2021 Annual Report
2021 Annual Report
Table of Contents
1 Chair’s Letter
3 Message from the CEO
6
2021 Segment Highlights
15 How Our Segments Performed
16 People Driving Growth
20 Social Impact and ESG
23 Looking Forward
24 Management’s Discussion and Analysis
of Financial Condition and Results of
Operations
57
Independent Auditors’ Report
61 Consolidated Statements
of Financial Position
62 Consolidated Statements of Net Profit
63 Consolidated Statements
of Comprehensive Income
64 Consolidated Statements of Changes in Equity
65 Consolidated Statements of Cash Flows
66 Notes to the Consolidated
Financial Statements
Proudly
Canadian
Additional information about the Company such as the Company’s 2021 Annual Information Form and Management
Additional Information
Circular can be found on SEDAR at www.SEDAR.com
Dated: November 24, 2021
Corporate Information
Common Share Information
The Company’s common shares are listed for trading on
the Toronto Stock Exchange under the symbol CGY.
Dividend Policy
The Company intends to continue to declare a quarterly
dividend in line with its overall financial performance and
cash flow generation. Decisions on dividend payments
are made on a quarterly basis by the Board of Directors.
There can be no assurance as to the amount of such
dividends in the future.
Corporate Head Office
770 Palladium Drive
Ottawa, Ontario, Canada K2V 1C8
Phone: 613.599.8600
Fax: 613.592.3664
Web: www.calian.com
Board of Directors
George Weber
President, WebX Consulting Ltd.
Chair, Calian Group Ltd.
Chair of the Nominating Committee
Kenneth J. Loeb
Executive Chairman, Ambassador Realty Inc.
Chair of the Compensation Committee
Jo-Anne Poirier
President and CEO, VON Canada
Chair of the Governance Committee
Ray Basler, CPA, CA
Consultant
Chair of the Audit Committee
Young Park
Corporate Director
Ronald Richardson
Corporate Director
Kevin Ford
CEO, Calian Group Ltd.
Chair’s Letter
Chair’s Letter
With world markets
facing ongoing
uncertainty, Calian
Group Ltd. (TSX:CGY)
continued to show
impressive growth
and solid financial
performance, powered
by the long-term
vision of senior
leadership, and supported by a capable,
dedicated team. Through a focused
strategy that emphasizes diversification and
innovation, Calian continued to grow its
services, products and workforce, despite
the formidable challenges of the current
business environment, reporting record
results for the year.
Despite the worsening situation with COVID-19 and
subsequent variants, the company’s diversity as well as
the essential services and solutions provided to Calian
customers was a major factor in our performance.
Where one segment encountered delays, another
picked up, keeping us profitable throughout the
year. Having that diversity gave Calian stability, while
innovation in all operating segments—and specifically
the Health segment—allowed the company to deliver
critical health services, such as vaccinations, during
the pandemic.
Reflecting the company’s record annual revenue of
$518 million—a 20 per cent increase over 2020—
Calian share price remained healthy. With EBITDA
increasing by 41% and adjusted net income growth
of 58%, Calian has posted solid results for the year.
Calian has continued to pay a stable dividend of
$0.28 per quarter, returning a total of $11.8 million to
shareholders through the year, which the company
finished having now reported consecutive profitable
quarters for 20 straight years.
Our balance sheet remained strong in 2021, and our
combination of cash and debt availability and the
renegotiation of our credit facility filled the engine to
allow us to move forward with acquisitions, R&D and
our aggressive innovation agenda. We completed the
largest acquisition in the company’s history, with the
purchase of Dapasoft and its subsidiary, iSecurity.
This acquisition presents opportunities for Calian
to continue to develop more innovative products
and services to answer the
increasing demand
for sophisticated IT, cybersecurity and healthcare
solutions.
We welcomed a new board member this year. Ronald
Richardson, who replaced Rich Vickers when he retired.
Ronald adds to our competency base, especially in the
areas of advanced technologies, software and start-
ups.
The Calian senior leadership team, under the strong
guidance of Kevin Ford, has successfully steered the
company through a rapidly changing environment
over the past two years. This leadership team worked
tirelessly with employees to achieve record profitable
growth, leading to several “firsts” this year, including
making the FP500 for the first time and passing the
half-billion-dollar revenue mark for the first time in
the company’s history. Our second and third quarter
results showed some of the largest revenues we’ve
ever had.
Social responsibility continues to be a vital part of the
Calian mission, and the board has been involved in
overseeing the development of a reporting framework
aligned with the achivievement of globally recognized
ESG standards. Our mission to help the world
communicate, innovate, learn and lead safe and
healthy lives translates into a belief in our responsibility
to use the tools we have to improve people’s lives,
while achieving sustainable, profitable growth.
The work we do with Indigenous groups is especially
important as we marked the first National Day for Truth
and Reconciliation on September 30th. Calian provided
sponsorship funding and volunteers for Remember
Me: A National Day of Remembrance, hosted by the
Customer diversification
saw
non-government
Indigenous Arts Collective of Canada and Every Child
contracts rise to become just under 50 percent of
Matters. Other initiatives included distributing care
Calian business, while acquisitions gained momentum,
packages to Nunavut families who were in quarantine
bringing new customers, expertise and capabilities.
during holidays, participating in the Operation Remote
With world markets
facing ongoing
uncertainty, Calian
Group Ltd. (TSX:CGY)
continued to show
impressive growth
and solid financial
performance, powered
by the long-term
vision of senior
leadership, and supported by a capable,
dedicated team. Through a focused
strategy that emphasizes diversification and
innovation, Calian continued to grow its
services, products and workforce, despite
the formidable challenges of the current
business environment, reporting record
results for the year.
Despite the worsening situation with COVID-19 and
subsequent variants, the company’s diversity as well as
the essential services and solutions provided to Calian
customers was a major factor in our performance.
Where one segment encountered delays, another
picked up, keeping us profitable throughout the
year. Having that diversity gave Calian stability, while
innovation in all operating segments—and specifically
the Health segment—allowed the company to deliver
critical health services, such as vaccinations, during
the pandemic.
Reflecting the company’s record annual revenue of
$518 million—a 20 per cent increase over 2020—
Calian share price remained healthy. With EBITDA
increasing by 41% and adjusted net income growth
of 58%, Calian has posted solid results for the year.
Calian has continued to pay a stable dividend of
$0.28 per quarter, returning a total of $11.8 million to
shareholders through the year, which the company
finished having now reported consecutive profitable
quarters for 20 straight years.
Customer diversification
non-government
contracts rise to become just under 50 percent of
Calian business, while acquisitions gained momentum,
bringing new customers, expertise and capabilities.
saw
Our balance sheet remained strong in 2021, and our
combination of cash and debt availability and the
renegotiation of our credit facility filled the engine to
allow us to move forward with acquisitions, R&D and
our aggressive innovation agenda. We completed the
largest acquisition in the company’s history, with the
purchase of Dapasoft and its subsidiary, iSecurity.
This acquisition presents opportunities for Calian
to continue to develop more innovative products
and services to answer the
increasing demand
for sophisticated IT, cybersecurity and healthcare
solutions.
We welcomed a new board member this year. Ronald
Richardson, who replaced Rich Vickers when he retired.
Ronald adds to our competency base, especially in the
areas of advanced technologies, software and start-
ups.
The Calian senior leadership team, under the strong
guidance of Kevin Ford, has successfully steered the
company through a rapidly changing environment
over the past two years. This leadership team worked
tirelessly with employees to achieve record profitable
growth, leading to several “firsts” this year, including
making the FP500 for the first time and passing the
half-billion-dollar revenue mark for the first time in
the company’s history. Our second and third quarter
results showed some of the largest revenues we’ve
ever had.
Social responsibility continues to be a vital part of the
Calian mission, and the board has been involved in
overseeing the development of a reporting framework
aligned with the achivievement of globally recognized
ESG standards. Our mission to help the world
communicate, innovate, learn and lead safe and
healthy lives translates into a belief in our responsibility
to use the tools we have to improve people’s lives,
while achieving sustainable, profitable growth.
The work we do with Indigenous groups is especially
important as we marked the first National Day for Truth
and Reconciliation on September 30th. Calian provided
sponsorship funding and volunteers for Remember
Me: A National Day of Remembrance, hosted by the
Indigenous Arts Collective of Canada and Every Child
Matters. Other initiatives included distributing care
packages to Nunavut families who were in quarantine
during holidays, participating in the Operation Remote
1
1
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report Immunity delivery of vaccines to remote communities in
northern Ontario, and delivering nursing and healthcare
services to communities in Nunavut. In addition, Calian
is working on a strategy that is based on engaging with
Indigenous partners to gain feedback and incorporate
their perspectives, improving awareness of Indigenous
perspectives and leveraging our capacity to support
Indigenous-led solutions to Indigenous challenges.
Our work with military families continues. Through
our Military Family Doctors Network (MFDN), Calian
has referred 3,450 military family members to doctors
and initiated two new pilot projects involving patient
support for military family members. Calian also
provided a $40K contribution to military and veteran
research through the Canadian Institute for Military and
Veteran Health Research. These are just some of the
initiatives Calian has undertaken to support veterans
and military families.
At the end of my first full year as Chair, I look forward
to seeing Calian navigate some of the obstacles that
continue to face all companies in today’s business
environment. It will be important to continue the
momentum and to retain and recruit the necessary
talent to keep moving forward. Sustaining momentum
and profitable growth in spite of market headwinds is
a challenge—one I’m confident the company is well
positioned to overcome. I’m optimistic about the
future for Calian and am convinced that the next few
years will see it become an innovation powerhouse
with unlimited potential.
Immunity delivery of vaccines to remote communities in
northern Ontario, and delivering nursing and healthcare
services to communities in Nunavut. In addition, Calian
is working on a strategy that is based on engaging with
Indigenous partners to gain feedback and incorporate
their perspectives, improving awareness of Indigenous
perspectives and leveraging our capacity to support
Indigenous-led solutions to Indigenous challenges.
Our work with military families continues. Through
our Military Family Doctors Network (MFDN), Calian
has referred 3,450 military family members to doctors
and initiated two new pilot projects involving patient
support for military family members. Calian also
provided a $40K contribution to military and veteran
research through the Canadian Institute for Military and
Veteran Health Research. These are just some of the
initiatives Calian has undertaken to support veterans
and military families.
At the end of my first full year as Chair, I look forward
to seeing Calian navigate some of the obstacles that
continue to face all companies in today’s business
environment. It will be important to continue the
momentum and to retain and recruit the necessary
talent to keep moving forward. Sustaining momentum
and profitable growth in spite of market headwinds is
a challenge—one I’m confident the company is well
positioned to overcome. I’m optimistic about the
future for Calian and am convinced that the next few
years will see it become an innovation powerhouse
with unlimited potential.
George Weber
Chair
George Weber
Chair
Military Family Doctors Network (MFDN):
Calian has referred 3,450 military family
members to doctors and initiated two new pilot
projects involving patient support for military
family members.
Military Family Doctors Network (MFDN):
Calian has referred 3,450 military family
members to doctors and initiated two new pilot
projects involving patient support for military
family members.
2
2
2021 Annual ReportCalian Group Ltd.2021 Annual ReportCalian Group Ltd. Message from the CEO
Message from the CEO
As I look back on
another challenging
year, I’m proud of,
and grateful to, the
incredible Calian team
for all the hard work
they did to achieve
another record year.
As CEO, I’m always
in awe of this team’s
dedication, strength
and perseverance
under difficult
circumstances.
Kevin Ford
CEO, Calian Group Ltd.
We’ve been running a marathon for the
past 18 months through this pandemic,
and I’ve been impressed by our capacity
to sprint, this far into the marathon. Our
ability to support our customers’ operations
throughout the pandemic has demonstrated
our strength and the critical nature of
everything we do, from responding quickly
to urgent needs in healthcare to facilitating
emergency management in remote
communities.
I’m pleased to report that we posted record 2021
revenues and with our fourth quarter results celebrated
80 consecutive profitable quarters. That’s 20 years!
We achieve these results by being valued partners
to our customers and by executing on our four-pillar
Backlog
growth strategy. Through a combination of strategic
acquisitions, innovative solutions and diversification, we
were able to increase our customer base in Canada and
expand into eight new international markets, providing
critical services in healthcare and remote learning,
among others. Three important acquisitions have been
key to our growth and customer expansion this year.
These acquisitions, alongside our ability to provide an
effective, nimble response to changing needs in the
markets we already serve, have helped us on our journey
to becoming an innovative global growth company. And
with operations slowly returning to pre-pandemic levels,
I’m confident in our ability to maintain our pace of growth
and profitability for the long term.
Our focus on stability through diversity and growth
through innovation informs the way we operate and
guides the decisions we make. Our performance this
year is a reflection of our unwavering commitment
to this strategy. In 2021, Calian reached an important
milestone, recording annual revenue of $518 million
and adjusted EBDITA of $52 million. This represents an
annual growth rate of 20% and 41%, respectively, and
the half-way mark on our way to becoming a $1-billion
company.
Calian benefits from the diversity of solutions, products
and services in our four distinct segments, but it’s the
execution of our four-pillar growth strategy across
those four segments that really drives our growth.
