6-K 1 financialstatements33119q1.htm 6-K Document
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
FORM 6-K
________________________________________
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of May, 2019
Commission File Number 1-10928
________________________________________
INTERTAPE POLYMER GROUP INC.
________________________________________
9999 Cavendish Blvd., Suite 200, Ville St. Laurent, Quebec, Canada, H4M 2X5
________________________________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F  x            Form 40-F  ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨
 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
INTERTAPE POLYMER GROUP INC.
 
 
 
Date: May 9, 2019
By:
 
/s/ Jeffrey Crystal
 
 
 
Jeffrey Crystal, Chief Financial Officer
















Intertape Polymer Group Inc.
Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2019




 
 
Unaudited Interim Condensed Consolidated Financial Statements
 
 
 
 
 
 
 
Consolidated Changes in Equity
4 to 5
 
 
 
 
 
 
Notes to Unaudited Interim Condensed Consolidated Financial Statements
8 to 19



Intertape Polymer Group Inc.
Consolidated Earnings
Periods ended March 31,
(In thousands of US dollars, except per share amounts)
(Unaudited)
 
 
 
Three months ended
March 31,
 
 
2019
 
2018
 
 
$
 
$
Revenue
 
277,823

 
237,229

Cost of sales
 
220,027

 
186,777

Gross profit
 
57,796

 
50,452

Selling, general and administrative expenses
 
32,683

 
29,123

Research expenses
 
3,168

 
3,221

 
 
35,851

 
32,344

Operating profit before manufacturing facility closures, restructuring and other related charges
 
21,945

 
18,108

Manufacturing facility closures, restructuring and other related charges
 
304

 
107

Operating profit
 
21,641

 
18,001

Finance (income) costs (Note 3)
 
 
 
 
Interest
 
7,693

 
2,462

Other (income) expense, net
 
(655
)
 
1,125

 
 
7,038

 
3,587

Earnings before income tax expense
 
14,603

 
14,414

Income tax expense (Note 4)
 
 
 
 
Current
 
1,175

 
988

Deferred
 
2,896

 
2,132

 
 
4,071

 
3,120

Net earnings
 
10,532

 
11,294

 
 
 
 
 
Net earnings (loss) attributable to:
 
 
 
 
Company shareholders
 
10,491

 
11,359

Non-controlling interests
 
41

 
(65
)
 
 
10,532

 
11,294

 
 
 
 
 
Earnings per share attributable to Company shareholders (Note 5)
 
 
 
 
Basic
 
0.18

 
0.19

Diluted
 
0.18

 
0.19

The accompanying notes are an integral part of the interim condensed consolidated financial statements. Note 3 presents additional information on consolidated earnings.


2

Intertape Polymer Group Inc.
Consolidated Comprehensive Income
Periods ended March 31,
(In thousands of US dollars)
(Unaudited)
 
 
 
Three months ended
March 31,
 
 
2019
 
2018
 
 
$
 
$
Net earnings
 
10,532

 
11,294

Other comprehensive (loss) income
 
 
 
 
Items that will be subsequently reclassified to net earnings:
 
 
 
 
Change in fair value of interest rate swap agreements designated as cash flow hedges (1) (Note 8)
 
(1,103
)
 
1,732

Reclassification adjustments for amounts recognized in earnings related to interest rate swap agreements (Note 8)
 
(85
)
 
—

Change in cumulative translation adjustments
 
(3,645
)
 
(586
)
Net gain arising from hedge of a net investment in foreign operations (Note 8)
 
4,681

 
—

Total other comprehensive (loss) income
 
(152
)
 
1,146

Comprehensive income for the period
 
10,380

 
12,440

 
 
 
 
 
Comprehensive income (loss) for the period attributable to:
 
 
 
 
Company shareholders
 
10,328

 
12,506

Non-controlling interests
 
52

 
(66
)
 
 
10,380

 
12,440

 
(1) 
Presented net of deferred income tax (benefit) expense of ($279) and $292 for the three months ended March 31, 2019 and 2018, respectively. Refer to Note 8 for additional information on the Company’s cash flow hedges.
The accompanying notes are an integral part of the interim condensed consolidated financial statements.


3

Intertape Polymer Group Inc.
Consolidated Changes in Equity
Three months ended March 31, 2018
(In thousands of US dollars, except for number of common shares)
(Unaudited)
 
 
 
 
 
 
 
Accumulated other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative translation adjustment account
 
Reserve for cash flow hedges
 
 
 
 
 
Total equity attributable to Company shareholders
 
Non-controlling interests
 
 
 
Capital stock
 
Contributed surplus
 
 
 
 
 
 
 
 
 
Total equity
 
Number
 
Amount
 
 
 
 
Total
 
Deficit
 
 
 
 
 
 
$
 
$
 
$
 
$
 
$
 
$
 
$
 
$
 
$
Balance as of December 31, 2017
58,799,910

 
350,759

 
17,530

 
(15,057
)
 
1,588

 
(13,469
)
 
(106,687
)
 
248,133

 
6,589

 
254,722

Transactions with owners
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercise of stock options (Note 7)
7,500

 
70

 
 
 
 
 
 
 
 
 
 
 
70

 
 
 
70

Change in excess tax benefit on exercised share-based awards
 
 
7

 
(7
)
 
 
 
 
 
 
 
 
 
—

 
 
 
—

Change in excess tax benefit on outstanding share-based awards
 
 
 
 
(152
)
 
 
 
 
 
 
 

 
(152
)
 
 
 
(152
)
Share-based compensation (Note 7)
 
 
 
 
60

 
 
 
 
 
 
 
(183
)
(1) 
(123
)
 
 
 
(123
)
Share-based compensation expense credited to capital on options exercised (Note 7)
 
 
20

 
(20
)
 
 
 
 
 
 
 
 
 
—

 
 
