WINNIPEG, MANITOBA — (Marketwire) — 07/21/11 — Winpak Ltd. (WPK) (TSX: WPK) today reports consolidated results in US dollars for the second quarter of 2011, which ended on June 26, 2011.

Basis of Presentation

The 2011 amounts have been determined in accordance with International Financial Reporting Standards (IFRS) and accordingly, the comparative amounts have been restated to conform with IFRS, unless otherwise stated.

Winpak Ltd. manufactures and distributes high-quality packaging materials and related packaging machines. The Company-s products are used primarily for the packaging of perishable foods, beverages and in health care applications.

(1)EBITDA is not a recognized measure under IFRS. Management believes that in addition to net income, this measure provides useful supplemental information to investors including an indication of cash available for distribution prior to debt service, capital expenditures and income taxes. Investors should be cautioned, however, that this measure should not be construed as an alternative to net income, determined in accordance with IFRS, as an indicator of the Company-s performance. The Company-s method of calculating this measure may differ from other companies, and, accordingly, the results may not be comparable.

Forward-looking statements: Certain statements made in the following Management-s Discussion and Analysis contain forward-looking statements including, but not limited to, statements concerning possible or assumed future results of operations of the Company. Forward-looking statements represent the Company-s intentions, plans, expectations and beliefs, and are not guarantees of future performance. Such forward-looking statements represent Winpak-s current views based on information as at the date of this report. They involve risks, uncertainties and assumptions and the Company-s actual results could differ, which in some cases may be material, from those anticipated in these forward-looking statements. Unless otherwise required by applicable securities law, we disclaim any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance upon forward-looking statements.

This management-s discussion and analysis for the three and six months ended June 26, 2011 reflects the Company-s adoption of International Financial Reporting Standards (IFRS) as of December 27, 2010, the start of the 2011 fiscal year. Comparative periods for fiscal 2010 have been restated in accordance with IFRS, including the December 28, 2009 transition date balance sheet, however, periods prior to fiscal 2010 have not been restated and are reported in accordance with Canadian GAAP. Note 7 of the interim consolidated financial statements for the three and six months ended June 26, 2011 contains a detailed reconciliation of the Company-s financial statements previously prepared under Canadian GAAP to those under IFRS for the three and six months ended June 27, 2010 and for the year ended December 26, 2010 as well as the balance sheets as of these dates and the opening transition date of December 28, 2009. In addition, a detailed description of the effects of the adoption of IFRS on the Company-s financial reporting is included later in this management-s discussion and analysis under Accounting Changes.

Financial Performance

Net income attributable to common shareholders for the second quarter of 2011 was $16.2 million or 25 cents in earnings per share compared to $14.1 million or 22 cents per share in the corresponding quarter of 2010, an increase of 14.6 percent. Approximately half of the improvement was due to volume growth while the other half was attributable to enhancements in gross profit as a result of both product mix and greater manufacturing efficiencies.

For the six months ended June 26, 2011, net income attributable to common shareholders advanced to $30.9 million or 48 cents in earnings per share, up 5.2 percent from the $29.4 million or 45 cents per share recorded in the comparable period in the prior year. Increased volumes contributed nearly 3.0 cents in earnings per share while gross profit improvement added a further 2.0 cents per share. The impact of the stronger Canadian dollar had a negative impact on earnings per share of approximately 2.0 cents for the first six months of 2011 versus 2010.

Revenue

Revenue in the second quarter of 2011 was $161.3 million, representing an increase of $15.8 million or 10.8 percent over the comparable quarter in 2010. Volumes, in aggregate, advanced by a very respectable 5.6 percent, but demand was uneven across product lines. Growth in shipment quantities was particularly evident in rigid packaging, where volumes rose by over 15 percent due in part to increased activity in condiment and specialty beverage markets. Following modest expansion in demand in the first quarter, modified atmosphere packaging volumes grew at a rate exceeding the Company average in the second quarter of 2011. Meanwhile, sales volumes remained within a few percentage points of the corresponding prior year levels in the rest of the product groups of lidding, specialty films, biaxially oriented nylon and packaging machinery, as the sluggishness of the US economic recovery played a large role in this lackluster growth. Higher overall selling prices, in response to raw material cost increases and changes in product mix, contributed 4.2 percent to revenue. The stronger Canadian dollar further improved revenue by 1.0 percent in comparison to the second quarter of 2010.

For the first six months of 2011, revenue grew to $309.9 million, an increase of $31.4 million or 11.3 percent in relation to the corresponding period in 2010. More than half of the revenue improvement was due to volume enrichment of 6.2 percent, with all product groups advancing. As with the quarterly result, single-serve rigid container shipments led the way, bettering the corresponding prior year period by in excess of 15 percent. Packaging machinery and modified atmosphere packaging both grew by mid-single digit percentage increases while only marginal growth was evident in specialty films, biaxially oriented nylon and lidding. A rise in selling prices, as a result of escalating raw material costs and sales mix changes, supplemented revenue by 4.1 percent. A further 1.0 percent was added to revenue from the conversion of Canadian dollar sales into US funds at a higher average exchange rate in 2011 versus 2010.

