17	3 month 9 month	3 month 9 month
	$ $	$ $ 26 885 77 392 (213) (8 971)

	18 381 39 940
	23 11 198
	(27 023) (18 435)	(20 790) 24 168
	(4 621) (21 090)	(4 695) (21 933)
	(13 240) 11 613	1 187 70 656
		(10 047) (26 913) 3 555 8 255 (454) (1 594)


	(6 360) (30 399) 4 783 25 839 (1 462) (2 914)
	57 135	149 152
	614 1 274	129 460
	1 195 3 670	917 2 615
	(1 173) (2 395)	(5 751) (17 025)
		(640) (3 501) (119) (421) (855) (2 787) - (5 399)



	(593) (3 659)
	(95) (322)
	(1 008) (3 012)
	- (5 998)
	(1 696) (12 991)	(1 614) (12 108)
		(6 178) 41 523 44 507 (3 194)

	(16 109) (3 773)
	31 319 18 983
	15 210 15 210	38 329 38 329

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

BMTC Group Inc. Consolidated Statements of Financial Position

(Unaudited and in thousands of Canadian dollars)

Notes	October 31, 2022	January 31, 2022
7 8 8 12 9 9 5 11	$ 15 210 6 189 4 495 119 751 3 029 148 674 216 214 1 749 144 007 39 901 401 871 550 545 120 786 3 602 - 124 388 6 119 12 929 19 048 143 436 2 628 404 481 407 109 550 545	$ 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

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

BMTC Group Inc. Notes to the Consolidated Financial Statements

(Unaudited and in thousands of dollars, except per share amounts)

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 unaudited interim 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 unaudited interim 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 unaudited interim consolidated financial statements.

3.1 Basis of consolidation

The unaudited interim consolidated financial statements include the accounts of BMTC, the ultimate and those of the wholly-owned subsidiary Ameublements Tanguay Inc. The accounting policies of the parent company, subsidiary 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 unaudited interim consolidated financial statements.

3.2 Foreign currency translation

The unaudited interim 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

(Unaudited and in thousands of dollars, except per share amounts)

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

(Unaudited and in thousands of dollars, except per share amounts)

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

(Unaudited and in thousands of dollars, except per share amounts)

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

(Unaudited and in thousands of dollars, except per share amounts)

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

(Unaudited and in thousands of dollars, except per share amounts)

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

(Unaudited and in thousands of dollars, except per share amounts)

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

(Unaudited and in thousands of dollars, except per share amounts)

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

3.17 Judgment, estimates and assumptions

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 14. 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.

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 13 for details on the carrying amount and other information on provisions and contingent liabilities.

BMTC Group Inc. Notes to the Consolidated Financial Statements

(Unaudited and in thousands of dollars, except per share amounts)

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

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.

4. ADDITIONAL INFORMATION ON CONSOLIDATED STATEMENTS OF EARNINGS

October	31, 2022	October 31,2021	October 31,2021
3 month	9 month	3 month	9 month
$	$	$	$
25 843 1 407 368	81 410 4 266 1 118 86 794	26 494 1 320 415	79 332 4 034 1 161
27 618		28 229	84 527

Salaries for the three month period ended October 31, 2021 include the Canada Emergency Wage Subsidy (CEWS) of $ 1,439.

Other elements of revenues and expenses Depreciation of property, plant and equipment Losses (gains) on disposals of financial assets	October 31,2021 October 31, 2022
	3 month 9 month 3 month 9 month
	$ $ $ $ 2 484 7 315 2 772 8 461 - (332) 30 (377)

October	31, 2022	October 31,2021	October 31,2021
3 month	9 month	3 month	9 month
$ 436 1 195 178	$ 774 3 670 500 4 944	$ 49 917 80	$

			236
			2 615

			224
1 809		1 046	3 075

BMTC Group Inc. Notes to the Consolidated Financial Statements

(Unaudited and in thousands of dollars, except per share amounts)

5. *INCOME TAXES*
The income tax expense is detailed as follows:	October	31, 2022	October	31,2021
	3 month	9 month	3 month	9 month
	$	$	$	$
Total current tax expense (recovery) for the period	4 326	11 918	6 383	15 925
Total deferred tax expense (recovery)*	208	(878)	313	2 116
	4 534	11 040	6 696	18 041

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:

October	31, 2022	October 31,2021	October 31,2021
3 month	9 month	3 month	9 month
$ 4 872 (129) (208) - (1)	$ 10 584 (387) 842 - 1 11 040	$ 7 125 (109) (317) 13 (16)	$ 20 509 (321) (2 164) 33 (16)
4 534		6 696	18 041

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

Balance as at February 1, 2022	Recognized in earnings	Recognized in other Balance as at comprehensive October 31, income 2022	Recognized in other Balance as at comprehensive October 31, income 2022
$ (3 369) (11 018) 580	$ 878 - - 878 Recognized in earnings	$ - - -	$ (2 491) (11 018) 580
(13 807)		-	(12929)
Balance as at February 1, 2021		Recognized in other comprehensive income	Balance as at January 31, 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