We are living every element of our strategy: customer
diversification, customer retention,
innovation and
continuous improvement.
We are diversifying our customer base with expansion
into Europe and developing new technologies for
As I look back on
another challenging
year, I’m proud of,
and grateful to, the
incredible Calian team
for all the hard work
they did to achieve
another record year.
As CEO, I’m always
in awe of this team’s
dedication, strength
and perseverance
under difficult
circumstances.
Kevin Ford
CEO, Calian Group Ltd.
We’ve been running a marathon for the
past 18 months through this pandemic,
and I’ve been impressed by our capacity
to sprint, this far into the marathon. Our
ability to support our customers’ operations
throughout the pandemic has demonstrated
our strength and the critical nature of
everything we do, from responding quickly
to urgent needs in healthcare to facilitating
emergency management in remote
communities.
I’m pleased to report that we posted record 2021
revenues and with our fourth quarter results celebrated
80 consecutive profitable quarters. That’s 20 years!
We achieve these results by being valued partners
to our customers and by executing on our four-pillar
Backlog
growth strategy. Through a combination of strategic
acquisitions, innovative solutions and diversification, we
were able to increase our customer base in Canada and
expand into eight new international markets, providing
critical services in healthcare and remote learning,
among others. Three important acquisitions have been
key to our growth and customer expansion this year.
These acquisitions, alongside our ability to provide an
effective, nimble response to changing needs in the
markets we already serve, have helped us on our journey
to becoming an innovative global growth company. And
with operations slowly returning to pre-pandemic levels,
I’m confident in our ability to maintain our pace of growth
and profitability for the long term.
Our focus on stability through diversity and growth
through innovation informs the way we operate and
guides the decisions we make. Our performance this
year is a reflection of our unwavering commitment
to this strategy. In 2021, Calian reached an important
milestone, recording annual revenue of $518 million
and adjusted EBDITA of $52 million. This represents an
annual growth rate of 20% and 41%, respectively, and
the half-way mark on our way to becoming a $1-billion
company.
Calian benefits from the diversity of solutions, products
and services in our four distinct segments, but it’s the
execution of our four-pillar growth strategy across
those four segments that really drives our growth.
We are living every element of our strategy: customer
diversification, customer retention,
innovation and
continuous improvement.
We are diversifying our customer base with expansion
into Europe and developing new technologies for
3
3
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report new markets. We’ve retained customers by delivering
consistently, despite challenges and evolving mandates.
With each acquisition, we absorb more experience,
expertise and technology into our four segments.
We continue to innovate with new technologies and
solutions. Of particular interest is an agreement with a
manufacturer of electric vehicles to supply two products
for their upcoming range. The Global Navigation
Satellite System (GNSS) Smart Power Splitter and the
Accutenna® GNSS antennas will be deployed in electric
delivery vehicles, and the Accutenna GNSS antennas will
be deployed in the manufacturer’s consumer models.
This contract represents a significant expansion into
the automotive sector and signals our commitment to
continued innovation and growth in the space.
The integration of EMSEC into the Calian IT and Cyber
Solutions segment this year opened myriad opportunities
for expansion in key areas of cybersecurity, helping to
diversify our customer base. Investments in Advanced
Technologies fuelled innovation and healthy growth for
that segment, which expanded its portfolio of products
and solutions.
Two important projects we’ve been working on this
year will affect Calian for years to come and reflect our
commitment to continuous improvement. The first is the
implementation of a new enterprise resource planning
(ERP) platform to support scaling our back office as
we grow. I’m looking forward to the improvements in
efficiency that will come from having one integrated
system across the enterprise. The other is our branding
exercise, aimed at solidifying all the Calian entities under
one unified brand with a common mission, vision and
goal.
The acquisition of Dapasoft
Inc. represents
the
company’s
largest acquisition
to date. Through
Dapasoft, we have expanded the services Calian can
offer in healthcare technology and cybersecurity and
opened new opportunities where these two segments
intersect. This acquisition will help to fuel the next
chapter of growth for Calian and augment our capacity
to deliver cutting-edge healthcare, IT and cybersecurity
solutions to our clients, at a time when demand for all
these services is increasing.
Two other exciting acquisitions, Cadence and InterTronic
Solutions, rounded out 2021. Cadence, located in the
United Kingdom, will allow Calian to further expand
our learning solutions in Europe. InterTronic Solutions
The acquisition of Dapasoft Inc. represents the
company’s largest acquisition to date. Through
Dapasoft, we have expanded the services Calian
can offer in healthcare technology and cybersecurity
and opened up new opportunities where these two
segments intersect.
new markets. We’ve retained customers by delivering
consistently, despite challenges and evolving mandates.
With each acquisition, we absorb more experience,
expertise and technology into our four segments.
We continue to innovate with new technologies and
solutions. Of particular interest is an agreement with a
manufacturer of electric vehicles to supply two products
for their upcoming range. The Global Navigation
Satellite System (GNSS) Smart Power Splitter and the
Accutenna® GNSS antennas will be deployed in electric
delivery vehicles, and the Accutenna GNSS antennas will
be deployed in the manufacturer’s consumer models.
This contract represents a significant expansion into
the automotive sector and signals our commitment to
continued innovation and growth in the space.
The integration of EMSEC into the Calian IT and Cyber
Solutions segment this year opened myriad opportunities
for expansion in key areas of cybersecurity, helping to
diversify our customer base. Investments in Advanced
Technologies fuelled innovation and healthy growth for
that segment, which expanded its portfolio of products
and solutions.
Two important projects we’ve been working on this
year will affect Calian for years to come and reflect our
commitment to continuous improvement. The first is the
implementation of a new enterprise resource planning
(ERP) platform to support scaling our back office as
we grow. I’m looking forward to the improvements in
efficiency that will come from having one integrated
system across the enterprise. The other is our branding
exercise, aimed at solidifying all the Calian entities under
one unified brand with a common mission, vision and
goal.
Inc. represents
largest acquisition
The acquisition of Dapasoft
the
to date. Through
company’s
Dapasoft, we have expanded the services Calian can
offer in healthcare technology and cybersecurity and
opened new opportunities where these two segments
intersect. This acquisition will help to fuel the next
chapter of growth for Calian and augment our capacity
to deliver cutting-edge healthcare, IT and cybersecurity
solutions to our clients, at a time when demand for all
these services is increasing.
Two other exciting acquisitions, Cadence and InterTronic
Solutions, rounded out 2021. Cadence, located in the
United Kingdom, will allow Calian to further expand
our learning solutions in Europe. InterTronic Solutions
The acquisition of Dapasoft Inc. represents the
company’s largest acquisition to date. Through
Dapasoft, we have expanded the services Calian
can offer in healthcare technology and cybersecurity
and opened up new opportunities where these two
segments intersect.
4
Calian Group Ltd.
4
Calian Group Ltd.
2021 Annual ReportCalian Group Ltd.2021 Annual ReportCalian Group Ltd. brings new assets in the satellite ground system market
family members with physicians. We’ve operated
and facilitates our entry into the North American space
vaccine clinics and testing sites throughout Canada and
exploration and defence sector. Our recent acquisition
in remote Indigenous communities to boost immunity
of SimFront provides technology assets to our Learning
and keep their members healthy.
segment, strengthening our ability to offer customers
innovative learning solutions.
This year, we began the process of defining our long-term
ESG strategy, aligned with the 17 goals of the United
I’m especially proud of the role Calian has played in
Nations 2030 Agenda for Sustainable Development.
the response to the COVID-19 pandemic, which aligns
These will include facility programs to reduce our
with part of our mission to help people lead healthy lives
carbon
footprint,
environmental management,
and stay safe. During 2021, we vaccinated more than
employee diversity, health and safety
initiatives,
300,000 Canadians at 21 pop-up clinics. Our work with
COVID-19 response, continued support for Indigenous
Indigenous communities has the potential to improve the
communities and military families, and annual corporate
health of underserved Canadians. Calian administered
giving.
the COVID-19 vaccine in 31 fly-in northern locations to
Indigenous community members and residents of First
Nations elder care homes. Calian also embarked on a
project with Indigenous Services Canada to provide
COVID-19 screening and paramedic services to improve
health and safety in Indigenous communities. Another
health project with the Government of Nunavut to
provide telehealth services is part of the territory’s long-
term pandemic preparedness strategy. Through this
initiative, Calian manages a virtual COVID-19 program
across the territory of Nunavut.
In July, we announced the appointment of Sacha Gera as
president of IT and Cyber Solutions (ITCS). He succeeds
Sandra Cote, who retires at the end of the year. I am
grateful for Sandra’s valuable contributions over the
years. Under her leadership, the segment flourished,
doubling in size and evolving from a services business
to a cyber and cloud solutions business. While I’m sorry
to see her retire, I’m excited to see Sacha’s vision for
ITCS taking shape. His technology background and
experience in professional services and SaaS provide
an excellent mix for our ITCS business and I’m confident
that he has the skills and knowledge to take the ITCS
business to new heights.
Our environmental, social and governance (ESG) and
corporate social responsibility (CSR) initiatives are
always close to my heart, and I believe that the social
impact Calian has is just as important as our business
impact. Our mission—to help the world communicate,
innovate, learn and lead safe and healthy lives—is much
more than just a statement. It’s at the core of everything
we do. Through our military family doctor network
(MFDN), Calian has matched more than 3,450 military
A major component of our company performance in
2021 was the dedication and hard work of the healthcare
and essential workers in our ranks. We owe them a debt
of gratitude for continuing to show up and perform in
difficult circumstances, and sometimes at great personal
sacrifice. Considering the exceptional performance of
Calian Health this year, these workers deserve special
thanks.
I’d also like to recognize the contributions of every single
Calian employee, including our many contractors, who
have demonstrated integrity and commitment though
another year of global uncertainty. They are living our
core values of integrity, teamwork, innovation and
customer commitment, and they are the reason Calian
continues to grow profitably every year.
The world still has some turbulence ahead, with
uncertainty about the pandemic and its disruptions to
supply chains, cost increases and talent shortages. I’m
grateful to our shareholders for continuing to believe
in us and for trusting us to deliver on our strategy to
become an innovative global growth company.
We unveiled our new Calian tagline this year: Confidence.
Engineered. These words describe our position and
define our approach going forward. We are confident
in our people, services and products, and we are
continuing to innovate and build technology that keeps
the world moving forward.
Kevin Ford
CEO
brings new assets in the satellite ground system market
and facilitates our entry into the North American space
exploration and defence sector. Our recent acquisition
of SimFront provides technology assets to our Learning
segment, strengthening our ability to offer customers
innovative learning solutions.
I’m especially proud of the role Calian has played in
the response to the COVID-19 pandemic, which aligns
with part of our mission to help people lead healthy lives
and stay safe. During 2021, we vaccinated more than
300,000 Canadians at 21 pop-up clinics. Our work with
Indigenous communities has the potential to improve the
health of underserved Canadians. Calian administered
the COVID-19 vaccine in 31 fly-in northern locations to
Indigenous community members and residents of First
Nations elder care homes. Calian also embarked on a
project with Indigenous Services Canada to provide
COVID-19 screening and paramedic services to improve
health and safety in Indigenous communities. Another
health project with the Government of Nunavut to
provide telehealth services is part of the territory’s long-
term pandemic preparedness strategy. Through this
initiative, Calian manages a virtual COVID-19 program
across the territory of Nunavut.
In July, we announced the appointment of Sacha Gera as
president of IT and Cyber Solutions (ITCS). He succeeds
Sandra Cote, who retires at the end of the year. I am
grateful for Sandra’s valuable contributions over the
years. Under her leadership, the segment flourished,
doubling in size and evolving from a services business
to a cyber and cloud solutions business. While I’m sorry
to see her retire, I’m excited to see Sacha’s vision for
ITCS taking shape. His technology background and
experience in professional services and SaaS provide
an excellent mix for our ITCS business and I’m confident
that he has the skills and knowledge to take the ITCS
business to new heights.
Our environmental, social and governance (ESG) and
corporate social responsibility (CSR) initiatives are
always close to my heart, and I believe that the social
impact Calian has is just as important as our business
impact. Our mission—to help the world communicate,
innovate, learn and lead safe and healthy lives—is much
more than just a statement. It’s at the core of everything
we do. Through our military family doctor network
(MFDN), Calian has matched more than 3,450 military
family members with physicians. We’ve operated
vaccine clinics and testing sites throughout Canada and
in remote Indigenous communities to boost immunity
and keep their members healthy.
This year, we began the process of defining our long-term
ESG strategy, aligned with the 17 goals of the United
Nations 2030 Agenda for Sustainable Development.
These will include facility programs to reduce our
environmental management,
carbon
employee diversity, health and safety
initiatives,
COVID-19 response, continued support for Indigenous
communities and military families, and annual corporate
giving.
footprint,
A major component of our company performance in
2021 was the dedication and hard work of the healthcare
and essential workers in our ranks. We owe them a debt
of gratitude for continuing to show up and perform in
difficult circumstances, and sometimes at great personal
sacrifice. Considering the exceptional performance of
Calian Health this year, these workers deserve special
thanks.
I’d also like to recognize the contributions of every single
Calian employee, including our many contractors, who
have demonstrated integrity and commitment though
another year of global uncertainty. They are living our
core values of integrity, teamwork, innovation and
customer commitment, and they are the reason Calian
continues to grow profitably every year.