Gross profit margins

Gross profit margins declined to 29.2 percent of revenue in the second quarter of 2011 from 29.8 percent of revenue recorded in the same quarter of 2010. However, in dollar terms, gross profit advanced by 8.6 percent to $47.1 million in the current quarter from $43.4 million in the second quarter of 2010, exceeding the increase in volume of 5.6 percent and contributing 1.5 cents to earnings per share. Changes in product mix, improved manufacturing performance, primarily through efficiency gains, and formulation refinements more than offset the negative impact of raw material cost escalations on gross profit. In periods of rising raw material costs, margins typically get squeezed, even when selling-price indexing agreements are in place with customers whereby prices are adjusted in response to raw material cost changes, as there is a time lag of approximately three months between cost increases and selling price adjustments. For the approximately 40 percent of the Company-s revenues that are not indexed, selling price increases were also introduced in the quarter to this portion of the customer base to combat the steep rise in raw material costs.

For the first half of 2011, gross profit margins of 29.2 percent were 0.8 percentage points less than the result achieved in the corresponding period in 2010. As with the results for the second quarter, shifts in product mix and enhanced manufacturing performance helped to overcome the impact of rising raw material costs on margins and resulted in an addition of 2.0 cents to earnings per share.

For reference, the following presents the weighted indexed purchased cost of Winpak-s eight primary raw materials in the reported quarter and each of the preceding eight quarters, where base year 2001 = 100. The index was rebalanced as of December 27, 2010 to reflect the mix of the eight primary raw materials purchased in 2010.

The index in the second quarter of 2011 rose by 9.8 percent from the previous quarter and 19.3 percent in the last two quarters. It is now only 3.3 percent less than the highest level ever recorded by the Company. The Company continues to work diligently in adjusting selling prices as raw material costs change in this very challenging environment.

Expenses and Other

The overall impact of foreign exchange on net income for the second quarter of 2011, in relation to the same period in 2010, was essentially neutral. Likewise, after adjusting for increased volumes in 2011, operating expenses in total were in line with the levels recorded in the second quarter of 2010.

On a year-to-date basis, foreign exchange had a negative impact of 2.0 cents in earnings per share. Approximately 1.0 cent of the impact was due to the translation of net Canadian dollar costs into US funds at a higher exchange rate in 2011 than 2010. The remaining negative impact of foreign exchange related to an anomaly experienced in 2010 whereby the Company-s Canadian subsidiaries filed their Canadian income tax returns in Canadian dollars, but the same entities had the US dollar as their functional currency for accounting purposes under IFRS. A foreign exchange gain was recorded on the revaluation of the Canadian dollar undepreciated capital cost (UCC) and cumulative eligible capital (CEC) income tax pools into US dollars at the period-end date. In addition, certain foreign exchange losses were allowed for tax purposes but not recorded under IFRS. The resulting tax savings stemming from these foreign exchange differences were recorded as a reduction of income tax expense in 2010. In 2011, the Company has received approval to file its Canadian tax returns in US dollars, thereby eliminating this foreign exchange fluctuation in 2011 and later years. Higher share-based incentive costs and customer credit-related expenses resulted in greater operating expenses in the first half of 2011 versus 2010. However, this was largely offset by the effects of a lower corporate income tax rate in Canada, effective January 1, 2011, which reduced income taxes in comparison to 2010.

Capital Resources, Cash Flow and Liquidity

In the second quarter of 2011, the Company-s cash and cash equivalents balance expanded to $97.7 million, an increase of $2.8 million in the quarter. Winpak continued to generate consistent cash flow from operating activities before changes in working capital of $31.1 million in the quarter, improving upon the comparable period in 2010 by $2.6 million. Working capital increases consumed $8.3 million in cash, including inventory additions of $10.6 million, due mainly to escalations in raw material costs. Cash was also utilized for property, plant and equipment additions of $9.4 million, income tax payments of $6.5 million, dividends of $2.0 million, redemption of preferred shares and dividends to the non-controlling interests in a subsidiary of $1.8 million, and employee benefit plan payments of $0.3 million.

For the first half of 2011, the Company supplemented its cash position by $7.2 million. Cash flow from operating activities before changes in working capital of $58.7 million, improved by $2.8 million over the comparable period in 2011. Increases in working capital utilized $15.2 million in cash, with investments in inventory rising by $16.2 million primarily as a result of higher raw material costs. Cash was also used for property, plant and equipment additions of $15.9 million, income tax payments of $12.0 million, dividends of $3.9 million, employee benefit plan payments of $2.5 million, distributions to the non-controlling interests in a subsidiary of $1.8 million, and intangibles of $0.2 million. The Company remains debt-free and has unutilized operating lines of $38 million, with the ability to increase borrowing capacity further should the need arise.

(i) Amounts are as previously reported under Canadian GAAP.

Looking Forward

Raw material costs continued to escalate in the second quarter and have been on a steady rise for more than two years, except for a short reprieve in the middle of 2010. Toward the end of the second quarter and heading into the third quarter, raw material costs appear to have leveled off somewhat and it is hoped that some level of stability will prevail for the near future. There is however no way of predicting whether this is the start of a trend or just a temporary lull before costs continue to rise again. With more than 60 percent of the Company-s revenues subject to selling-price indexing agreements and the Company-s continued focus on trying to minimize margin erosion by matching raw material cost changes with selling price adjustments, gross profit margins for the balance of the year should remain within one or two percentage points of current levels and above the long-term average for the Company. Overall demand for the Company-s products in the first half of 2011 was better than the market average but was uneven across the various product lines. Moderate demand growth is expected for the balance of the year although the overall pace of the US economic recovery will be a factor in driving volume advancement for Winpak-s customers. While the Company is resistant to economic weakness due to its prime focus on food packaging, it is nonetheless not immune from a slowdown in overall activity in the economy. With the Company-s continued investments in the latest technology, the Company will continue to add new customers and products to its established customer base and build upon an already solid foundation.