 
—

Dividends on common shares (Note 7)
 
 
 
 
 
 
 
 
 
 
 
 
(8,233
)
 
(8,233
)
 
 
 
(8,233
)
 
7,500

 
97

 
(119
)
 
 
 
 
 
 
 
(8,416
)
 
(8,438
)
 
 
 
(8,438
)
Net earnings (loss)
 
 
 
 
 
 
 
 
 
 
 
 
11,359

 
11,359

 
(65
)
 
11,294

Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in fair value of interest rate swap agreements designated as cash flow hedges (2) (Note 8)
 
 
 
 
 
 
 
 
1,732

 
1,732

 
 
 
1,732

 
 
 
1,732

Change in cumulative translation adjustments
 
 
 
 
 
 
(585
)
 
 
 
(585
)
 
 
 
(585
)
 
(1
)
 
(586
)
 
 
 
 
 
 
 
(585
)
 
1,732

 
1,147

 


 
1,147

 
(1
)
 
1,146

Comprehensive income (loss) for the period
 
 
 
 
 
 
(585
)
 
1,732

 
1,147

 
11,359

 
12,506

 
(66
)
 
12,440

Balance as of March 31, 2018
58,807,410

 
350,856

 
17,411

 
(15,642
)
 
3,320

 
(12,322
)
 
(103,744
)
 
252,201

 
6,523

 
258,724


(1) 
Presented net of income tax benefit of $62 for the three months ended March 31, 2018.
(2) 
Presented net of deferred income tax expense of $292 for the three months ended March 31, 2018.
The accompanying notes are an integral part of the interim condensed consolidated financial statements.

4

Intertape Polymer Group Inc.
Consolidated Changes in Equity
Three months ended March 31, 2019
(In thousands of US dollars, except for number of common shares)
(Unaudited)
 
 
 
 
 
 
 
 
Accumulated other comprehensive loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cumulative translation adjustment account
 
Reserve for cash flow hedges
 
 
 
 
 
Total equity attributable to Company shareholders
 
Non-controlling interests
 
 
 
Capital stock
 
Contributed surplus
 
 
 
 
 
 
 
 
 
Total equity
 
Number
 
Amount
 
 
 
 
Total
 
Deficit
 
 
 
 
 
 
$
 
$
 
$
 
$
 
$
 
$
 
$
 
$
 
$
Balance as of December 31, 2018
58,650,310

 
350,267

 
17,074

 
(24,170
)
 
2,490

 
(21,680
)
 
(95,814
)
 
249,847

 
11,581

 
261,428

Transactions with owners
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercise of stock options (Note 7)
17,500

 
159

 
 
 
 
 
 
 
 
 
 
 
159

 
 
 
159

Change in excess tax benefit on exercised share-based awards
 
 
5

 
(5
)
 
 
 
 
 
 
 
 
 
—

 
 
 
—

Change in excess tax benefit on outstanding share-based awards
 
 
 
 
194

 
 
 
 
 
 
 


 
194

 
 
 
194

Share-based compensation (Note 7)
 
 
 
 
110

 
 
 
 
 
 
 
(56
)
(1) 
54

 
 
 
54

Share-based compensation expense credited to capital on options exercised (Note 7)
 
 
44

 
(44
)
 
 
 
 
 
 
 
 
 
—

 
 
 
—

Dividends on common shares (Note 7)
 
 
 
 
 
 
 
 
 
 
 
 
(8,213
)
 
(8,213
)
 
 
 
(8,213
)
 
17,500

 
208

 
255

 
 
 
 
 
 
 
(8,269
)
 
(7,806
)
 
 
 
(7,806
)
Net earnings
 
 
 
 
 
 
 
 
 
 
 
 
10,491

 
10,491

 
41

 
10,532

Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in fair value of interest rate swap agreements designated as cash flow hedges (2) (Note 8)
 
 
 
 
 
 
 
 
(1,103
)
 
(1,103
)
 
 
 
(1,103
)
 
 
 
(1,103
)
Reclassification adjustments for amounts recognized in earnings related to interest rate swap agreements (Note 8)
 
 
 
 
 
 
 
 
(85
)
 
(85
)
 
 
 
(85
)
 
 
 
(85
)
Change in cumulative translation adjustments
 
 
 
 
 
 
(3,656
)
 
 
 
(3,656
)
 
 
 
(3,656
)
 
11

 
(3,645
)
Net gain arising from hedge of a net investment in foreign operations (Note 8)
 
 
 
 
 
 
4,681

 
 
 
4,681

 
 
 
4,681

 
—

 
4,681

 
 
 
 
 
 
 
1,025

 
(1,188
)
 
(163
)
 
 
 
(163
)
 
11

 
(152
)
Comprehensive income for the period
 
 
 
 
 
 
1,025

 
(1,188
)
 
(163
)
 
10,491

 
10,328

 
52

 
10,380

Balance as of March 31, 2019
58,667,810

 
350,475

 
17,329

 
(23,145
)
 
1,302

 
(21,843
)
 
(93,592
)
 
252,369

 
11,633

 
264,002


(1) 
Presented net of income tax benefit of $19 for the three months ended March 31, 2019.
(2) 
Presented net of deferred income tax benefit of $279 for the three months ended March 31, 2019.

