Red River Co-Op 2020 Annual Report

2020 A UAL REPORT

LOCALLY IN VESTED | COMMUNITY MINDED | LIFETIME MEMB ERSHIP BENEFITS CONTENTS Our Mission To capture the hearts and minds of our PRESIDENT’S MESSAGE 5 employees, members and communities to CEO’S MESSAGE 6 grow our co-operative while returning profits MINUTES OF THE 82ND ANNUAL GENERAL MEETING 8 to our member-owners. BOARD REPORTS 13

Board of Directors' Report 14

Audit Committee Report 16

Our Vision Nominations Committee Report 16 To be our members’ preferred brand along Governance and Compensation Committee Report 17 life’s journey. FINANCIAL STATEMENTS 19

DIVISION REPORTS 39

Our Values About Us 40 INTEGRITY…be honest and trustworthy in Food Division 42 everything we do! Energy Division 44 Human Resources Division 46

TEAMWORK…we see the value in working SUSTAINABILITY REPORT 49 together and always striving to do our best. Community Investment 48

RESPECT…for our co-workers, members Environmental Sustainability 51 and communities. STATEMENT OF CO-OP IDENTITY 52 CODE OF ETHICAL STANDARDS FOR CO-OPERATIVES 53

RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 3 SUSTAINABILITY PILLARS PRESIDENT’S MESSAGE

Red River Co-op is a different kind of business, he role of the Board of Directors is to steward the (at Seasons of Tuxedo) under resources of the organization and report on the state of construction. We have also and we operate our business with five guiding pillars. our co-operative. This is my fourth year as President of completely renovated our the Red River Co-op Board of Directors and I have been original city store locations. honored to work with our current Board to grow our The renovation at St. Vital Tco-operative for the benefit of our many members. was completed in December and we are very proud of the The pandemic and the subsequent restrictions imposed by look and feel of the store. We encourage you to experience it for government to protect us all created huge challenges for you, yourself. We continue to look for new opportunities to grow our our members, but it also drastically reduced the consumption food and energy offering to better serve our members, where a of fuel at our assets in Winnipeg and surrounding area. It was an business case can be supported. unprecedented situation and the Board met with management very early in the process to chart a new plan that took into We continue to invest in our energy business across our network. account what was a dramatically changed business environment We are in the midst of a multi-year plan to improve our older for both food and energy. assets so that they are consistent with the offering we want to see across the co-operative retailing system. The dramatic fall in Your Board, and indeed the whole organization, takes its demand driven by the pandemic led us to defer much of the repair responsibility to members very seriously and while the year was and maintenance planned in fiscal 2020 and this will delay the different than anything we had experienced before, we continued completion of the plan by at least a year. to work diligently to advance our co-operative and its competitive position, facilitating the sustainable growth of Red River Co-op. I am proud of what we have accomplished during the past 80 years. However, longevity is not an indicator of success It is important to tell our story – a story that was started in and not something we can take for granted. We must remain the city of Winnipeg and surrounding communities more than relevant, competitive and flexible to meet the changing needs 80 years ago. Not only do we keep profits local and invest in of our members. local economies, we are involved and personally give where we live and work. In order to accomplish this, we are taking a more strategic approach to co-operative governance. This approach is made more We are a different kind of business. A business built on the idea of important due to the increasing size of our retail and the increasing being truly local and a promise to stay that way. A business that pace of change – requiring our Board to look five or ten years into cares. For people and about people. For communities and about the future to ensure we are meeting the needs of our members communities. A business that is centered on the customer. Where and communities. customers can become members, and members are owners. A business that shares its profits with its members. We have benefited from bringing corporate performance management into all key areas at our co-operative. This is a In today’s economy, competition remains a challenge to our process to provide insight into business decisions, alignment business. We continue to observe competitors who are interested of resources and accountability. It is important that we remain in entering the market. Technology continues to change focused on our members and communities and leverage our behaviour; therefore, we must think about how our co-operative co-operative advantage. The Board works with our Executive conducts its business and reaches both its members as well as Leadership Team, assessing potential challenges and developing non-member customers. the strategic direction to lead us through the ever-changing business landscape. We have a distinct advantage over our competition as our business model balances economic and social interests. Investing in our Members’ support in the past and into the future is a cornerstone local communities and meeting the needs of our more than of our continued success, along with our alignment in values, 312,000 members is essential to who we are as a business. vision and purpose. In the years to come, we will continue to build on our strengths to advance our vision to “Be our members’ We have been challenged by our members to expand our preferred brand along life’s journey.” food offering in and around the city of Winnipeg and we have responded. We entered the food business with four locations in Ward Weisensel 2014 and today we have eight locations operating with a ninth President of the Board CO-OPERATIVE LEADERSHIP CO-OPERATIVE COMMUNITY INVESTMENT FISCAL RESPONSIBILITY FISCAL SUSTAINABILITY ENVIRONMENTAL ENGAGEMENT EMPLOYEE

RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 5 CEO'S MESSAGE

he 2020 fiscal year was one of the most challenging years faced by our co-op. The combination of the labour disruption at the Co-op Refinery Complex in Regina and the impacts associated with the pandemic took their toll on our operating results. What was Tchallenging for us is that both of these occurrences were external conditions thrust upon us which we had no control over. Despite these challenges your Red River Co-op was able to deliver a financial result very close to what we had budgeted, however significantly less earnings than what were achieved from last year’s strong results.

By far the most significant disruptor in the marketplace was the effects of the lockdown measures implemented to control the spread of the COVID-19 virus. As governments initiated lockdowns, we saw early into our fiscal year the potential impact which could have been devasting to our financial performance. The pandemic has had a global impact and at one point we saw world crude futures selling at negative prices. The impact of this unprecedented event resulted in a major decline in profitability at the Co-op Refinery Complex and resulted in reduced patronage allocations from our wholesale, Federated Co-operatives Limited (FCL).

At the initial onset of the pandemic, we began to implement appropriate safety protocols to protect our customers and employees. My appreciation goes out to our members for your acceptance of these measures and as a result we experienced limited push back. Our Executive Leadership Team also began the process of forecasting what the pandemic’s impact “could” have on our operations and determined it would be significant. I am proud of the efforts of our management and their buy-in of changes initiated to mitigate the risks we saw coming. As a result of the decisions made, we were able to limit the impact to our employees, however some did experience lay-offs for a brief period. As financial pressures mounted, so did associated costs of implementing safety protocols at our facilities. As lockdowns were imposed, we saw volumes at our gas bars decline. To counteract the declining revenues, an aggressive expense control campaign was implemented which included delaying some major projects

Continued on page 8

6 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT and elimination of a number of major repairs planned. As a result planned for phase two. We are also working with FCL to explore For the past couple of years, we have looked inward reviewing of the measures taken, we were able to achieve earnings at the other fuel alternatives such as hydrogen, E-85 and natural gas programs and policies to ensure we provide competitive working local level in excess of our budget, however, not enough to offset that could be introduced to the market. conditions and a supportive and inclusive environment for our the decline in patronage from FCL. As stated, the pandemic’s team members. In 2020 we wanted to see how we stacked up impact to FCL’s refining operations was significant, and overall, The pandemic consumed our lives in 2020 and continues to do against other Canadian and Manitoban employers and submitted all retail co-ops experienced a decline in energy allocations. As a so in 2021, however the risks it presented to us also provided us our first application for recognition as a Top Employer. I am result, our net earnings were slightly less than our budget which with a look into the future and the potential opportunities on the pleased to share that we were recognized as one of Manitoba’s resulted in reduced allocations to our members, specifically on the horizon. In 2014 Red River Co-op made a bold step to re-enter the Top 50 Employers – receiving our recognition in 2021. energy side of our business. food business with the acquisition of four Safeway stores in the city. Today our food store network has grown to eight locations Red River Co-op is a different kind a busines, a business built on We have known for some time that the carbon-based economy with our nineth store scheduled to open at Seasons of Tuxedo the foundation of being local and giving back to the community. was moving into a period of decline. There are many forecasts in 2021. In addition to these nine locations, we will also have In 2020 we continued our efforts to make the communities estimating when peak demand will be reached, however we two standalone pharmacies by the end of 2021. The decision to we serve a better place for all and supported local charities believe that peak demand for gasoline was experienced in 2019. diversify our business model back in 2014 was a bold step, but the through more than $185,000 in donations. We also partnered The pandemic has given us a glimpse into what the future of the right decision for the long-term viability of our co-op. In 2020 the with FCL to host another successful Fuel Good Day where five energy business could look like for our co-op. Despite seeing profits generated by our food and pharmacy division supported cents from every litre of fuel sold at Red River Co-op locations a significant decline in litre sales in 2020, our energy division the overall financial success of our co-op. on September 15 raised more than $50,600 for the Bear Clan was able to maintain profitability at the local level, however Patrol as well as $5,000 for the Feed the Furbabies non-profit. operations were challenged by the decline in patronage from Since 2014 we have invested heavily into all of our assets, most At Red River Co-op we are proud to support local producers, FCL. Moving forward we will continue to be an energy company significantly in the expansion of our food store and pharmacy growers and manufacturers; aiding in the development of a but this will require us to adapt and evolve to remain relevant locations. All Winnipeg food stores have now been re-modelled vibrant and sustainable community. to our members. Like our predecessors who shifted from coal with the St. Vital modernization completed in 2020. These to petroleum, it will be incumbent upon us to shift our model stores, combined with the recent opening of the St. Norbert store, 2020 was an unprecedented year; a year the world joined forces for the energy side of our business. To that end, our co-op will are some of the finest food facilities in our market. The addition to face a very different and unusual challenge: the COVID-19 of the store at Seasons in 2021 will further enhance our food virus. I typically look forward to the coming year with a great be installing four electric super-charging stations in the city of We remain committed to maintaining our dominant position brand and expand our reach to more of our 312,000 members. deal of optimism, however the reality is the pandemic will likely Winnipeg as part of a western Canadian co-operative network of as a retailer of energy in the Winnipeg market. To that end, We are under renovation at our Gimli and Lorette food stores will be with us for a significant part of 2021. Regardless, there electric vehicle charging stations across the Prairies. This is phase we continued our modernization project and plan to upgrade and hope to begin renovation of the Selkirk store later in 2021. are many positives on the horizon as the distribution of the one of our expansion into EV chargers with four more units all energy sites by the end of 2022. During 2020 a number of vaccine occurs, hopefully allowing us to return to a new sense planned projects were stopped, however we will continue to of normal. invest in the energy business moving forward. This year we completed upgrades at our Pembina at Taylor, Stonewall and I want to thank our members for their unwavering support Grandmont (St. Norbert) gas bars. We began a major project of our co-op, our team members who continue to provide to replace our gas bar in Selkirk and will expand the car wash exceptional service, to our leadership team for their dedication service with a new tunnel wash and wand wash bays. During and ability to adapt to the unusual events we witnessed this 2021 we will construct our first four EV charging stations in past year, and to our board for their support, dedication and Winnipeg as well as begin construction of a new gas bar on stewardship of our co-op. Lagimodiere Boulevard. Red River Co-op will adapt to the ever-changing competitive During 2020 two new technologies were introduced to our forces in the market and will continue to grow to meet the members, the mobile car wash app and Click & Collect online future needs of our members. shopping service at our city food stores. The car wash app continues to build momentum, offering consumers the ability Sincerely, to purchase a single wash or subscription service through your Doug Wiebe smart phone. Further enhancements to the car wash app are Chief Executive Officer in the works. The introduction of the Click & Collect service at our Grant Park, Southdale, St. Vital and St. Norbert food stores enhanced our ability to provide a safe customer experience for our members as we continue to navigate the pandemic. This service will be part of the Seasons food store construction, and is planned for the Selkirk market in 2021.