The world still has some turbulence ahead, with
uncertainty about the pandemic and its disruptions to
supply chains, cost increases and talent shortages. I’m
grateful to our shareholders for continuing to believe
in us and for trusting us to deliver on our strategy to
become an innovative global growth company.
We unveiled our new Calian tagline this year: Confidence.
Engineered. These words describe our position and
define our approach going forward. We are confident
in our people, services and products, and we are
continuing to innovate and build technology that keeps
the world moving forward.
Kevin Ford
CEO
5
5
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report 2021 Segment Highlights
2021 Segment Highlights
Advanced Technologies
The Advanced Technologies segment
focused on growth through strategic
acquisitions, new contracts and entry
into new markets throughout 2021, while
ensuring continuity of service for our existing
customers as the pandemic continued to
test the resilience of businesses on a global
scale.
Customers seeking to increase momentum in their
service offerings relied on our team to make the
technology advancements they needed to offer a new
generation of services to their customers. While work
continued integrating new acquisitions, additional
investment in cutting edge technologies to support
organic growth contributed to a strong year for the
Advanced Technologies team.
The challenges faced during the COVID-19 pandemic
created headwinds for our satellite RF ground systems,
requiring us to work closely with our customers and our
supply chain to ensure uninterrupted service. As global
satellite network operators, our customers provide
essential communications infrastructure, which made
access to the internet even more critical during the
pandemic. Thus, the services and solutions we provide
to them are also considered essential. Our efforts
in early 2021 focused on maintaining workflow and
minimizing service interruptions for these customers.
These efforts included enhanced close contact with
supply chains, remote working for most staff, and
implementation of health and safety measures at the
manufacturing facilities, including staggered shifts,
dispersed workstations and increased cleaning and
sanitation. This was in addition to navigating the ever-
changing restrictions placed on our installation crews
travelling to sites around the world.
While challenging, these measures ensured most of
the work was able to continue safely and without any
major interruptions. Supply chain disruptions posed
a significant hurdle throughout the year. Meeting
our obligations to our customers in this complicated
environment came with increased costs that could not
always be passed on to our customers. In addition,
the technical challenges involved with deploying state-
of-the-art, high frequency RF ground solutions were
greater than expected as the team worked steadily to
resolve these issues.
This year saw continued evolution of our products
business. The introduction of the Decimator D4
spectrum analyser, which spurred a record quarter
of sales, is a great example of progress we are
making in evolving our products to meet market
demands. This fourth generation of Calian low-cost
spectrum analyzer is designed to monitor and analyze
satellite and terrestrial wireless radio
frequency
(RF) communications signals. New test platform
developments will set the stage for additional growth.
In January, Calian acquired InterTronic Solutions Inc.
(“InterTronic”), a Canadian-based RF ground systems
manufacturer that specializes in state-of-the-art, high
precision antenna solutions. InterTronic incorporates
high-accuracy, high-speed motion systems in their
antennas that are used by military, scientific and
commercial customers. Applications of InterTronic
solutions include radio astronomy, radar, electronic
warfare, deep space and satellite communications.
The addition of InterTronic to Calian satellite and
space ground systems business, in combination with
our composites antenna product line, allows Calian to
create a broader set of our own antenna solutions for
our customers. Through this, we will offer our customers
differentiators—be it lower cost, better accuracy or
higher performance—depending on the application,
but also have more control of the competitive value
chain of the RF ground solutions that we provide.
Calian has established itself as a satellite operations
centre of excellence with its group of highly trained and
experienced engineers and technicians who operate at
the Canadian Space Agency’s headquarters in Saint-
Hubert, QC. The major win of a multi-year contract, in
partnership with MDA, to provide continued satellite
operations for MDA’s and the Canadian Space
Agency’s existing fleet of smallsat missions, along
with the new Radarsat Constellation, will maximize the
value to Canada provided by these earth observation
missions. In these times of environmental concerns
over global climate change, the data these missions
supply to Canada and the world is critical. In addition,
the three deep space antennas that we provided as
Advanced Technologies
The Advanced Technologies segment
focused on growth through strategic
acquisitions, new contracts and entry
into new markets throughout 2021, while
ensuring continuity of service for our existing
customers as the pandemic continued to
test the resilience of businesses on a global
scale.
Customers seeking to increase momentum in their
service offerings relied on our team to make the
technology advancements they needed to offer a new
generation of services to their customers. While work
continued integrating new acquisitions, additional
investment in cutting edge technologies to support
organic growth contributed to a strong year for the
Advanced Technologies team.
The challenges faced during the COVID-19 pandemic
created headwinds for our satellite RF ground systems,
requiring us to work closely with our customers and our
supply chain to ensure uninterrupted service. As global
satellite network operators, our customers provide
essential communications infrastructure, which made
access to the internet even more critical during the
pandemic. Thus, the services and solutions we provide
to them are also considered essential. Our efforts
in early 2021 focused on maintaining workflow and
minimizing service interruptions for these customers.
These efforts included enhanced close contact with
supply chains, remote working for most staff, and
implementation of health and safety measures at the
manufacturing facilities, including staggered shifts,
dispersed workstations and increased cleaning and
sanitation. This was in addition to navigating the ever-
changing restrictions placed on our installation crews
travelling to sites around the world.
While challenging, these measures ensured most of
the work was able to continue safely and without any
major interruptions. Supply chain disruptions posed
a significant hurdle throughout the year. Meeting
our obligations to our customers in this complicated
environment came with increased costs that could not
always be passed on to our customers. In addition,
the technical challenges involved with deploying state-
of-the-art, high frequency RF ground solutions were
greater than expected as the team worked steadily to
resolve these issues.
This year saw continued evolution of our products
business. The introduction of the Decimator D4
spectrum analyser, which spurred a record quarter
of sales, is a great example of progress we are
making in evolving our products to meet market
demands. This fourth generation of Calian low-cost
spectrum analyzer is designed to monitor and analyze
satellite and terrestrial wireless radio
frequency
(RF) communications signals. New test platform
developments will set the stage for additional growth.
In January, Calian acquired InterTronic Solutions Inc.
(“InterTronic”), a Canadian-based RF ground systems
manufacturer that specializes in state-of-the-art, high
precision antenna solutions. InterTronic incorporates
high-accuracy, high-speed motion systems in their
antennas that are used by military, scientific and
commercial customers. Applications of InterTronic
solutions include radio astronomy, radar, electronic
warfare, deep space and satellite communications.
The addition of InterTronic to Calian satellite and
space ground systems business, in combination with
our composites antenna product line, allows Calian to
create a broader set of our own antenna solutions for
our customers. Through this, we will offer our customers
differentiators—be it lower cost, better accuracy or
higher performance—depending on the application,
but also have more control of the competitive value
chain of the RF ground solutions that we provide.
Calian has established itself as a satellite operations
centre of excellence with its group of highly trained and
experienced engineers and technicians who operate at
the Canadian Space Agency’s headquarters in Saint-
Hubert, QC. The major win of a multi-year contract, in
partnership with MDA, to provide continued satellite
operations for MDA’s and the Canadian Space
Agency’s existing fleet of smallsat missions, along
with the new Radarsat Constellation, will maximize the
value to Canada provided by these earth observation
missions. In these times of environmental concerns
over global climate change, the data these missions
supply to Canada and the world is critical. In addition,
the three deep space antennas that we provided as
6
6
2021 Annual ReportCalian Group Ltd.2021 Annual ReportCalian Group Ltd. part of the European Space Agency’s Deep Space
Network are being used on their BepiColumbo mission
as the probe is receiving initial images from its mission
to study Mercury. These 35m antennas were built by
Calian to support multiple ESA deep space missions
to track and control the probe and to receive images
the probe gathers.
Subsidiaries Intragrain, SatService (which celebrated
25 years in business) and Tallysman, all contributed
to a strong year for Calian. In addition to the shipping
of global navigation satellite system (GNSS) antennas
for applications such as warehouse robots, Tallysman
fuelled a significant expansion into the automotive
sector, signing an agreement to supply two products
to an electric vehicle manufacturer supporting their
product expansion.
The Tallysman GNSS Smart Power Splitter and the
Accutenna® GNSS antennas will be deployed in
electric delivery vehicles, and the Accutenna GNSS
antennas will be deployed in the manufacturer’s
consumer models. Tallysman adapted and refined
the technology for this project, resulting in a patented
antenna that meets exacting requirements for phase-
based positioning. Tallysman antennas range from
cost-effective high-volume products to super-precise
antennas capable of 0.5mm resolution, making them
among the most precise GNSS antennas in the world.
Calian won a Canadian Department of National Defence
(DND) contract to support the Data Remediation
and Marking of Serial Managed Materiel (DRM-SM)
program. Leveraging Calian expertise in advanced
technologies, DND will be able to seamlessly track
approximately millions of assets using a scalable,
trusted life cycle management process. It is estimated
that approximately 2.7 million assets will have to be
labelled and remediated.
Defence prime contractors such as GLDS-C depend
on the resilience of our vetronics solutions to keep
their armored vehicles and the people inside safe.
With our control boxes, shielded cable harnesses, and
fire suppression systems, we form a part of GDLS-C’s
advanced engineering team as they continue to roll out
new and innovative armored platforms.
Calian values customer diversification as one of the
key drivers of our future growth. In the fourth quarter
of 2021, Calian Nuclear won a contract with the
7
The Tallysman GNSS Smart Power Splitter
and the Accutenna® GNSS antennas will
be deployed in electric delivery vehicles and
consumer models.
The Tallysman GNSS Smart Power Splitter
and the Accutenna® GNSS antennas will
be deployed in electric delivery vehicles and
consumer models.
part of the European Space Agency’s Deep Space
Network are being used on their BepiColumbo mission
as the probe is receiving initial images from its mission
to study Mercury. These 35m antennas were built by
Calian to support multiple ESA deep space missions
to track and control the probe and to receive images
the probe gathers.
Subsidiaries Intragrain, SatService (which celebrated
25 years in business) and Tallysman, all contributed
to a strong year for Calian. In addition to the shipping
of global navigation satellite system (GNSS) antennas
for applications such as warehouse robots, Tallysman
fuelled a significant expansion into the automotive
sector, signing an agreement to supply two products
to an electric vehicle manufacturer supporting their
product expansion.
The Tallysman GNSS Smart Power Splitter and the
Accutenna® GNSS antennas will be deployed in
electric delivery vehicles, and the Accutenna GNSS
antennas will be deployed in the manufacturer’s
consumer models. Tallysman adapted and refined
the technology for this project, resulting in a patented
antenna that meets exacting requirements for phase-
based positioning. Tallysman antennas range from
cost-effective high-volume products to super-precise
antennas capable of 0.5mm resolution, making them
among the most precise GNSS antennas in the world.
Calian won a Canadian Department of National Defence
(DND) contract to support the Data Remediation
and Marking of Serial Managed Materiel (DRM-SM)
program. Leveraging Calian expertise in advanced
technologies, DND will be able to seamlessly track
approximately millions of assets using a scalable,
trusted life cycle management process. It is estimated
that approximately 2.7 million assets will have to be
labelled and remediated.
Defence prime contractors such as GLDS-C depend
on the resilience of our vetronics solutions to keep
their armored vehicles and the people inside safe.
With our control boxes, shielded cable harnesses, and
fire suppression systems, we form a part of GDLS-C’s
advanced engineering team as they continue to roll out
new and innovative armored platforms.
Calian values customer diversification as one of the
key drivers of our future growth. In the fourth quarter
of 2021, Calian Nuclear won a contract with the
7
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report government of Saskatchewan for a small modular
Despite the continuing challenges of the COVID-19
reactor study, contributing to the diversification of our
pandemic, the Advanced Technologies segment had
customer base and our nuclear portfolio of services.
a very strong 2021. As we move past the logistical and
supply chain disruptions of the past 18 months, we
continue to push forward with acquisition integration
and investment in leading technologies and solutions.
We anticipate continued organic and acquisitive
growth for many years to come.
The software development teams’ ability to pivot to
a productive remote working environment was timely
as the software defined solution teams received a
string of new development projects that contributed
well through the year. Despite the remote working
environment,
the software development
team
continues to grow to support its large backlog.
Customers like Inmarsat and SiriusXM continue to rely
on Calian for the provision of highly complex solutions
for the critical services they offer. Using our systems
engineering approach, our subject matter experts
work closely with customers to provide cutting-edge
solutions to increase the performance of their satellite
networks.
Notable software solutions wins include a contract with
ORBCOMM Inc. (Nasdaq: ORBC), a global provider
of Internet of Things (IoT) solutions, to develop the
satellite ground gateway system for ORBCOMM’s
next-generation OGx service. This service will
provide industrial customers around the world with
increased global coverage, battery power, bandwidth
and speed. Critical applications, such as machine-
to- machine communications, remote monitoring
and environmental-sensing will take advantage of
the ORBCOMM next generation OGx service. Our
no-fail software architecture ensures the data flows
constantly for these critical services. Calian has built
multiple custom satellite communication gateways
over the last three decades and is proud to again be
selected as the supplier of choice for these types of
solutions.
