Exhibit 99.4

CANADIAN GAAP
CONSOLIDATED FINANCIAL STATEMENTS

|Management's Report  |                                            | 76
|-------------------- | ------------------------------------------ | --
|Auditors' Report     |                                            | 77
|Financial Statements |                                            |   
|                     | Consolidated Balance Sheets                |   
|                     | Consolidated Earnings                      |   
|                     | Consolidated Retained Earnings             |   
|                     | Consolidated Cash Flows                    |   
|                     | Notes to Consolidated Financial Statements |   

---



MANAGEMENT'S REPORT

The
consolidated financial statements of Axcan Pharma Inc. and the other financial information included in this annual report are the responsibility of the Company's management.

These
consolidated financial statements and the other financial information have been prepared by management in accordance with Canadian generally accepted accounting principles. This
responsibility includes the selection of appropriate accounting principles and methods in the circumstances and the use of careful judgement in establishing reasonable accounting estimates.

Management
maintains internal control systems designed among other things, to provide reasonable assurance that the Company's assets are adequately safeguarded and that the accounting
records are a reasonable basis to prepare relevant and reliable financial information.

The
Audit Committee is composed solely of external directors. This Committee meets with the external auditors and management to discuss matters relating to the audit, internal control
and financial information. The Committee also reviews the consolidated quarterly and annual financial statements.

These
consolidated financial statements have been audited by Raymond Chabot Grant Thornton, LLP, Chartered Accountants, whose report indicating the scope of their audit and their
opinion on the consolidated financial statements is presented below.

The
Board of Directors has approved the Company's financial statements on the recommendation of the Audit Committee.

The
Company decided, for the year beginning October 1, 2002 to switch from Canadian generally accepted accounting principles to generally accepted accounting principles in the
United States of America as its primary reporting convention. Consolidated financial statements in accordance with generally accepted accounting principles in the United States of
America have been also prepared.

|GRAPHICLéon F. Gosselin
President and
Chief Executive Officer |  | GRAPHICDavid W. Mims
Executive Vice President
and Chief Operating Officer |  | GRAPHICJean Vézina
Vice President, Finance and
Chief Financial Officer
|------------------------------------------------------------- |  | ------------------------------------------------------------------------- |  | ----------------------------------------------------------------------

Mont-Saint-Hilaire,
Quebec, Canada
November 10, 2004

76            CANADIAN GAAP

---



AUDITORS' REPORT

TO THE SHAREHOLDERS OF AXCAN PHARMA INC.

We have audited the consolidated balance sheets of Axcan Pharma Inc. as at September 30, 2004 and 2003 and the consolidated statements of earnings,
retained earnings and cash flows for each of the years in the three-year period ended September 30, 2004. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and with generally accepted auditing standards in Canada.
Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.

In
our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at September 30, 2004 and 2003 and the
results of its operations and its cash flows for each of the years in the three-year period ended September 30, 2004 in accordance with generally accepted accounting principles in
Canada.

On
November 10, 2004, we reported separately to the shareholders of Axcan Pharma Inc. on the consolidated financial statements for the same periods, prepared in accordance
with generally accepted accounting principles in the United States of America.

