Form 40-F
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 40-F
(Check One)
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Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934 |
Or
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Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 |
For the fiscal year ended December 31, 2010
Commission File Number: 001-13425
Ritchie Bros. Auctioneers Incorporated
(Exact Name of Registrant as Specified in Its Charter)
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Not Applicable |
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Canada |
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Not Applicable |
(Translation of
Registrants Name
Into
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(Province or Other
Jurisdiction of
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(I.R.S. Employer
Identification |
English (if
Applicable))
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Incorporation or
Organization)
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Number (if Applicable)) |
7389
(Primary Standard Industrial Classification Code Number (if Applicable))
9500 Glenlyon Parkway, Burnaby, British Columbia, Canada V5J 0C6 (778) 331-5500
(Address and Telephone Number of Registrants Principal Executive Offices)
Ritchie Bros. Auctioneers (America) Inc., 15500 Eastex Frwy, Humble, TX, 77396, (713) 455-5200
(Name, Address (Including Zip Code) and Telephone Number (Including Area Code) of
Agent For Service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on Which Registered |
Common Shares
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New York Stock Exchange; Toronto Stock Exchange |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
Not Applicable
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
Not Applicable
For annual reports, indicate by check mark the information filed with this Form:
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þ Annual information form
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þ Audited annual financial statements |
Indicate the number of outstanding shares of each of the issuers classes of capital or common
stock as of the close of the period covered by the annual report.
Common Shares: 105,648,035
Indicate by check mark whether the Registrant by filing the information contained in this Form is
also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934. If Yes is marked, please indicate the filing number assigned to
the Registrant in connection with such Rule.
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the Registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.
Indicate by check mark whether the Registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the Registrant was required to submit and post such files).
The Annual Report on Form 40-F shall be incorporated by reference into or as an exhibit to, as
applicable, each of the Registrants Registration Statements under the Securities Act of 1933:
Forms S-8 (File Nos. 333 65533 and 333 71577).
Forward-Looking Statements
This Annual Report on Form 40-F and documents incorporated by reference contain
forward-looking statements (as such term is defined under the U.S. Private Securities Litigation
Reform Act of 1995) that involve risks and uncertainties. These statements are based on current
expectations and estimates about the Companys business and include, among others, statements
relating to:
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the Companys future performance; |
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growth of the Companys operations; |
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growth of the world market for used trucks and equipment; |
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increases in the number of consignors and bidders participating in the Companys
auctions; |
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the impact of the current economic environment on the Companys operations and capital
resources and customers, including the number of bidders and buyers attending the
Companys auctions and consignment volumes at those auctions; the demand for the Companys
services during challenging economic times; the Companys bidders ability to access
credit to fund their purchases; the impact of the economic environment on equipment
prices, supply of and demand for equipment at the Companys auctions, risk and the
Companys business model; |
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the Companys principal operating strengths, competitive advantages, and the appeal of
the Companys auctions to buyers and sellers of industrial assets; |
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the Companys ability to draw consistently significant numbers of local and
international end-user bidders to its auctions; |
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the Companys ability to grow the core auction business, including the ability to
increase market share and make the auctions easier, and do
more business with new customer groups in new markets, the acquisition and development of
auction facilities and the related impact on capital expenditures, and response by
customers to the new initiatives being launched in 2011; |
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the Companys ability to add new business and information solutions, including
utilizing technology to enhance auction services and support additional value added
services, maximizing the use of business intelligence to enhance understanding of the
equipment market and managements ability to make www.rbauction.com the preferred
equipment website; |
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the Companys ability to perform by building a customer focused Company, including an
inspired high-performance team, ability to improve sales force productivity, employee
engagement and management bench strength; |
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the relative percentage of the Companys gross auction proceeds represented by straight
commission, guarantee and inventory contracts; |
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the Companys auction revenue rates, the sustainability of those rates, as well as the
seasonality of gross auction proceeds and auction revenues; |
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the Companys direct expense and income tax rates, depreciation expenses and general
and administrative expenses; |
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the Companys future capital expenditures; |
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the Companys internet initiatives and the level of participation in its auctions by
internet bidders; |
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the proportion of the Companys revenues and operating costs denominated in currencies
other than the U.S. dollar or the effect of any currency exchange and interest rate
fluctuations on its results of operations; and |
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financing available to the Company and the sufficiency of its working capital to meet
its financial needs. |
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Forward-looking statements are typically identified by such words as anticipate, believe,
could, feel, continue, estimate, expect, intend, may, ongoing, plan, potential,
predict, will, should, would, could, likely, generally, future, period to period,
long term, or the negative of these terms, and similar expressions intended to identify
forward-looking statements. The Companys forward-looking statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that are difficult to predict. While
the Company has not described all potential risks related to its business and owning its common
shares, the important factors listed under Risk Factors in the Managements Discussion and
Analysis of Financial Condition and Results of Operations attached in Exhibit 3 to this Report on
Form 40-F are among those that may affect the Companys performance significantly or could cause
actual financial and operational results to differ significantly from the Companys predictions.