With many of our customers sending new satellite
payloads into space, we have seen increased revenues
in our In-Orbit-Test Systems. These systems capitalize
on our deep understanding of satellite communications
payloads and our test and measurement software
to provide accurate measurement of satellite
communication payload performance once
the
satellite has reached its orbital slot. After their rough
ride aboard a launch vehicle, customers depend on
this solution to ensure their payload still works as well
in orbit as it did on the ground before launch.
ORBCOMM next generation OGx service:
Our no-fail software architecture ensures the
data flows constantly for critical applications,
such as machine-to-machine communications,
remote monitoring and environmental-sensing.
government of Saskatchewan for a small modular
reactor study, contributing to the diversification of our
customer base and our nuclear portfolio of services.
the software development
The software development teams’ ability to pivot to
a productive remote working environment was timely
as the software defined solution teams received a
string of new development projects that contributed
well through the year. Despite the remote working
environment,
team
continues to grow to support its large backlog.
Customers like Inmarsat and SiriusXM continue to rely
on Calian for the provision of highly complex solutions
for the critical services they offer. Using our systems
engineering approach, our subject matter experts
work closely with customers to provide cutting-edge
solutions to increase the performance of their satellite
networks.
Notable software solutions wins include a contract with
ORBCOMM Inc. (Nasdaq: ORBC), a global provider
of Internet of Things (IoT) solutions, to develop the
satellite ground gateway system for ORBCOMM’s
next-generation OGx service. This service will
provide industrial customers around the world with
increased global coverage, battery power, bandwidth
and speed. Critical applications, such as machine-
to- machine communications, remote monitoring
and environmental-sensing will take advantage of
the ORBCOMM next generation OGx service. Our
no-fail software architecture ensures the data flows
constantly for these critical services. Calian has built
multiple custom satellite communication gateways
over the last three decades and is proud to again be
selected as the supplier of choice for these types of
solutions.
With many of our customers sending new satellite
payloads into space, we have seen increased revenues
in our In-Orbit-Test Systems. These systems capitalize
on our deep understanding of satellite communications
payloads and our test and measurement software
to provide accurate measurement of satellite
communication payload performance once
the
satellite has reached its orbital slot. After their rough
ride aboard a launch vehicle, customers depend on
this solution to ensure their payload still works as well
in orbit as it did on the ground before launch.
Despite the continuing challenges of the COVID-19
pandemic, the Advanced Technologies segment had
a very strong 2021. As we move past the logistical and
supply chain disruptions of the past 18 months, we
continue to push forward with acquisition integration
and investment in leading technologies and solutions.
We anticipate continued organic and acquisitive
growth for many years to come.
ORBCOMM next generation OGx service:
Our no-fail software architecture ensures the
data flows constantly for critical applications,
such as machine-to-machine communications,
remote monitoring and environmental-sensing.
8
8
2021 Annual ReportCalian Group Ltd.2021 Annual ReportCalian Group Ltd. Health
Calian Health continued to play a significant role
in Canada’s COVID-19
response
throughout
2021, vaccinating more than 300,000 Canadians
at 21 pop-up clinics managed by Calian. Clinic
operations were supported by the Calian resource
management software platform. The Calian Health
team also expanded existing services—winning
contract extensions with the Government of Nunavut,
Indigenous Services Canada, Canadian Natural
Resources Limited and Canada Border Services
Agency, among others. These activities, combined
with new business in key markets, resulted in a strong
year.
Since the start of the pandemic, government agencies
have tapped Calian to provide healthcare solutions and
services. This year was no different. The Government
of Ontario chose Calian to administer the COVID-19
vaccine in 31 fly-in northern locations to Indigenous
community members and residents of First Nations
elder care homes. Indigenous Services Canada selected
Calian to provide COVID-19 screening and paramedic
services to keep Indigenous communities safe.
Calian Health was also selected by the Government
of Nunavut to provide telehealth services as part of
the government’s long-term pandemic preparedness
strategy. Calian manages a well-defined virtual
COVID-19 program as an integral part of the pandemic
response across the territory of Nunavut.
During 2021, Calian Health announced an expansion
of clinical trial and patient support programs (PSPs)
to pharmaceutical customers
in new markets,
representing a significant milestone in our service line
evolution and customer diversification strategy. The
expansion was the result of a 2020 pharmaceutical
clinical trial pilot program that far exceeded industry
target metrics. The pilot was implemented to re-start
previous, non-Calian programs that had experienced
ECG and blood monitoring interruptions due to lab
closures during the pandemic. The program quickly
surpassed key performance indicators for the industry
under challenging circumstances.
response
Health
Calian Health continued to play a significant role
throughout
in Canada’s COVID-19
2021, vaccinating more than 300,000 Canadians
at 21 pop-up clinics managed by Calian. Clinic
operations were supported by the Calian resource
management software platform. The Calian Health
team also expanded existing services—winning
contract extensions with the Government of Nunavut,
Indigenous Services Canada, Canadian Natural
Resources Limited and Canada Border Services
Agency, among others. These activities, combined
with new business in key markets, resulted in a strong
year.
Since the start of the pandemic, government agencies
have tapped Calian to provide healthcare solutions and
services. This year was no different. The Government
of Ontario chose Calian to administer the COVID-19
vaccine in 31 fly-in northern locations to Indigenous
community members and residents of First Nations
elder care homes. Indigenous Services Canada selected
Calian to provide COVID-19 screening and paramedic
services to keep Indigenous communities safe.
Calian Health was also selected by the Government
of Nunavut to provide telehealth services as part of
the government’s long-term pandemic preparedness
strategy. Calian manages a well-defined virtual
COVID-19 program as an integral part of the pandemic
response across the territory of Nunavut.
During 2021, Calian Health announced an expansion
of clinical trial and patient support programs (PSPs)
to pharmaceutical customers
in new markets,
representing a significant milestone in our service line
evolution and customer diversification strategy. The
expansion was the result of a 2020 pharmaceutical
clinical trial pilot program that far exceeded industry
target metrics. The pilot was implemented to re-start
previous, non-Calian programs that had experienced
ECG and blood monitoring interruptions due to lab
closures during the pandemic. The program quickly
surpassed key performance indicators for the industry
under challenging circumstances.
The success of the clinical trial pilot prompted
an expansion of our home healthcare services to
customers in new markets. By January 2021, Calian had
onboarded personnel internationally and welcomed its
The Government of Ontario: Calian administered
the COVID-19 vaccine in 31 fly-in northern locations
to Indigenous community members and residents of
First Nations elder care homes.
The success of the clinical trial pilot prompted
an expansion of our home healthcare services to
customers in new markets. By January 2021, Calian had
onboarded personnel internationally and welcomed its
The Government of Ontario: Calian administered
the COVID-19 vaccine in 31 fly-in northern locations
to Indigenous community members and residents of
First Nations elder care homes.
9
9
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report first patient enrollment in the Netherlands. Expansion
continued throughout 2021 into eight new markets
across the US and Europe.
The year also saw wins for the Calian Health team
in the area of psychological services. In August,
Calian Health won a multi-year contract to provide
psychological assessments to the RCMP, representing
the segment’s largest win to date for the provision
of psychological services. The Health team also
won a contract for psychological assessments for
Parliamentary Protective Services. Leveraging the
Alio software platform for the digitization of the intake
process and management of our psychological
assessment services represents a key part of our FY22
solution roadmap.
Through its Military Family Doctor Network program
(MFDN), Calian Health is providing on-demand home
care for adult dependents of active-duty military as
a pilot program. The Military Family Doctor Network,
created in 2016, has now linked more than 3,500
patients with family doctors. In September, Calian
Health also began supporting the St. Joseph’s
Operational Stress Injury Clinic, assisting veterans
who are vared for by the OSI clinic to secure a family
doctor in their home community.
Alongside
the continued support
for COVID-19
protection efforts, Calian Health continues to expand
its domestic and international infrastructure to offer a
suite of healthcare services. Calian now has offices in
strategic international locations to ensure local support
and to secure patient data in compliance with regional
and international privacy regulations. Today, Calian
Health operates across Canada, the US, Belgium,
France, Germany, Hungary, the Netherlands, Poland
and Spain, with plans to expand further in Europe and
North and South America in 2022.
Moving forward, evolving the Calian health technology
platform, and leveraging assets in the company’s
health and IT segments, will be a focus. We believe
that our capabilities in both health services and the
technology required to deliver healthcare services has
been greatly increased with the acquisition of Dapasoft
earlier this year, and Alio prior to that. We are excited
about the potential to become a major player in the
healthcare domain.
RCMP: Calian Health won a multi-
year contract to provide psychological
assessments to the RCMP, representing the
business unit’s largest win to date for the
provision of psychological services.
first patient enrollment in the Netherlands. Expansion
continued throughout 2021 into eight new markets
across the US and Europe.
The year also saw wins for the Calian Health team
in the area of psychological services. In August,
Calian Health won a multi-year contract to provide
psychological assessments to the RCMP, representing
the segment’s largest win to date for the provision
of psychological services. The Health team also
won a contract for psychological assessments for
Parliamentary Protective Services. Leveraging the
Alio software platform for the digitization of the intake
process and management of our psychological
assessment services represents a key part of our FY22
solution roadmap.
Through its Military Family Doctor Network program
(MFDN), Calian Health is providing on-demand home
care for adult dependents of active-duty military as
a pilot program. The Military Family Doctor Network,
created in 2016, has now linked more than 3,500
patients with family doctors. In September, Calian
Health also began supporting the St. Joseph’s
Operational Stress Injury Clinic, assisting veterans
who are vared for by the OSI clinic to secure a family
doctor in their home community.
the continued support
for COVID-19
Alongside
protection efforts, Calian Health continues to expand
its domestic and international infrastructure to offer a
suite of healthcare services. Calian now has offices in
strategic international locations to ensure local support
and to secure patient data in compliance with regional
and international privacy regulations. Today, Calian
Health operates across Canada, the US, Belgium,
France, Germany, Hungary, the Netherlands, Poland
and Spain, with plans to expand further in Europe and
North and South America in 2022.
Moving forward, evolving the Calian health technology
platform, and leveraging assets in the company’s
health and IT segments, will be a focus. We believe
that our capabilities in both health services and the
technology required to deliver healthcare services has
been greatly increased with the acquisition of Dapasoft
earlier this year, and Alio prior to that. We are excited
about the potential to become a major player in the
healthcare domain.
RCMP: Calian Health won a multi-
year contract to provide psychological
assessments to the RCMP, representing the
business unit’s largest win to date for the
provision of psychological services.
10
10
2021 Annual ReportCalian Group Ltd.2021 Annual ReportCalian Group Ltd. Learning
This year was pivotal for Calian Learning,
with two important acquisitions, a growing
presence in international markets with a
major push into Europe, and key strategic
wins of new contracts and renewals. While
the acquisitions contributed to our focus
on customer diversification and innovation,
contract renewals and expansion of our
complex training solutions led to successful
customer retention and continuous
improvement, rounding out a successful
year for all four growth pillars.
The acquisition of Cadence Consultancy Limited
(Cadence), a UK-based training firm with operations
across the North Atlantic Treaty Organization (NATO),
with a particular focus on the Joint Forces Training
Centre (JFTC) in Bydgoszcz, Poland, was a key move for
Calian Learning this year. Cadence designs, develops
and delivers complex training exercises for JFTC, one
of the two multi-national and multi- service collective
training centres in NATO, and to the wider NATO
alliances across Europe. It also delivers operational
training to members of the NATO Mission Iraq and the
NATO Resolute Support Mission in Afghanistan.
The acquisition of Cadence, along with our established
footprint
in Norway and Germany, boosts our
presence in the European market. The expansion into
international markets continues to be a key focus of
the Calian growth strategy.
In October, Calian announced the acquisition of
SimFront, a Canadian-based provider of military
training and simulation solutions. Calian and SimFront
have a 15-year collaborative relationship within
the Department of National Defence. The SimFront
Virtual Command and Control Interface (VCCI) tool
suite has served as the cornerstone for simulation-
to-command, control, communications, computers,
intelligence, surveillance and reconnaissance (C4ISR)
integration/interoperability and after-action review
(AAR). The VCCI tool suite, combined with Calian
MaestroEDE™, enables Calian to provide end-to-end
military training and simulation capabilities and pursue
new opportunities with customers seeking integration
and immersive training support.
In addition to strong defence experience, SimWave,
a SimFront wholly owned subsidiary, is a leader in
immersive training simulations technologies in the
skilled trades sectors and has been developing
simulation
training solutions since 2013. The
acquisition of SimFront diversifies the Calian Learning
portfolio and provides new opportunities for domestic
and international expansion.
SimFront: Calian announced the acquisition of
SimFront, a Canadian-based provider of military
training and simulation solutions.
Learning
This year was pivotal for Calian Learning,
with two important acquisitions, a growing
presence in international markets with a
major push into Europe, and key strategic
wins of new contracts and renewals. While
the acquisitions contributed to our focus
on customer diversification and innovation,
contract renewals and expansion of our
complex training solutions led to successful
customer retention and continuous
improvement, rounding out a successful
year for all four growth pillars.