The Company has begun its ambitious capital investment program which over the next five years is targeted to grow revenue organically to a level approaching $1 billion. Capital expenditures to date have exceeded $15 million and are expected to reach approximately $60 million by the end of the year, making it the largest capital investment undertaken by the Company in a single year. This is lower, however, than the $70 to $80 million initially disclosed for 2011 due to extended lead times for certain specialized equipment which will push out some installations until 2012 as well as a delayed start to the construction of the new rigid thermoforming facility which broke ground in June 2011. All of the Company-s investments remain focused on the Company-s core businesses in food and health care packaging. Winpak will continue to evaluate acquisition opportunities in these packaging markets and will consummate a transaction if the right combination of organization fit and valuation are present.

Accounting Changes

International Financial Reporting Standards

In February 2008, the Canadian Accounting Standards Board confirmed that Publicly Accountable Enterprises will be required to adopt International Financial Reporting Standards (IFRS) for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. As permitted under National Instrument 52-107, the Company has elected to adopt IFRS for its fiscal year beginning December 27, 2010 and accordingly reported under this basis as of the first quarter of 2011, with fiscal 2010 comparative financial information being presented using IFRS.

The interim consolidated financial statements for the three and six months ended June 26, 2011 have been prepared in accordance with IFRS applicable to the preparation of interim financial statements, including IAS 34 and IFRS 1. Subject to certain transition elections disclosed in note 7 to the consolidated financial statements, the Company has consistently applied the same accounting policies in its opening IFRS balance sheet at December 28, 2009 and throughout all periods presented, as if these policies had always been in effect. The Company anticipates adopting these same policies in its December 25, 2011 annual consolidated financial statements, which are based on the IFRS standards that the Company expects to be applicable at that time. However, any subsequent changes to IFRS, that are given effect in the Company-s annual consolidated financial statements for the year ending December 25, 2011 could result in restatement of these interim consolidated financial statements, including the transition adjustments recognized on change-over to IFRS.

The interim consolidated financial statements should be read in conjunction with the Company-s Canadian GAAP annual consolidated financial statements for the year ended December 26, 2010. Such Canadian GAAP financial statements may not be comparable in all material respects. Accordingly, note 19 discloses IFRS information for the year ended December 26, 2010 that is material to the understanding of these interim consolidated financial statements. Note 7 details the impact of the transition to IFRS on the Company-s reported balance sheet, statements of income, comprehensive income and cash flows, including the nature and effect of significant changes in accounting policies from those used in the Company-s Canadian GAAP consolidated financial statements for the year ended December 26, 2010. The following highlights the impacts of the more significant changes in accounting policies:

First-Time Adoption of International Financial Reporting Standards – IFRS 1, First-Time Adoption of International Financial Reporting Standards, provides guidance for an entity-s initial adoption of IFRS and generally requires the retrospective application of all IFRS effective at the end of its first IFRS reporting period. IFRS 1 however does include certain mandatory exceptions and allows certain limited optional exemptions from this general requirement of retrospective application. The exemptions and exceptions most relevant to the Company under IFRS 1 on the opening transition date of December 28, 2009 are as follows:

Functional Currency – IAS 21, The Effects of Changes in Foreign Exchange Rates, requires that the functional currency of each entity in a consolidated group be determined separately based on the currency of the primary economic environment in which the entity operates. A list of primary and secondary indicators is used under IFRS in this determination and these differ in content and emphasis to a certain degree from those factors used under Canadian GAAP. The parent Company and all of its Canadian subsidiaries, with the exception of American Biaxis Inc., operated with the Canadian dollar as their functional currency under Canadian GAAP. However, it was determined that under IFRS, these same entities had a change in their functional currency at varying points in prior years, such that all entities within the Winpak group now operate with the US dollar as their functional currency. The historical cost basis for certain balance sheet items is different under IFRS than it was under Canadian GAAP and the balance in the cumulative translation differences for each of these Canadian subsidiaries was held constant at the amount in effect at the date of the change in functional currency. The impact of this change in functional currency, as at December 28, 2009, was a net decrease in equity of $15.9 million. For the three months ended June 27, 2010, the change in functional currency decreased net income by $0.4 million and increased other comprehensive income by $2.1 million. The change in functional currency increased net income by $2.6 million for the six months ended June 27, 2010 while other comprehensive income decreased by $2.9 million. For the year ended December 26, 2010, the change in functional currency increased net income by $7.0 million and decreased other comprehensive income by $9.5 million. The specific line items affected by the change in functional currency are detailed in note 7 to the consolidated financial statements. Going forward, income volatility due to foreign exchange fluctuations should decline as the magnitude of net Canadian dollar monetary financial asset exposure is significantly less than the net US dollar monetary financial asset exposure within the Canadian entities.