8 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 9 Minutes of the 82nd Annual General Meeting Minutes of the 82nd Annual General Meeting JUNE 11, 2020 JUNE 11, 2020

REGISTRATION Motion that the minutes of the 81st Annual Meeting of Red River 8. PRESENTATION OF AUDITED FINANCIAL STATEMENTS 3. Member #39476 Dwight Stewart (07:09:01 pm) All members registered in advance by June 4, 2020 in order to sign in Cooperative Ltd. be adopted as received. Susan McLean, Chief Financial Officer, presented the Financial Did the strike at our refinery (FCL refinery) in Regina affect to the virtual annual meeting and participate with voting and question Moved: Kristen Wittman #106089 Statements for the year ending October 31, 2019. Throughout the report our co-op? period. In preparation to the meeting all registered members received Seconded: Ward Weisensel #198348 members were asked to refer to the financial statements provided in the D. Wiebe responded: Definitely Red River was impacted through the Agenda, 2019 Annual Report, and the bylaw amendments by secure 2019 Annual Report provided prior to the meeting. secondary picketing which we saw declines in volume. The biggest email communication. 48 registered members voted: 48 in favour/0 against Carried • S . Mclean reviewed Management’s Responsibility to the impact was due to the disruption from blockades not allowing us (Red preparation and presentation of the financial statements and River Co-op) to access fuel at the Shell and Esso terminals in Winnipeg, 1. CALL TO ORDER 6. BOARD OF DIRECTORS’ REPORT highlighted points of the financial statements noting the positive resulting in some of our sites having to shut down. D. Wiebe was unable to share the financial impact at this time. An Order made by the government under the Emergency Measures W. Weisensel referred the members to the detailed reports included in contribution of the food division. Act allowed Red River Co-op to hold the 82nd Annual General Meeting the 2019 Annual Report booklet, highlighting points within the reports: o Sales: With increased growth in the food division sales 4. Member #0315540 Liz Cronk (07:15:03 pm) (AGM) electronically. The meeting was held on June 11th, 2020 and o Red River Co-op paid $33.7 million in cash to the membership increased 28% over 2018. Red River saw an increase in litres I would like to add my thanks to those employees who have streamed from the head office of Red River Co-op. in February 2020. Over the past 5 years patronage of $167.9 sold however the deflation in petroleum pricing resulted in million has been paid to the members. lower sales dollars. been on the front lines, those who have attended work day after day to keep our members & the public fed while some of us were President Ward Weisensel called the meeting to order at 7:00 pm. o In 2019, Red River Co-op added an additional food store in o Gross margin: An increase of 7.6% over 2018 resulted mainly Gimli, Manitoba. from the increase in the food division. able to be at home. Thank-you! D. Wiebe thanked Liz for the positive comments. 2. WELCOME AND INTRODUCTIONS o The reconstruction of the St. Norbert food store is slated to open in early 2021; and construction of the Seasons of 9. AUDIT REPORT W. Weisensel, on behalf of the Board of Directors and Management, 5. Member #290342 Fred Horbaty (07:19:21 pm) Tuxedo food store to begin in 2020. Jeff Eckstein, CPA, CA and Partner with Myers Norris Penny, and Lead welcomed the initial 65 registered members and 16 guests to the AGM What is the strategy to support the transition to electric vehicles o Red River continues to modernize their facilities; St. Vital food Engagement Partner of the Red River Co-op audit reported, with the and confirmed that quorum was achieved (note: after 7 pm there were by members? Charging stations? store is expected to be completed later in 2020. assistance of the FCL internal audit team, confirmed that the audit was 80 registered members). He thanked the members for their attendance, D. Wiebe responded: To date, Red River has one charging station at the o Red River Co-op is focused on local issues and concerns. Red completed in an effective and efficient manner. J. Eckstein confirmed participation and their support of their Red River Co-op gas bars, food Red River Co-op Dryden Gas Bar, a Tesla supercharging site. Between River Co-op is locally vested in the community, providing the MNP received the full cooperation and support from Management, stores and pharmacies. 2020-2021 Red River will be installing 4 universal supercharging stations members with quality products from local suppliers. the Audit Committee and the Board of Directors throughout the o The Board approved donations of over $180,000 to at 4 different locations within the city as part of the Western Canadian He shared that with the challenges of a virtual AGM, the Board of process. The Independent Auditors Report is included on pages 21-22 community organizations. A full listing of the organizations Corridor for the Co-operative Retailing System. Directors would make and second all motions to be voted on, and of the 2019 Annual Report booklet. J Eckstein reported, based on can be found (in the annual report booklet and) on the explained how registered members would be called upon to vote the audit procedures performed, that the financial statements of Red website. 6. Member #197550 Sheila Snider (07:29:54 pm) throughout the meeting and how questions were to be submitted for River Cooperative Ltd. are fairly presented as at and for the year ended W. Weisensel concluded by thanking the membership for their continued Will you be maintaining the one-way aisles and distancing going question period. October 31, 2019. This is an unmodified or clean audit opinion. support of their Red River Co-op. forward? D. Wiebe responded: Yes, it is Red River Co-op’s intent to maintain this He introduced fellow Directors in attendance, Kristen Wittman, 10. APPROVAL OF REPORTS AND QUESTION PERIOD 7. RETAIL REPORT strategy until we are through the pandemic. This will be the new norm Secretary, Donna Zwarich and Directors attending virtually, Glenn Motion that the 2019 Board of Directors’ Report, Retail (Energy Division, for the foreseeable future. Williams Vice-President, Marlene Boersch, Jim Huggard, Anna Maria D. Wiebe acknowledged the retirement of Judy Yeo, CFO in April 2020. Food Division and Human Resources Division), Finance and Audit He thanked her for the many years of service to Red River Co-op and the Magnifico. Also in attendance, Chief Executive Officer Doug Wiebe, and Reports be approved as presented. 11. MOTION TO APPOINT EXTERNAL AUDITORS FOR 2019 Co-operative Retailing System and wished her the best in her retirement. Executive Assistant René Baker recording secretary for the meeting. Moved: Ward Weisensel #198348 FISCAL YEAR Seconded: Donna Zwarich #33023 Donna Zwarich, Chair of the Audit Committee, thanked the Red 3. ADOPTION OF AGENDA Doug Wiebe, Chief Executive Officer introduced the Executive Leadership Team and presented the Retail Report, sharing Red River Co-op’s 2019 River finance team, the FCL internal audit team, and MNP external W. Weisensel stated the meeting would conclude close to 8:15 pm. 59 registered members voted: 59 in favour/0 against Carried accomplishments, focus, goals and continued areas of commitment; audit team. D. Zwarich advised that Management and the Board of • D . Wiebe reported Red River Co-op grew and provided strong Directors were pleased with the level of service provided and the ease of Motion that the agenda for the 82nd Annual General Meeting of Red DISCUSSION returns to the members, with member allocations of $37.8 communication with all teams involved. River Cooperative Ltd. be adopted as presented. Questions received by registered members via online submission. million. Moved: Ward Weisensel #198348 There were no questions received regarding matters arising from the 81st • Red River continues to support local, by providing more than Motion to approve Meyers Norris Penny (MNP) be appointed as external Seconded: Kristen Wittman #106089 AGM minutes. 600 local products amounting to $10 million in sales annually. auditors for 2019-2020 fiscal year. 1. Member #82712 Paul Andre (07:05:50 pm) • Supporting local with community giving; proceeds from the Moved: Donna Zwarich #33023 54 registered members voted: 54 in favour/0 against Carried Why don’t you post your diesel price at the gas bar? 2019 Fuel Good Day raised close to $72,000 for the Children’s Seconded: Ward Weisensel #198348 D. Wiebe responded: Red River conforms with city bylaws in terms of Hospital Foundation. 4. MOMENT OF SILENCE allowable square footage to advertise at each of our sites. Red River does • Red River continues to invest in facilities, offer new services and 57 registered members voted: 55 in favour/2 against Carried identify locations that do sell diesel but not the price. Management A moment of silence was observed in memory of those members who will evolve to stay relevant to our members. made the decision to promote gasoline pricing. Red River made the passed this past year. • Management continues to support Red River Co-op employees 12. BY-LAW CHANGES decision to advertise services of the gas bar site, carwash, convenience with opportunities to develop and advance within Red River Co- a. Electronic Meetings (This bylaw amendment was made available store, lottery to help drive volume. 5. ADOPTION OF MINUTES OF THE 81st ANNUAL MEETING op. to the membership on the Red River Co-op website the week of May 4, Director Kristen Wittman referred the members to the 81st Annual • With the completion of the St. Norbert and Seasons of Tuxedo 2020 and was part of the documents received with registration.) 2. Member #39476 Dwight Stewart (07:09:01 pm) General Meeting draft minutes provided for their review prior to the food stores Red River will have 9 food stores. Do we have any gasohol (ethanol) in our fuel? meeting in the 2019 Annual Report booklet and on the Red River Co-op • The upgrade of Energy Assets is to be completed by the end of K. Wittman advised the members that amendments may be adopted D. Wiebe responded: Yes, depending on the fuel there are varying website. Members were asked if there were any questions in regards to 2021 with the new construction of a gas bar on Lagimodiere Blvd by the Board of Directors provided the amendment is ratified by the degrees; up to 10% in regular gas; 5% in midgrade and 0 in premium business arising from the minutes to submit via the questions button and to begin in 2021. members at the AGM. allowing owners of high-performance vehicles the ability to purchase it would be addressed during question period. • Red River continues to monitor the energy market and the With the current pandemic situation, on May 4, 2020 the board premium gas. trends to better serve its members, today and in the future. approved an amendment to permit members to attend and participate • On behalf of management and the board, D. Wiebe in future AGMs via electronic communication. The bylaws, at present, acknowledged the families affected by the pandemic of 2020 and the financial toll it has had on local business.

10 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 11 Minutes of the 82nd Annual General Meeting JUNE 11, 2020

do not permit electronic meetings and tonight’s meeting is pursuant to which affects Red River Co-op’s local earnings and that same drop in an Order made by the government under the Emergency Measures Act. demand affects the earnings of the refinery. We are expecting earnings The main change is to allow members to participate in future AGMs via to be lower this year. electronic communication. 62 registered members voted: 58 in favour/4 against Carried

The Board requests ratification from the members of a motion passed by 13. DIRECTOR ELECTION RESULTS the Board of Directors on May 4, 2020, to amend the by-laws by adding D. Ward, Deputy Returning Officer, reported on the election activities in the new Section 10.11. and results. Moved: Kristen Wittman #106089 D. Ward explained his primary role was to oversee the voting process, Seconded: Ward Weisensel #198348 and ensure its accuracy and integrity. D. Ward outlined the process of the election and timelines that were adhered to and discussed the To allow for discussion members were given one minute to submit verification, safety, and security process of the ballots. He ensured that questions for discussion on this bylaw amendment. member confidentiality was protected throughout the process, and certified that the 2020 Board of Directors Election process was properly No questions were submitted. conducted in all aspects. This was the first year of online voting. 61 registered members voted: 60 in favour/1 against Carried D. Ward’s report included the following results: BOARD b. Special Reserves (Notice of this amendment was included in the The results were as follows: member package mailed February 20, 2020, on the Red River Co-op Total eligible voters 293,849 website the week of March 4, 2020, and was part of the documents Mailed ballots returned 7,363 received with registration.) Online ballots 2,768 Spoiled ballots 229 W. Weisensel provided an overview of the purposes of the General REPORTS Valid ballots 9,902 reserves and the Special reserves. The changes being proposed to special reserves will allow funds to be used to enhance future allocations Candidates Votes Received beyond the actual profits of Red River Co-op in a particular year. (Alphabetical Order - *designates Incumbents) WORKING TOGETHER Boersch, Marlene* 3,669 Motion to approve the amendments to by-law 1.01, 9.02, 9.03 and 9.10 Taylor, Sonya 2,624 as presented. Timlick, Gary 5,668 Moved: Ward Weisensel #198348 Wittman, Kristen* 6,773 TO MAKE A DIFFERENCE Seconded Donna Zwarich #33023 Gary Timlick and Kristen Wittman* were declared elected. To allow for discussion members were given one minute to submit IN MEMBERS’ LIVES questions for discussion on this bylaw amendment. 14. MOTION TO DESTROY THE BALLOTS Question: Motion that the ballots of the 2020 election be destroyed. 1. Member #0315540 Liz Cronk (08:00:20 pm) Moved: Dale Ward #89165 Can I assume that the ultimate goal is to hold in person AGMs Seconded Ward Weisensel #198348 when we are in a non-pandemic situation?