The acquisition of Cadence Consultancy Limited
(Cadence), a UK-based training firm with operations
across the North Atlantic Treaty Organization (NATO),
with a particular focus on the Joint Forces Training
Centre (JFTC) in Bydgoszcz, Poland, was a key move for
Calian Learning this year. Cadence designs, develops
and delivers complex training exercises for JFTC, one
of the two multi-national and multi- service collective
training centres in NATO, and to the wider NATO
alliances across Europe. It also delivers operational
training to members of the NATO Mission Iraq and the
NATO Resolute Support Mission in Afghanistan.
The acquisition of Cadence, along with our established
footprint
in Norway and Germany, boosts our
presence in the European market. The expansion into
international markets continues to be a key focus of
the Calian growth strategy.
In October, Calian announced the acquisition of
SimFront, a Canadian-based provider of military
training and simulation solutions. Calian and SimFront
have a 15-year collaborative relationship within
the Department of National Defence. The SimFront
Virtual Command and Control Interface (VCCI) tool
suite has served as the cornerstone for simulation-
to-command, control, communications, computers,
intelligence, surveillance and reconnaissance (C4ISR)
integration/interoperability and after-action review
(AAR). The VCCI tool suite, combined with Calian
MaestroEDE™, enables Calian to provide end-to-end
military training and simulation capabilities and pursue
new opportunities with customers seeking integration
and immersive training support.
In addition to strong defence experience, SimWave,
a SimFront wholly owned subsidiary, is a leader in
immersive training simulations technologies in the
skilled trades sectors and has been developing
simulation
training solutions since 2013. The
acquisition of SimFront diversifies the Calian Learning
portfolio and provides new opportunities for domestic
and international expansion.
SimFront: Calian announced the acquisition of
SimFront, a Canadian-based provider of military
training and simulation solutions.
11
11
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report In March, Calian was awarded a Regional Individual
participants from Rapid Reaction Corps-France (HQ
Standing Offer (RISO) by the Department of National
RRC-FR) will practice newly acquired skills on French
Defence (DND) to provide research assistant services to
terrain in real-time.
the Royal Military College of Canada (RMC). While this
was not a new contract, it underpins our commitment
to customer partnership and delivery excellence and
aligns with our customer retention strategy. RMC has
been a trusted and important Calian customer for
more than 20 years.
HQ RRC-FR employs 450 personnel, including 70
non-French officers and non-commissioned officers
from 12 different EU and NATO countries. The French
Ministry of Defence chose Calian for this contract
based on a solid track record of managing complex
training requirements while ensuring reduced time to
Valued at up to $32.5M over five years, the RISO
competency. The expansion of the Calian footprint in
will see Calian provide research assistance to RMC
Europe resulted in increased staffing, including more
professors who carry out research and development in
than 20 starred military trainers.
engineering, science, social science and humanities.
Through this partnership, Calian will help to provide
high quality defence-related and
inquiry-based
research and leadership.
One of last year’s acquisitions, Comprehensive Training
Solutions International (CTSI) signed a contract with
the German Ministry of Defense to deliver a national,
multi-agency exercise. Beyond defence work
in
Later in the year, Calian announced another expansion
Europe, Calian is now actively reviewing and pursuing
of services to an existing customer, with international
opportunities in non-defence learning for the EU and
scope. Calian is already delivering strategic and
UN.
operational training to NATO Command Structure and
NATO Force Structure commands. This new contract
supports on-site training with the NATO Security Force
Assistance Centre of Excellence (NATO SFA COE), a
multinational entity with Italy, Albania and Slovenia as
sponsoring nations.
On the innovation front, several new projects are
on the go. The Emergency Management (EM) team
is expanding current emergency operations staff
training across an eLearning platform that can be
offered to any staff in municipal, provincial and federal
emergency management organizations when surge
Calian brings military expertise and a deep
requirements are needed. As a result of the pandemic,
understanding of management and
leadership
the need to prepare commercial organizations to
principles to the NATO SFA COE. The COE is
plan and manage crises became clear. The EM team
committed to knowledge-sharing among the alliance,
has developed a new resilience-as-a-solution (RaaS)
NATO nations and NATO partners in the field of SFA,
offering for corporate clients that provides the ability
building the skills of its personnel. It aims to improve
to choose crisis management tools and resources
the effectiveness of the alliance in promoting stability
to meet their business resilience requirements. The
and reconstruction efforts for conflict and post-conflict
EM team is also realigning its go-to-market strategy
scenarios.
Other European wins include a new contract with
the French Ministry of Defence (MoD) Land Forces.
The first multi-year international contract for Calian
to move from communities to regional districts for
emergency management planning solutions, allowing
for efficiencies
internally and, more
importantly,
improved coordination of services for our customers.
Learning, this project involves the development of
Calian Learning has had a strong year, with demand
scenario and exercise scripts for upskilling 60,000
for virtual learning and immersive training simulation at
troops as part of one of the French MoD’s core 2022-
an all-time high. Opportunities to expand further into
2023 defence exercise programs.
For this contract, Calian will produce a four-phase
program, linked to a common scenario, culminating
in a land-based exercise that combines simulated and
real manoeuvres. During this land-based exercise,
Europe and beyond, as well as entry into new verticals,
point to a healthy future for the Calian Learning
business segment.
In March, Calian was awarded a Regional Individual
Standing Offer (RISO) by the Department of National
Defence (DND) to provide research assistant services to
the Royal Military College of Canada (RMC). While this
was not a new contract, it underpins our commitment
to customer partnership and delivery excellence and
aligns with our customer retention strategy. RMC has
been a trusted and important Calian customer for
more than 20 years.
Valued at up to $32.5M over five years, the RISO
will see Calian provide research assistance to RMC
professors who carry out research and development in
engineering, science, social science and humanities.
Through this partnership, Calian will help to provide
inquiry-based
high quality defence-related and
research and leadership.
Later in the year, Calian announced another expansion
of services to an existing customer, with international
scope. Calian is already delivering strategic and
operational training to NATO Command Structure and
NATO Force Structure commands. This new contract
supports on-site training with the NATO Security Force
Assistance Centre of Excellence (NATO SFA COE), a
multinational entity with Italy, Albania and Slovenia as
sponsoring nations.
Calian brings military expertise and a deep
understanding of management and
leadership
principles to the NATO SFA COE. The COE is
committed to knowledge-sharing among the alliance,
NATO nations and NATO partners in the field of SFA,
building the skills of its personnel. It aims to improve
the effectiveness of the alliance in promoting stability
and reconstruction efforts for conflict and post-conflict
scenarios.
Other European wins include a new contract with
the French Ministry of Defence (MoD) Land Forces.
The first multi-year international contract for Calian
Learning, this project involves the development of
scenario and exercise scripts for upskilling 60,000
troops as part of one of the French MoD’s core 2022-
2023 defence exercise programs.
For this contract, Calian will produce a four-phase
program, linked to a common scenario, culminating
in a land-based exercise that combines simulated and
real manoeuvres. During this land-based exercise,
participants from Rapid Reaction Corps-France (HQ
RRC-FR) will practice newly acquired skills on French
terrain in real-time.
HQ RRC-FR employs 450 personnel, including 70
non-French officers and non-commissioned officers
from 12 different EU and NATO countries. The French
Ministry of Defence chose Calian for this contract
based on a solid track record of managing complex
training requirements while ensuring reduced time to
competency. The expansion of the Calian footprint in
Europe resulted in increased staffing, including more
than 20 starred military trainers.
One of last year’s acquisitions, Comprehensive Training
Solutions International (CTSI) signed a contract with
the German Ministry of Defense to deliver a national,
multi-agency exercise. Beyond defence work
in
Europe, Calian is now actively reviewing and pursuing
opportunities in non-defence learning for the EU and
UN.
On the innovation front, several new projects are
on the go. The Emergency Management (EM) team
is expanding current emergency operations staff
training across an eLearning platform that can be
offered to any staff in municipal, provincial and federal
emergency management organizations when surge
requirements are needed. As a result of the pandemic,
the need to prepare commercial organizations to
plan and manage crises became clear. The EM team
has developed a new resilience-as-a-solution (RaaS)
offering for corporate clients that provides the ability
to choose crisis management tools and resources
to meet their business resilience requirements. The
EM team is also realigning its go-to-market strategy
to move from communities to regional districts for
emergency management planning solutions, allowing
for efficiencies
importantly,
improved coordination of services for our customers.
internally and, more
Calian Learning has had a strong year, with demand
for virtual learning and immersive training simulation at
an all-time high. Opportunities to expand further into
Europe and beyond, as well as entry into new verticals,
point to a healthy future for the Calian Learning
business segment.
12
12
2021 Annual ReportCalian Group Ltd.2021 Annual ReportCalian Group Ltd. IT and Cyber Solutions
Calian made bold moves in 2021, with a
major acquisition that added new depth
and breadth to our offering, a strategic
addition to the senior leadership team and
expanded support for new and existing
customers in the public and private
sectors. The integration of RF emission
security firm EMSEC, and a series of wins
in virtual healthcare and health IT solutions
contributed to a strong year for the IT and
Cyber Solutions segment.
In July, Calian announced the appointment of Sacha
Gera as President, IT and Cyber Solutions, assuming
leadership from Sandra Cote on her retirement at the
end of 2021. Gera has 20 years of experience working
in technology for both start-ups and large multinational
organizations, such as IBM, Nortel and CGI. His
expertise lies in leading SaaS innovators towards
achieving escape velocity, recurring revenue growth
and profitability. Most recently, he led the $115M
USD spinout of SaaS-based Kandy.io from Ribbon
Communications. The addition of Gera to the Calian
senior leadership team marks a transition to the next
phase of growth. He will focus on building the portfolio
and positioning Calian as a cyber and cloud leader in
the Canadian, US and European markets.
Calian continued to pursue an aggressive growth
strategy in 2021, with the acquisition of Dapasoft and
its subsidiary, iSecurity. Dapasoft is a Microsoft Gold
Partner and Microsoft Canada Healthcare Impact
award winner, and iSecurity is a full-service MSSP
(Managed Security Services Provider). This was
the largest acquisition Calian has made to date and
enables Calian to offer a variety of XaaS (as a Service)
platforms including: a virtual healthcare platform
built upon a Microsoft Teams and Azure solution, a
healthcare IT digital transformation PaaS (Platform as
a Service), and a cybersecurity SIEM (Security Incident
Event Management) to facilitate SOCaaS (Security
Operations as a Service). In addition, the acquisition
enables the segment to expand our range of cloud
migration, cybersecurity and managed services
solutions while also providing Calian the capacity
to scale and meet increasing customer demand for
secure digital transformation.
Through Dapasoft, Calian benefits
from
the
convergence of two healthcare industry trends:
the need for virtual care technologies that enable a
seamless patient experience and the rising pressure
on hospitals and health teams to increase efficiencies
and scale expertise across their networks through
care collaboration. Early in the COVID-19 pandemic,
customers quickly began adopting virtual care as part
of their delivery. Now, they are looking for a strategic
partner to help them implement a sustainable model
that leverages existing investments while adapting
to the changing needs of their communities. At
the foundation of this future-ready approach is the
growing demand for healthcare platforms that can
support integrated care models and easily extend and
customize for new services and partners.
An example of this integrated care model is the
Dapasoft solution that went live in September as a
pilot program for Fraser Health in British Columbia.
The solution
incorporates
integration with
the
electronic medical record (EMR) system to eliminate
the need for manual patient data entry. It reduces the
time spent on administrative tasks and improves the
patient experience with better coordination of care
and the option to include multiple providers and family
members in a single session.
The acquisition of Dapasoft places Calian in an
advantageous position at the intersection of health
and information technology, producing opportunities
to contribute solutions for better health management
in both the public and private sector. This year Calian
signed a multi-year extension to our agreement with
BORN Ontario. Dapasoft was selected to enable
comprehensive maternal-infant health information
by integrating data from five providers into a single
system. This will ensure that each baby has received all
relevant testing and will improve maternal-child health
outcomes in the province. Through this project Calian
has helped to provide better care for families in Ontario
and position the province as a leader in prenatal and
newborn research.
IT and Cyber Solutions
Calian made bold moves in 2021, with a
major acquisition that added new depth
and breadth to our offering, a strategic
addition to the senior leadership team and
expanded support for new and existing
customers in the public and private
sectors. The integration of RF emission
security firm EMSEC, and a series of wins
in virtual healthcare and health IT solutions
contributed to a strong year for the IT and
Cyber Solutions segment.
In July, Calian announced the appointment of Sacha
Gera as President, IT and Cyber Solutions, assuming
leadership from Sandra Cote on her retirement at the
end of 2021. Gera has 20 years of experience working
in technology for both start-ups and large multinational
organizations, such as IBM, Nortel and CGI. His
expertise lies in leading SaaS innovators towards
achieving escape velocity, recurring revenue growth
and profitability. Most recently, he led the $115M
USD spinout of SaaS-based Kandy.io from Ribbon
Communications. The addition of Gera to the Calian
senior leadership team marks a transition to the next
phase of growth. He will focus on building the portfolio
and positioning Calian as a cyber and cloud leader in
the Canadian, US and European markets.