Impairment of Assets – Upon transition to IFRS, all of the Company-s property, plant and equipment and intangible assets, including goodwill, were reviewed to determine whether there were any indications of impairment. When these indications were present, the asset-s recoverable amount was estimated. IAS 36, Impairment of Assets, uses a one-step approach for both testing for and measurement of impairment, with asset carrying values compared directly with the higher of fair value less costs to sell and value in use, which is based on discounted future cash flows. Canadian GAAP, on the other hand, generally used a two-step approach to impairment testing of long-lived assets and finite-life intangible assets by first comparing asset carrying values with undiscounted future cash flows to determine whether impairment existed. If it was determined that there was impairment under this basis, the impairment was then calculated by comparing asset carrying values with fair values in much the same manner as computed under IFRS. Additionally under IFRS, testing for impairment occurs at the level of cash generating units, which is the lowest level of assets that generate largely independent cash inflows. This lower level of grouping compared to Canadian GAAP along with the one-step approach to testing for impairment may increase the likelihood that the Company will realize an impairment of assets under IFRS in the future. It should also be noted that under IAS 36, previous impairment losses, with the exception of goodwill, can be reversed when there are indications that circumstances have changed whereas Canadian GAAP prohibited reversal of non-financial asset impairment losses. As of the transition date of December 28, 2009, the Company determined that an impairment of goodwill with regard to the specialty film business had taken place under IAS 36. This resulted in a reduction of goodwill and retained earnings of $3.4 million as of that date.

Employee Benefit Plans – As previously mentioned, under IFRS 1, the Company has elected to recognize all cumulative actuarial gains and losses at the transition date, resulting in a charge to opening retained earnings at December 28, 2009 of $10.0 million. Under Canadian GAAP, past service costs for defined benefit pension plans were generally amortized on a straight-line basis over the expected average remaining service period of active employees in the plan. IAS 19, Employee Benefits, requires the past service costs to be expensed on an accelerated basis, with vested past service costs being expensed immediately and unvested past service costs being recognized on a straight-line basis until the benefits become vested. This resulted in a charge to retained earnings at December 28, 2009 of $1.4 million. Under IAS 19 and IFRIC 14, the Company is not able to report an asset in its financial statements in excess of the economic benefit it can expect to receive in the form of a refund of a pension plan surplus and/or a reduction in future contributions. This differs from the treatment allowed under Canadian GAAP and as a result, under IFRS, the impact as at December 28, 2009 is a decrease in retained earnings of $1.1 million. In total, the changes under IFRS related to employee benefits resulted in a net decrease to opening retained earnings upon transition of $12.5 million.

Subsequent to the transition date, the Company has selected to recognize actuarial gains and losses directly in equity through other comprehensive income as its accounting policy choice under IAS 19 to be consistent with the latest revisions to the standard issued by the IASB which will become mandatory for annual periods beginning on or after January 1, 2013. Under Canadian GAAP, unrecognized actuarial gains and losses, in excess of 10 percent of the greater of the benefit obligation or the fair value of plan assets, were amortized to the statement of income on a straight-line basis over the expected average remaining service lives of active plan members. This change in policy recognition of actuarial gains and losses along with the other changes under IFRS related to past service costs and recognition of pension assets, had only a minimal increase on net income of $0.2 million for both the three months and six months ended June 27, 2010 as well as the year ended December 26, 2010. The employee benefit accounting changes had no impact on other comprehensive income for the three and six months ended June 27, 2010, and only a marginal increase of $0.4 million for the year ended December 26, 2010.

Under IFRS, interest costs on the benefit obligation of defined benefit plans are charged to the statement of income as a finance expense and the expected return on employee benefit plan assets is presented as finance income. Under Canadian GAAP, these two items were presented as part of personnel expenses within various lines within the statement of income. As a result of this change, finance income and finance expense increased by $0.9 million for the three months ended June 27, 2010, $1.7 million and $1.8 million respectively for the six months ended June 27, 2010 and $3.5 million for the year ended December 26, 2010. Various other reclassifications related to this item were insignificant.

Provisions – Under IAS 37, Provisions, Contingent Liabilities and Contingent Assets, the threshold for recording provisions is considerably lower than under Canadian GAAP as the probability for recording a provision for a cash outflow has to be only more likely than not under IFRS. Under Canadian GAAP, the probability of a future outflow has to be viewed as likely before a liability is recorded, which is a much higher probability than under IFRS. As a result, provisions are inclined to be recorded more often and/or sooner under IFRS than under Canadian GAAP.

The Company participates in one multiemployer defined benefit pension plan providing benefits to certain unionized employees in the US. Under IAS 19, multiemployer plans, that are defined benefit plans, are to be accounted for as such under IFRS unless sufficient information is not available to use defined benefit accounting. Most multiemployer plans, by their nature, do not provide sufficient information to participating employers to enable them to use defined benefit accounting. However, IAS 19 notes that IAS 37 should be considered for certain multiemployer plans. IAS 37 is applicable in recognizing a liability where there is a contractual agreement to determine how a deficit would be funded. The board of independent trustees of the multiemployer plan communicated to both the Company and the Union that this plan was in a critical status position from a funding perspective in 2010. During the fourth quarter of 2010, the Company, with the assistance of external consultants, determined that the only realistic course of action was to withdraw from the plan. In 2011, an agreement was reached with the Union to withdraw from the plan and the necessary paperwork was filed with the plan trustees. Pursuant to US federal pension legislation, an employer who withdraws from a plan with unfunded vested benefits is legally responsible for a share of that underfunding. Based on the relevant facts and circumstances, it was concluded that the potential withdrawal liability met the definition of a provision under IFRS as at December 26, 2010, which was not the case under Canadian GAAP. As a result of this difference, for the year ended December 26, 2010, other expenses increased by $7.1 million and income tax expense decreased by $2.5 million, for a reduction in net income of $4.6 million.