Except as required by applicable securities law and regulations of relevant securities exchanges,
the Company does not intend to update publicly any forward-looking statements, even if its
predictions have been affected by new information, future events or other developments.
Disclosure Controls and Procedures
The Company performed an evaluation, under the supervision and with the participation of
the principal executive officer and principal financial officer, of the effectiveness of Ritchie
Bros. disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934) as of December 31, 2010. Based on this evaluation, the Companys
principal executive officer and principal financial officer concluded that the Companys disclosure
controls and procedures are effective to provide reasonable assurance that information required to
be disclosed by the Company in the reports that it files or submits under the Securities Exchange
Act of 1934 is accumulated and communicated to its management, including its principal executive
and principal financial officers, or persons performing similar functions, as appropriate to allow
timely decisions regarding required disclosure. Furthermore, we concluded that our disclosure controls and procedures were effective to ensure that
information required to be disclosed in the reports filed under the Securities Exchange Act of 1934
is recorded, processed, summarized and reported within the time periods specified in the U.S.
Securities and Exchange Commissions rules and forms.
Managements Report on Internal Control Over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate
internal controls over financial reporting for the Company as defined in Rule 13a-15(f) and
15d-15(f) under the Securities and Exchange Act of 1934. The Companys internal control over
financial reporting is a process designed under the supervision of the Companys CEO and CFO,
overseen by the Companys Board of Directors and implemented by the Companys management and other
personnel, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of the financial statements for external purposes in accordance with Canadian generally
accepted accounting principles and the requirements of the United States Securities and Exchange
Commission (the SEC).
Because of its inherent limitations, internal control over financial reporting may not prevent
or detect misstatements. Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions or
that the degree of compliance with policies and procedures may deteriorate.
Management has assessed the effectiveness of the Companys internal control over financial
reporting as of December 31, 2010. In making this assessment, management used the criteria
described in Internal Control Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on its assessment
under the framework in
Internal Control Integrated Framework, management has
concluded that the Companys internal control over
financial reporting was effective as of December 31, 2010.
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Attestation Report of the Registered Public Accounting Firm
The Companys independent registered public accounting firm, KPMG LLP, has audited the
Companys internal control over financial reporting, as stated in their report attached
hereto as part of Exhibit 2.
Changes in Internal Control Over Financial Reporting
There has been no change in the Companys internal control over financial reporting that
occurred during the year ended December 31, 2010 that has materially affected or are reasonably
likely to materially affect the Companys internal control over financial reporting.
Audit Committee Financial Expert
The Companys Board of Directors has determined that it has at least one audit committee
financial expert serving on its Audit Committee. Ms. Beverley Briscoe has been determined to be
such audit committee financial expert and is independent, as that term is defined by the New York
Stock Exchanges (NYSE) corporate governance listing standards applicable to the Company for Audit
Committee membership. The SEC has indicated that the designation of Ms. Briscoe as an audit
committee financial expert: (1) does not make Ms. Briscoe an expert for any purpose; (2) impose
any duties, obligations or liability on Ms. Briscoe that are greater than those imposed on members
of the Audit Committee and Board of Directors who do not carry this designation, or (3) affect the
duties, obligations or liability of any other member of the Audit Committee or Board of Directors.