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

5

Intertape Polymer Group Inc.
Consolidated Cash Flows
Periods ended March 31,
(In thousands of US dollars)
(Unaudited)
 
 
Three months ended
March 31,
 
 
2019
 
2018
 
 
$
 
$
OPERATING ACTIVITIES
 
 
 
 
Net earnings
 
10,532

 
11,294

Adjustments to net earnings
 
 
 
 
Depreciation and amortization
 
14,669

 
10,059

Income tax expense
 
4,071

 
3,120

Interest expense
 
7,693

 
2,462

Share-based compensation (benefit) expense
 
(1,436
)
 
410

(Gain) loss on foreign exchange
 
(1,200
)
 
769

Pension and other post-retirement expense related to defined benefit plans
 
516

 
726

Other adjustments for non-cash items
 
162

 
664

Income taxes paid, net
 
(487
)
 
(22
)
Contributions to defined benefit plans
 
(300
)
 
(512
)
Cash flows from operating activities before changes in working capital items
 
34,220

 
28,970

Changes in working capital items
 
 
 
 
Trade receivables
 
(4,624
)
 
(4,811
)
Inventories
 
(14,858
)
 
(23,330
)
Other current assets
 
2,433

 
(82
)
Accounts payable and accrued liabilities and share-based compensation liabilities, current
 
(35,211
)
 
(20,795
)
Provisions
 
(458
)
 
(82
)
 
 
(52,718
)
 
(49,100
)
Cash flows from operating activities
 
(18,498
)
 
(20,130
)
 
 
 
 
 
INVESTING ACTIVITIES
 
 
 
 
Purchases of property, plant and equipment
 
(17,850
)
 
(18,396
)
Other investing activities
 
(596
)
 
(156
)
Cash flows from investing activities
 
(18,446
)
 
(18,552
)
 
 
 
 
 
FINANCING ACTIVITIES
 
 
 
 
Proceeds from borrowings
 
74,799

 
101,323

Repayment of borrowings
 
(33,415
)
 
(55,236
)
Interest paid
 
(3,977
)
 
(2,350
)
Dividends paid
 
(8,189
)
 
(8,333
)
Other financing activities
 
(83
)
 
70

Cash flows from financing activities
 
29,135

 
35,474

 
 
 
 
 
Net decrease in cash
 
(7,809
)
 
(3,208
)
Effect of foreign exchange differences on cash
 
39

 
(807
)
Cash, beginning of period
 
18,651

 
9,093

Cash, end of period
 
10,881

 
5,078

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

6

Intertape Polymer Group Inc.
Consolidated Balance Sheets
As of
(In thousands of US dollars)
 
 
March 31,
2019
 
December 31, 2018
 
 
(Unaudited)
 
(Audited)
 
 
$
 
$
ASSETS
 
 
 
 
Current assets
 
 
 
 
Cash
 
10,881

 
18,651

Trade receivables
 
134,235

 
129,285

Inventories
 
205,780

 
190,675

Other current assets
 
22,297

 
24,395

 
 
373,193

 
363,006

Property, plant and equipment
 
414,075

 
377,076

Goodwill
 
108,029

 
107,714

Intangible assets
 
120,953

 
122,389

Deferred tax assets (Note 4)
 
25,530

 
25,069

Other assets
 
8,487

 
9,586

Total assets
 
1,050,267

 
1,004,840

 
 
 
 
 
LIABILITIES
 
 
 
 
Current liabilities
 
 
 
 
Accounts payable and accrued liabilities
 
122,322

 
154,838

Share-based compensation liabilities, current (Note 7)
 
5,665

 
5,066

Provisions, current
 
1,325

 
2,262

Borrowings, current
 
20,668

 
14,389

 
 
149,980

 
176,555

Borrowings, non-current
 
553,583

 
485,596

Pension, post-retirement and other long-term employee benefits
 
15,172

 
14,898

Share-based compensation liabilities, non-current (Note 7)
 
2,115

 
4,125

Non-controlling interest put options (Note 8)
 
10,527

 
10,499

Deferred tax liabilities (Note 4)
 
44,687

 
42,321

Provisions, non-current
 
4,653

 
4,194

Other liabilities
 
5,548

 
5,224

Total liabilities
 
786,265

 
743,412

 
 
 
 
 
EQUITY
 
 
 
 
Capital stock (Note 7)
 
350,475

 
350,267

Contributed surplus
 
17,329

 
17,074

Deficit
 
(93,592
)
 
(95,814
)
Accumulated other comprehensive loss
 
(21,843
)
 
(21,680
)
Total equity attributable to Company shareholders
 
252,369

 
249,847

Non-controlling interests
 
11,633

 
11,581

Total equity
 
264,002

 
261,428

Total liabilities and equity
 
1,050,267

 
1,004,840

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

7

Intertape Polymer Group Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
March 31, 2019
(In US dollars, tabular amounts in thousands, except per share data and as otherwise noted)
(Unaudited)
1 - GENERAL BUSINESS DESCRIPTION
Intertape Polymer Group Inc. (the “Parent Company”), incorporated under the Canada Business Corporations Act, has its principal administrative offices in Montreal, Québec, Canada and in Sarasota, Florida, U.S.A. The address of the Parent Company’s registered office is 800 Place Victoria, Suite 3700, Montreal, Québec H4Z 1E9, c/o Fasken Martineau DuMoulin LLP. The Parent Company’s common shares are listed on the Toronto Stock Exchange (“TSX”) in Canada.
The Parent Company and its subsidiaries (together referred to as the “Company”) develop, manufacture and sell a variety of paper-and-film based pressure sensitive and water-activated tapes, polyethylene and specialized polyolefin films, protective packaging, engineered coated products and complementary packaging systems for industrial and retail use.
Intertape Polymer Group Inc. is the Company’s ultimate parent.
2 - ACCOUNTING POLICIES
Basis of Presentation and Statement of Compliance
The unaudited interim condensed consolidated financial statements (“financial statements”) present the Company’s consolidated balance sheets as of March 31, 2019 and December 31, 2018, as well as its consolidated earnings, comprehensive income, changes in equity and cash flows for the three months ended March 31, 2019 and 2018.
These financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 – Interim Financial Reporting and are expressed in United States (“US”) dollars. Accordingly, certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), have been omitted or condensed. These financial statements use the same accounting policies, except for the adoption of the new standard described below, and use the same methods of computation as compared with the Company’s most recent annual audited consolidated financial statements, except for (i) the estimate of the provision for income taxes, which is determined in these financial statements using the estimated weighted average annual effective income tax rate applied to the earnings before income tax expense of the interim period, which may have to be adjusted in a subsequent interim period of the financial year if the estimate of the annual income tax rate changes, and (ii) the re-measurement of the defined benefit liability, which is required at year-end and if triggered by plan amendment or settlement during interim periods.
These financial statements reflect all adjustments which are, in the opinion of management, necessary to present a fair statement of the results for these interim periods. These adjustments are of a normal recurring nature.
These financial statements were authorized for issuance by the Company’s Board of Directors on May 8, 2019.
Critical Accounting Judgments, Estimates and Assumptions
The preparation of these financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Significant changes in the underlying assumptions could result in significant changes to these estimates. Consequently, management reviews these estimates on a regular basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. The judgments, estimates and assumptions applied in these financial statements were the same as those applied in the Company’s most recent annual audited consolidated financial statements other than (as noted above) the accounting policies and methods of computation for the estimate of the provision for income taxes, the re-measurement of the defined benefit liability, and the measurement of lease liabilities under IFRS 16 - Leases, discussed below, which requires judgment as to the certainty of renewal options to be exercised and the discount rates applied.