Income Taxes – Under Canadian GAAP, when the functional currency for accounting purposes differed from the functional currency for taxation purposes, deferred taxes were first calculated in the currency in which income taxes were paid and then translated to the functional currency for accounting purposes at the period end exchange rate. Under IFRS, IAS 12, Income Taxes, deferred taxes are calculated based on the functional currency for accounting purposes, regardless of the functional currency used for taxation purposes. As a result of this difference between Canadian GAAP and IFRS, retained earnings increased by $0.9 million and non-controlling interests increased by $0.8 million as at December 28, 2009. The offset was an increase in deferred tax assets. There was virtually no impact on 2010 net income in regard to this change.

Non-controlling interest – Under Canadian GAAP, minority interest was classified in the consolidated balance sheets between total liabilities and equity. Under IAS 27, Consolidated and Separate Financial Statements, minority interest is reclassified to a separate component of equity entitled non-controlling interest. As at December 28, 2009, this reclassification was $15.9 million. Under Canadian GAAP, minority interest in the consolidated statements of income was presented as an expense. Under IFRS, non-controlling interests are presented as an allocation of net income for the period.

Future Changes to Accounting Standards

As more fully described in Note 6 to the Consolidated Financial Statements, various new accounting standards have been issued which apply as follows: IFRS 7 „Financial Instruments: Disclosures“, effective for annual periods beginning July 1, 2011; IFRS 9 „Financial Instruments“, IFRS 10 „Consolidated Financial Statements“, IFRS 11 „Joint Arrangements“, IFRS 12 „Disclosure of Interests in Other Entities“, amended IAS 27 „Separate Financial Statements“, and amended IAS 28 „Investments in Associates and Joint Ventures“, effective for annual periods beginning January 1, 2013. None of these standards is expected to have a significant impact on the Company-s consolidated financial statements.

The IASB issued an amendment to IAS 1 „Financial Statement Presentation“ regarding the presentation of items of other comprehensive income. This amendment is effective for annual periods beginning July 1, 2012 and is not expected to have a significant impact on the Company-s consolidated financial statements.

The IASB also issued a new accounting standard and an amended standard effective for annual periods beginning January 1, 2013: IFRS 13 „Fair Value Measurement“ which is a comprehensive standard for fair value measurement and disclosure requirements for use across all IFRS standards; and amended IAS 19 „Employee Benefits“ which is a comprehensive set of amendments dealing with the manner in which pensions and other employee benefits are recorded, classified and disclosed in the financial statements. The Company has not yet begun the process of assessing the impact that these standards will have on its consolidated financial statements.

Controls and Procedures

Disclosure Controls

Management is responsible for establishing and maintaining disclosure controls and procedures in order to provide reasonable assurance that material information relating to the Company is made known to them in a timely manner and that information required to be disclosed is reported within time periods prescribed by applicable securities legislation. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on management-s evaluation of the design of the Company-s disclosure controls and procedures, the Company-s Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are designed as of June 26, 2011 to provide reasonable assurance that the information being disclosed is recorded, summarized and reported as required.

Internal Controls Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with Canadian generally accepted accounting principles. Internal control systems, no matter how well designed, have inherent limitations and therefore can only provide reasonable assurance as to the effectiveness of internal controls over financial reporting, including the possibility of human error and the circumvention or overriding of the controls and procedures. Management used the Internal Control – Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as the control framework in designing its internal controls over financial reporting. Based on management-s design of the Company-s internal controls over financial reporting, the Company-s Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are designed as of June 26, 2011 to provide reasonable assurance that the financial information being reported is materially accurate. During the second quarter ended June 26, 2011, there have been no changes to the design of the Company-s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal controls over financial reporting.

See accompanying notes to consolidated financial statements, including note 7(b) which reconciles amounts previously reported under Canadian GAAP to International Financial Reporting Standards (IFRS).

See accompanying notes to consolidated financial statements, including note 7(c) which reconciles amounts previously reported under Canadian GAAP to IFRS.

See accompanying notes to consolidated financial statements, including note 7(d) which highlights the significant adjustments made to the amounts previously reported under Canadian GAAP.

1. General

Winpak Ltd. is incorporated under the Canada Business Corporations Act. The Company manufactures and distributes high-quality packaging materials and related packaging machines. The Company-s products are used primarily for the packaging of perishable foods, beverages and in health care applications. The address of the Company-s registered office is 100 Saulteaux Crescent, Winnipeg, Manitoba, Canada R3J 3T3.

2. Basis of Presentation

The Company prepares its consolidated financial statements in accordance with Canadian generally accepted accounting principles as set out in the Handbook of the Canadian Institute of Chartered Accountants (CICA). In 2010, the CICA Handbook was revised to incorporate International Financial Reporting Standards (IFRS), and require publicly accountable enterprises to apply such standards for years beginning on or after January 1, 2011. The Company-s current fiscal year commenced on December 27, 2010. As permitted under National Instrument 52-107, the Company elected to commence reporting on this new basis for the quarter ended March 27, 2011. In these financial statements, the term „Canadian GAAP“ refers to Canadian GAAP before the adoption of IFRS.

These interim consolidated financial statements have been prepared in accordance with IFRS applicable to the preparation of interim financial statements, including IAS 34 and IFRS 1. Subject to certain transition elections disclosed in note 7, the Company has consistently applied the same accounting policies in its opening IFRS balance sheet at December 28, 2009 and throughout all periods presented, as if these policies had always been in effect. Note 7 discloses the impact of the transition to IFRS on the Company-s reported balance sheet, statements of income, comprehensive income and cash flows, including the nature and effect of significant changes in accounting policies from those used in the Company-s Canadian GAAP consolidated financial statements for the year ended December 26, 2010.