Code of Ethics
The Company has adopted a Code of Business Conduct and Ethics (the Code of Conduct)
that applies to all employees, officers and directors. The Code of Conduct includes, among other
things, written standards for the Companys principal executive officer, principal financial
officer and principal accounting officer that are required by the SEC for a code of ethics
applicable to such officers. The Code of Conduct is available at the Companys internet website,
www.rbauction.com or by telephoning the Companys Corporate Secretary at 778-331-5500. The Company
intends to disclose on its website within five days following the date of any such amendment or
waiver, any amendment or waiver of the code of ethics portion of its Code of Conduct applicable to
these officers that is required by SEC rules or regulations to be disclosed publicly, and to keep
such disclosure available on the website for at least a 12-month period.
Principal Accountant Fees And Services
KPMG LLP and its predecessor firms have served as Ritchie Bros. auditing firm since 1974.
The aggregate fees billed by KPMG LLP and its affiliates during fiscal 2010 and 2009 are detailed
below.
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Fiscal 2010 |
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Fiscal 2009 |
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Audit Fees |
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$ |
1,233,100 |
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$ |
1,254,600 |
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Audit-Related Fees |
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153,800 |
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37,300 |
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Tax Fees |
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504,400 |
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494,200 |
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All Other Fees |
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Total Fees |
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1,891,300 |
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$ |
1,786,100 |
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The nature of each category of fees is as follows:
Audit Fees:
Audit fees were paid for professional services rendered by the auditors for the audit and
interim reviews of the Companys consolidated financial statements or services provided in
connection with statutory and regulatory filings or engagements.
Audit-Related Fees:
Audit-related fees were paid for assurance and related services that are reasonably related to
the performance of the audit or review of the Companys financial statements and are not reported
under the Audit Fees item above.
Tax Fees:
Tax fees were paid for tax compliance, tax advice and tax planning professional services.
These services consisted of: tax compliance, including the review of original and amended tax
returns; assistance with questions regarding tax audits; assistance in completing routine tax
schedules and calculations; and tax planning and advisory services relating to common forms of
domestic and international taxation (i.e., income tax, capital tax, Goods and Services Tax and
Value Added Tax).
Pre-Approval Policies and Procedures:
The Audit Committee has considered whether the provision of services other than audit services
is compatible with maintaining the auditors independence and has adopted a policy governing the
provision of these services. This policy requires the pre-approval by the Audit Committee of all
audit and non-audit services provided by the external auditor, other than any de minimus non-audit
services allowed by applicable law or regulation. The policy outlines the procedures and
the conditions pursuant to which permissible services proposed to be performed by KPMG LLP are
pre-approved, provides a general pre-approval for certain permissible services and for subsequent
reporting to the Audit Committee, and outlines a list of prohibited services. For 2010, less than
5% of the fees for the services described above were approved by the Audit Committee pursuant to
the de minimus exemption.
All requests for KPMG LLP to provide services that do not require specific approval by the
Audit Committee are reported to and documented by the Companys Chief Financial Officer. If the
proposed services are not covered by a pre-approval and the estimated fees for the proposed
engagement are more than CA$5,000, the engagement of KPMG LLP to provide such services requires
specific approval by the Audit Committee. Any proposed engagement to provide services that
requires specific approval by the Audit Committee pursuant to the terms of the policy is submitted
to the Chief Financial Officer for presentation to the Audit Committee for its consideration. Less
than 5% of KPMGs fees, excluding audit and review fees, were subject to a waiver of the
pre-approval requirement in 2010.
Additional Corporate Governance Information
Additional information regarding the Companys corporate governance practices is included
in its Information Circular for the 2011 Annual and Special Meeting of Shareholders and is available on the
Companys internet website at www.rbauction.com. Any foreign private issuer listed on the NYSE is
required to report any significant ways in which its corporate governance practices differ from
those required for United States companies under NYSE listing standards. The Company is in
conformance with the NYSE corporate governance requirements applicable to United States companies.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to
have a current or future material effect on the Companys financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources.