|GRAPHICChartered Accountants |  | 
|---------------------------- |  | 

Montreal, Quebec, Canada
November 10, 2004

CANADIAN GAAP            77

---



CONSOLIDATED BALANCE SHEETS

|September 30                                         |                                                    | 2004    |        | 2003   
|---------------------------------------------------- | -------------------------------------------------- | ------- | ------ | -------
|
|Assets                                               |                                                    |         |        |        
|Current assets                                       |                                                    |         |        |        
|                                                     | Cash and cash equivalents                          |         | 22,063 |        
|                                                     | Short-term investments, at cost (Note 5)           |         | 15,922 |        
|                                                     | Accounts receivable (Note 6)                       |         | 46,518 |        
|                                                     | Income taxes receivable                            |         | 9,196  |        
|                                                     | Inventories (Note 7)                               |         | 37,270 |        
|                                                     | Prepaid expenses and deposits                      |         | 3,499  |        
|                                                     | Future income taxes (Note 8)                       |         | 4,586  |        
|                                                     |                                                    |         |        |        
|Total current assets                                 |                                                    | 139,054 |        | 225,203
|Investments (Note 9)                                 |                                                    |        |        | 775    
|Property, plant and equipment (Note 10)              |                                                    | 31,265  |        | 20,351 
|Intangible assets (Note 11)                          |                                                    | 420,235 |        | 277,837
|Goodwill (Note 12)                                   |                                                    | 28,862  |        | 29,342 
|Deferred debt issue expenses, at amortized cost      |                                                    | 3,088   |        | 4,233  
|Future income taxes (Note 8)                         |                                                    | 930     |        | 1,775  
|                                                     |                                                    |         |        |        
|                                                     |                                                    | 623,434 |        | 559,516
|                                                     |                                                    |         |        |        
|Liabilities                                          |                                                    |         |        |        
|Current liabilities                                  |                                                    |         |        |        
|                                                     | Accounts payable and accrued liabilities (Note 14) |         | 47,985 |        
|                                                     | Income taxes payable                               |         | 731    |        
|                                                     | Instalments on long-term debt                      |         | 1,778  |        
|                                                     | Future income taxes (Note 8)                       |         | 936    |        
|                                                     |                                                    |         |        |        
|Total current liabilities                            |                                                    | 51,430  |        | 50,634 
|Long-term debt (Note 15)                             |                                                    | 110,203 |        | 107,527
|Future income taxes (Note 8)                         |                                                    | 39,376  |        | 35,742 
|                                                     |                                                    |         |        |        
|                                                     |                                                    | 201,009 |        | 193,903
|                                                     |                                                    |         |        |        
|Shareholders' Equity                                 |                                                    |         |        |        
|Equity component of convertible debt (Note 16)       |                                                    | 24,239  |        | 24,239 
|Capital stock (Note 17)                              |                                                    | 267,288 |        | 262,388
|Retained earnings                                    |                                                    | 107,671 |        | 63,211 
|Accumulated foreign currency translation adjustments |                                                    | 23,227  |        | 15,775 
|                                                     |                                                    |         |        |        
|                                                     |                                                    | 422,425 |        | 365,613
|                                                     |                                                    |         |        |        
|                                                     |                                                    | 623,434 |        | 559,516
|                                                     |                                                    |         |        |        

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

|GRAPHICLéon F. Gosselin
Director |  | GRAPHICDr Claude Sauriol
Director
|-------------------------------- |  | ---------------------------------

78            CANADIAN GAAP

---



CONSOLIDATED EARNINGS

|Years ended September 30                 |         | 2004    |            | 2003    |            | 2002    |           
|---------------------------------------- | ------- | ------- | ---------- | ------- | ---------- | ------- | ----------
|
|Revenue                                  |         | 243,792 |            | 179,542 |            | 133,175 |           
|                                         |         |         |            |         |            |         |           
|Cost of goods sold                       |         | 54,247  |            | 44,474  |            | 34,145  |           
|Selling and administrative expenses      |         | 76,574  |            | 63,461  |            | 50,522  |           
|Research and development expenses        |         | 18,641  |            | 11,638  |            | 8,025   |           
|Depreciation and amortization            |         | 16,421  |            | 8,127   |            | 7,613   |           
|                                         |         |         |            |         |            |         |           
|                                         |         | 165,883 |            | 127,700 |            | 100,305 |           
|                                         |         |         |            |         |            |         |           
|Operating income                         |         | 77,909  |            | 51,842  |            | 32,870  |           
|                                         |         |         |            |         |            |         |           
|Financial expenses                       |         | 11,131  |            | 6,590   |            | 906     |           
|Interest income                          |         | (762    | )          | (1,642  | )          | (912    | )         
|Loss (gain) on foreign currency          |         | (308    | )          | 128     |            | 266     |           
|Takeover-bid expenses                    |         |        |            | 3,697   |            |        |           
|                                         |         |         |            |         |            |         |           
|                                         |         | 10,061  |            | 8,773   |            | 260     |           
|                                         |         |         |            |         |            |         |           
|Earnings before income taxes             |         | 67,848  |            | 43,069  |            | 32,610  |           
|Income taxes (Note 8)                    |         | 23,388  |            | 14,452  |            | 11,742  |           
|                                         |         |         |            |         |            |         |           
|Net earnings                             |         | 44,460  |            | 28,617  |            | 20,868  |           
|                                         |         |         |            |         |            |         |           
|Earnings per common share                |         |         |            |         |            |         |           
|                                         | Basic   |         | 0.98       |         | 0.64       |         | 0.50      
|                                         | Diluted |         | 0.96       |         | 0.63       |         | 0.49      
|Weighted average number of common shares |         |         |            |         |            |         |           
|                                         | Basic   |         | 45,286,199 |         | 44,914,944 |         | 41,664,510
|                                         | Diluted |         | 52,787,964 |         | 45,607,992 |         | 42,527,500