W. Weisensel responded: It is dependent on the situation next year and 54 registered members voted: 53 in favour/1 against Carried future years. He requested members to complete the survey they will receive by email to help plan future meetings. W. Weisensel resumed the chair thanking Dale Ward for his dedication and thorough report of the election process and tabulation. 2. Member #0315540 Liz Cronk (08:07:45 pm) Weisensel congratulated the elected Directors, Gary Timlick and Kristen Can you explain that in more simple terms, please? Wittman. A special thank you to Marlene Boersch and her 11 years of W. Weisensel responded: This bylaw would allow the board the ability service on the Red River Cooperative Ltd. Board of Directors. to increase the allocation in years when local earnings or patronage from FCL are low, where the Board felt it necessary to do so to be competitive 15. ADJOURNMENT and maintain market share. In other words, the Board could increase the patronage paid to Red River Co-op membership by accessing the Special W. Weisensel thanked the membership for their attendance, reserves. participation and supporting their co-op. He thanked Management and staff for all their efforts for the past year, as well as for their preparations 3. Member #304285 Kirt Ansell (08:10:11 pm) for the AGM. W. Weisensel thanked his fellow Directors for the Does Red River feel that next year’s equity will be substantially dedication to do what is best for the co-op and its members. less, likely due to Covid19 and the refinery strike, that it is necessary to use special reserves the following year to boost the W. Weisensel adjourned the meeting at 8:25pm. members equity allocations? W. Weisensel responded: There was a drop in demand on the fuel side

12 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT BOARD OF DIRECTORS' REPORT Your Board of Directors is responsible for the stewardship of your co-operative, providing leadership and guidance to our Chief Executive Officer, monitoring the co-operative’s performance and reporting to the membership.

he last year has been extremely challenging for Red During 2020, Red River Co-op implemented the vast majority organizations bringing the total donated during the last five Your co-operative is currently in a strong position and is well River Co-op and we know it has been extremely of the changes identified by the cyber security assessment years to $760,000. We are proud of our activities in this area and recognized in the community. In the years ahead we must challenging for you, our members, as well. Reduced completed by Meyers Norris Penny (MNP). We continue to work appreciate the opportunity to work with the many organizations continue to improve our products and operations so that your demand tied to the pandemic restrictions put in place with our IT provider to maintain or upgrade our systems and that make our communities a better place for all. co-op is able to meet the changing demands of a very competitive to protect all of us dramatically lowered consumption practices to protect our co-op. marketplace, in an effort to better serve our membership. Tof fuel at all assets across our system. Also a factor in lower fuel The Committees of the Board were very active in 2020. The volumes, was the fall-out of the UNIFOR strike at the Federated In 2020, we also implemented the Director Endorsement Process. individual Committee reports are included in this annual report. We want to express our thanks to the management and staff for Co-operatives Ltd. refinery in Regina, Saskatchewan. Overall, There were challenges with this, particularly in a pandemic year, their efforts during the past year. Their dedication to serving you, The Audit Committee worked closely with our appointed auditors, fuel consumption at our facilities fell by more than 65 million but we continue to believe the process is important to providing our customers, in the unprecedented pandemic environment MNP, to facilitate the audit of the annual financial statements. litres or 15% from fiscal 2019. During the first lockdown in our membership more insight into the candidates who are deserves our highest praise. Also, my thanks go to my fellow We are pleased to report that the audit process went smoothly. March 2020, fuel consumption at our facilities fell to 50% of seeking to be elected to the Red River Co-op Board. Directors for their commitment to our co-op and for their budgeted volumes. The situation was unprecedented and we leadership and guidance during the past year. Despite the significant challenges associated with the The Nominations Committee was active during the year as the needed to look at extraordinary actions to protect the financial pandemic, your co-op provided $17.5 million in patronage to our Committee was responsible for the development of the Director Most importantly, we want to thank our members for your performance of our co-operative. On the energy side, we made membership. During the last five years, $156 million has been Endorsement process. Unfortunately, the pandemic environment support during the past year. the decision to defer a significant portion of our repair and allocated to Red River Co-op members. This is a record that all significantly impacted interest in running for the Red River maintenance program to protect earnings and cash flow. members and staff can be proud of. Co-op Board and as a result, for the first time there will not be an election for the Board as we had only two individuals stand Partly offsetting the shortfalls in our energy business were Our patronage dividend this year reflects our earnings but it for election for two Board vacancies. Respectfully submitted by Ward Weisensel (President) on behalf increases in demand at our food stores as all of us revised also reflects that our volumes and revenues have been - and will of the Red River Board of Directors. our purchasing habits due to the pandemic restrictions. We continue to be - negatively affected by the pandemic throughout The Governance and Compensation Committee ensured that Ward Weisensel, President have been aggressively improving and expanding our food the 2021 fiscal year. In addition, while Red River Co-op was able good governance practices are closely followed by Red River and wellness footprint over the last number of years and we Glenn Williams, Vice-President to defer repair and maintenance expenditure through the 2020 Co-op. The Committee also oversees the compensation policies did not slow these activities even though they would draw fiscal year, that option does not exist to the same degree for the of the co-op. Kristen Wittman, Secretary on our cash flow situation. We are very proud of our newly 2021 fiscal year. This will continue to put pressure on the cash Jim Huggard renovated store in St. Vital and are extremely excited about The success of Red River Co-op is largely related to the flow position of Red River Co-op. the St. Norbert location which opened in February. We are continuing strong support received from our membership. There Anna Maria Magnifico is no doubt that member support is the most important factor also very excited about the construction progress at our new Community investment has always been an important Gary Timlick location in Seasons of Tuxedo. In addition, we continued our component of our goal to be active in our local communities. that has enabled our co-op to successfully grow the business to Donna Zwarich store upgrade strategy at our locations in Lorette and Gimli. Over the last year, the Board approved funding to 79 charities what it is today. We now have eight food locations in our trading area and and non-profits. In 2020, over $185,000 was donated to worthy continue to look at additional opportunities.

14 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 15 Audit Committee Nominations Governance and Compensation Report Committee Report Committee Report

The mandate of the Audit Committee is to assist the Board in The Committee is mandated to oversee a free, fair, efficient, and secure annual The Committee is mandated to oversee all governance matters, The Committee’s mandate includes an ongoing review of fulfilling its independent oversight role by monitoring the Board election process culminating in the announcement of members elected as including strategic planning, and to ensure compliance with other compensation for directors. Members approved an increase in integrity of: Directors at the Annual General Meeting (AGM). governance goals generally considered to be “best practices” in Director compensation in 2019 providing a $550 per diem for modern corporate governance. The Committee met once in 2020, meetings of up to six hours (with an additional $195.00 per hour  the financial and management reporting process, This year’s election process saw, for the first time, a candidate information session in November. The Committee has previously adopted 15 goals to for meetings that exceed six hours), along with a $500 monthly  internal controls, which was held in September. As well, this year’s nomination process included an guide Red River Co-op’s governance. These guidelines are reviewed retainer, which is where it remains. Although annual increases to  risk management, updated Director Candidate Information Handbook. regularly and most recently posted on Red River Co-op’s website compensation are recommended, the Committee’s assessment  environmental management, in April 2020 (under “Your Local Co-op - About Us”). this year is that there should be no increase requested, in light of New to the nomination process was the opportunity for candidates who  potential conflicts of interest, and the pandemic and its impact on the business and our community chose to submit to a third-party interview process, to receive an endorsement  the independence and performance of the external auditor. This year, the Committee was thrilled to congratulate at large. recommendation on the ballot by the Board. The third-party Candidate management on attaining the designation of a Top 50 Employer in This is our fourth fiscal year with MNP LLP as our external auditors. Assessment Consultant uses the Red River Co-op Board Profile and Board- Manitoba. Management committed to the adoption of employee Respectfully submitted, As we continue to grow in Winnipeg and surrounding area, MNP approved criteria to evaluate candidates. The evaluation process includes a review friendly policies such as flexible work arrangements, volunteer Kristen Wittman, Chair ensures our internal financial systems follow the internal controls of candidate materials, an introductory overview of all candidates, and an in-depth time off, maternity and parental leave top up, personal days, leave Donna Zwarich in place. MNP’s assistance in the area of cyber security has also interview with the candidates whose qualifications are determined to best match of absence, as well as many other initiatives, including taking Glenn Williams benefitted our co-op, by identifying potential risk, allowing us to the skills and experience set out in the Red River Co-op Board Profile. Candidates proactive steps to keep our employees safe during the pandemic. Ward Weisensel, Ex-Officio implement measures to minimize our risk and secure our systems. (including incumbents) must participate in this interview process to be eligible for Red River Cooperative Ltd. continues to retain FCL as our recommendation. Incumbents will not automatically receive recommendation The Committee has adopted several new policies, including internal auditor. for re-election. policies governing confidentiality and communications, and is working on refining Red River Co-op’s technology policies. The The Audit Committee held meetings with senior management, The third-party interviewer provides a list of recommended candidates to the Committee is overseeing succession planning and continues to as well as with the external and internal auditors during the Nominations Committee. These individuals will be specified on the ballot as work with senior management to ensure a smooth transition year which included approving the audit plan for 2020. Senior recommended candidates. There is no maximum number of candidates who may as members of the senior management team work towards management is pleased with the strong working relationship in be endorsed as a recommended candidate. Candidates are advised as to whether retirement. place with both the internal and external audit teams. they will be a recommended candidate. Candidates who are not recommended may choose to withdraw from the ballot. The internal and external auditors reviewed and agreed with In preparation for the annual call for nominations each fall, the Committee reviews the streamlined accounting practices initiated by the Chief the eligibility criteria which covers Director responsibilities, qualifications, desired Financial Officer. Both our internal and external auditors are competencies, and attributes. Consistent with the bylaws, Directors must be very comfortable with the control environment at Red River members who have purchased a minimum of $250 in goods or services from Red Cooperative Ltd. and will continue to ensure that our control River Co-op in the most recent fiscal year. environment is appropriate. This year, there are two vacancies on the Board because of terms expiring. The The Committee is pleased to advise members that in the opinion members who are elected at this year’s AGM will hold the position for a three-year of the external auditor, the company’s financial statements term expiring in 2024. present fairly, in all material respects, the financial position of Red River Cooperative Ltd. as at October 31, 2020 and the results of its Upon close of nominations, the Committee reviewed and approved the slate of operations and cash flows for the year then ended in accordance candidates and recommended them to the Board. There were only two candidates with Canadian accounting standards for private enterprises (ASPE). who put their names forward, an incumbent and one other member. Both candidates received endorsement status from the third-party interviewer. As there Respectfully submitted, were only two candidates and there were only two vacancies, the two candidates Donna Zwarich, Chair were elected by acclamation. Anna Maria Magnifico Gary Timlick Respectfully submitted, Ward Weisensel, Ex-Officio Gary Timlick, Chair Anna Maria Magnifico Kristen Wittman Ward Weisensel, Ex-Officio