These interim consolidated financial statements have been prepared in accordance with the accounting policies the Company expects to adopt in its December 25, 2011 annual consolidated financial statements, which are based on the IFRS standards that the Company expects to be applicable at that time. Any subsequent changes to IFRS, that are given effect in the Company-s annual consolidated financial statements for the year ending December 25, 2011 could result in restatement of these interim consolidated financial statements, including the transition adjustments recognized on change-over to IFRS.

The interim consolidated financial statements should be read in conjunction with the Company-s Canadian GAAP annual consolidated financial statements for the year ended December 26, 2010. Such Canadian GAAP financial statements may not be comparable in all material respects. Accordingly, note 19 discloses IFRS information for the year ended December 26, 2010 that is material to the understanding of these interim consolidated financial statements.

The Company-s functional currency is the US dollar. The US dollar is the reporting currency as more than three-quarters of the Company-s business is conducted in US dollars thereby increasing transparency by significantly reducing volatility of reported results due to fluctuations in the rate of exchange between the US and Canadian currencies. As part of the Company-s conversion to IFRS, entities with the Canadian dollar as their functional currency under Canadian GAAP changed their functional currency to the US dollar (see note 7).

The interim consolidated financial statements have been prepared under the historical-cost convention, except that asset and liabilities of certain financial instruments, employee benefit plans, share-based payments and provisions are stated at their fair value.

The interim consolidated financial statements were approved by the Audit Committee on behalf of the Board of Directors on July 21, 2011.

3. Significant Accounting Policies

(a) Principles of Consolidation:

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as well as the majority-owned subsidiary American Biaxis Inc. Subsidiaries are entities controlled by the Company. Control exists when the Company has the power to govern the financial and operating policies so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. Subsidiaries are fully consolidated from the date on which control is obtained until the date that control ceases. The financial statements of all subsidiaries are prepared as of the same reporting date using consistent accounting policies. All inter-company balances and transactions, including any unrealized profits arising from inter-company transactions have been eliminated.

(b) Business Combinations:

Business combinations are accounted for using the acquisition method of accounting. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued and liabilities assumed at the date of exchange. Acquisition costs incurred are expensed and included in general and administrative expenses. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognized in accordance with IAS 39 either in net income or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be re- measured upon final settlement.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of the acquisition over the fair value of the Company-s share of the identifiable net assets acquired is recorded as goodwill. If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statement of income.

(c) Non-controlling Interests:

Non-controlling interests represent equity interests in American Biaxis Inc. owned by third parties. The share of net assets attributable to non- controlling interests is presented as a component of equity. Their share of net income and other comprehensive income is recognized directly in equity.

(d) Foreign Currency Translation:

The financial statements for each of the Company-s subsidiaries are prepared using their functional currency, that being the US dollar. The functional currency is the currency of the primary economic environment in which a subsidiary operates. Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. Foreign currency differences arising on translation are recognized directly to the statement of income. Non-monetary assets and liabilities arising from transactions in foreign currencies are translated to the functional currency at the exchange rate prevailing at the date of the transaction.

(e) Revenue:

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, rebates and discounts. Revenue is recognized when the risks and rewards of ownership have transferred to the customer. No revenue is recognized if there are significant uncertainties regarding recovery of the consideration due, the costs incurred or to be incurred cannot be measured reliably, or there is continuing management involvement with the goods.

(f) Research and Technical Expenses:

Research and technical expenses are expensed in the period in which the costs are incurred.

(g) Government Grants:

Grants from government are recognized at their fair value when there is a reasonable assurance that the grant will be received and/or earned and any specified conditions will be met.

Grants received in relation to the purchase and construction of plant and equipment are included in non-current liabilities as deferred income and are credited to the statement of income on a straight-line basis over the estimated useful life of the related asset. Grants received in relation to research and development activities are recorded to reduce these costs when it is determined there is reasonable assurance the tax claims will be realized.

(h) Leases:

Rental income received from packaging machine operating leases is recognized on a straight-line basis over the term of the corresponding lease.

Payments made under operating leases are recognized in the statement of income on a straight-line basis over the term of the lease, while any lease incentive received is recognized as a reduction of the total lease expense, over the term of the lease.

(i) Inventories:

Inventories are stated at the lower of cost and net realizable value. The cost of inventories is based on the first-in first-out principle and includes expenditures incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of manufactured inventories, cost includes an appropriate share of variable and fixed overheads based on normal operating capacity. Any excess, unallocated, fixed overhead costs are expensed as incurred. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(j) Cash and Cash Equivalents:

Cash and cash equivalents include cash on hand, cash invested in interest-bearing money market accounts and short-term deposits with maturities of less than three months. Cash equivalents are all highly liquid investments. Bank overdrafts are shown within current liabilities. Bank overdrafts that are repayable on demand and form an integral part of the Company-s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(k) Property, Plant and Equipment:

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. All costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management are included in the carrying value of the asset. When the Company has a legal right or constructive obligation to restore a site on which an asset is located either through make-good provisions in lease agreements or decommissioning of environmental risks, the present value of the estimated costs of dismantling and removing the asset and restoring the site are included in the carrying value of the asset with a corresponding increase to provisions. Borrowing costs directly attributable to the acquisition, construction or production of qualifying property, plant and equipment that takes an extended period of time to be placed into service are added to the cost of the assets, until such time as the assets are substantially ready for their intended use. See note 3(o) on impairment.