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

CONSOLIDATED RETAINED EARNINGS

|Years ended September 30                                                                 |  | 2004    |  | 2003   |  | 2002   |  
|---------------------------------------------------------------------------------------- |  | ------- |  | ------ |  | ------ | -
|
|Balance, beginning of year                                                               |  | 63,211  |  | 34,594 |  | 16,914 |  
|Net earnings                                                                             |  | 44,460  |  | 28,617 |  | 20,868 |  
|Common share issue expenses, net of future income taxes in the amount of $1,649 for 2002 |  |        |  |       |  | (3,188 | )
|                                                                                         |  |         |  |        |  |        |  
|Balance, end of year                                                                     |  | 107,671 |  | 63,211 |  | 34,594 |  
|                                                                                         |  |         |  |        |  |        |  

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

CANADIAN GAAP            79

---



CONSOLIDATED CASH FLOWS

|Years ended September 30                                 |                                              | 2004     |         | 2003     |        | 2002    |      
|-------------------------------------------------------- | -------------------------------------------- | -------- | ------- | -------- | ------ | ------- | -----
|
|Operations                                               |                                              |          |         |          |        |         |      
|Net earnings                                             |                                              | 44,460   |         | 28,617   |        | 20,868  |      
|Non-cash items                                           |                                              |          |         |          |        |         |      
|                                                         | Implicit interest on convertible debt        |          | 4,234   |          | 2,292  |         |     
|                                                         | Non-controlling interest                     |          |        |          | (103   | )       | (363 
|                                                         | Amortization of deferred debt issue expenses |          | 1,144   |          | 646    |         | 247  
|                                                         | Other depreciation and amortization          |          | 16,421  |          | 8,127  |         | 7,613
|                                                         | Loss on disposal of assets                   |          | 475     |          | 1,130  |         |     
|                                                         | Foreign currency fluctuation                 |          | 342     |          | 305    |         | 507  
|                                                         | Future income taxes                          |          | 6,597   |          | 2,810  |         | 2,187
|                                                         | Changes in working capital items (Note 19)   |          | (50,344 | )        | 12,764 |         | 4,266
|                                                         |                                              |          |         |          |        |         |      
|Cash flows from operating activities                     |                                              | 23,329   |         | 56,588   |        | 35,325  |      
|                                                         |                                              |          |         |          |        |         |      
|Financing                                                |                                              |          |         |          |        |         |      
|Long-term debt                                           |                                              | 2,212    |         | 101,825  |        | 1,506   |      
|Repayment of long-term debt                              |                                              | (3,840   | )       | (1,979   | )      | (3,267  | )    
|Equity component of convertible debt                     |                                              |         |         | 24,239   |        |        |      
|Repayment of balance of purchase price                   |                                              |         |         | (2,704   | )      |        |      
|Deferred debt issue expenses                             |                                              |         |         | (4,589   | )      | (537    | )    
|Issue of shares                                          |                                              | 4,900    |         | 1,103    |        | 69,876  |      
|Share issue expenses                                     |                                              |         |         |         |        | (4,837  | )    
|                                                         |                                              |          |         |          |        |         |      
|Cash flows from financing activities                     |                                              | 3,272    |         | 117,895  |        | 62,741  |      
|                                                         |                                              |          |         |          |        |         |      
|Investment                                               |                                              |          |         |          |        |         |      
|Acquisition of short-term investments                    |                                              | (20,936  | )       | (133,112 | )      | (60,740 | )    
|Disposal of short-term investments                       |                                              | 138,074  |         | 60,740   |        |        |      
|Acquisition of investments                               |                                              |         |         |         |        | (16     | )    
|Disposal of investments                                  |                                              | 1,876    |         | 637      |        | 385     |      
|Acquisition of property, plant and equipment             |                                              | (13,409  | )       | (4,302   | )      | (2,873  | )    
|Disposal of property, plant and equipment                |                                              | 405      |         |         |        |        |      
|Acquisition of intangible assets                         |                                              | (149,628 | )       | (81,093  | )      | (1,561  | )    
|Disposal of intangible assets                            |                                              | 917      |         |         |        |        |      
|Other                                                    |                                              |         |         |         |        | 1,363   |      
|Net cash used for business acquisitions (Note 4)         |                                              |         |         |         |        | (31,302 | )    
|                                                         |                                              |          |         |          |        |         |      
|Cash flows from investment activities                    |                                              | (42,701  | )       | (157,130 | )      | (94,744 | )    
|                                                         |                                              |          |         |          |        |         |      
|Foreign exchange gain on cash held in foreign currencies |                                              | 277      |         | 528      |        | 142     |      
|                                                         |                                              |          |         |          |        |         |      
|Net increase (decrease) in cash and cash equivalents     |                                              | (15,823  | )       | 17,881   |        | 3,464   |      
|Cash and cash equivalents, beginning of year             |                                              | 37,886   |         | 20,005   |        | 16,541  |      
|                                                         |                                              |          |         |          |        |         |      
|Cash and cash equivalents, end of year                   |                                              | 22,063   |         | 37,886   |        | 20,005  |      
|                                                         |                                              |          |         |          |        |         |      