8

New Standards Adopted as of January 1, 2019
IFRS 16 - Leases ("IFRS 16"), which replaced IAS 17 - Leases along with three Interpretations (IFRIC 4 ‘Determining whether an Arrangement contains a Lease’, SIC 15 ‘Operating Leases-Incentives’ and SIC 27 ‘Evaluating the Substance of Transactions Involving the Legal Form of a Lease’), introduced a comprehensive model for the identification of lease arrangements and accounting treatments for both lessors and lessees, as well as new disclosure requirements. IFRS 16 became effective for annual reporting periods beginning on or after January 1, 2019. The new standard has been applied using the modified retrospective approach and as a result, prior periods have not been restated. The Company has made use of the practical expedient available on transition to IFRS 16 not to reassess whether a contract is or contains a lease and the definition of a lease in accordance with IAS 17 and IFRIC 4 will continue to apply to those leases entered or modified before January 1, 2019 ("the date of initial application"). For those leases previously classified as finance leases, the right-of-use asset and lease liability are measured at the date of initial application at the same amounts as under IAS 17 immediately before the date of initial application. The Company has applied recognition exemptions across its complete portfolio of leased assets for short-term leases and leases of low value items. Furthermore, the Company has used certain relevant practical expedients available under the modified retrospective approach. Specifically, these include (i) applying a single discount rate to a portfolio of leases with reasonably similar characteristics, (ii) relying on the assessment of whether leases are onerous applying IAS 37 Provisions, Contingent Liabilities and Contingent Assets immediately before the date of initial application as an alternative to performing an impairment review, (iii) excluding leases for which the lease term ends within 12 months of the date of initial application, (iv) excluding initial direct costs from the measurement of the right-of-use asset at the date of initial application, and (v) using hindsight, such as in determining the lease term if the contract contains options to extend or terminate the lease. The Company has also elected to measure the right-of-use assets at an amount equal to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date of initial application.
The adoption of this new guidance resulted in changes to the balance sheet, including (i) recognition of $31.1 million in right-of-use assets included in property, plant and equipment, (ii) the recognition of $31.5 million in lease liabilities included in borrowings, current and non-current, (iii) decrease of $0.1 million in accounts payable and accrued liabilities and (iv) decrease of $0.3 million in other liabilities.
On transition to IFRS 16 the weighted average incremental borrowing rate applied to lease liabilities recognized was 6.6%. These rates are based on market rates as of January 1, 2019 for a BB- rated industrial company issuing debt for maturities ranging from 3 months to 10 years.
The following is a reconciliation of total operating lease commitments as of December 31, 2018 to the lease liabilities recognized as of January 1, 2019:
 
 
Lease details
 
 
$
Total operating lease commitments disclosed as of December 31, 2018
 
35,544

Recognition exemptions:
 
 
Leases of low value assets
 
(226
)
Leases with remaining lease term of less than 12 months
 
(2,093
)
Other minor adjustments relating to commitment disclosures
 
(670
)
Operating lease liabilities before discounting
 
32,555

Discounted using incremental borrowing rate
 
(5,754
)
Reasonably certain extension options
 
4,683

Operating lease liabilities recognized under IFRS 16 as of January 1, 2019
 
31,484

Finance lease liabilities
 
5,712

Total lease liabilities recognized under IFRS 16 as of January 1, 2019
 
37,196


9

Lease liabilities are presented in the consolidated balance sheet under the caption borrowings as follows:
 
March 31, 2019
 
December 31, 2018
 
$
 
$
Lease liabilities (current)
5,748

 
1,441

Lease liabilities (non-current)
30,310

 
4,271

 
36,058

 
5,712

Rent expense relating to payments not included in the measurement of a lease liability was approximately $1.4 million for the three months ended March 31, 2019.
Included in the net carrying amount of property, plant and equipment presented in the consolidated balance sheet are right-of-use assets as follows:
 
March 31, 2019
 
January 1, 2019
 
$
 
$
Buildings
26,960

 
27,960

Manufacturing equipment
2,275

 
1,180

Furniture, office equipment and other
1,105

 
1,914

Right-of-use assets
30,340

 
31,054

Accounting policy applicable from January 1, 2019
Contracts entered into on or after January 1, 2019 that meet the definition of a lease are recognized on the balance sheet as a right-of-use asset and a lease liability, unless they are determined to be low value or short-term leases. At the lease commencement date, the lease liability is measured at the present value of the lease payments unpaid at that date, including non-lease components, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate. Lease payments are apportioned between the finance cost and the liability. The finance charge is recognized in earnings in finance costs and is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.
At the lease commencement date, the right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received). Right-of-use assets are depreciated on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.
The lease liability is remeasured to reflect any reassessment or modification and the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already fully depreciated.
The classification of a short-term lease is re-assessed if the terms of the lease are changed. Lease payments related to low value and short-term leases are recognized in earnings on a straight-line basis over the lease term.