(Unaudited and in thousands of dollars, except per share amounts)

6. CASH FLOW ADJUSTMENTS AND CHANGES IN WORKING CAPITAL

October	31, 2022	October 31,2021	October 31,2021
3 month	9 month	3 month	9 month
$	$ 7 315 1 860 (4 944) 6 689 (44) 322 11 198	$ 2 772 405 (1 046) (2 336) (127) 119	$ 8 461 1 216 (3 075) (15 866) (128) 421
2 484 851 (1 809) (1 571) (27) 95
23		(213)	(8 971)

The net change in working capital detailed as follows:

Trade and other receivables Inventory Prepaid expenses Trade and other payables excluding accrued charges of construction in progress	3 month	9 month	3 month	9 month
	$ (4 158) 1 083 2 113 (26 061)	$ (855) (5 933) (2 006) (9 641) (18 435)	$ (353) (14 073) 834 (7 198)	$ (210) (17 576) (1 607) 43 561
	(27 023)		(20 790)	24 168

7. OTHER FINANCIAL ASSETS

October 31, 2022	October 31, 2022	October 31, 2022
Fair value		Cost
		$ 58 173 30 382 44 003 64 091
	216 214	196 649
	216 214	196 649
	January31,2022
	$ 68 074 27 627 55 503 67 139	$ 68 074 26 804 42 993 54 279
	218 343	192 150
	218 343	192 150

BMTC Group Inc. Notes to the Consolidated Financial Statements

(Unaudited and in thousands of dollars, except per share amounts)

8. PROPERTY, PLANT AND EQUIPMENT

Gross carrying amount Balance as at February 1, 2022 Additions Disposals Balance as at October 31, 2022 Depreciation and impairment Balance as at February 1, 2022 Disposals Depreciation Balance as at October 31, 2022 Carrying amount as at October 31, 2022 Gross carrying amount Balance as at February 1, 2021 Additions Disposals Balance as at January 31, 2022 Balance as at February 1, 2021 Disposals Depreciation Balance as at January 31, 2022 Carrying amount as at January 31, 2022	Parking lots Leasehold Automotive Computer Furniture and Leased Leased Land and buildings Signs improvements equipment equipment equipment property automotive Total equipment
	$ $ $ $ $ $ $ $ $ $ 55 691 152 715 539 9 719 3 976 9 055 7 123 22 432 1 525 262 775 - - - - 1 071 54 1 373 - - 2 498 - - - - (147) - - - - (147)
	55 691 152 715 539 9 719 4 900 9 109 8 496 22 432 1 525 265 126
	- 74 862 461 9 628 2 502 8 313 6 032 11 097 965 113 860 - - - - (57) - - - - (57) - 3 554 18 33 259 203 330 2 673 246 7 316
	- 78 416 479 9 661 2 704 8 516 6 362 13 770 1 211 121 119
	55 691 74 299 60 58 2 196 593 2 134 8 662 314 144 007
	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) - - - - (7557)
	55 691 152 715 539 9 719 3 976 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 3400 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

During the period ended October 31, 2022, the Company disposed of financial assets in the amount of $135, which resulted in a gain of $44.

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.

BMTC Group Inc. Notes to the Consolidated Financial Statements

(Unaudited and in thousands of dollars, except per share amounts)

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	Oct. 31, 2022	Jan. 31,2022
		15 295 1 211 550 (4 323)
	12 733


	322
	(3 334)
		12 733
	9 721

The principal payments to be made are detailed as follows:

October 31, 2022 January 31, 2022	Less than one year $ 3 602 4 007	From 1 to 5 years $ 5 376 7 555	More than 5 years Total $ $ 743 9 721 1 171 12 733

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 nine month period ended October 31, 2022, a rental charge of $2,884 was recognized in earnings ($1,285 for the corresponding period of 2021) in connection with these additional payments.

For the nine month peirods ended October 31, 2022 and 2021, there were no low value or short-term contracts recorded in earnings.

==> picture [508 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 nine month period ended October 31, 2022, the company was not in default.

BMTC Group Inc. Notes to the Consolidated Financial Statements

(Unaudited and in thousands of dollars, except per share amounts)

11. CAPITAL STOCK

Authorized

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

Second preferred shares, issuable in series.

Unlimited number of shares without par value Second preferred shares, issuable in series. First preferred shares, issuable in series.
	October 31, 2022	January31,2022
	$	$
Issued and fully paid
33,172,000
(33,423,000 as at January 31, 2022)	2 628	2 647
	October 31, 2022	January31,2022
Issued and fully paid
Beginning of period	33 423 000	33 880 000
Share redemption	(251 000)	(457 000)
Issued and fully paid, end of period	33 172 000	33 423 000
Shares authorized for the share option plan	5 710 864	5 710 864
Total shares authorized	38 882 864	39 133 864

During the nine month period ended October 31, 2022, the Company redeemed 251,000 common shares for a total cash consideration of $3,659. The redemption premium of $3,640 for the shares was recognized in retained earnings.