16 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 17 Board Attendance and Remuneration

BOARD OF DIRECTORS Ward Weisensel Anna Maria Magnifico President Ward Weisensel President Apr. 2017 – Oct. 2020 Director Apr. 2017 – Oct. 2020 Vice President Glenn Williams Term Expires: 2022 Term Expires: 2022 Secretary Kristen Wittman Attendance Record 33/33 Attendance Record 26/26 Board Meetings 13/13 Director Jim Huggard Board Meetings 13/13 Committee Meetings 8/8 Committee Meetings 4/4 Director Anna Maria Magnifico Special Meetings 12/12 Special Meetings 9/9 Director Gary Timlick Remuneration $33,982 Remuneration $24,182 Director Donna Zwarich Glenn Williams Gary Timlick NOMINATIONS COMMITTEE Vice-President May 2019 – Oct. 2020 Director Jun. 2020 – Oct. 2020 Director Gary Timlick – Chair Term Expires: 2021 Term Expires: 2023 Director Anna Maria Magnifico Attendance Record 28/28 Attendance Record 10/10 Director Kristen Wittman Board Meetings 13/13 Board Meetings 3/3 President Ward Weisensel – Board Committee Meetings 5/5 Committee Meetings 3/3 FINANCIAL President/Ex-Officio Special Meetings 11/11 Special Meetings 4/4 member Remuneration $27,757 Remuneration $9,057

Kristen Wittman Donna Zwarich AUDIT COMMITTEE Secretary May 2019 – Oct. 2020 Director Nov. 2016 – Oct. 2020 Director Donna Zwarich – Chair STATEMENTS Term Expires: 2023 Term Expires: 2022 Director Jim Huggard Attendance Record 24/24 Attendance Record 25/25 Director Anna Maria Magnifico Board Meetings 13/13 Board Meetings 13/13 Director Gary Timlick Committee Meetings 3/3 Committee Meetings 3/3 AS OF OCTOBER 31, 2020 President Ward Weisensel – Board Special Meetings 8/8 Special Meetings 9/9 President/Ex-Officio Remuneration $24,007 Remuneration $23,157 member Jim Huggard GOVERNANCE & COMPENSATION Director Nov. 2016 – Oct. 2020 COMMITTEE Term Expires: 2021 Director Kristen Wittman – Chair Attendance Record 26/26 Board Meetings 13/13 Director Glenn Williams Committee Meetings 5/5 Director Donna Zwarich Special Meetings 9/9 President Ward Weisensel – Board Remuneration $17,825 President/Ex-Officio member

18 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT Management's Responsibility Independent Auditor's Report Independent Auditor's Report

To the Members of Red River Cooperative Ltd.:

Opinion

We have audited the consolidated financial statements of Red River Cooperative Ltd. (the "Cooperative"), which comprise the consolidated balance sheet as at October 31, 2020, and the consolidated statements of net savings and retained savings and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Cooperative as at October 31, 2020, and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for private enterprises.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Cooperative in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

Management is responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated financial statements and our auditor's report thereon. The annual report is expected to be made available to us after the date of this auditor’s report.

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

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

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

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

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

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

20 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | FINANCIAL STATEMENTS FINANCIAL STATEMENTS ACCOUNTING| RED RIVER COOPERATIVE › LTDCONSULTING | 2020 ANNUAL REPORT › | TAX 21 TRUE NORTH SQUARE - 242 HARGRAVE STREET, SUITE 1200, WINNIPEG MB, R3C 0T8 1 (877) 500-0795 T: (204) 775-4531 F: (204) 783-8329 MNP.ca Independent Auditor's Report Consolidated Balance Sheet As at October 31, 2020

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

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

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

 Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Cooperative’s internal control.  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.  Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Cooperative’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Cooperative to cease to continue as a going concern.  Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.  Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Cooperative to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

Winnipeg, Manitoba

January 4, 2021 Chartered Professional Accountants

The accompanying notes are an integral part of these consolidated financial statements

True North Square - 242 Hargrave Street, Suite 1200, Winnipeg, Manitoba, R3C 0T8, Phone: (204) 775-4531, 1 (877) 500-0795 Consolidated Statement of Net Savings and Consolidated StatementRed of River Cash Cooperative Flows Ltd. For the Year Ended October 31, 2020 Consolidated Statement of Cash Flows Statement of Retained RedSavings River Cooperative Ltd. For the Year Ended October 31, 2020 For the Year Ended OctoberConsolidated 31, 2020 Statement of Net Savings and Statement of Retained Savings For the Year Ended October 31, 2020 2020 2019 Operating activities 2020 % 2019 % Net savings $ 30,311,511 $ 52,853,512 Adjustments for: Sales (Note 15) $ 532,281,336 100.0 $ 649,917,772 100.0 Depreciation 6,823,983 6,420,252 FCL patronage refund (3,822,464) (53,667,178) Cost of goods sold 457,928,760 86.0 577,198,683 88.8 Loss (gain) on the disposal of property, plant and equipment (2,996) 213,497

Gross margin 74,352,576 14.0 72,719,089 11.2 Changes in non-cash operating working capital: Accounts receivable 553,580 1,425,570 Income taxes recoverable 2,878,317 (1,560,723) Expenses Inventories 555,290 (700,508) Prepaid expenses (46,751) (13,180) Operating and administration 62,004,999 11.6 69,594,538 10.7 Long-term receivables 234,979 (1,767,120) Net interest (Note 17) (779,959) (0.1) (892,262) (0.1) Accounts payable and trust liabilities (9,302,349) 4,789,400 Customer prepaid accounts 45,578 (30,779) 61,225,040 11.5 68,702,276 10.6 Net working capital on business combinations - 644,777

Savings from operations 13,127,536 2.5 4,016,813 0.6 Cash provided by operating activities 28,228,678 8,607,520

FCL loyalty program (Note 4(d)(iii)) 16,943,106 3.2 - - Investing activities Patronage refund (Note 4(b)) 3,822,464 0.7 53,667,178 8.3 Redemption of FCL shares 33,263,402 49,499,859 Additions to property, plant and equipment (10,528,040) (8,513,154) Savings before income taxes 33,893,106 6.4 57,683,991 8.9 Proceeds from the disposal of property, plant and equipment 7,673 53,657 Investment in other organization - (12) Income tax expense (Note 19) 3,581,595 0.7 4,830,479 0.7 Additions to intangible assets - (60,000) Cash consideration on business combinations - (1,899,796)

Net savings $ 30,311,511 5.7 $ 52,853,512 8.2 Cash provided by investing activities 22,743,035 39,080,554

Financing activities Repayment of long-term debt (923,197) (923,197) Share capital issued 36,390 54,025 Retained savings, beginning of year $ 18,686,559 $ 18,603,019 GST on allocation 1,671,422 1,843,138 Redemption of share capital (36,120,408) (38,778,730)

Net savings 30,311,511 52,853,512 Cash used for financing activities (35,335,793) (37,804,764) Transfer to special reserve (Note 14) (11,207,252) (11,991,396) Transfer to general reserve (Note 14) (1,694,655) (2,876,985) Net increase in cash and cash equivalents 15,635,920 9,883,310 Patronage allocation to members (Note 13) (17,455,800) (37,901,591) Cash and cash equivalents, beginning of year 19,291,785 9,408,475

Retained savings, end of year (Note 14) $ 18,640,363 $ 18,686,559 Cash and cash equivalents, end of year $ 34,927,705 $ 19,291,785 Cash and cash equivalents are comprised of: Cash and cash equivalents $ 5,587,601 $ 1,577,190 FCL special deposit 29,340,104 17,714,595 $ 34,927,705 $ 19,291,785

The accompanying notes are an integral part of these consolidated financial statements The accompanying notes are an integral part of these consolidated financial statements The accompanying notes are an integral part of these consolidated financial statements

2 Consolidated Notes to Redthe River Financial Cooperative Statements Ltd. Consolidated Notes toRed the River Financial Cooperative Statements Ltd. For the Year Ended October 31, 2020 For the Year Ended October 31, 2020 Consolidated Notes to the Financial Statements Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020 For the Year Ended October 31, 2020

1. Incorporation and operations (c) Cash and cash equivalents

Red River Cooperative Ltd. ("the Cooperative") was incorporated under The Cooperatives Act of Manitoba on Cash and cash equivalents are defined as cash and investments with an initial maturity of less than three September 15, 1937. The primary business of the Cooperative is operating retail petroleum and food store months. outlets in Winnipeg and surrounding area. (d) Inventories 2. Significant accounting policies Inventories are valued using a weighted average formula, first-in first-out method, and the retail method. The consolidated financial statements have been prepared by management in accordance with Canadian Inventories are stated at the lower of cost and net realizable value. The cost of retail inventories is determined accounting standards for private enterprises. A precise determination of many assets and liabilities is using the weighted average cost on a first-in, first-out method of accounting for petroleum inventories and the dependent upon future events and consequently, the preparation of these consolidated financial statements retail method of accounting for grocery inventories, and on a first-in, first-out cost method for all other food involves the use of estimates and approximations. Areas subject to estimation include valuation of accounts store commodities. Costs include the cost of purchased goods net of vendor allowances, plus other costs receivable, inventory, useful life of property, plant and equipment and intangible assets, impairment of long- incurred in bringing all other food store commodities inventories to their present location and condition. lived assets, goodwill and intangible assets, income taxes, accrued liabilities and potential contingencies. These estimates also affect the disclosure of contingencies at the date of the consolidated financial statements The Cooperative estimates net realizable value as the amount that inventories are expected to be sold for, and the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from those taking into consideration fluctuations of retail price due to seasonality less estimated costs necessary to make estimates. the sale. Inventories are written down to net realizable value when the cost of inventories is determined to be not recoverable due to obsolescence, damage or permanent declines in selling prices. During the year, the World Health Organization declared a global pandemic (COVID-19 pandemic), which has had a significant impact on businesses through the restrictions put in place by the Canadian, provincial and (e) Investments municipal governments regarding travel, business operations and isolation/quarantine orders. At this time, it is unknown the extent of the impact the COVID-19 outbreak may have on the Cooperative as this will depend on The Cooperative's investments are accounted for using the cost method. Accordingly, the investments are future developments that are highly uncertain and that cannot be predicted with confidence. These recorded at acquisition cost, less any provisions for permanent impairment or adjustments for patronage uncertainties arise from the inability to predict the ultimate geographic spread of the disease, and the duration refunds or share redemptions. All transactions with FCL are disclosed in a separate note (Note 4). of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may be put, in place by Canada and other countries to fight (f) Financial instruments the virus.

These consolidated financial statements have been prepared to reflect the following significant accounting Financial instruments are recorded at fair value on initial recognition and are subsequently recorded at policies: amortized cost, unless management has elected to carry the instruments at fair value. The Cooperative has not elected to carry any such financial instruments at fair value. Financial instruments, which are subsequently measured at amortized cost, are adjusted by transaction and financing costs incurred on acquisition. (a) Basis of consolidation Financial assets are assessed for impairment on an annual basis at the end of the fiscal year if there are i. Subsidiaries indicators of impairment. If there is an indicator of impairment, the Cooperative determines if there is a The consolidated financial statements include the accounts of the Cooperative and its subsidiaries. significant adverse change in the expected amount or timing of future cash flows from the financial asset. If Subsidiaries are entities that the Cooperative controls. Subsidiaries are fully consolidated from the date that there is a significant adverse change in the expected cash flows, the carrying value of the financial asset is control commences until the date that control ceases. reduced to the highest of the present value of the expected cash flows, the amount that could be realized from selling the financial asset or the amount the Cooperative could realize by exercising its right to any collateral. If ii. Transactions eliminated on consolidation events and circumstances reverse in a future period, an impairment loss will be reversed to the extent of the improvement, not exceeding the initial carrying value. Inter-group balances and transactions, and any unrealized income and expenses arising from said transactions, are eliminated in preparing the consolidated financial statements.