In the current year, the Company has applied a number of other amendments to IFRS Standards and Interpretations issued by the IASB that are effective for an annual period that begins on or after January 1, 2019. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

10

New Standards and Interpretations Issued but Not Yet Effective
Certain new standards, amendments and interpretations, and improvements to existing standards have been published by the IASB but are not yet effective and have not been adopted early by the Company. Management anticipates that all the relevant pronouncements will be adopted in the first reporting period following the date of application. Information on new standards, amendments and interpretations, and improvements to existing standards, which could potentially impact the Company’s financial statements, are detailed as follows:
On March 29, 2018, the IASB issued its revised Conceptual Framework for Financial Reporting ("Conceptual Framework"). This replaces the previous version of the Conceptual Framework issued in 2010. The revised Conceptual Framework will be effective on November 1, 2020. Management is currently assessing but has not yet determined the impact of the Conceptual Framework on the Company’s financial statements.
Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Company’s financial statements.
3 - INFORMATION INCLUDED IN CONSOLIDATED EARNINGS
The following table describes the charges incurred by the Company which are included in the Company’s consolidated earnings:
 
Three months ended
March 31,
 
2019
 
2018
 
$
 
$
Employee benefit expense
 
 
 
Wages, salaries and other short-term benefits
54,132

 
46,606

Termination benefits
252

 
96

Share-based compensation (benefit) expense (Note 7)
(1,436
)
 
410

Pension, post-retirement and other long-term employee benefit plans:
 
 
 
Defined benefit plans
534

 
745

Defined contributions plans
2,417

 
1,761

 
55,899

 
49,618

 
 
 
 
Finance costs - Interest
 
 
 
Interest on borrowings (1)
8,152

 
2,484

Amortization of debt issue costs on borrowings
298

 
190

Interest capitalized to property, plant and equipment
(757
)
 
(212
)
 
7,693

 
2,462

 
 
 
 
Finance costs - Other (income) expense, net
 
 
 
Foreign exchange (gain) loss
(1,200
)
 
769

Other costs, net
545

 
356

 
(655
)
 
1,125

 
 
 
 
Additional information
 
 
 
Depreciation of property, plant and equipment
12,135

 
9,027

Amortization of intangible assets
2,534

 
1,032

Impairment of assets
211

 
346





11

4 - INCOME TAXES
The calculation of the Company’s effective tax rate is as follows:
 
Three months ended
March 31,
 
2019
 
2018
Income tax expense
$
4,071

 
$
3,120

Earnings before income tax expense
$
14,603

 
$
14,414

Effective tax rate
27.9
%
 
21.6
%

The increase in the effective tax rate in the three months ended March 31, 2019 as compared to the same period in 2018 was primarily due to the elimination of certain tax benefits as a result of the Tax Cuts and Jobs Act related to intercompany debt and an unfavourable change in the mix of earnings between jurisdictions.
5 - EARNINGS PER SHARE
The weighted average number of common shares outstanding is as follows:
 
Three months ended
March 31,
 
2019
 
2018
Basic
58,652,366

 
58,801,327

Effect of stock options
271,741

 
345,366

Diluted
58,924,107

 
59,146,693


For the three months ended March 31, 2019 and 2018, the number of stock options that were anti-dilutive and not included in diluted earnings per share calculations were 242,918 in both periods.
6 - COMMITMENTS
The following table summarizes information related to commitments to purchase machinery and equipment:
 
 
March 31, 2019
 
December 31, 2018
Commitments to purchase machinery and equipment
 
$
11,378

 
$
16,256

7 - CAPITAL STOCK
Common Shares
The Company’s common shares outstanding as of March 31, 2019 and December 31, 2018 were 58,667,810 and 58,650,310, respectively.
Dividends
The cash dividends paid during the period were as follows:
Declared Date
 
Paid date
 
Per common
share amount
 
Shareholder
record date
 
Common shares
issued and
outstanding
 
Aggregate 
payment (1)
March 12, 2019
 
March 29, 2019
 
$0.14
 
March 22, 2019
 
58,665,310
 
$
8,189


(1) 
The aggregate dividend payment amount presented in the table above has been adjusted for the impact of foreign exchange rates on cash payments to shareholders.

12

Share Repurchases
Under the Company’s normal course issuer bid (“NCIB”), the Company has the ability to repurchase for cancellation up to 4,000,000 common shares of the Company at prevailing market prices over the twelve-month period starting on July 23, 2018 and ending July 22, 2019.
There were no shares repurchased under the current NCIB during the three months ended March 31, 2019 and under the prior NCIB during the three months ended March 31, 2018. As of March 31 and May 8, 2019, there were 3,782,900 shares available for repurchase under the NCIB.

Stock Options

The following tables summarize information related to stock options (in Canadian dollars ("CDN") where indicated):
 
Three months ended
March 31,
 
2019
 
2018
Stock options granted (1)
392,986

 
242,918

Weighted average exercise price per stock option granted
CDN$17.54

 
CDN$21.76

Stock options exercised
(17,500
)
 
(7,500
)
Weighted average exercise price per stock option exercised
CDN$12.11

 
CDN$12.04


(1) 
The Company's Executive Stock Option Plan ("ESOP") adopted in 1992 and last ratified on June 4, 2015, elapsed on June 4, 2018. No further grants of stock options have been made under the ESOP since June 4, 2018. On March 12, 2019, the Board of Directors adopted a new Executive Stock Option Plan ("2019 ESOP") and on June 6, 2019, shareholders will be asked to approve the 2019 ESOP at the Company's Annual Meeting of Shareholders. As a result, the stock options granted on March 28, 2019 are subject to shareholder approval of the 2019 ESOP and will be cancelled if the 2019 ESOP is not approved.