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.

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 October 31, 2022, a total of 5,710,864 common shares (5,710,864 common shares as at January 31, 2022) remained authorized for issuance under the Company’s share option plan.

BMTC Group Inc. Notes to the Consolidated Financial Statements

(Unaudited and in thousands of dollars, except per share amounts)

12. TRADE AND OTHER PAYABLES

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

	October 31,	2022	January 31, 2022
	$		$
Trade accounts payable	33	076	29 009
Accrued expenses	22	575	14 046
Accrued expenses construction in progress		-	416
Employee benefits	11	834	14 484
Customer deposits	53	301	72 888
	120	786	130 843

13. 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.

14. 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 Trade (excluding employee benefits) and other payables	Oct. 31, 2022	Jan. 31,2022
	$ 216 214 15 210 6 189 21 399 108 952 108 952	$ 218 343
		18 983 5 334
		24317
		116 359
		116 359

BMTC Group Inc. Notes to the Consolidated Financial Statements

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

14. 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		October 31, 2022
	Level 1 $ 58 153 30 884 53 342 73 835	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, 2022
	Level 1 $ 68 074 27 627 55 503 67 139	Level 2 Level 3 $ $

BMTC Group Inc. Notes to the Consolidated Financial Statements

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

14. 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.

October 31, 2022	October 31, 2022	October 31,2021	October 31,2021
3 month	9 month	3 month	9 month
$ 1 571 - 1 571	$ (6 689) 332 (6 357)	$ 2 336 (30) 2 306	$ 15 866 377
			16 243

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

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

14. 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 nine month periods ended October 31, 2022 and 2021.

Variation Income for the period and equity	October 31,2021 October 31, 2022
	$ $ 6 856 6 302

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	October 31, 2022	October 31, 2021
	$ 73 835 (2 054) 71 781	$ 64 619 (956)
		63 663

Variation Income for the period and equity	October 31,2021 October 31, 2022
	$ $ 3 127 2 768

BMTC Group Inc. Notes to the Consolidated Financial Statements

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

14. 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, 2021 October 31, 2022	January 31, 2021 October 31, 2022
		$ $ 15 210 18 983 6 189 5 334 21 399 24317

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 October 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

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

14. FINANCIAL INSTRUMENTS (Continued)

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

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

	$ $	$ $ $
Trade and other payables excluding customer deposits Lease liability
	67 485 67 485 9 721 10 434	67 485 - - 3 902 5 771 761
	77 206 77 919	71 387 5 771 761

	Valeur Contractual comptable 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	62376 8132 1 218

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

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

15. EARNINGS PER SHARE AND DIVIDENDS

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

October 31, 2022	October 31, 2022	October	31,2021
3 month	9 month	3month	9month
	$ 28 900 33 365 759 0,87	$ 20 189 0,60	$ 59 351
			33 814 924
			1,76

16. SUBSEQUENT EVENT

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

AI assistant

BMTC Group Inc. — Interim / Quarterly Report 2023

43306_rns_2022-12-14_71580e86-67cd-4783-a258-df806031a38d.pdf

QUARTERLY MANAGEMENT REPORT AS AT OCTOBER 31st, 2022

Notice related to the review of interim financial statements

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/**

TONY FIONDA/**

STOCK LISTING

HEAD OFFICE

BMTC Group Inc.

FINANCIAL HIGHLIGHTS

For the nine month periods ended October 31, 2022 and 2021

**Quarterly 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

Related party transactions

Lease liability

Accounting policies and accounting estimates

Financial instruments

Quarterly results

Operations

BMTC Inc.

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

BMTC Group Inc. Consolidated Statements of Earnings

BMTC Group Inc. Consolidated Statements of Changes in Shareholders' Equity For the nine month periods ended October 31, 2022 and 2021

BMTC Group Inc. Consolidated Statements of Cash Flows

For the three month and nine month periods ended October 31, 2022 and 2021

BMTC Group Inc. Consolidated Statements of Financial Position

BMTC Group Inc. Notes to the Consolidated Financial Statements

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

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

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

3.6 Inventory

3.7 Vendor rebates

3.8 Property, plant and equipment

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

BMTC Group Inc. Notes to the Consolidated Financial Statements

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

3.10 Impairment of property, plant and equipment

3.11 Shareholders' equity

3.12 Share-based remuneration

BMTC Group Inc. Notes to the Consolidated Financial Statements

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

3.13 Post-employment benefits

BMTC Group Inc. Notes to the Consolidated Financial Statements

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

3.14 Provisions and contingent liabilities

3.15 Financial instruments

BMTC Group Inc. Notes to the Consolidated Financial Statements

3. SUMMARY OF ACCOUNTING POLICIES (Continued)

Financial assets at amortized cost

BMTC Group Inc. Interim / Quarterly Report 2023

Quarterly Management Report *