(b) Definition of financial year

The Cooperative's financial year ends on the Saturday closest to October 31. As a result, the Cooperative's fiscal year is usually fifty-two weeks in duration, but includes a fifty-third week approximately every five years. Fiscal 2020 year is comprised of fifty-two weeks and 2019 was comprised of fifty-three weeks.

4 5 Consolidated Notes to the Financial Statements Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020 Red River Cooperative Ltd. For the Year Ended October 31, 2020 Red River Cooperative Ltd. Consolidated Notes to the Financial Statements Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020 For the Year Ended October 31, 2020

(g) Property, plant and equipment (j) Revenue recognition

Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses. The Cooperative recognizes revenue when evidence of an arrangement exists, delivery or change of Depreciation is taken over the estimated useful lives of the assets using the following methods and rates: ownership has occurred, the price has been determined, and collection is reasonably assured.

Buildings Straight-line 25 years (k) Income taxes Pavement Declining balance 8% Signs Declining balance 20% The Cooperative follows the taxes payable method whereby only current income tax assets and liabilities are Tanks Declining balance 10% & 30% recognized to the extent they remain unpaid or are recoverable. In addition, the benefit relating to a tax loss Furniture & equipment Straight-line & declining balance 5 years & 20% - 55% incurred in the current period and carried back to prior periods is recognized as a current asset. Current Vehicles Declining balance 30% income tax assets and liabilities are measured using substantively enacted tax rates and laws expected to Vehicle equipment Declining balance 15% apply when the tax liabilities or assets are to be either settled or realized.

Leasehold improvements are amortized on a straight-line basis over the lease term. Assets under construction (l) Goodwill and land are not amortized. Goodwill resulting from business combinations represents the portion of the purchase price that was in excess Expenditures for maintenance and repairs are charged to operating expenses as incurred. Significant of the fair value of the net identifiable assets acquired. Goodwill is not amortized and is tested for impairment expenditures for improvements are capitalized. Gains or losses realized on the disposal of property, plant and whenever changes in circumstances indicate that the carrying amount of the reporting unit to which goodwill is equipment are reflected in operations in the year of disposition. assigned exceeds the fair value of the reporting unit. If the carrying value of the reporting unit to which goodwill has been assigned exceeds its fair value, then, with respect to the reporting unit’s goodwill, any excess of its Claims for assistance under various FCL programs are recorded as a reduction of the cost of related assets in carrying value over its fair value is expensed. Impairment losses relating to goodwill cannot be reversed in the period in which eligible expenditures are incurred, with any depreciation calculated on the net amount. future years.

An impairment loss is recognized when the carrying amount of a long-lived asset is not recoverable and (m) Intangible assets exceeds its fair value. No such impairment loss was recorded during the year.

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. (h) Asset retirement obligation Amortization is taken over the estimated useful lives of the assets using the following methods and rates once the intangible asset is functional: The Cooperative has a liability for an asset retirement obligation in the period in which a legal liability is incurred. The liability is based on management's best estimate. The liability is subsequently adjusted for the passage of time, which is recognized as an accretion expense in the statement of operations. The liability is Customer lists Straight-line 10 to 15 years also adjusted due to revisions in either the timing or the amount of the original estimated cash flows associated Below market leases Straight-line 25 to 42 years with the liability. Actual costs incurred upon settlement of the asset retirement obligations are charged against Lease enhancements Straight-line 8 to 32 years the asset retirement obligation to the extent of the liability recorded. Franchise fees Straight-line 10 years

(i) Share capital Finite life intangible assets are tested for impairment when events or circumstances indicate the carrying value may not be recoverable. An impairment loss is recognized when the carrying amount of an intangible asset is The Cooperative approves an allocation to members subsequent to year end. The amount is recorded as an not recoverable and exceeds its fair value. No such impairment loss was recorded during the year. addition to share capital and a reduction in retained savings. The Cooperative records the redemption of shares that is to be paid to members at the time it has been approved by the Board of Directors.

6 7 Consolidated Notes to the Financial Statements Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020 Red River Cooperative Ltd. For the Year Ended October 31, 2020 Red River Cooperative Ltd. Consolidated Notes to the Financial Statements Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020 For the Year Ended October 31, 2020

(n) Business combinations (c) Liquidity risk

Liquidity risk is the risk that the Cooperative will encounter difficulty in meeting obligations associated with Business combinations are accounted for using the acquisition method. The application of this method requires financial liabilities. The Cooperative is exposed to liquidity risk arising primarily from the current obligations. certain estimates and assumptions especially concerning the determination of the fair value of the acquired The Cooperative's ability to meet obligations depends on funds generated by its operations. intangible assets, property, plant and equipment, as well as the liabilities assumed at the date of the acquisition, based on information available at that date. 4. Transactions with Federated Co-operatives Limited (FCL) At the acquisition date, the Cooperative recognizes, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the subsidiary. Identifiable assets acquired and (a) FCL special deposit liabilities assumed are measured at their acquisition-date fair values. Any non-controlling interest in a subsidiary is measured either at fair value or at the non-controlling interest's proportionate share of the Amounts held with FCL as special deposits earn interest at rates based on prime rates. subsidiary's identifiable net assets. (b) Patronage refund

The consideration transferred for each acquisition is measured as the sum of the acquisition-date fair values of the assets transferred, the liabilities incurred, and equity instruments issued by the Cooperative to obtain The Cooperative, along with other Cooperatives in Western Canada, own FCL. At the end of each year, FCL control of the subsidiary. divides a substantial portion of its net savings among these retail Cooperatives in proportion to the business done by each with FCL. During FCL's fiscal year ended October 31, 2020, the Cooperative purchased goods amounting to $375,967,459 (2019 - $484,600,020) from FCL in the normal course of operations. (o) Government grants These purchases resulted in a patronage refund from FCL which was received as non-cash consideration in The Cooperative recognizes government grants when there is reasonable assurance that it will comply with the the form of additional shares in FCL. FCL, based on its available cash flow, redeemed an amount of FCL conditions attached to that grant and that the grant will be received. Government grants are recognized in the shares held by the Cooperative. The amounts of the patronage refund and shares redeemed are as follows: Consolidated Statement of Net Savings and Statement of Retained Savings in the period in which the Cooperative recognizes the expense for the related costs for which the grants are intended to compensate. 2020 2019

3. Financial instruments and risk management Opening investment balance $ 153,105,148 $ 148,937,829 Patronage refund 3,822,464 53,667,178 The significant financial risks to which the Cooperative is exposed are credit risk, interest rate risk and liquidity Share redemptions (33,263,402) (49,499,859) risk. Closing investment balance $ 123,664,210 $ 153,105,148 (a) Credit risk

The Cooperative is exposed to credit risk on accounts receivable from its customers. The Cooperative (c) Asset retirement obligation manages credit risk through an active credit management program. The Cooperative does not have a significant exposure to any individual customer. The Cooperative participates in a contaminated site management program established by FCL to manage its asset retirement obligations. This program limits the Cooperative’s liability to $25,000 per site as long as the (b) Interest rate risk Cooperative continues to exercise due diligence. The Cooperative has 39 sites under this program. Management believes that due diligence has been exercised and that the impact of the asset retirement Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in obligation to the Cooperative's financial statements is not significant. interest rates. Changes in market interest rates may have an effect on cash flows associated with some financial assets and liabilities, known as cash flow risk, and on the fair value of other financial assets or (d) Purchase commitments liabilities, known as price risk. The Cooperative's sensitivity to fluctuations in interest rates is limited to its cash

and funds on deposit. The Cooperative manages its exposure to interest rate risk through floating rate deposits and borrowings. (i) Under the terms of the agreement with FCL, the Cooperative has committed to purchase petroleum products, at market price, from FCL for its gas bar and cardlock operations over a ten year period commencing from November 3, 2010. Failure to meet this commitment would require the Cooperative to immediately pay outstanding gas bar and cardlock loan balances owed to FCL, plus repay any gas bar and cardlock grants received, including interest on the grants compounded annually at 10% from the grant date. Total grants received during this period amounted to approximately $13,943,064 (2019 - $19,584,771). Management intends to fulfill all existing contracts with FCL.

8 9 Consolidated Notes to the Financial Statements Consolidated Notes toRed the River Financial Cooperative Statements Ltd. For the Year Ended October 31, 2020 Red River Cooperative Ltd. For the Year Ended October 31, 2020 Consolidated Notes to the Financial Statements Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020 For the Year Ended October 31, 2020

(ii) Under the terms of the agreement with FCL, the Cooperative has committed to purchase petroleum 7. Property, plant and equipment products, at market price, from the FCL corporate bulk plant over a ten year period commencing from December 9, 2011. Failure to meet this commitment would require the Cooperative to pay a portion of the Accumulated 2020 2019 capital costs of the bulk plant to FCL determined by a formula based upon usage. Management intends to Original Cost Depreciation Book Value Book Value fulfill all existing contracts with FCL. Land $ 13,875,372 $ - $ 13,875,372 $ 13,875,372 (iii) Under the terms of the agreement with FCL, the Cooperative has committed to purchase at least 90% of its Buildings 30,348,349 12,132,669 18,215,680 19,606,273 total goods from FCL and commits, to the best of its ability, to use FCL's services. If the eligibility requirements Pavement 8,454,417 4,523,580 3,930,837 4,269,889 are met, FCL will pay the Cooperative, on a quarterly basis, a Loyalty Payment based on cents per litre. Signs 530,966 407,929 123,037 153,793 Tanks 782,927 568,501 214,426 300,214 (iv) Under the terms of the agreement with FCL, the Cooperative has committed to purchase food, pharmacy, Furniture & equipment 40,757,968 27,669,053 13,088,915 12,364,950 and food-related products, from FCL and continue to operate certain food stores over periods of ten to thirty Leasehold improvements 15,362,378 3,102,292 12,260,086 9,797,072 years depending on the specific contract. Failure to meet this commitment would require the Cooperative to Vehicles 1,487,237 951,602 535,635 375,490 repay the assistance received on a prorated basis. Total assistance that would be repayable if commitments Vehicle equipment 1,476,141 970,597 505,544 557,658 were not met without FCL approval as at October 31, 2020 amounted to $3,158,361 (2019 - $1,251,861). Under construction 3,328,953 - 3,328,953 402,688 Management intends to fulfill all commitments with FCL. $ 116,404,708 $ 50,326,223 $ 66,078,485 $ 61,703,399 5. Accounts receivable - customer Depreciation for the current year included in operating and administration expenses was $6,148,277 (2019 - Shown net of an allowance for doubtful accounts of $585,491 (2019 - $446,679). $5,747,547).