When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (major components).

The cost of replacing a component of an item of plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits of the item will occur and its cost can be measured reliably. The costs of day-to-day maintenance of plant and equipment are recognized directly in the statement of income.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, commencing the date the assets are ready for use as follows:

Depreciation methods, useful lives and residual values are reassessed annually or more frequently when there is an indication that they have changed.

The gain or loss on the retirement of an item of property, plant and equipment is the difference between the net sale proceeds and the carrying amount of the asset and is recognized in the statement of income.

(l) Pre-production Costs:

Pre-production costs relating to installations of major new production equipment are expensed in the period in which occurred.

(m) Intangible Assets:

Intangible assets are stated at cost less accumulated amortization and accumulated impairment losses. See note 3(o) on impairment. Computer software that is integral to a related item of hardware is included with plant and equipment. All other computer software is treated as an intangible asset. Amortization is computed using the straight-line method over the estimated useful lives of the assets, as follows:

(n) Goodwill:

Goodwill represents the excess of the cost of an acquisition over the Company-s interest in the fair value of the identifiable assets, including intangible assets, and liabilities of the acquiree at the date of acquisition. At the date of acquisition, goodwill is allocated to cash-generating units (CGUs) for the purpose of impairment testing. A CGU is the smallest group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Goodwill is tested at least annually for impairment at the CGU level and is carried at cost less accumulated impairment losses (see note 3(o)).

(o) Impairment:

The carrying amount of the Company-s property, plant and equipment, intangible assets and goodwill are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the applicable asset-s recoverable amount is estimated.

The recoverable amount of the Company-s assets are calculated as the value-in-use, being the present value of future cash flows, using a pre-tax discount rate that reflects the current assessment of the time value of money, or the fair value less costs to sell, if greater. For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the CGU to which it belongs. The Company bases its impairment calculation on detailed financial forecasts, which are prepared separately for each of the Company-s CGUs to which the individual assets are allocated. These financial forecasts are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

An impairment loss is recognized whenever the carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment losses are recognized in the statement of income within other expenses. Impairment losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then, to reduce the carrying amount of other assets in the CGU on a pro rata basis.

Impairment losses in respect of goodwill are not reversed. In respect of property, plant and equipment and intangible assets, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset-s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been previously recognized.

(p) Employee Benefit Plans:

The Company maintains five funded non-contributory defined benefit pension plans in Canada and the US and one funded non-contributory supplementary income postretirement plan for certain CDN-based executives. A market discount rate is used to measure the benefit obligations. The cost of providing the benefits is actuarially determined using the projected unit credit method. Actuarial valuations are conducted, at a minimum, on a triennial basis with interim valuations performed as deemed necessary. Consideration is given to any event that could impact the plan assets or obligation up to the balance sheet date where interim valuations are performed. Current service costs are charged to the statement of income and included in the same line items as the related compensation cost. Interest costs on the benefit obligation are charged to the statement of income as finance expenses. Likewise, the expected return on employee benefit plan assets is presented in the statement of income as finance income. Actuarial gains and losses are recognized directly in equity within other comprehensive income. Gains and losses on the curtailment or settlement of a plan are recognized in the statement of income when the Company is demonstrably committed to the curtailment or settlement. Past service costs are recognized immediately in the statement of income to the extent that the benefits are already vested, and are otherwise amortized on a straight-line basis over the average period until the amended benefits become vested. The amount recognized in the balance sheet at each year-end reporting date represents the present value of the defined benefit obligation, adjusted for unrecognized past service costs, and reduced by the fair value of plan assets. Any recognized asset or surplus is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions. To the extent that there is uncertainty regarding entitlement to the surplus, no asset is recorded. The Company-s funding policy is in compliance with statutory regulations and amounts funded are deductible for income tax purposes.

One of the Company-s subsidiaries maintains one unfunded contributory defined benefit postretirement plan for health care benefits for a limited group of US individuals. A market discount rate is used to measure the benefit obligation. The cost of providing the benefits is actuarially determined using the per capita claims cost method. Current service costs are charged to the statement of income as they accrue and are included in general and administrative expenses. Interest costs on the benefit obligation are charged to the statement of income as finance expenses. Actuarial gains and losses are recognized directly in equity within other comprehensive income. Past service costs are recognized immediately to the extent that the benefits are already vested, and are otherwise amortized on a straight-line basis over the average period until the amended benefits become vested. The amount recognized in the balance sheet at each year-end reporting date represents the present value of the defined benefit obligation, adjusted for unrecognized past service costs.

The Company participates in one multiemployer defined benefit pension plan providing benefits to certain unionized employees in the US. The administration of the plan and investment of its assets are controlled by a board of independent trustees. The Company-s responsibility to make contributions is the amount established pursuant to its collective agreement; however poor performance of the investments in this plan could have an adverse impact on the Company, its employees and former employees who are members of this plan. This multiemployer defined benefit pension plan is accounted for using the accounting standards for defined contribution plans as there is insufficient information to apply defined benefit pension plan accounting. Accordingly, the Company-s pension expense charged to the statement of income is the annual funding contribution and the Company does not reflect its share of a plan surplus or deficit. The cost of withdrawing from the plan is charged to the statement of income as other expenses and is calculated as the present value of the required future cash outflows. For further information on the Company-s withdrawal from the plan, refer to note 7(b). Changes in estimates with respect to the withdrawal liability are recorded to the statement of income as either other expenses or other income.