Calian continued to pursue an aggressive growth
strategy in 2021, with the acquisition of Dapasoft and
its subsidiary, iSecurity. Dapasoft is a Microsoft Gold
Partner and Microsoft Canada Healthcare Impact
award winner, and iSecurity is a full-service MSSP
(Managed Security Services Provider). This was
the largest acquisition Calian has made to date and
enables Calian to offer a variety of XaaS (as a Service)
platforms including: a virtual healthcare platform
built upon a Microsoft Teams and Azure solution, a
healthcare IT digital transformation PaaS (Platform as
a Service), and a cybersecurity SIEM (Security Incident
Event Management) to facilitate SOCaaS (Security
Operations as a Service). In addition, the acquisition
enables the segment to expand our range of cloud
migration, cybersecurity and managed services
solutions while also providing Calian the capacity
to scale and meet increasing customer demand for
secure digital transformation.
from
the
Through Dapasoft, Calian benefits
convergence of two healthcare industry trends:
the need for virtual care technologies that enable a
seamless patient experience and the rising pressure
on hospitals and health teams to increase efficiencies
and scale expertise across their networks through
care collaboration. Early in the COVID-19 pandemic,
customers quickly began adopting virtual care as part
of their delivery. Now, they are looking for a strategic
partner to help them implement a sustainable model
that leverages existing investments while adapting
to the changing needs of their communities. At
the foundation of this future-ready approach is the
growing demand for healthcare platforms that can
support integrated care models and easily extend and
customize for new services and partners.
incorporates
An example of this integrated care model is the
Dapasoft solution that went live in September as a
pilot program for Fraser Health in British Columbia.
The solution
the
electronic medical record (EMR) system to eliminate
the need for manual patient data entry. It reduces the
time spent on administrative tasks and improves the
patient experience with better coordination of care
and the option to include multiple providers and family
members in a single session.
integration with
The acquisition of Dapasoft places Calian in an
advantageous position at the intersection of health
and information technology, producing opportunities
to contribute solutions for better health management
in both the public and private sector. This year Calian
signed a multi-year extension to our agreement with
BORN Ontario. Dapasoft was selected to enable
comprehensive maternal-infant health information
by integrating data from five providers into a single
system. This will ensure that each baby has received all
relevant testing and will improve maternal-child health
outcomes in the province. Through this project Calian
has helped to provide better care for families in Ontario
and position the province as a leader in prenatal and
newborn research.
13
13
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report The new iSecurity C 360 managed service platform was
With new business opportunities resulting from
launched in August. iSecurity was selected by Health
the EMSEC, Dapasoft and iSecurity acquisitions
Science North for an Ontario Health-funded project to
and new leadership at the helm, the IT and Cyber
develop one of three health regional security operations
Solutions operating segment is delivering on the
centres in Ontario, using the C 360 platform. More than
Calian commitment to diversify our customer base.
30 hospitals and health care entities will be protected
The ability to offer new, innovative solutions through
in the northeast region of Ontario using iSecurity
our acquisitions as well as expand and develop our
C 360 platform. The new platform allows clients to
existing products and services for new markets places
leverage their existing investments in cybersecurity
Calian at the leading edge of the IT and cybersecurity
without the need for costly additional monitoring and
industry.
incident response software. It provides a 360-degree
view of existing security devices, cybersecurity threats
and vulnerabilities both for on-premises and cloud
enterprise assets.
iSecurity also successfully launched its ransomware
simulation software tool that allows customers to
train staff under the scenario of a ransomware attack.
The iSecurity simulated malware was developed
to bypass security controls without harm to the
client’s environment. Limited and customized level of
simulated damage can be deployed depending on the
client’s needs. This is huge step in our capabilities to
help organizations prepare for a real cyberattack.
iSecurity enhances our ability to deliver consulting
and advisory services with a focus on cybersecurity,
risk management, enterprise security architecture
and security solution deployment. Our already strong
presence in government has been enhanced with
the addition of iSecurity customers in the healthcare,
insurance, retail and private sector markets.
The Calian advisory services team has had recent wins
with healthcare entities in the Ontario government,
municipal governments,
international
insurance
companies, Canadian hospitals, labs and international
retail organizations.
In the cybersecurity space, the integration of EMSEC
under the Calian brand was completed in September.
This step was crucial to incorporating the company’s
deep experience providing emissions security
solutions into the Calian services spectrum. Through
EMSEC, Calian offers products, certifications, in-field
platform testing, emission security vulnerability studies
and solutions. With ongoing threats to cybersecurity
and rising risks for IP theft, we anticipate significant
demand in both the public and private sectors for RF
emission security solutions.
Dapasoft: The Dapasoft acquisition places
Calian in an advantageous position at
the intersection of health and information
technology, producing opportunities to
contribute solutions for better health
management in both the public and private
sectors.
The new iSecurity C 360 managed service platform was
launched in August. iSecurity was selected by Health
Science North for an Ontario Health-funded project to
develop one of three health regional security operations
centres in Ontario, using the C 360 platform. More than
30 hospitals and health care entities will be protected
in the northeast region of Ontario using iSecurity
C 360 platform. The new platform allows clients to
leverage their existing investments in cybersecurity
without the need for costly additional monitoring and
incident response software. It provides a 360-degree
view of existing security devices, cybersecurity threats
and vulnerabilities both for on-premises and cloud
enterprise assets.
iSecurity also successfully launched its ransomware
simulation software tool that allows customers to
train staff under the scenario of a ransomware attack.
The iSecurity simulated malware was developed
to bypass security controls without harm to the
client’s environment. Limited and customized level of
simulated damage can be deployed depending on the
client’s needs. This is huge step in our capabilities to
help organizations prepare for a real cyberattack.
iSecurity enhances our ability to deliver consulting
and advisory services with a focus on cybersecurity,
risk management, enterprise security architecture
and security solution deployment. Our already strong
presence in government has been enhanced with
the addition of iSecurity customers in the healthcare,
insurance, retail and private sector markets.
The Calian advisory services team has had recent wins
with healthcare entities in the Ontario government,
municipal governments,
insurance
companies, Canadian hospitals, labs and international
retail organizations.
international
In the cybersecurity space, the integration of EMSEC
under the Calian brand was completed in September.
This step was crucial to incorporating the company’s
deep experience providing emissions security
solutions into the Calian services spectrum. Through
EMSEC, Calian offers products, certifications, in-field
platform testing, emission security vulnerability studies
and solutions. With ongoing threats to cybersecurity
and rising risks for IP theft, we anticipate significant
demand in both the public and private sectors for RF
emission security solutions.
14
14
With new business opportunities resulting from
the EMSEC, Dapasoft and iSecurity acquisitions
and new leadership at the helm, the IT and Cyber
Solutions operating segment is delivering on the
Calian commitment to diversify our customer base.
The ability to offer new, innovative solutions through
our acquisitions as well as expand and develop our
existing products and services for new markets places
Calian at the leading edge of the IT and cybersecurity
industry.
Dapasoft: The Dapasoft acquisition places
Calian in an advantageous position at
the intersection of health and information
technology, producing opportunities to
contribute solutions for better health
management in both the public and private
sectors.
2021 Annual ReportCalian Group Ltd.2021 Annual ReportCalian Group Ltd. How Our Segments Performed
How Our Segments Performed
Health
Advanced Technologies
training, technical services
Core business: Engineering services, products,
Core business: Health services, psychological
solutions, software development, manufacturing,
assessment services, medical property management
Markets: Satellite communications, aerospace,
defence, cable networks, nuclear power, agriculture,
government, electric vehicle manufacturing
Customers: SiriusXM Satellite Radio, Inmarsat,
ORBCOMM, Department of National Defence, MDA
Nunavut
Markets: Defence, law enforcement and security,
corrections, energy, occupational safety
Customers: Department of National Defence,
Loblaw, SNC Lavalin, RCMP, Canada Border
Services Agency, Otsuka, Janssen, Government of
Advanced Technologies
Core business: Engineering services, products,
solutions, software development, manufacturing,
training, technical services
Markets: Satellite communications, aerospace,
defence, cable networks, nuclear power, agriculture,
government, electric vehicle manufacturing
Customers: SiriusXM Satellite Radio, Inmarsat,
ORBCOMM, Department of National Defence, MDA
2021
2020
2021
2020
2021
2020
Revenues:
Gross margin (%):
EBITDA(1):
EBITDA (%):
Backlog(2):
$ 166,591 $ 153,382
Revenues:
$ 194,936 $ 163,035
25%
22%
Gross margin (%):
$
20,855
$ 21,003
13%
14%
$ 150,664
$ 143,400
EBITDA(1):
EBITDA (%):
Backlog(2):
$ 34,786
$ 23,396
25%
18%
20%
14%
$ 775,747
$822,600
Revenues:
Gross margin (%):
EBITDA(1):
EBITDA (%):
Backlog(2):
$ 166,591 $ 153,382
22%
$ 21,003
14%
$ 143,400
25%
20,855
13%
$ 150,664
$
Health
Core business: Health services, psychological
assessment services, medical property management
Markets: Defence, law enforcement and security,
corrections, energy, occupational safety
Customers: Department of National Defence,
Loblaw, SNC Lavalin, RCMP, Canada Border
Services Agency, Otsuka, Janssen, Government of
Nunavut
Revenues:
Gross margin (%):
EBITDA(1):
EBITDA (%):
Backlog(2):
2021
2020
$ 194,936 $ 163,035
20%
$ 23,396
14%
$822,600
25%
$ 34,786
18%
$ 775,747
Learning
IT and Cyber Solutions
Learning
IT and Cyber Solutions
Core business: Custom training, emergency
management solutions, software products,
consulting, course development
Core business: IT consulting, IT and cloud
solutions, software development, SAP consulting,
cybersecurity solutions
Core business: Custom training, emergency
management solutions, software products,
consulting, course development
Core business: IT consulting, IT and cloud
solutions, software development, SAP consulting,
cybersecurity solutions
Markets: Defence, health, energy, government,
Markets: Government, defence, private sector
Indigenous communities
Customers: Department of National Defence,
Canadian Armed Forces, NATO, French Ministry of
Ontario, Fraser Health
Defence, Bruce Power
Customers: Shared Services Canada, General
Dynamics, William Osler Health System, BORN
Markets: Defence, health, energy, government,
Indigenous communities
Customers: Department of National Defence,
Canadian Armed Forces, NATO, French Ministry of
Defence, Bruce Power
Markets: Government, defence, private sector
Customers: Shared Services Canada, General
Dynamics, William Osler Health System, BORN
Ontario, Fraser Health
2021
2020
2021
2020
2021
2020
Revenues:
Gross margin (%):
EBITDA(1):
EBITDA (%):
Backlog(2):
23%
$ 74,622 $ 57,834
22%
$ 12,435 $ 8,582
15%
$ 276,100
17%
$ 264,711
Revenues:
Gross margin (%):
EBITDA(1):
EBITDA (%):
Backlog(2):
24%
$ 82,255 $ 58,069
18%
$ 9,978 $ 4,787
8%
$ 65,900
12%
$ 78,998
Revenues:
Gross margin (%):
EBITDA(1):
EBITDA (%):
Backlog(2):
$ 74,622 $ 57,834
Revenues:
23%
22%
Gross margin (%):
$ 12,435 $ 8,582
17%
15%
$ 264,711
$ 276,100
EBITDA(1):
EBITDA (%):
Backlog(2):
2021
2020
$ 82,255 $ 58,069
24%
18%
$ 9,978 $ 4,787
12%
8%
$ 78,998
$ 65,900
Canadian dollars in thousands
(1) Excludes corporate costs; see financial statements for reconciliation.
(2) Total backlog is $1.5 billion (FY20 $1.5 billion) and realizable backlog is $1.3 billion (FY20 $1.3 billion).
Canadian dollars in thousands
(1) Excludes corporate costs; see financial statements for reconciliation.
(2) Total backlog is $1.5 billion (FY20 $1.5 billion) and realizable backlog is $1.3 billion (FY20 $1.3 billion).
15
15
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report
People
Driving Growth
A small selection of the many people at
Calian who are advancing our innovation
and growth, in Canada and abroad.
Matt Thomas
Head of Business Development at newly acquired SimWave
(SimFront), Matt Thomas is part of a team offering leading-
edge immersive training to customers in the Royal Canadian
Navy, hospitals, post-secondary
institutions and more.
SimWave proprietary software powers innovative, immersive
training technology like the Oculus Quest 2 and the Microsoft
HoloLens 2—technology
that helps customers achieve
readiness and thus, confidence. And now, Matt is helping
make this accessible to customers worldwide, from where it all
started in Ottawa, Canada.
People
Driving Growth
A small selection of the many people at
Calian who are advancing our innovation
and growth, in Canada and abroad.
Matt Thomas
Head of Business Development at newly acquired SimWave
(SimFront), Matt Thomas is part of a team offering leading-
edge immersive training to customers in the Royal Canadian
Navy, hospitals, post-secondary
institutions and more.
SimWave proprietary software powers innovative, immersive
training technology like the Oculus Quest 2 and the Microsoft
HoloLens 2—technology
that helps customers achieve
readiness and thus, confidence. And now, Matt is helping
make this accessible to customers worldwide, from where it all
started in Ottawa, Canada.