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

80            CANADIAN GAAP

---





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS        September 30        Amounts in the tables are stated in thousands of U.S. dollars, except share related data.

1.     GOVERNING STATUTES AND NATURE OF OPERATIONS



2.     CHANGES IN ACCOUNTING POLICIES



CANADIAN GAAP            81

---





3.     ACCOUNTING POLICIES



82            CANADIAN GAAP

---





Buildings

4 to 10%Furniture and equipment

10 to 20%Computer equipment

20 to 50%Automotive equipment

20 to 25%Leasehold and building improvements

10 to 20%Trademarks, trademark licenses and manufacturing rights

4 to 15%




CANADIAN GAAP            83

---



4.     ACQUISITIONS



$Net assets acquired at the attributed valuesAssetsCash and cash equivalents

77Other working capital items

7,323Property, plant and equipment

9,433Intangible assets with indefinite life

29,175Goodwill

9,632Future income taxes

656Other assets

1,36357,659LiabilitiesAccounts payable

8,215Long-term debt

6,922Future income taxes

6,38421,52136,138ConsiderationCash

31,379Common shares issued

4,75936,138Net cash used for the acquisitions

31,302




(unaudited)$Revenue

140,983Net earnings

20,802Net earnings per share

0.50


84            CANADIAN GAAP

---





5.     SHORT-TERM INVESTMENTS



6.     ACCOUNTS RECEIVABLE

2004

2003$

$Trade accounts, net of allowance for doubtful accounts of $876,000 ($613,000 in 2003)(a)