6. Long-term receivables 8. Intangible assets

2020 2020 2019 2019 Accumulated 2020 2019 Total Current Portion Deferred Portion Current Portion Deferred Portion Original Cost Amortization Book Value Book Value Loan receivable (1) $ 89,682 $ 13,623 $ 76,059 $ 13,623 $ 89,683 Loan receivable (2) 3,163 3,163 - 4,551 3,162 Customer lists $ 2,535,000 $ 1,102,584 $ 1,432,416 $ 1,602,583 Loan receivable (3) 1,558,661 54,650 1,504,011 42,838 1,743,278 Below market leases 3,375,894 833,263 2,542,631 2,670,825 Loan receivable (4) 10,650 1,936 8,714 - - Lease enhancements 5,947,950 2,096,429 3,851,521 4,225,866 Franchise fees 60,000 3,000 57,000 60,000 $ 1,662,156 $ 73,372 $ 1,588,784 $ 61,012 $ 1,836,123 Intangible assets $ 11,918,844 $ 4,035,276 $ 7,883,568 $ 8,559,274 (1) Finance loan receivable at $1,135 per month plus interest at 8%. Amortization for the current year end included in operating and administration expenses was $675,706 (2019 - $672,705). (2) Finance loan receivable at $403 per month including interest at 5%. 9. Goodwill (3) Under the terms of the agreement, the Cooperative provided a loan that will be forgiven over a 35-year term provided that certain terms and conditions are met. In the event of default, the outstanding amount will be due and The changes in the carrying amount of goodwill for October 31, 2020 are as follows: payable immediately. The amount is forgiven at a rate of $4,554 per month including interest at 1% and is recorded in operating and administration expenses. 2020 2019

(4) Finance loan receivable at $161 per month. Balance, beginning of year $ 6,315,364 $ 6,011,138 Additions to goodwill (Note 22) - 304,226 Balance, end of year $ 6,315,364 $ 6,315,364

11 10 Consolidated Notes to Redthe River Financial Cooperative Statements Ltd. Consolidated Notes to Redthe River Financial Cooperative Statements Ltd. For the Year Ended October 31, 2020Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020 For the Year Ended October 31, 2020

10. Line of credit 13. Share capital

The Cooperative has a $1,000,000 (2019 - $1,000,000) line of credit of which no amount has been drawn as at Authorized, unlimited @ $1 2020 2019 October 31, 2020 (2019 - $nil). The line of credit is secured by a promissory note and a general security agreement covering all present and after acquired property. Interest on the line of credit is prime plus 0.25%. Balance, beginning of year $ 92,609,725 $ 92,256,719 Allocation to members 17,455,800 37,901,591 The Cooperative has available a $17,430,000 (2019 - $21,450,000) line of credit with Federated Co-operatives Cash from new members 36,390 54,025 Limited of which no amount has been drawn as at October 31, 2020 (2019 - $nil). The amount available to the GST on allocation 1,671,422 1,843,138 Cooperative declines by 10% of the initial amount available over the life of the agreement which expires June Shares transferred from reserves 29,907 37,205 1, 2024. 111,803,244 132,092,678 The Cooperative has available a $5,530,000 (2019 - $6,320,000) line of credit with Federated Co-operatives General repayment 32,271,397 34,300,506 Limited of which no amount has been drawn as at October 31, 2020 (2019 - $nil). The amount available to the Shares transferred to reserves 284,453 704,223 Cooperative declines by 10% of the initial amount available over the life of the agreement which expires September 1, 2027. Withdrawals and retirements 672,502 879,186 Withholding tax 3,176,509 3,599,038 Amounts drawn on each line bear interest as determined by Federated Co-operatives Limited primary financial 36,404,861 39,482,953 institution which was 2.45% per annum at October 31, 2020 (2019 - 3.95%).

Balance, end of year $ 75,398,383 $ 92,609,725 FCL reserves the right to take a security interest in the property and associated assets of the Cooperative at any time, upon reasonable notice, over the term of the loans or until all amounts owing have been paid in full. The Board of Directors approved a patronage allocation to members in the amount of $17,455,800 (2019 - $37,901,591). 11. Accounts payable and trust liabilities 14. Reserves and retained savings 2020 2019 Special General Retained FCL payables $ 40,507,285 $ 51,041,467 Reserve Reserve Savings 2020 2019 Other payables 10,785,917 10,554,448 Trust liabilities: Balance, Payroll deductions 225,136 1,192 beginning of Federal fuel charge 2,526,068 2,031,096 year $ 69,144,155 $ 37,772,537 $ 18,686,559 $ 125,603,251 $ 109,984,312 Provincial sales tax 344,773 54,541 Workers Compensation Board - 8,784 Net savings distributed to $ 54,389,179 $ 63,691,528 retained savings - - 30,311,511 30,311,511 52,853,512

12. Long-term debt Patronage allocation - - (17,455,800) (17,455,800) (37,901,591) 2020 2020 2019 2019 Total Current Portion Deferred Portion Current Portion Deferred Portion Shares transferred - 254,546 - 254,546 667,018 FCL $ - $ - $ - $ 923,197 $ - Reserve Federated Co-operatives Limited loan paid in full during 2020. transfers 11,207,252 1,694,655 (12,901,907) - -

Balance, end of year $ 80,351,407 $ 39,721,738 $ 18,640,363 $ 138,713,508 $ 125,603,251

12 13 Consolidated Notes to Redthe River Financial Cooperative Statements Ltd. Consolidated Notes to Redthe River Financial Cooperative Statements Ltd. For the Year Ended October 31, 2020Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020 For the Year Ended October 31, 2020

15. Sales 19. Income tax expense 2020 2019 The Cooperative accounts for income taxes using the taxes payable method. As a result, the Cooperative's Gas bars $ 345,734,033 $ 472,450,290 income tax expense varies from the amount that would otherwise result from the application of the statutory Bulk petroleum 45,621,609 56,283,392 income tax rates as set out below: Food stores 139,673,537 120,360,027 Subsidiaries 1,252,157 824,063 2020 2019

$ 532,281,336 $ 649,917,772 Savings before income taxes $ 33,893,106 $ 57,683,991

The Cooperative's business operations consist of four segments. All sales are to external customers and no Expected income tax expense at the combined tax rate of 27% single customer accounts for more than 10% of sales. (2019 - 26.8%) net of the general rate reduction 9,151,139 15,459,310

16. Government assistance Increase (decrease) in income tax expense resulting from: Non-taxable income and non-deductible expense 24,165 65,914 In April 2020, the Government of Canada introduced the Canada Emergency Wage Subsidy (“CEWS”) Patronage allocation to members of $17,455,800 (2019 - $37,901,591) (4,713,066) (10,157,626) program to support employers that had experienced the required reduction in revenue as a result of the Covid- 19 pandemic. The Cooperative determined that it met the prescribed conditions and applied for the CEWS. Income or expenses claimed in different periods for income During the year, the Cooperative recorded $5,791,753 related to CEWS included in operating and tax purposes: administration expenses. As of October 31, 2020, the Cooperative recognized a receivable related to CEWS Capital cost allowance in excess of depreciation (873,865) (482,247) of $373,439 included in other receivable in the consolidated balance sheet. Other items that impact income taxes: 17. Net interest Manufacturing and processing investment tax credit (46,423) (54,879) Loss carry forward 42,027 - 2020 2019 Prior year tax adjustment (2,382) 7

Interest expense on short-term debt $ 3,567 $ 11,573 Income tax expense $ 3,581,595 $ 4,830,479 Interest revenue (783,526) (903,835) 20. Commitments $ (779,959) $ (892,262) As of October 31, 2020, the Cooperative has entered into commitments of $25,000,000 (2019 - $15,200,000) 18. Pension plan for the construction, expansion and renovation of buildings and the purchase of real property. These projects will be financed through operations or loans. The Cooperative participates in a multi-employer defined contribution plan whereby the Cooperative and participating employees contribute equal amounts up to the maximum allowed under the Income Tax Act. The 21. Operating leases Cooperative has no unfunded liability under this plan. During the year, the Cooperative recorded $1,118,405 (2019 - $1,010,625) of expense relating to the plan. There were no significant changes to the rate of employer The Cooperative is committed to operating leases. Total minimum lease payments are as follows: contributions during the year. 2021 $ 2,476,779 2022 2,761,583 2023 2,869,610 2024 3,091,047 2025 2,906,820 Subsequent payments 47,325,173

$ 61,431,012

14 15 Consolidated Notes to Redthe River Financial Cooperative Statements Ltd. For the Year Ended October 31, 2020 Consolidated Notes to the Financial Statements For the Year Ended October 31, 2020

22. Business combinations

On April 1, 2019, the Cooperative acquired 100% of the shares of Nova Star Refrigeration, Air Conditioning, Heating Ltd. The Cooperative determined the acquisition constituted a business combination and applied the consolidation method to record the transaction.

On July 7, 2019, the Cooperative acquired the business operations and all of the assets of Super A food store in Gimli. The Cooperative determined the acquisition constituted a business combination and applied the acquisition method to record the transaction. The businesses have been integrated and are reported within the Food stores division segment from the date of acquisition.

The acquisition had the following effect on the Cooperative's assets and liabilities on acquisition date:

Fair Value at DIVISION acquisition date

Property, plant and equipment $ 950,793 Inventories 426,256 REPORTS Other current assets 336,629 Financial liabilities (118,108)

Net identifiable assets and liabilities 1,595,570 RED RIVER CO-OP Goodwill on acquisitions recognized 304,226 OFFERS A VARIETY OF Total cost of acquisition $ 1,899,796 SERVICES TO BEST SERVE Cash consideration $ 1,899,796 ITS COMMUNITIES. 23. Group entities

Outlined in the table below is a list of the Cooperative's subsidiaries:

Name of subsidiary Ownership interest Nova Star Refrigeration, Air Conditioning, Heating Ltd. 100% Red River CL Ltd. 100% Red River JJ Ltd. 100%

38 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT

16 ABOUT US

Red River Co-op offers a variety of services to best serve its communities.

FOOD STORES Red River Co-op provides fast, friendly, and professional service at our eight food store locations: Grant Park, Southdale, St. Vital, St. Norbert, Lorette, Selkirk, Stonewall and Gimli. Visit us for competitive prices on a vast selection of food products including fresh, local produce and meats, baked goods and our private label foods.

GAS BARS/CONVENIENCE STORES Our gas bars continue to offer full service in an increasingly self-service world. Attendants offer to fill up the tank, clean the windshield, and check the oil. We have three grades of Top Tier gasoline, as well as diesel at each pump. Our convenience stores offer fresh brewed, ethically sourced Co-operative Coffee, a large selection of cold beverages and a wide variety of affordable snacks.

CAR WASHES All of our car washes use industry-leading products like Turtle Wax, and our most recently upgraded facilities offer the choice between Touchless and Soft Touch Car Washes. For added convenience, car wash codes can be used at any of our car wash locations.

BULK FUEL/CARDLOCKS We have a fleet of delivery units which provide farms and businesses with convenient service. Our cardlocks offer readily available fuel for farmers and commercial vehicle drivers 24 hours a day, 365 days a year. We use the latest in environmental protection equipment to ensure safe, reliable product dispensing.

ABOUT YOUR CO-OP Red River Co-op is a dynamic, Winnipeg-based Co-op with over 312,000 members. We have a distinguished 83-year history of serving local communities and have become one of Manitoba’s most trusted and valued brands, not just by sales or market share, but by reputation.

We serve our members daily in our food stores and pharmacies, at our home office, gas bars, car washes and cardlocks, and through our bulk fuel delivery to farms and businesses. We are a proud member of the Co-operative Retailing System, and one of the largest co-op retails in Western Canada.