 
March 31, 2019
Stock options outstanding
1,385,279

Weighted average exercise price per stock option outstanding
$
15.46


The weighted average fair value of stock options granted was estimated using the Black-Scholes option pricing model, taking into account the following weighted average assumptions:
 
Three months ended
March 31,
 
2019
 
2018
Expected life
4.9 years
 
 4.8 years
Expected volatility (1)
29.79%
 
32.09%
Risk-free interest rate
1.44%
 
2.05%
Expected dividends
4.27%
 
3.30%
Stock price at grant date
CDN$17.54
 
CDN$21.76
Exercise price of awards
CDN$17.54
 
CDN$21.76
Foreign exchange rate USD to CDN
1.3380
 
1.2809

(1) 
Expected volatility was calculated by applying a weighted average of the daily closing price change on the TSX for a term commensurate with the expected life of each grant.


13

Restricted Share Units

The following tables summarize information related to restricted share units ("RSUs"):
 
Three months ended
March 31,
 
2019
 
2018
RSUs granted
120,197

 
113,047

Weighted average fair value per RSU granted
$
13.74

 
$
16.29


 
March 31, 2019
RSUs outstanding
232,016

Weighted average fair value per RSU outstanding
$
13.25


Deferred Share Units

There were no deferred share units ("DSUs") granted during the three months ended March 31, 2019. The following tables summarize information related to DSUs:
 
Three Months Ended
March 31, 2018
DSUs granted
174,426

Weighted average fair value per DSU granted
$
15.87


 
March 31, 2019
DSUs outstanding
198,993

Weighted average fair value per DSU outstanding
$
13.25


Performance Share Units

The following table summarizes information about performance share units ("PSUs") during the period:
 
Three months ended
March 31,
 
2019
 
2018
PSUs granted
291,905

 
284,571

Weighted average fair value per PSU granted
$
14.28

 
$
17.84

PSUs (cancelled)/added by performance factor (1)
(371,158
)
 
—

PSUs settled (1)
—

 
(217,860
)
Weighted average fair value per PSU settled
—

 
$
16.61

Cash payments on PSUs settled(2)
—

 
$
3,967


(1) 
The following table provides further information regarding the PSUs settled and adjusted by performance factor included in the table above. The number of "Target Shares" reflects 100% of the PSUs granted and the number of PSUs settled reflects the performance adjustments to the Target Shares.
Grant Date
Date Settled
Target Shares

Performance

PSUs settled

March 14, 2015
March 21, 2018
217,860

100
%
217,860

March 21, 2016
March 21, 2019
371,158

—
%
—


(2) 
Cash payments on PSUs settled include the fair value of the PSUs plus the cash dividends per common share declared and paid by the Company from the date of grant of the PSUs to the settlement date.

14

The weighted average fair value of PSUs granted was estimated based on a Monte Carlo simulation model, considering the following weighted average assumptions:
 
Three months ended
March 31,
 
2019
 
2018
Expected life
3 years

 
3 years

Expected volatility(1)
25
%
 
30
%
US risk-free interest rate
2.36
%
 
2.43
%
Canadian risk-free interest rate
1.60
%
 
1.96
%
Expected dividends(2)
0
%
 
0
%
Performance period starting price(3)
CDN$16.36

 
CDN$21.13

Closing stock price on TSX as of the estimation date
CDN$18.06

 
CDN$20.59

 
(1) 
Expected volatility was calculated based on the daily dividend adjusted closing price change on the TSX for a term commensurate with the expected life of the grant.
(2) 
A participant will receive a cash payment from the Company upon PSU settlement that is equivalent to the number of settled PSUs multiplied by the amount of cash dividends per share declared by the Company between the date of grant and the settlement date. As such, there is no impact from expected future dividends in the Monte Carlo simulation model.
(3) 
The performance period starting price is measured as the VWAP for the common shares of the Company on the TSX on the grant date.

The following table summarizes information about PSUs outstanding as of:
 
March 31, 2019
PSUs outstanding
954,986

Weighted average fair value per PSU outstanding
$
11.24

Based on the Company’s current performance adjustment factors, the number of PSUs earned if all of the outstanding PSUs were to be settled at March 31, 2019 would be as follows:
Grant Date
 
Performance
December 20, 2016
 
0
%
March 20, 2017
 
50
%
March 21, 2018
 
101.1
%
March 21, 2019
 
57.6
%

Stock Appreciation Rights

There were no stock appreciation rights (“SARs”) outstanding as of March 31, 2019 and there was no activity during the three months ended March 31, 2019. There were 40,000 SARs outstanding as of March 31, 2018 and there were 107,500 SARs exercised during the three months ended March 31, 2018 with a base price of CDN$7.56.

15

Summary of Share-based Compensation Expense and Share-based Compensation Liabilities

The following table summarizes share-based compensation (benefit) expense recorded in earnings in selling, general and administrative expense:
 
Three months ended
March 31,
 
2019
 
2018
 
$
 
$
Stock options
110

 
60

PSUs
(1,989
)
 
372

RSUs
230

 
59

DSUs
213

 
(57
)
SARs
—

 
(24
)
Total share-based compensation (benefit) expense
(1,436
)
 
410

The following table summarizes share-based liabilities, including dividend equivalents accrued, recorded in the consolidated balance sheets as of:
 
March 31, 2019
 
December 31, 2018
Share-based compensation liabilities, current
$
 
$
PSUs(1)
2,859

 
2,563

RSUs(1)
126

 
86

DSUs(2)
2,680

 
2,417

Total share-based compensation liabilities, current
5,665

 
5,066

 
 
 
 
Share-based compensation liabilities, non-current
 
 
 