44,253

16,676Investments receivable within one year



1,102Taxes receivable

1,978

1,479Other

287

40846,518

19,665




---



CANADIAN GAAP            85

---





7.     INVENTORIES

2004

2003$

$Raw materials and packaging material

10,311

8,441Work in progress

1,781

1,466Finished goods

25,178

10,25637,270

20,163


8.     INCOME TAXES



2004

2003$

$Short-term future income tax assetsInventories

376

2,554Prepaid expenses and deposits

167

Accounts payable and accrued liabilities

2,941

2,558Pending legal settlements

1,102

1,1024,586

6,214Long-term future income tax assetsInvestments



16Share issue expenses

930

1,746Unused operating losses



13930

1,775Short-term future income tax liabilitiesAccounts receivable

379

318Inventories

109

Prepaid expenses and deposits

434

163Investments

14

13936

494Long-term future income tax liabilitiesProperty, plant and equipment

2,484

1,993Intangible assets

35,705

32,940Goodwill

682

682Research and development expenses

505

12739,376

35,742


86            CANADIAN GAAP

---





2004

2003

2002$

$

$Current

16,791

11,642

9,555FutureCreation and reversal of temporary differences

6,597

3,640

2,043Change in promulgated rates



(830
)
1446,597

2,810

2,18723,388

14,452

11,742DomesticCurrent

825

(1,265
)
2,953Future

2,756

1,328

1,5303,581

63

4,483ForeignCurrent

15,966

12,907

6,602Future

3,841

1,482

65719,807

14,389

7,25923,388

14,452

11,742




2004

2003

2002%

$

%

$

%

$Combined basic rate applied to pre-tax income

31.52

21,386

33.59

14,467

35.66

11,629Increase (decrease) in taxes resulting from:Large corporations tax

0.04

29







Change in promulgated rates





(1.93
)
(830
)
0.44

144Difference with foreign tax rates

(2.59
)
(1,755
)
(3.05
)
(1,312
)
3.65

1,189Non-deductible items

3.84

2,602

3.44

1,481

0.70

228Use of unrecorded prior years' losses









(0.71
)
(231
)Non-taxable items and other

(1.23
)
(832
)
(1.40
)
(604
)
(6.16
)
(2,008
)Foreign withholding taxes

2.89

1,958

2.90

1,250

2.43

79134.47

23,388

33.55

14,452

36.01

11,742




CANADIAN GAAP            87

---



9.     INVESTMENTS

2004

2003$

$Investments in preferred shares of a private company, at estimated net realizable value



578Note receivable, 8.5% beginning on January 1, 2002, maturing on January 1, 2004



936Other



363

1,877Investments receivable within one year



1,102

775


10.   PROPERTY, PLANT AND EQUIPMENT

2004Cost

Accumulated depreciation

Net$

$

$Land

1,581



1,581Buildings

20,311

3,412

16,899Furniture and equipment

15,762

7,981

7,781Automotive equipment

75

21

54Computer equipment

7,553

3,132

4,421Leasehold and building improvements

810

281

52946,092

14,827

31,265


2003Cost

Accumulated depreciation

Net$

$

$Land

940



940Buildings

12,431

2,484

9,947Furniture and equipment

13,761

6,417

7,344Automotive equipment

86

13

73Computer equipment

3,822

2,085

1,737Leasehold and building improvements

522

212

31031,562

11,211

20,351




88            CANADIAN GAAP

---



11.   INTANGIBLE ASSETS

2004Cost

Accumulated depreciation

Net$

$

$Trademarks, trademark licenses and manufacturing rights with a:Finite life

292,863

30,338

262,525Indefinite life

170,127

12,417

157,710462,990

42,755

420,235


2003Cost

Accumulated depreciation

Net$

$

$Trademarks, trademark licenses and manufacturing rights with a:Finite life

124,157

20,414

103,743Indefinite life

186,512

12,418

174,094310,669

32,832

277,837




$2005

13,7982006

13,7982007

13,7982008

13,7982009

13,787


12.   GOODWILL

2004

2003$

$Cost

32,651

33,200Accumulated amortization

3,789

3,858Net

28,862

29,342


CANADIAN GAAP            89

---



13.   AUTHORIZED LINE OF CREDIT



14.   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

2004

2003$

$Accounts payable

13,327

9,605Contract rebates, product returns and accrued chargebacks

8,853

7,248Accrued interest on subordinated notes

2,530

3,038Accrued royalty fees

5,340

4,820Accrued salaries

3,228

3,084Accrued bonuses

2,804

2,883Accrued research and development expenses

3,447

1,995Accounts payable on intangible assets



7,000Other accrued liabilities

5,556

1,218Pending legal settlements

2,900

2,90047,985

43,791


15.   LONG-TERM DEBT

2004

2003$

$Convertible subordinated notes, 4.25%, interest payable semi-annually starting October 15, 2003, convertible into 8,924,113 common shares, maturing April 15, 2008. (Note 16)

107,287

103,053Bank loans, 3.8% (interest rates varying between 4.84% and 7.15% as at September 30, 2003) secured by immovable hypothecs on land and buildings having a net book value of $6,826,494 in 2004, payable in quarterly
instalments of $200,000, principal and interest, maturing in 2007.