40 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT renovating our food store in Gimli as well as our food store in Lorette. We opened our brand new food store FOOD AND PHARMACY REPORT in St. Norbert in early February and the community responded enthusiastically. We are building a new pharmacy in the community of Niverville and our food hen I joined Red River Co-op in January 2020, I had no The pharmacy division also experienced their share of challenges store in Seasons of Tuxedo is scheduled to open in the idea of the challenging year we were about to embark as the pandemic created some shortage concerns of certain summer. Our food store in Selkirk is also scheduled to on. The pandemic hit us just eight weeks into my new medications for a period of time. Another difficulty came when start renovations this fall. role and challenged us to re-think how we would the Manitoba government changed the maximum quantity conduct business in our food stores going forward. of prescriptions allowed in one transaction in all pharmacies. 2020 will be a year to remember as so much changed in WWe had to quickly adapt and create safe environments for our This created a huge monthly traffic increase and our pharmacy our work and personal lives. We learned to navigate an employees, members and customers. We went through the “panic teams worked tirelessly for a few months to keep up with this uncertain world in this pandemic and were challenged to buy” period in the spring and had to re-focus our efforts to counter new demand. Thankfully, things got back to a more normal pace a whole different level. I want to thank my team and all balance the supply chain gaps caused by manufactures closing by the summer. of our members for their continued support throughout down or reducing their selection of products. The entire food world this past year. I look forward to 2021 being another In October, Betsy Thomas joined our team as the new District was learning to do business in a whole different way. exciting year! Manager of our pharmacy operations. Betsy opened the new I am very proud of our food store teams and how they conducted pharmacy in Carman four years ago and has been a great themselves during the peak of the pandemic. Our team stayed addition to our team. Betsy Thomas Paul Jackson District Manager District Manager strong and continued to offer quality products and service to of Pharmacy Operations of Food Operations our members. After a while, we found our new rhythm in this The 2019/2020 fiscal year was a very successful pandemic. We signed up more new members than any other year for the food division. Our financials year before as more customers discovered what Red River Co-op were the best since Red River Co-op is all about; they liked the size of our stores and parking lots re-entered the food business in which made their shopping trip easy and quick, new members 2014. We have learned a great commented on the quality of our fresh departments and they deal this past year and we learned of our truly local mindset through our vast selection of will continue to work hard at local products. managing our standards and service to maintain this new The closure of restaurants and reduction in travel forced all of us to level of business. do more cooking at home and our food stores benefited from this new trend. Even though our customer traffic and total transactions This coming year will be very were down compared to the previous year, the average basket grew busy again at Red River 30 percent as customers bought more each time they shopped in Co-op as we have started our stores. The pandemic also increased the need for curbside pickup and we successfully launched our Click & Collect online shopping option in all four of our Winnipeg stores this past year.

Some of the food division projects were postponed due to the pandemic, but our renovation of our food store in St. Vital continued throughout the whole year. We experienced a few delays due to manufacturing issues, but the renovation was completed in December and the store looks amazing! We have seen members come back quickly and are seeing an increase in new members as they see the beautiful store offered to their community.

Sara Fournier VP of Food & Pharmacy Operations

42 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT As the adoption of electric vehicles increases, the demand for fast charging stations will become more commonplace. Red ENERGY REPORT River Co-op, in partnership with the Co-operative Retailing System, will be installing universal chargers at selected locations across western Canada. We will host four locations within the he year 2020 was a very unusual and challenging year for certified fuel improves the following: vehicle performance, city of Winnipeg, with construction beginning spring 2021. our co-op, especially in the energy division. The collapse emissions reduction, fuel economy, gasoline engine protection, of world crude prices due to shrinking demand caused and deposit control. CAR WASH APP by lockdowns implemented to contain the Coronavirus In August, Red River Co-op rolled out the new car wash mobile INTERIOR UPGRADES devastated our business line. To counteract the significant app. A major advantage of the app is the convenience of never Interior upgrades were completed at our gas bars on Pembina, Tdecline in litre sales we experienced early into 2020, we began to having to leave your vehicle to purchase a wash. It’s great for Grandmont and in Stonewall. The upgrades included new décor tighten our belts. Most major projects were curtailed or delayed as people not prepared to enter public spaces due to COVID-19, and a revamped floor plan. The beverage counters have been we looked for opportunities to protect our financial results. I am parents with young children, and people with physical converted to include Co-operative Coffee, plus we have added the pleased to say the energy division was able to exceed the targets restrictions. Also, app users can earn points for free washes Big Cool Twist program. we had for our local operations; however, the net results were and receive promotions for discounts. impacted because of a large decline in patronage allocations from SELKIRK CAR WASH our wholesale. Both individual wash and monthly subscriptions options are Construction on the replacement of the Selkirk gas bar is ongoing available. The monthly subscription service provides the app with an estimated completion date of fall 2021. The new site will The energy division team diligently worked and adjusted to user the ability to wash their vehicles up to four times each also include a new tunnel car wash as well as a six-bay wand wash every situation. Ultimately our goal was to continue to provide a month. A subscription user simply needs to enter a Red River which is new to our co-op’s car wash offering. pleasant and safe environment for our members. Co-op car wash site to have their subscription recognized and the app will prompt them to use their subscription. If they We experienced many challenges in 2020, however by far the most OIL WAREHOUSE choose to use the subscription, a wash code will be provided - significant was the impact that the lockdowns had to our business Construction began on a warehouse at 940 Redonda Road. This a very quick, and easy process. Wash codes can be used at any as members drove less and many worked from home. In an effort project will consolidate our inventory into one versus the existing Red River Co-op wash location. to counteract the impact of the lockdowns, we reduced hours of three locations and is scheduled to open spring 2021. operation and full-service levels, temporarily. The one constant was ELECTRIC CHARGING STATIONS the loyalty of our members, which allowed us to persevere. Environmental stewardship has been part of our business As mentioned, the division’s contribution remained decisions at Red River Co-op for many years and has positive and with the continued support of our included things such as: double-walled underground wholesale, Federated Co-operatives Ltd. (FCL), we tanks and lines, LED lighting, high efficiency were pleased to provide a return to our members, heating and cooling systems, and eco-friendly car albeit less than the previous year. The energy team wash soaps. With FCL, we continue to investigate understands there are many choices for the members alternative energy products, and to that end, we in the market and are appreciative of the support will be moving forward with the installation of shown by our more than 312,000 members. Our goal is electric vehicle (EV) charging stations. to continue to earn that support in the coming years at our gas bars, car washes, convenience stores, and with our Gordon Grainger VP of Energy Operations bulk deliveries.

I have recapped some of the projects and programs that were initiated in 2020.

TOP TIER GASOLINE Co-op gasoline is certified as a Top Tier™. This designation is an industry-leading fuel certification backed by auto manufacturers and goes beyond current government standards in detergency. Top Tier™

44 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT HUMAN RESOURCES REPORT

n behalf of our over 800 employees on our payroll, and champion a program called Not Myself Today. This program has representing another 1,000 or so active employees in been successfully executed in many businesses across Canada and our lease operated gas bars, it is a privilege to be able we are proud to pilot this program in April of 2021 at five of our to address our HR division year in review with you. This locations inside our co-op. After the pilot we will roll it out to the year has seen a lot of emotional ups and downs when entirety of our co-op. Owe look at it through an HR lens. 2020 will never be forgotten for many reasons! We will do all we can to protect the mental health of our employees. Typically when people talk about health and safety COVID-19 in the workplace, most people think about steel-toed boots and When 2020 started it was full of optimism and excitement, then personal protective equipment. But we are putting forth the same COVID-19 hit. The exhilaration of the year turned to a mindset vigor to protect people’s minds. of trying to figure out what COVID-19 means from a human resources landscape. One in five people experience a mental illness in any given year. Our bulk petroleum division, which has seven petroleum trucks on 95% of people who call in sick for mental health reasons say the the road at any given time, are compliant with the National Safety Once COVID-19 arrived, we took appropriate steps to mitigate reason is for something else. Armed with these and similar stats, Code, which is a Canada-wide certification program designed to its impact. We gathered a team of employees that stepped up it is imperative upon us personally and professionally to ensure establish minimum performance standards for the safe operation to serve on our Pandemic Preparedness Committee. Together, positive mental health resources are provided to all our staff. We of commercial vehicles. 2021 will see an external audit of that we created an execution strategy to contain the spread of the look forward to normalizing conversations about mental health program to gauge its effectiveness. pandemic both for the safety of our staff, and our members. and mental illness, and reducing the stigma that unfortunately still exists surrounding these issues. We have introduced an audit procedure for our food division And yes we have had some COVID-19 cases inside our co-op. to ensure standards are being upheld. Special attention has But with thorough PPE and safe work procedures in place, we are SAFE WORKPLACE been given to tracking incidents and identifying patterns. From proud to say there has been no community spread (from worker to Our health and safety division that information, more attention has been placed on reviewing co-worker) of the disease inside our co-op to date. has made great strides over the procedures to mitigate the recurrence of those incidents. past two years. We have thorough This is a testament to our frontline staff who, through their safety programs operating Our gas bars have active safety programs to ensure the safety of attention, are diligent in executing the standards to keep co- across all our divisions, including our staff at all times. Support has been provided and our gas bars workers and members safe! Our hats go off to our incredible staff established safe work procedures, have a very good track record on safety. for abiding by, and gently nudging our membership to abide by our and return to work programs. Our COVID-19 procedures. culture of safety is becoming more BEST EMPLOYER engrained with each passing month. Although 2020 presented us with many challenges, we were very We would also like to recognize the public health nurses in our proud to receive some impressive accolades. Early in the new year, community. They have been crucial in providing guidance and Red River Co-op was recognized as a Top Employer in Manitoba. contact tracing when a positive case has been experienced. This award was presented by MediaCorp Canada, partnered through the Globe and Mail, and locally advertised through the DIVERSITY AND INCLUSION Winnipeg Free Press. Our co-op is a diverse mosaic made up of employees, representative of the communities we serve. We aim to ensure We are honoured to be recognized. This award is an indirect result In order to obtain more feedback from our staff and their staff and members from all walks of life feel included and welcome of a number of initiatives not limited to: attitudes towards our co-op, we will administer an employee in our co-op. Our diversity and inclusion journey has begun. Our • the active listening and two-way communication we have with engagement survey in the fall of 2021. This will provide us with early efforts will focus on building an inclusive workplace culture. our staff which creates a positive work atmosphere, further insight into their opinions and provide opportunities to A positive workplace culture attracts talent, drives engagement, • the thorough involvement our co-op has within our communities, address and meet their needs. impacts happiness and satisfaction, and affects performance. In • our employee-friendly policies and benefits. other words – we all win from a strong culture! The “I’m at Home CONCLUSION Here” campaign will be rolling out in stages throughout 2021, and We were even told that we were short-listed as a Top Employer in As you can see, we have had an exciting year in 2020, and all we will ensure inclusion is at the forefront of all we do. Canada, but weren’t quite selected for that honour. Maybe next measures indicate we will continue that trend in 2021. We have year? In the end, we want to make sure we are doing all we can an amazing group of employees who work collaboratively and MENTAL HEALTH to attract top talent to come and work for our co-op. Our Top really like the work they do. We are fortunate to employ such a We are endeavoring to create a workplace culture where the Employer status will help immensely to retain our existing staff fantastic group who are determined to serve our members in the question ‘How are you?’ has meaning. With that in mind, we Murray Dehn and also attract the best talent across the sectors we serve. best way possible! have partnered with the Canadian Mental Health Association to VP of Human Resources