PSUs(1)
1,565

 
3,764

RSUs(1)
550

 
361

Total share-based compensation liabilities, non-current
2,115

 
4,125


(1) 
Includes dividend equivalents accrued.
(2) 
Includes dividend equivalent grants and effect of DSUs received in lieu of cash for directors' fees not yet granted.
8 - FINANCIAL INSTRUMENTS
Classification and Fair Value of Financial Instruments
The carrying amounts of the following financial assets and liabilities are considered a reasonable approximation of fair value given their short maturity periods:
•
cash
•
trade receivables
•
supplier rebates and other receivables
•
accounts payable and accrued liabilities
•
call option redemption liability
•
Amounts due to former shareholders of Polyair(1) included in other liabilities

(1) 
Represents amounts payable to the former shareholders of Polyair Inter Pack, Inc. ("Polyair") relating to estimated income tax benefits as a result of the Company's payment of certain deal-related costs on behalf of Polyair.

16

Borrowings

The fair value of the Company's $250 million senior unsecured notes issued in October 2018 ("Senior Unsecured Notes) is based on the trading levels and bid/offer prices observed by a market participant. As of March 31, 2019 and December 31, 2018, the Senior Unsecured Notes had a carrying value, including unamortized debt issuance cost, of $245.3 million in both periods and a fair value of $256.2 million and $248.7 million, respectively.

The Company's borrowings, other than the Senior Unsecured Notes, consist primarily of variable rate debt. The corresponding fair values are estimated using observable market interest rates of similar variable rate loans with similar risk and credit standing. Accordingly, the carrying amounts are considered to be a reasonable approximation of the fair values.

As of March 31, 2019, and December 31, 2018, the Company categorizes its borrowings as Level 2 on the three-level fair value hierarchy.
Interest Rate Swaps
The Company measures the fair value of its interest rate swap agreements using discounted cash flows. Future cash flows are estimated based on forward interest rates (from observable yield curves at the end of a reporting period) and contract interest rates, discounted as a rate that reflects the credit risk of various counterparties.
As of March 31, 2019, and December 31, 2018, the Company categorizes its interest rate swaps as Level 2 on the three-level fair value hierarchy, meaning that the fair value is estimated using a valuation technique based on unobservable market data, either directly or indirectly.
Non-Controlling Interest Put Options
In connection with the acquisition of Airtrax Polymers Private Limited on May 11, 2018, the Company, through its partially owned subsidiary Capstone, is party to a shareholders’ agreement that contains put options, which provide each of the non-controlling interest shareholders with the right to require the Company to purchase their retained interest at a variable purchase price following a five-year lock-in period following the date of acquisition. The agreed-upon purchase price is equal to the fair market valuation as determined through a future negotiation or, as needed, a valuation to be performed by an independent and qualified expert at the time of exercise. During the three months ended March 31, 2019, the obligation was remeasured due to changes in exchange rates resulting in less than a $0.1 million increase in the liability and a corresponding loss recorded in finance costs in other (income) expense, net. As of March 31, 2019 and December 31, 2018, the amount recorded on the consolidated balance sheet for this obligation is $10.5 million.
The Company categorizes its non-controlling interest put options as Level 3 of the fair value hierarchy, meaning that the fair value is estimated using a valuation technique based on unobservable market data. Details of inputs used in this valuation technique have been disclosed in the Company's audited consolidated financial statements and notes thereto as of December 31, 2018.
A reconciliation of the carrying amount of financial instruments classified within Level 3 follows for the years ended:
 
Non-controlling interest put options
 
$
Balance as of December 31, 2018
10,499

Net foreign exchange differences
28

Balance as of March 31, 2019
10,527


17

Interest Rate Swap Agreements
The Company is exposed to a risk of change in cash flows due to the fluctuations in interest rates on its variable rate borrowings. To minimize the potential long-term cost of floating rate borrowings, the Company entered into interest rate swap agreements.
The terms of the interest rate swap agreements are as follows as of March 31, 2019:
 
 
Effective Date
 
Maturity
 
Notional Amount
$
 
Settlement
 
Fixed interest rate paid
%
Qualifying cash flow hedges:
 
 
 
 
 
 
 
 
 
 
June 8, 2017
 
June 20, 2022
 
40,000

 
Monthly
 
1.7900
 
 
July 21, 2017
  
July 18, 2022
  
CDN$36,000 (1)

  
Monthly
  
1.6825
 
 
August 20, 2018
 
August 18, 2023
 
60,000

 
Monthly
 
2.0450
Non-qualifying cash flow hedges:
 
 
 
 
 
 
 
 
 
 
March 18, 2015
 
November 18, 2019
 
40,000

 
Monthly
 
1.6100

(1) 
The notional amount will decrease by CDN$18.0 million on July 18, 2021 and 2022.

The following tables summarize information regarding interest rate swap agreements designated as hedging instruments:
 
Three months ended
March 31,
 
2019
 
2018
 
$
 
$
Change in fair value of the hedging instrument recognized in OCI (1)
(1,382
)
 
2,024

Change in deferred tax recognized in OCI
279

 
(292
)
Amounts reclassified from cash flow hedging reserve to earnings (2)
(85
)
 
—


(1) 
The hedging (loss)/gain recognized in other comprehensive income ("OCI") before tax is equal to the change in fair value used for measuring effectiveness. There is no ineffectiveness recognized in earnings.
(2) 
Reclassification of unrealized gains from OCI as a result of the discontinuation of hedge accounting for the interest rate swap agreement not qualifying as a cash flow hedge are included in interest expense under the caption finance costs in earnings.