2,174

2,576Obligations under capital leases, interest rates varying between 3.81% and 6.20% payable in monthly instalments, principal and interest, maturing on different dates until 2009.

2,520

3,426111,981

109,055Instalments due within one year

1,778

1,528110,203

107,527


90            CANADIAN GAAP

---





Obligations under capital leases

Other long term loans$

$2005

1,089

7922006

838

7602007

483

6222008

264

107,2872009

92

2,766Interest included in the minimum lease payments

2462,520


16.   CONVERTIBLE SUBORDINATED NOTES



17.   CAPITAL STOCK



14,175,000

Series A, non-voting, annual preferential cumulative dividend of 5%, redeemable on or prior to June 8, 2001 at CDN$1.00 per share payable at the option of the Company in cash or by the issuance of common shares
or in any combination of cash and common shares.12,000,000

Series B, non-voting, redeemable on the fifth anniversary of their issuance at CDN$1.00 per share payable in cash or by the issuance of common shares at the option of the Company, convertible into common shares at
the holder's option on the basis of one common share for each 15 Series B preferred shares.


CANADIAN GAAP            91

---





2004

2003

2002Number

Amount

Number

Amount

Number

Amount$



$



$Common sharesBalance, beginning of year

45,004,320

262,388

44,863,198

261,285

38,412,133

186,650Shares issued following public offerings(a)









5,000,000

57,500Shares issued following private investors' subscription(a)









208,044

3,000Shares issued following the exercise of the underwriters' option(a)









750,000

8,625Shares issued pursuant to the stock option plan(a)

558,016

4,900

141,122

1,103

127,489

751Shares issued for the acquisition of assets









365,532

4,75945,562,336

267,288

45,004,320

262,388

44,863,198

261,285Balance, end of year


---





2004

2003

2002Number of options

Weighted average exercise price

Number of options

Weighted average exercise price

Number of options

Weighted average exercise price$



$



$Balance, beginning of year

2,681,840

10.12

2,429,078

9.67

1,956,441

7.75Granted

738,350

15.44

531,850

11.36

684,050

13.38Exercised

(558,016
)
8.78

(141,122
)
7.82

(127,489
)
5.89Cancelled

(261,618
)
11.23

(137,966
)
10.73

(83,924
)
9.58Balance, end of year

2,600,556

11.86

2,681,840

10.12

2,429,078

9.67Options exercisable at end of year

954,459

9.93

965,909

9.00

614,716

7.79


92            CANADIAN GAAP

---





Options outstandingOptions exercisableWeighted average remaining contractual lifeExercise price

Number

Weighted average exercise price

Number

Weighted average exercise price$



$$4.06    $5.00

17,000

5.23

4.06

11,000

4.06$5.01    $7.00

23,100

4.87

6.12

20,500

6.03$7.01    $10.00

809,586

5.84

8.42

527,549

8.30$10.01  $13.00

760,510

7.62

11.70

287,970

11.89$13.01  $16.00

707,360

8.40

13.56

107,440

14.00$16.01  $19.00

195,500

9.53

18.30



$19.01  $19.99

87,500

9.39

19.99



2,600,556

7.40

11.86

954,459

9.93


18.   FINANCIAL INFORMATION INCLUDED IN THE CONSOLIDATED STATEMENT OF EARNINGS



2004

2003

2002$

$

$Interest on long-term debt

9,848

5,647

159Bank charges

139

297

218Financing fees





282Amortization of deferred debt issue expenses

1,144

646

24711,131

6,590

906




2004

2003

2002$

$

$Shipping and handling expenses

4,349

3,477

2,763Advertising expenses

15,155

10,524

10,501




2004

2003

2002$

$

$Non-controlling interest



(103
)
(363
)Rental expenses

1,216

1,228

1,148Depreciation of property, plant and equipment

3,728

3,477

2,499Amortization of intangible assets

12,693

4,650

5,114Investment tax credits applied against research and development expenses

1,163

488

830




CANADIAN GAAP            93

---





2004

2003

2002$

$

$Net earnings available to common shareholdersBasic

44,460

28,617

20,868Financial expenses relating to the convertible notes

6,379



Net earnings available to common shareholders on a diluted basis

50,839

28,617

20,8682004

2003

2002Weighted average number of common sharesWeighted average number of common shares outstanding