Alexandra McCabe
As a Health Account Executive, Alexandra McCabe’s
role became even more crucial during the pandemic,
as she helped mobilize Calian health service providers
for COVID-19 screening, quarantine management,
testing, mental health support and administration of over
300,000 vaccinations to Canadians. Alexandra and team
have been instrumental in supporting customers with
pandemic response. And the innovation doesn’t stop—
Alexandra is committed to improving health services to
keep Calian customers safe today and tomorrow.
Alexandra McCabe
As a Health Account Executive, Alexandra McCabe’s
role became even more crucial during the pandemic,
as she helped mobilize Calian health service providers
for COVID-19 screening, quarantine management,
testing, mental health support and administration of over
300,000 vaccinations to Canadians. Alexandra and team
have been instrumental in supporting customers with
pandemic response. And the innovation doesn’t stop—
Alexandra is committed to improving health services to
keep Calian customers safe today and tomorrow.
16 2021 Annual Report
16 2021 Annual Report
Justin Gerein
Justin Gerein started out on a two-person team at Calian,
involved
in all aspects of
the development of high-
performance composite antennas. Built from the ground
up, this team has since grown to occupy a large facility in
Saskatchewan. Now responsible for developing and growing
the engineering department, Justin helps introduce new,
cutting-edge manufacturing processes and technologies, ones
that help customers solve unique problems. When he’s not
brainstorming how to improve the design and production of
high-precision antennas, Justin introduces university students
to robotics through rover competitions, as part of the Canadian
International Rover Challenge (CIRC).
in all aspects of
Justin Gerein
Justin Gerein started out on a two-person team at Calian,
involved
the development of high-
performance composite antennas. Built from the ground
up, this team has since grown to occupy a large facility in
Saskatchewan. Now responsible for developing and growing
the engineering department, Justin helps introduce new,
cutting-edge manufacturing processes and technologies, ones
that help customers solve unique problems. When he’s not
brainstorming how to improve the design and production of
high-precision antennas, Justin introduces university students
to robotics through rover competitions, as part of the Canadian
International Rover Challenge (CIRC).
Eric Norton
As a Technology Leader, Eric Norton believes that the most
effective and sustainable solutions are created in collaboration
with customers. MaestroEDE™, an exercise management
platform and toolset for complex training environments, is
one of these solutions. As customer problems evolve, so does
MaestroEDE™. This is only one of the various, innovative tools
Eric has helped build as part of his work at the Canadian Army
Simulation Centre. Eric calls his work on MaestroEDE™ a “real
privilege and honour” as he’s able to deliver better learning
outcomes, more efficiently, for customers.
Eric Norton
As a Technology Leader, Eric Norton believes that the most
effective and sustainable solutions are created in collaboration
with customers. MaestroEDE™, an exercise management
platform and toolset for complex training environments, is
one of these solutions. As customer problems evolve, so does
MaestroEDE™. This is only one of the various, innovative tools
Eric has helped build as part of his work at the Canadian Army
Simulation Centre. Eric calls his work on MaestroEDE™ a “real
privilege and honour” as he’s able to deliver better learning
outcomes, more efficiently, for customers.
Calian Group Ltd.
Calian Group Ltd.
2021 Annual Report 17
2020 Annual Report 17
Calian Group Ltd.
Calian Group Ltd.
2020 Annual Report 17
2021 Annual Report 17
Greg Mcleod
With an uncompromising focus on customer satisfaction, Greg
Mcleod and his team responded to the increased national demand
for healthcare professionals. These healthcare professionals
delivered COVID-19 rapid testing as well as vaccination services
to remote Northern and Indigenous communities. In addition to
playing a key role in pandemic response, Greg has aided the
integration of patient support programs and clinical research
projects from the 2020 acquisition of Alio Health and Allphase
Clinical Research.
Greg Mcleod
With an uncompromising focus on customer satisfaction, Greg
Mcleod and his team responded to the increased national demand
for healthcare professionals. These healthcare professionals
delivered COVID-19 rapid testing as well as vaccination services
to remote Northern and Indigenous communities. In addition to
playing a key role in pandemic response, Greg has aided the
integration of patient support programs and clinical research
projects from the 2020 acquisition of Alio Health and Allphase
Clinical Research.
Michele Bedford
When Michele Bedford joined Calian as Chief Commercial
Officer, she recognized the impact a single company brand
could have for a company with four operating segments and
multiple sub-brands. A single company brand allows Calian
to build upon deeply entrenched customer relationships
while expanding to new markets. It encompasses the Calian
promise to help keep the world moving forward. To move
forward, the world must have confidence in the ability to
communicate, innovate, learn and lead safe and healthy
lives. Calian helps our customers achieve that confidence.
Michele Bedford
When Michele Bedford joined Calian as Chief Commercial
Officer, she recognized the impact a single company brand
could have for a company with four operating segments and
multiple sub-brands. A single company brand allows Calian
to build upon deeply entrenched customer relationships
while expanding to new markets. It encompasses the Calian
promise to help keep the world moving forward. To move
forward, the world must have confidence in the ability to
communicate, innovate, learn and lead safe and healthy
lives. Calian helps our customers achieve that confidence.
18 2021 Annual Report
Calian Group Ltd.
18 2021 Annual Report
Calian Group Ltd.
Patrick Thera
Over the past 35 years, Patrick Thera has played a key role in
significant Calian innovations. His early work on communications
systems not only provided the game-changing digital satellite
communications, but it also helped pivot Calian towards
software-defined solutions. Leading a team in Saskatoon, Patrick
helped customers optimize their use of limited satellite spectrum
and power resources to service end users across their fleet of
satellites. Three decades later, Patrick heads up the Advanced
Technologies segment and is leading the charge to innovate for
new customers and new markets.
Patrick Thera
Over the past 35 years, Patrick Thera has played a key role in
significant Calian innovations. His early work on communications
systems not only provided the game-changing digital satellite
communications, but it also helped pivot Calian towards
software-defined solutions. Leading a team in Saskatoon, Patrick
helped customers optimize their use of limited satellite spectrum
and power resources to service end users across their fleet of
satellites. Three decades later, Patrick heads up the Advanced
Technologies segment and is leading the charge to innovate for
new customers and new markets.
Paula Coutts-Hills
While world travel stalled during COVID-19, our customers’
need
for mission-critical communications
installations
persisted. Calian needed a way to get experts to and
from customer sites safely and in accordance with travel
guidelines. Paula Coutts-Hills, Executive Assistant,
Advanced Technologies stepped up to the challenge,
navigating multiple organizations—US Homeland Security,
Centers for Disease Control and Prevention, Canada
Border Services Agency—as well Foreign Consulates and
Governments researching Entry Requirements and the ever-
changing COVID-19 restrictions. Paula’s work behind the
scenes as a 24/7 “lifeline” for Calian travellers ensured their
safety as they completed important work worldwide, from
Australia to South Korea and everywhere in between.
for mission-critical communications
Paula Coutts-Hills
While world travel stalled during COVID-19, our customers’
need
installations
persisted. Calian needed a way to get experts to and
from customer sites safely and in accordance with travel
guidelines. Paula Coutts-Hills, Executive Assistant,
Advanced Technologies stepped up to the challenge,
navigating multiple organizations—US Homeland Security,
Centers for Disease Control and Prevention, Canada
Border Services Agency—as well Foreign Consulates and
Governments researching Entry Requirements and the ever-
changing COVID-19 restrictions. Paula’s work behind the
scenes as a 24/7 “lifeline” for Calian travellers ensured their
safety as they completed important work worldwide, from
Australia to South Korea and everywhere in between.
19
19
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report Social Impact and ESG
Social Impact and ESG
Calian is committed to making life better
for all Canadians and the global community
through initiatives that are aligned with
our company mission to help the world
communicate, innovate, learn and lead safe
and healthy lives—today and tomorrow. This
year, that commitment has translated into
several projects addressing the pandemic,
programs for military, veterans and their
families, and initiatives for engagement and
reconciliation with Indigenous communities.
ESG
expanding our disclosures to include more robust
sustainability measures based on
international
standards, such as IFRS.
Supporting Employee Wellbeing
Like many businesses worldwide, the COVID-19
pandemic has affected Calian. We are proud that we
were able to maintain our full workforce throughout
the pandemic, at a time when many businesses were
forced to layoff staff.
While we’ve had to adapt many aspects of our day-to-
day operations to meet the demands of a COVID-19
environment, our employees have been our top priority.
To protect their health and safety, all Calian employees
The Calian leadership team considers Environmental,
who could work remotely have done so this year. Where
Social and Corporate Governance (ESG) to be a core
crucial teams needed to be on site for manufacturing
responsibility of the organization and seeks to have
and other areas where remote work isn’t possible, all
a significant and meaningful impact. We are in the
public health recommendations have been enforced,
process of mapping out a new strategic plan aligned
including social distancing, masks, hand sanitizer and
to our mission and vision that balances the three ‘P’s
reduced contact with others whenever possible.
Recognizing the new paradigm of remote and flexible
work arrangements, Calian engaged a third party to
survey employees to find out their work preference.
of ESG: people, profit and planet. Our ESG journey
has six phases: Identify ESG Focus, Develop Board
Mandate, Share Our Story, Define Key Metrics, Set
Long-Term Goals, and Achieve Long-Term Goals.
Although our ESG journey is still in early stages, we
have already identified our focus on connecting,
communicating and facilitating learning, and keeping
our population safe and our employees engaged. As
we examine our environmental impact, we are looking
for ways to address climate change and transition
to a low carbon economy. We are also developing a
roadmap to integrated ESG reporting, based on best
practices and transparency.
To frame our priorities and plans, we have chosen to
adopt seven of the UN Sustainable Development Goals.
Our environmental plans will focus on responsible
consumption and production. To frame the social
aspects of our strategy, we will incorporate industry
innovation and
infrastructure, quality education,
good health and wellbeing, and sustainable cities
and communities. To ensure maximum benefit to our
people, we are focusing on decent work and economic
growth, and gender equality.
To ensure strong governance, we will continue to
deliver transparent financial reporting with an eye to
Diversity and inclusion: More than 38 per
cent of our employees are women, and women
represent 33 per cent of our management team.
Calian is committed to making life better
for all Canadians and the global community
through initiatives that are aligned with
our company mission to help the world
communicate, innovate, learn and lead safe
and healthy lives—today and tomorrow. This
year, that commitment has translated into
several projects addressing the pandemic,
programs for military, veterans and their
families, and initiatives for engagement and
reconciliation with Indigenous communities.
ESG
The Calian leadership team considers Environmental,
Social and Corporate Governance (ESG) to be a core
responsibility of the organization and seeks to have
a significant and meaningful impact. We are in the
process of mapping out a new strategic plan aligned
to our mission and vision that balances the three ‘P’s
of ESG: people, profit and planet. Our ESG journey
has six phases: Identify ESG Focus, Develop Board
Mandate, Share Our Story, Define Key Metrics, Set
Long-Term Goals, and Achieve Long-Term Goals.
Although our ESG journey is still in early stages, we
have already identified our focus on connecting,
communicating and facilitating learning, and keeping
our population safe and our employees engaged. As
we examine our environmental impact, we are looking
for ways to address climate change and transition
to a low carbon economy. We are also developing a
roadmap to integrated ESG reporting, based on best
practices and transparency.
To frame our priorities and plans, we have chosen to
adopt seven of the UN Sustainable Development Goals.
Our environmental plans will focus on responsible
consumption and production. To frame the social
aspects of our strategy, we will incorporate industry
innovation and
infrastructure, quality education,
good health and wellbeing, and sustainable cities
and communities. To ensure maximum benefit to our
people, we are focusing on decent work and economic
growth, and gender equality.
To ensure strong governance, we will continue to
deliver transparent financial reporting with an eye to
expanding our disclosures to include more robust
sustainability measures based on
international
standards, such as IFRS.
Supporting Employee Wellbeing
Like many businesses worldwide, the COVID-19
pandemic has affected Calian. We are proud that we
were able to maintain our full workforce throughout
the pandemic, at a time when many businesses were
forced to layoff staff.
While we’ve had to adapt many aspects of our day-to-
day operations to meet the demands of a COVID-19
environment, our employees have been our top priority.
To protect their health and safety, all Calian employees
who could work remotely have done so this year. Where
crucial teams needed to be on site for manufacturing
and other areas where remote work isn’t possible, all
public health recommendations have been enforced,
including social distancing, masks, hand sanitizer and
reduced contact with others whenever possible.
Recognizing the new paradigm of remote and flexible
work arrangements, Calian engaged a third party to
survey employees to find out their work preference.
Diversity and inclusion: More than 38 per
cent of our employees are women, and women
represent 33 per cent of our management team.
20
20
2021 Annual ReportCalian Group Ltd.2021 Annual ReportCalian Group Ltd. This will allow us to plan a future that aligns with their
during COVID-19. To ensure culturally appropriate care,
wishes and expectations. Many of our employees
Calian nurses delivering services to the community are
indicated that they don’t want to return to the workplace
all provided with specialized training. Many nurses
full-time, and we are taking this opportunity to assess
commented on the pride they felt providing support
the impact this will have on our facilities, costs and
to these remote communities during the pandemic.
carbon footprint.