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Contractual Obligations
The following table provides information about the Companys aggregate known contractual
obligations as of December 31, 2010 (in thousands of U.S. dollars):
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Payments Due by Period |
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Less than |
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1-3 |
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3-5 |
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More than |
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Total |
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1 year |
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years |
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years |
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5 years |
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Long-term debt obligations |
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$ |
136,218 |
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$ |
30,000 |
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$ |
15,000 |
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$ |
31,074 |
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$ |
60,144 |
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Interest on long-term debt
obligations |
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24,379 |
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5,369 |
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9,957 |
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7,730 |
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1,323 |
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Operating leases obligations |
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173,083 |
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10,653 |
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18,299 |
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16,879 |
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127,252 |
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Other long-term obligations |
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1,332 |
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321 |
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656 |
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355 |
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Total contractual obligations |
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$ |
335,012 |
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$ |
46,343 |
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$ |
43,912 |
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$ |
56,038 |
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$ |
188,719 |
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The Companys long-term debt in the table above is comprised mainly of term loans put in place
in 2005 with original terms to maturity of five years, which were subsequently extended, a revolving loan drawn under a credit
facility that is available until January 2014, as well as a term loan put in place in 2009 with a
term to maturity of seven years. The Companys operating leases relate primarily to land on which
it operates regional auction units and administrative offices. These properties are located in
Canada, the United States, Spain, Germany, the Netherlands, and the United Arab Emirates.
Audit Committee
The Companys Board of Directors has a separately-designated standing Audit Committee
established in accordance with section 3(a)(58)(A) of the Securities Exchange Act of 1934 for the
purpose of overseeing the accounting and financial reporting processes of the Company and audits of
the Companys annual financial statements. As of the date of this Report, the members of the Audit
Committee include Eric Patel, Beverley A. Briscoe and James M. Micali. Ms. Briscoe serves as Chair
of the Committee.
Undertaking
The Company undertakes to make available, in person or by telephone, representatives to
respond to inquiries made by the SEC staff, and to furnish promptly, when requested to do so by the
SEC staff, information relating to: the securities registered pursuant to Form 40-F; the securities
in relation to which the obligation to file an annual report on Form 40-F arises; or transactions
in said securities.
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Signatures
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets
all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed
on its behalf by the undersigned, thereto duly authorized.
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RITCHIE BROS. AUCTIONEERS INCORPORATED
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By: |
/s/ JEREMY BLACK
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Name: |
Jeremy Black |
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Title: |
Corporate Secretary |
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Date: February 24, 2011
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EXHIBIT INDEX
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Exhibit |
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No. |
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Description |
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1. |
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Annual Information Form of the Registrant dated February 22, 2011. |
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2. |
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The following audited consolidated financial statements of the
Registrant, together with the independent auditors reports dated
February 22, 2011 of KPMG LLP, Chartered Accountants: |
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a.
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Consolidated Statements of Operations for the years ended
December 31, 2010, 2009 and 2008; |
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b.
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Consolidated Balance Sheets as of December 31, 2010 and 2009; |
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c.
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Consolidated Statements of Shareholders Equity for the years
ended December 31, 2010, 2009 and 2008; |
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d.
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Consolidated Statements of Comprehensive Income for the years
ended December 31, 2010, 2009 and 2008; |
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e.
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Consolidated Statements of Cash Flows for the years ended
December 31, 2010, 2009 and 2008; and |
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f.
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Notes to Consolidated Financial Statements (which include
reconciliation with United States generally accepted accounting
principles). |
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3. |
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Managements Discussion and Analysis of Financial Condition and
Results of Operations for the year ended December 31, 2010. |
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4. |
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Consent dated February 22, 2011 of KPMG LLP, Chartered Accountants. |
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31.1 |
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Certificate of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002. |
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31.2 |
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Certificate of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002. |
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32.1 |
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Certificate of Chief Executive Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002. |
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32.2 |
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Certificate of Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002. |
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