46 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 47 COMMUNITY SUPPORT HIGHLIGHTS COMMUNITY INVESTMENT ne of the defining factors that makes Red River Co-op Fuel Good Day, Red River Co-op was able to make a donation of $70,000 a different kind of business is the investments we $50,678 to the Bear Clan and $5,000 to Feed The Furbabies. to the SELKIRK & DISTRICT make in the communities that we do business so that CURLING CLUB $70,000 was donated to the Selkirk and District Curling Club $11.7 they may become better places for everyone. 2020 marked a challenging year for non-profits and charities through Co-op's Community Spaces grant – a program that million Odoing important work in our markets. As the government helps to improve community health and well-being by building imposed lockdown and safety measures to control the spread of places for people to come together and build social connections. in sales of over Red River Co-op's donation will go towards the repair and $15,857 COVID-19, organizations relying on fundraising and awareness 600 Manitoba to the GREEN ACTION enhancement the club’s roof, which will also significantly reduce events worked tirelessly to pivot their plans online or were forced grown and CENTRE from the sale of the heating costs and reduce the facility's carbon footprint. to cancel them. Stages were dark and community centres closed made products plastic bags as gathering in groups became prohibited, affecting our local arts Red River Co-op and Ace Burpee, local advocate and Virgin and recreation sectors. Winnipeg radio host, teamed up in 2019 to develop delicious In these unprecedented and challenging times, Red River Co-op Co-op PURE Honey Dill Kettle Cooked Potato Chips with proceeds $15,000 remained committed to giving back to communities. In 2020, from every sale going to The Dream Factory. The Dream Factory to the DREAM FACTORY $185,911 was donated to 79 non-profits and charities. The works to fulfill the dreams of children who are battling life- from the sale of Ace Burpee’s organizations supported align with Red River Co-op’s values and threatening illnesses right here in Manitoba. The campaign was a Honey Dill Chips address the needs of our communities. They range from health success, with bags flying off food store and gas bar shelves. Thanks organizations, sport and recreation, arts, youth education, animal to the tremendous support from the community, this year we welfare, environmental causes, and food insecurity and healthy were able to donate $15,000 for The Dream Factory and allocated eating programming. $7,500 to two-year-old Nova so she and her family could share the most magical Christmas. We will be choosing another wish We hosted our annual Fuel Good Day on September 15 where we to grant in partnership with Ace Burpee with the remainder of the $185,911 pledged to donate five cents of every litre of fuel sold at our gas donation in coming months. in COMMUNITY INVESTMENT bars that day to the Bear Clan, a community-based solution to to more than 70 recipients * crime prevention. They also deliver food hampers and operate a Despite 2020 being a difficult year, thanks to the support of walk-up “grocery store” where community members can take the you - our members - we were able to continue to give back to the communities we live in. We support organizations in the food that they need. In addition, we pledged to donate a portion areas we serve: to Feed The Furbabies Canada – a Manitoban animal welfare $50,678 Please see the next page for Red River Co-op’s 2020 community non-profit. Thanks to our members’ and customers’ support on Winnipeg • Lorette to the Bear Clan Patrol Inc. investment summary. Oakbank • Gimli + $5,000 freezer donation Headingley • Stonewall Selkirk • Niverville • Teulon $5,000 Ste. Agathe • Dryden • Kenora to Feed the Furbabies + 11,700 lbs of pet food

107,305 lbs $22,517 Red River of food donated donated to 34 schools, PAC committees and other programs through our GIFT CARD FUNDRAISING PROGRAM

2,745 lbs $134,900 in support of organizations that add vibrancy to of food donated + 864 lbs of COFFEE from our coffee drive for Siloam our communities and make them better places to live, work and play. 400 lbs in clothing donations 48 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT Organizations like the Assiniboine Park Conservancy to put in cash donations on the Zoo Lights Festival, the Manitoba Moose for $2,430 community game sponsorships and more. SUPPORTING OUR COMMUNITY ENVIRONMENTAL SUSTAINABILITY NON-PROFITS AND CHARITIES SUPPORTED THROUGH RED RIVER CO-OP’S COMMUNITY INVESTMENT PROGRAM

ENERGY EFFICIENT UPGRADES operations year over year by 2,132.47 tonnes of carbon 1st Crestview Scout Group Feed the Furbabies Manitoba Indigenous Cultural Prairie Theatre Exchange Red River Co-op continues to work towards reducing its dioxide equivalent (tCO2e) since 2016. The largest impact Education Centre Inc. environmental impact by improving the energy efficiency of the to our GGE was refrigerant loss from breakdowns due to Alzheimer Society of Manitoba Fort Garry Women's Resource Rossbrook House buildings and equipment in operation. The upgrades provide an the aged equipment in use. The co-op and its members Centre Manitoba Museum Archwood School Rotary Club of Winnipeg opportunity to reduce operating costs, demand on local utilities are starting to see the benefits of the more reliable and up Fort Whyte Foundation Inc. Manitoba Mutts Dog Rescue Assiniboine Memorial Curling Royal Manitoba Theatre Centre and infrastructure; which helps our members and the local to date equipment with lower greenhouse gas emissions. Club Gifts of Grace Manitoba Naturalist Society community. The improvements taking place at the food stores Siloam Mission and gas bar sites will continue to improve and reduce the co- GREENHOUSE GAS EMISSIONS Assiniboine Park Conservancy Gordon Howard Centre Manitoba Possible (formally In 2020 Red River Co-op had a greenhouse gas emissions SMD) South West District Palliative op’s overall environmental impact now and in the future. Bear Clan Patrol Inc. Green Action Centre Care Inc. (GGE) of 5,391.83 tonnes of carbon dioxide equivalent Manitoba Schizophrenia Society Red River Co-op made the decision to begin renovating the (tCO2e) a reduction of 586.73 tCO2e compared to the Bookmates Inc. Habitat for Humanity St. Amant Foundation Inc. Manitoba Theatre for Young food store locations with improved and up to date equipment. previous year and a total of 2,132.47 tCO2e over the last Boys and Girls Club of Winnipeg Hospital Activity Book for People St. Boniface Hospital Foundation The benefits of the upgrades over the years have helped reduce four years. Children the total greenhouse gas emissions (GGE) produced from CancerCare Manitoba Mood Disorders Association of St. Norbert Arts Centre Foundation IISD Experimental Lakes Area Manitoba Triathlon Manitoba Cerebral Palsy Association of Inner City Youth Alive MS Society of Manitoba Manitoba U Multicultural Inc. Jocelyn Hutton Foundation CARBON FOOTPRINT (tCO2e) Muscular Dystrophy Canada University Winnipeg Co-op Children’s Wish Foundation 2017 2018 2019 2020 Joy Smith Foundation Never Alone Foundation Scholarships Children's Hospital Foundation Food stores & pharmacies 5,264 4,163 3,158 2,806 Kenora District Festival of the Niigaanaki Day Care Centre Urban Stable Children's Rehabilitation Arts Gas bars, cardlock & bulk 2150 2,695 2,751 2,510 Foundation North Point Douglas Women's Winnipeg Arts Council Kidney Foundation of Canada, Head office & buildings 109 68 68 73 Centre Winnipeg Humane Society Community Safety Net MB Branch Total 7,524 6,929 5,978 5,391 NorWest Co-op Community Convalescent Home of Winnipeg Lake Winnipeg Foundation Winnipeg International Writers Food Centre Festival Corydon Community Centre Lakewood School WATER CONSUMPTION (m3) Parkinson Canada - Manitoba Winnipeg Police Association- Water Consumption 304,752 309,162 291,844 278,018 Dakota Community Centre Linden Meadows School Parent Patricia Region Senior Services Cool 2Be Kind Scholarships Advisory Inc. Women's Health Research Diabetes Canada Lorette Collegiate Safe Grad Pitch for Pride Foundation Ècole LaVerendrye Community Manitoba Chamber Orchestra Plug In Inc. Youth Parliament of Manitoba Council Manitoba Conservatory of Music Prairie Fire Press, Inc. Elmwood High School and Arts Greenhouse gas emissions from 115 vehicles driven in one year or the ➤ equivalent to 2,125,582 km driven by an average passenger vehicle.

➤ CO2 emissions from 90 homes’ electricity use for a year. FUN FACTS RED RIVER CO-OP’S REDUCTION OF Carbon sequestered by 8,801 tree seedlings grown for 10 years or the ➤ 586.73 tCO2e in 2020 equivalent to 695 acres of forests in one year. IS EQUIVALENT TO: ➤ 67,881,892 smartphones charged.

RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 51 Statement on the Co-operative Identity Code of Ethical Standards for Co-operatives International Co-op Alliance

DEFINITION A co-operative is an autonomous association of persons united voluntarily to meet their common We recognize that this consumer-owned co-operative has a responsibility to respect, to economic, social, and cultural needs and aspirations through a jointly-owned and democratically- promote, and to protect the rights of consumers, and that these rights include: controlled enterprise. THE RIGHT TO SAFETY • THE RIGHT TO BE INFORMED • THE RIGHT TO CHOOSE • THE RIGHT TO BE HEARD VALUES Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others. In support of its responsibility to appreciate the rights of consumers, this co-operative shall aim to observe and apply in all of its activities, the following:

AUTONOMY AND INDEPENDENCE ETHICAL STANDARDS APPLICATION OF THE CODE PRINCIPLES Co-operatives are autonomous, self-help organizations 1. All claims, statements, information, advice, and proposals shall Having acknowledged that the consumer has certain rights, and The co-operative principles are guidelines by which co-operatives controlled by their members. If they enter into agreements be honest and factual. being resolved to conduct our activities in the interests of the put their values into practice. with other organizations, including governments, or raise consumer, we shall, at all times, when applying this code or capital from external sources, they do so on terms that ensure 2. Sufficient disclosure of pertinent facts and information shall interpreting its intent, emphasize ethical human relations and VOLUNTARY AND OPEN MEMBERSHIP democratic control by their members and maintain their be made to enable others to adequately judge the offered values rather than technicalities or legalisms. Co-operatives are voluntary organizations, open to all persons co-operative autonomy. product, service, or proposal, and its suitability for the able to use their services and willing to accept the responsibilities purpose to be served. Our test for compliance to this Code of Ethical Standards shall of membership, without gender, social, racial, political or EDUCATION, TRAINING AND INFORMATION be the effect of a communication or action on the ordinary religious discrimination. Co-operatives provide education and training for their members, 3. Due regard shall be given to public decency and good taste. or trusting mind. We recognize that it is not sufficient that a elected representatives, managers, and employees so they can discerning, knowledgeable, or analytical person may derive a DEMOCRATIC MEMBER CONTROL 4. Unfair exploitation in any form shall be avoided. contribute effectively to the development of their co-operatives. correct interpretation if others may be misled. Co-operatives are democratic organizations controlled by their They inform the general public – particularly young people and 5. Comparison of co-operative merchandising, products, services, members, who actively participate in setting their policies opinion leaders – about the nature and benefits of co-operation. The Code of Ethical Standards is adopted by the Red River Co-op philosophy, principles, or practices, to those of others shall and making decisions. Men and women serving as elected Board of Directors. representatives are accountable to the membership. In primary CO-OPERATION AMONG CO-OPERATIVES only be made honestly and fairly, and without intent to co-operatives members have equal voting rights (one member, Co-operatives serve their members most effectively and harmfully disparage. one vote) and co-operatives at other levels are also organized in a strengthen the co-operative movement by working together 6. The interests of the membership as a whole shall be paramount democratic manner. through local, national, regional and international structures. to the interests of the institution. MEMBER ECONOMIC PARTICIPATION CONCERN FOR COMMUNITY 7. The co-operative shall aim to be equitable in the treatment of Members contribute equitably to, and democratically control, the Co-operatives work for the sustainable development of their its members. capital of their co-operative. At least part of that capital is usually communities through policies approved by their members. the common property of the co-operative. Members usually 8. Knowingly advising or persuading individuals to take action that receive limited compensation, if any, on capital subscribed as a may not be in their best interests shall be avoided. condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.

52 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT | 53 NOTES

54 | RED RIVER COOPERATIVE LTD | 2020 ANNUAL REPORT HEAD OFFICE 10 Prairie Way Winnipeg, Manitoba R2J 3J8

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