 
March 31, 2019
 
December 31, 2018
 
$
 
$
Carrying amount included in other assets
884

 
2,266

Balance in cash flow hedge reserve for continuing hedges
1,074

 
2,177

Balance remaining in cash flow hedge reserve from hedging relationship for which hedge accounting no longer applies
228

 
313



18

Hedge of net investment in foreign operations
A foreign currency exposure arises from the Parent Company's net investment in its USD functional currency subsidiary, IPG (US) Holdings Inc. The risk arises from the fluctuations in the USD and Canadian dollar current exchange rate, which causes the amount of the net investment in IPG (US) Holdings Inc. to vary. The Company's Senior Unsecured Notes are being used to hedge the Company’s exposure to the USD foreign exchange risk on this investment.
The gains related to the Senior Unsecured Notes designated as a hedging instrument in the hedge of a net investment are as follows for the three months ended March 31, 2019 (nil for the three months ended March 31, 2018):
 
Three months ended
March 31,
 
2019
 
$
Change in value used for calculating hedge ineffectiveness
5,340

Change in value of hedging instrument recognized in OCI
4,681

Hedge ineffectiveness recognized in earnings in finance costs in other (income) expense, net
647

Foreign exchange impact recognized in CTA
12


The notional and carrying amounts of the Senior Unsecured Notes are as follows:
 
March 31, 2019
 
December 31, 2018
 
$
 
$
Notional amount
250,000

 
250,000

Carrying amount
245,310

 
245,252


The amounts related to the net investment in IPG (US) Holdings, Inc., designated as the hedged item in the in the hedge of a net investment, are as follows for the three months ended March 31, 2019 (nil for the three months ended March 31, 2018):
 
Three months ended
March 31,
 
2019
 
$
Change in value used for calculating hedge ineffectiveness
4,681

The cumulative amounts included in the foreign currency translation reserve related to the net investment in IPG (US) Holdings, Inc., designated as the hedged item in the hedge of a net investment, is as follows:
 
March 31, 2019
 
December 31, 2018
 
$
 
$
Foreign currency translation reserve
(4,740
)
 
(9,421
)
9 - POST REPORTING EVENTS
Non-Adjusting Events
•
On May 8, 2019, the Company declared a quarterly cash dividend of $0.14 per common share payable on June 28, 2019 to shareholders of record at the close of business on June 14, 2019. The estimated amount of this dividend payment is $8.2 million based on 58,670,935 of the Company’s common shares issued and outstanding as of May 8, 2019.
No other significant adjusting or non-adjusting events have occurred between the reporting date of these financial statements and the date of authorization.

19

Form 52-109F2
Certification of Interim Filings
Full Certificate
I, Gregory A.C. Yull, Chief Executive Officer of INTERTAPE POLYMER GROUP INC./LE GROUPE INTERTAPE POLYMER INC., certify the following:
1.
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of INTERTAPE POLYMER GROUP INC./LE GROUPE INTERTAPE POLYMER INC. (the “Issuer”) for the interim period ended March 31, 2019.
2.
No misrepresentation: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the Issuer, as of the date and for the periods presented in the interim filings.
4.
Responsibility: The Issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the Issuer.
5.
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the Issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings: 
(a)
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
(a)
material information relating to the Issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
(b)
information required to be disclosed by the Issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b)
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Issuer’s GAAP.
5.1
Control framework: The control framework the Issuer’s other certifying officer(s) and I used to design the Issuer’s ICFR is the 2013 Internal Control – Integrated Framework published by the Committee of Sponsoring Organization of the Treadway Commission (COSO).
5.2
ICFR – material weakness relating to design: N/A
5.3
Limitation on scope of design: The issuer has disclosed in its interim MD&A
(a)
the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of:
(i) N/A;
(ii) N/A; or
(iii) a business that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings;
(b)
summary financial information about business that the issuer acquired that has been consolidated in the issuer’s financial statements.


6.
Reporting changes in ICFR: The Issuer has disclosed in the interim MD&A any change in the Issuer’s ICFR that occurred during the period beginning on January 1, 2019 and ended on March 31, 2019 that has materially affected, or is reasonably likely to materially affect, the Issuer’s ICFR.


DATED the 9th day of May, 2019.

By: /s/ Gregory A.C. Yull
Gregory A.C. Yull
Chief Executive Officer


Form 52-109F2
Certification of Interim Filings
Full Certificate
I, Jeffrey Crystal, Chief Financial Officer of INTERTAPE POLYMER GROUP INC./LE GROUPE INTERTAPE POLYMER INC., certify the following:
1.
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of INTERTAPE POLYMER GROUP INC./LE GROUPE INTERTAPE POLYMER INC. (the “Issuer”) for the interim period ended March 31, 2019.
2.
No misrepresentation: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
3.
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the Issuer, as of the date and for the periods presented in the interim filings.
4.
Responsibility: The Issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52 - 109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the Issuer.
5.
Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the Issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings: 
(a)
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
(a)
material information relating to the Issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
(b)
information required to be disclosed by the Issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
(b)
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the Issuer’s GAAP.
5.1
Control framework: The control framework the Issuer’s other certifying officer(s) and I used to design the Issuer’s ICFR is the 2013 Internal Control – Integrated Framework published by the Committee of Sponsoring Organization of the Treadway Commission (COSO).
5.2ICFR – material weakness relating to design: N/A
5.3
Limitation on scope of design: The issuer has disclosed in its interim MD&A
a.
the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of:
(i) N/A;
(ii) N/A; or
(iii) a business that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings;
b.
summary financial information about business that the issuer acquired that has been consolidated in the issuer’s financial statements.


6.
Reporting changes in ICFR: The Issuer has disclosed in the interim MD&A any change in the Issuer’s ICFR that occurred during the period beginning on January 1, 2019 and ended on March 31, 2019 that has materially affected, or is reasonably likely to materially affect, the Issuer’s ICFR.

DATED the 9th day of May, 2019.

By: /s/ Jeffrey Crystal
Jeffrey Crystal
Chief Financial Officer