45,286,199

44,914,944

41,664,510Effect of dilutive stock options

820,872

472,599

660,970Effect of dilutive equity component of purchase price



220,449

202,020Effect of dilutive convertible subordinated notes

6,680,893



Adjusted weighted average number of common shares outstanding

52,787,964

45,607,992

42,527,500Number of common shares outstanding as at November 9, 2004.

45,562,336




19.   FINANCIAL INFORMATION INCLUDED IN THE CONSOLIDATED STATEMENT OF CASH FLOWS



2004

2003

2002$

$

$Accounts receivable

(27,748
)
5,750

2,120Income taxes receivable

(3,752
)
(4,459
)
(388
)Inventories

(17,157
)
(411
)
(2,532
)Prepaid expenses and deposits

(654
)
(942
)
401Accounts payable and accrued liabilities

3,018

9,619

3,870Income taxes payable

(4,051
)
3,207

795(50,344
)
12,764

4,266




2004

2003

2002$

$

$Interest received

1,031

1,427

787Interest paid

6,122

342

242Income taxes paid

23,599

12,417

7,672


94            CANADIAN GAAP

---



20.   JOINT VENTURES



2004

2003

2002$

$

$Current assets

122

217

190Total assets

168

649

606Current liabilities

312

393

248Total liabilities

343

422

273Revenue

906

659

725Expenses

1,361

765

771Net loss

(455
)
(106
)
(46
)Cash flows from:Operations

(31
)
92

(8
)Financing

2

4

Investment



(11
)
10


21.   SEGMENTED INFORMATION



2004

2003

2002%

%

%Customer A

24.3

15.6

20.2Customer B

18.3

18.6

18.8Customer C

13.1

15.4

13.355.7

49.6

52.3




CANADIAN GAAP            95

---





2004

2003

2002$

$

$RevenueCanadaDomestic sales

28,002

20,555

17,413Foreign sales





United StatesDomestic sales

162,810

113,875

100,088Foreign sales

3,921



EuropeDomestic sales

43,988

40,429

13,870Foreign sales

4,846

4,531

1,696Other

225

152

108243,792

179,542

133,175Property, plant, equipment, intangible assets and goodwillCanada

44,676

19,311

15,645United States

131,602

133,695

135,839Europe

265,431

138,530

55,093Other

38,653

35,994

23,423480,362

327,530

230,000




22.   FINANCIAL INSTRUMENTS



2004

2003Fair value

Carrying amount

Fair value

Carrying amount$

$

$

$AssetsCash and cash equivalents

22,063

22,063

37,886

37,886Short-term investments

15,922

15,922

133,112

133,112Accounts receivable

44,540

44,540

17,894

17,894Investments in a private company





b
)
578Note receivable





b
)
936Other investments





363

363LiabilitiesAccounts payable and accrued liabilities

47,985

47,985

43,791

43,791Long-term debt

162,674

111,981

154,283

109,055


96            CANADIAN GAAP

---





23.   COMMITMENTS AND CONTINGENCIES



$2005

2,7252006

9532007

2972008

2632009

444,282




CANADIAN GAAP            97

---





98            CANADIAN GAAP

---



24.   STOCK-BASED COMPENSATION



2004

2003

2002Actual

Pro-forma

Actual

Pro-forma

Actual

Pro-forma$

$

$

$

$

$Net earnings

44,460

40,174

28,617

25,248

21,188

18,699Basic earnings per share

0.98

0.89

0.64

0.56

0.51

0.45Diluted earnings per share

0.96

0.88

0.63

0.55

0.50

0.44


CANADIAN GAAP            99

---



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