The Company maintains seven defined contribution pension plans in Canada and the US. The pension expense charged to the statement of income for these plans is the annual funding contribution by the Company.

Termination benefits are recognized as an expense in the statement of income when the Company is committed to a formal detailed plan to either terminate employment before the normal retirement date or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as an expense in the statement of income if the Company has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably.

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a legal or constructive obligation to pay this amount as a result of past service provided by the employee.

(q) Income Taxes:

Income tax expense comprises current and deferred tax. Income tax expense is recognized in the statement of income except to the extent that it relates to items recorded directly to equity, in which case it is recognized directly in equity.

Current income tax expense is the expected income tax payable on the taxable income for the period, using income tax rates enacted or substantively enacted in the jurisdictions the Company is required to pay income tax at the reporting date, and any income adjustments to income taxes payable in respect of previous periods. Current income tax expense is adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and by the availability of unused income tax losses.

Deferred tax expense is recognized using the balance sheet method in which temporary differences are calculated based on the carrying amounts of assets and liabilities for financial reporting purposes and the tax bases of assets and liabilities for income taxation purposes. Deferred tax is not recognized for the following temporary timing differences: the initial recognition for both goodwill and assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable income; and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the income tax rates that are expected to be applied when the temporary difference reverses, that is, when the asset is realized or the liability is settled, based on the income tax laws that have been enacted or substantively enacted at the reporting date.

Deferred tax assets are recognized only to the extent that it is probable that future taxable income will be available against which the assets can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related income tax benefit will be realized.

Current tax assets and liabilities are offset when the Company and its subsidiaries have a legally enforceable right to offset the amounts and intend to either settle on a net basis, or to realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and when the deferred tax balances relate to the same income tax authority.

Management periodically evaluates positions taken in income tax returns with respect to situations in which applicable income tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to income tax authorities.

(r) Provisions:

A provision is recognized when there is a legal or constructive obligation as a result of a past event and it is probable that a future outlay of cash will be required to settle the obligation, and the amount can be reliably estimated. Provisions are determined by discounting the expected future cash flows at a pre-income tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When some or all of the monies required to settle a provision are expected to be recovered from a third party, the recovery is recognized as an asset when it is virtually certain that the recovery will be received.

When the Company has a legal right or constructive obligation to restore a site on which an asset is located either through make-good provisions in lease agreements or decommissioning of environmental risks, the present value of the estimated costs of dismantling and removing the asset and restoring the site is recognized as a provision with a corresponding increase to the related item of property, plant and equipment. At each reporting date, the obligation is re-measured in line with changes in discount rates, estimated cash flows and the timing of those cash flows. Any changes in the obligation are added or deducted from the related asset. The change in the present value of the obligation due to the passage of time is recognized as a finance expense in the statement of income.

(s) Financial Assets and Liabilities:

Derivative financial instruments are measured at fair value, even when they are part of a hedging relationship. The Company-s financial instruments are classified as follows: a) cash and cash equivalents – loans and receivables, b) trade and other receivables – loans and receivables c) trade payables and other liabilities – other financial liabilities and d) cash flow hedging derivative – derivatives designated as effective hedges. All financial instruments, including derivatives, are included in the consolidated balance sheet and are measured at fair value except loans and receivables and other financial liabilities, which are measured at amortized cost.

All changes in fair value are recorded to the statement of income unless cash flow hedge accounting is used, in which case changes in fair value are recorded in other comprehensive income.

(t) Derivative Financial Instruments:

The Company operates principally in Canada and the United States, which gives rise to risks that its income and cash flows may be adversely impacted by fluctuations in foreign exchange rates. The Company enters into foreign currency forward contracts to manage foreign exchange exposures on anticipated labor and overhead expenditures to be incurred in Canadian dollars.

All foreign currency forward contracts are designated as cash flow hedges. The fair value of each contract is included on the balance sheet within derivative financial instrument assets or liabilities, depending on whether the fair value was in an asset or liability position. Changes in the fair value of these contracts are initially recorded in other comprehensive income and subsequently recorded in the statement of income within other income or other expenses when the hedged item affects income or loss.

(u) Share-based Payments:

The Company maintains a stock-based compensation plan, which provides stock appreciation rights under the President-s Incentive Plan. Rights under the plan vest immediately, and are paid in cash during the fourth quarter of the third year or the first quarter of the fourth year after the date of grant based upon the quoted market value of the common shares of the Company on the day prior to the date of payment. The fair value of the rights granted is recognized as an employee expense, with a corresponding increase in liabilities, over the period that the rights pertain. The liability is re- measured at each reporting date. Any changes in the fair value of the liability are recognized as an employee expense in the statement of income.

(v) Earnings per Share:

Basic earnings per share are calculated by dividing the net income attributable to equity holders for the period by the weighted average number of common shares outstanding during the period. Fully diluted earnings per share are calculated on the same basis as there are no potential dilutive common shares.

4. Critical Accounting Estimates and Judgments

The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the actual results. The estimates and assumptions that are critical to the determination of carrying value of assets and liabilities are addressed below.

(a) Allowance for Doubtful Accounts:

The Company estimates allowances for potential losses resulting from the inability of customers to make required payments of trade receivables. Additional allowances may be required if the financial condition of any customer deteriorates.

(b) Allowance for Inventory Obsolescence:

The Company estimates allowances for potential losses resulting from inventory becoming obsolete and that cannot be