While Calian always prioritizes employee mental
health, it has been even more critical during the
Calian also funded a bursary for Indigenous or black
students enrolled in the Northern Alberta Institute of
Technology (NAIT) emergency management program.
pandemic. We recognize the ongoing stressors faced
In response to the heartbreaking discoveries on the
by our employees balancing work, family and personal
sites of residential schools, Calian has embarked upon
well-being in a crisis that has gone on far longer than
several projects focused on Indigenous engagement. In
anyone could have predicted. Early in the year, we
support of the National Day of Truth and Reconciliation
conducted a mental health survey to gauge the health
on September 30th, Calian provided sponsorship,
and perceived health of Calian employees. Feedback
funding and volunteers for Remember Me: A National
from our survey informed an internal communications
Day of Remembrance, hosted by the Indigenous
plan to encourage the use of our EAP and mental
Arts Collective of Canada and Every Child Matters.
health resources, which received positive feedback.
Other initiatives include program management and
Calian is committed to diversity and inclusion in
our workforce. We are proud that more than 38 per
cent of our employees are women, and that women
represent 33 per cent of our management team.
proposal development, risk planning and after-action
review, nuclear preparedness and rehearsals, water
and wastewater planning, health services and custom
training for Indigenous communities.
Calian is serious about providing a workplace that is
Calian is a Leadership Circle member of Indigenous
free of discrimination and harassment and ensures
Works, a non-profit that works to improve the
equal opportunity in all stages of employment. During
inclusion and engagement of Indigenous people in
the past fiscal year, Calian hired 39 retired military
the Canadian economy. As a charter member of the
members and 12 military spouses.
Indigenous Community Support
Support for Indigenous communities across Canada
has expanded in 2021. In 2018, Calian established an
Indigenous working group with members from all our
business segments participating in discussions about
Indigenous engagement. We are currently working
with Indigenous communities to deliver health services
and virtual care solutions, emergency planning,
environmental management and training.
In 2021, we were proud to answer the call for help
with COVID-19 screening and vaccination distribution
in communities across Canada. Operation Remote
Immunity, saw Calian dispatch more than 70 nurses to
25 fly-in communities in Northern Ontario and another
30 nurses to Nunavut, vaccinating more than 25,000
community members in total.
Calian also delivered care packages to families in
Nunavut who were in quarantine over the holidays, and
books and blankets for children and youth of Nunavut
Luminary initiative, Calian participated in working
groups to develop an Indigenous innovation strategy—
an Indigenous-led research ecosystem to support
Indigenous economic transformation and wellbeing.
Calian is also a supporting member of the Canadian
Council for Aboriginal Business and the Bruce Power
Indigenous Relations Supplier Network.
Protecting the Health of Canadians and Military
Families
The COVID-19 pandemic provided ample opportunity
for Calian to contribute health and safety personnel,
expertise and equipment to support vaccination and
testing for Canadians across the country. Calian has
set up pop-up clinics to provide vaccinations in some
of the most vulnerable areas of Toronto. So far, more
than 200 Calian nurses have administered more than
61,000 vaccinations in these hard-hit neighbourhoods.
Calian also supplied staffing and supplies for border
entry testing at the Coutts land border crossing and the
Calgary International Airport, administering 105,000
COVID-19 tests in total.
This will allow us to plan a future that aligns with their
wishes and expectations. Many of our employees
indicated that they don’t want to return to the workplace
full-time, and we are taking this opportunity to assess
the impact this will have on our facilities, costs and
carbon footprint.
While Calian always prioritizes employee mental
health, it has been even more critical during the
pandemic. We recognize the ongoing stressors faced
by our employees balancing work, family and personal
well-being in a crisis that has gone on far longer than
anyone could have predicted. Early in the year, we
conducted a mental health survey to gauge the health
and perceived health of Calian employees. Feedback
from our survey informed an internal communications
plan to encourage the use of our EAP and mental
health resources, which received positive feedback.
Calian is committed to diversity and inclusion in
our workforce. We are proud that more than 38 per
cent of our employees are women, and that women
represent 33 per cent of our management team.
Calian is serious about providing a workplace that is
free of discrimination and harassment and ensures
equal opportunity in all stages of employment. During
the past fiscal year, Calian hired 39 retired military
members and 12 military spouses.
Indigenous Community Support
Support for Indigenous communities across Canada
has expanded in 2021. In 2018, Calian established an
Indigenous working group with members from all our
business segments participating in discussions about
Indigenous engagement. We are currently working
with Indigenous communities to deliver health services
and virtual care solutions, emergency planning,
environmental management and training.
In 2021, we were proud to answer the call for help
with COVID-19 screening and vaccination distribution
in communities across Canada. Operation Remote
Immunity, saw Calian dispatch more than 70 nurses to
25 fly-in communities in Northern Ontario and another
30 nurses to Nunavut, vaccinating more than 25,000
community members in total.
Calian also delivered care packages to families in
Nunavut who were in quarantine over the holidays, and
books and blankets for children and youth of Nunavut
during COVID-19. To ensure culturally appropriate care,
Calian nurses delivering services to the community are
all provided with specialized training. Many nurses
commented on the pride they felt providing support
to these remote communities during the pandemic.
Calian also funded a bursary for Indigenous or black
students enrolled in the Northern Alberta Institute of
Technology (NAIT) emergency management program.
In response to the heartbreaking discoveries on the
sites of residential schools, Calian has embarked upon
several projects focused on Indigenous engagement. In
support of the National Day of Truth and Reconciliation
on September 30th, Calian provided sponsorship,
funding and volunteers for Remember Me: A National
Day of Remembrance, hosted by the Indigenous
Arts Collective of Canada and Every Child Matters.
Other initiatives include program management and
proposal development, risk planning and after-action
review, nuclear preparedness and rehearsals, water
and wastewater planning, health services and custom
training for Indigenous communities.
Calian is a Leadership Circle member of Indigenous
Works, a non-profit that works to improve the
inclusion and engagement of Indigenous people in
the Canadian economy. As a charter member of the
Luminary initiative, Calian participated in working
groups to develop an Indigenous innovation strategy—
an Indigenous-led research ecosystem to support
Indigenous economic transformation and wellbeing.
Calian is also a supporting member of the Canadian
Council for Aboriginal Business and the Bruce Power
Indigenous Relations Supplier Network.
Protecting the Health of Canadians and Military
Families
The COVID-19 pandemic provided ample opportunity
for Calian to contribute health and safety personnel,
expertise and equipment to support vaccination and
testing for Canadians across the country. Calian has
set up pop-up clinics to provide vaccinations in some
of the most vulnerable areas of Toronto. So far, more
than 200 Calian nurses have administered more than
61,000 vaccinations in these hard-hit neighbourhoods.
Calian also supplied staffing and supplies for border
entry testing at the Coutts land border crossing and the
Calgary International Airport, administering 105,000
COVID-19 tests in total.
21
21
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report Since 2018 Calian Health, in partnership with Military
Supporting Learning
Family Services (MFS), has administered the Military
Family Doctor Network (MFDN). The goal of the MFDN
is to improve access to quality healthcare for families of
serving Canadian Armed Forces members by helping
to find them physicians as they move across Canada.
To date, the program has referred 3,450 military family
members to a physician.
In 2021, Calian made a $40K contribution to military
and veteran research through the Canadian Institute
for Military and Veteran Health Research (CIMVHR).
The CIMHVR administers research-funding awards
within the academic community on behalf of research
funding organizations, as well as annual scholarships
for emerging researchers.
Calian recognizes that challenges for veterans go
beyond funding. For this reason, Calian conducted
a research project to develop guides to support
conversations between veterans and healthcare
providers. These guides were provided to Veterans
Affairs Canada and will be available to healthcare
providers in the Calian network.
In 2021, Calian initiated two new pilots to support
military families and Veterans. The first is the Military
Family Patient Support Program, delivered
in
collaboration with Canadian Forces Morale Welfare
Services. This program provides on-demand home
care for dependents when active-duty military are
called away to meet the demands of their roles. The
Veteran Primary Care pilot is focused on the Ontario
catchment of St. Joseph’s Health Care London’s
Operational Stress Injury (OSI) Clinic. The catchment
area
includes Southwestern Ontario, Hamilton-
Niagara region, Greater Toronto Area (GTA) and
portions of Northern and Western Ontario. Calian
will assist veterans who are cared for by the St.
Joseph’s OSI clinic to secure a family doctor in their
home community. This initiative will help veterans
transitioning from military service ease their transition
to their home community and ensure continuity of care.
Queen’s University’s research program, has produced
culturally informed, evidence-based guides for both
the health care providers and veterans in the program.
These guides have been provided by Veterans Affairs
Canada for wider use and distribution.
Supporting learning is important to Calian, and we look
for ways to have an impact on education. This year Calian
committed to a five-year in-kind contribution of our
ResponseReady™ product and supporting services for
use in the Northern Alberta Institute of Technology (NAIT)
Centre for Applied Disaster and Emergency Management
(CADEM) This will provide students and emergency
management practitioners with access to state-of-the-art
simulation technology that helps them build knowledge
and technical skills.
Initiatives to help computer science and engineering
students include financial contributions to support:
• Engineering Advancement Trust
• IEEE Illumination (Engineering Student Conference)
• Computer Science Student Society Career Fair
• Biennial Symposium on Communications (National
Symposium for Engineering students)
• Spectrum (science and engineering event)
• WEC (Western Engineering Competition)
• Code Retreats (software development retreats)
• Canadian International Rover Challenge
• University of Saskatchewan Space Design Team
• Sci-Fi Engineering Science Camps
• Space Camp for Kids
• Regional science fairs
Charitable Giving
Some of the organizations Calian supported in FY 2021:
• The Ottawa Hospital Foundation
• The Ottawa Hospital
• Ottawa Mission
• Victoria Hospice
• Canadian Cancer Society
• Rainbow Bistro
• Dube Centre for Mental Health
• Jim Pattison Children’s Hospital
• Canadian Liver Foundation
• ALS Canada
• Kidney Foundation
To support this program, Calian, in collaboration with
• United Way (Saskatoon and Regina)
Since 2018 Calian Health, in partnership with Military
Family Services (MFS), has administered the Military
Family Doctor Network (MFDN). The goal of the MFDN
is to improve access to quality healthcare for families of
serving Canadian Armed Forces members by helping
to find them physicians as they move across Canada.
To date, the program has referred 3,450 military family
members to a physician.
In 2021, Calian made a $40K contribution to military
and veteran research through the Canadian Institute
for Military and Veteran Health Research (CIMVHR).
The CIMHVR administers research-funding awards
within the academic community on behalf of research
funding organizations, as well as annual scholarships
for emerging researchers.
Calian recognizes that challenges for veterans go
beyond funding. For this reason, Calian conducted
a research project to develop guides to support
conversations between veterans and healthcare
providers. These guides were provided to Veterans
Affairs Canada and will be available to healthcare
providers in the Calian network.
In 2021, Calian initiated two new pilots to support
military families and Veterans. The first is the Military
Family Patient Support Program, delivered
in
collaboration with Canadian Forces Morale Welfare
Services. This program provides on-demand home
care for dependents when active-duty military are
called away to meet the demands of their roles. The
Veteran Primary Care pilot is focused on the Ontario
catchment of St. Joseph’s Health Care London’s
Operational Stress Injury (OSI) Clinic. The catchment
area
includes Southwestern Ontario, Hamilton-
Niagara region, Greater Toronto Area (GTA) and
portions of Northern and Western Ontario. Calian
will assist veterans who are cared for by the St.
Joseph’s OSI clinic to secure a family doctor in their
home community. This initiative will help veterans
transitioning from military service ease their transition
to their home community and ensure continuity of care.
To support this program, Calian, in collaboration with
Queen’s University’s research program, has produced
culturally informed, evidence-based guides for both
the health care providers and veterans in the program.
These guides have been provided by Veterans Affairs
Canada for wider use and distribution.
Supporting Learning
Supporting learning is important to Calian, and we look
for ways to have an impact on education. This year Calian
committed to a five-year in-kind contribution of our
ResponseReady™ product and supporting services for
use in the Northern Alberta Institute of Technology (NAIT)
Centre for Applied Disaster and Emergency Management
(CADEM) This will provide students and emergency
management practitioners with access to state-of-the-art
simulation technology that helps them build knowledge
and technical skills.
Initiatives to help computer science and engineering
students include financial contributions to support:
• Engineering Advancement Trust
• IEEE Illumination (Engineering Student Conference)
• Computer Science Student Society Career Fair
• Biennial Symposium on Communications (National
Symposium for Engineering students)
• Spectrum (science and engineering event)
• WEC (Western Engineering Competition)
• Code Retreats (software development retreats)
• Canadian International Rover Challenge
• University of Saskatchewan Space Design Team
• Sci-Fi Engineering Science Camps
• Space Camp for Kids
• Regional science fairs
Charitable Giving
Some of the organizations Calian supported in FY 2021:
• The Ottawa Hospital Foundation
• The Ottawa Hospital
• Ottawa Mission
• Victoria Hospice
• Canadian Cancer Society
• Rainbow Bistro
• United Way (Saskatoon and Regina)
• Dube Centre for Mental Health
• Jim Pattison Children’s Hospital
• Canadian Liver Foundation
• ALS Canada
• Kidney Foundation
22
22
2021 Annual ReportCalian Group Ltd.2021 Annual ReportCalian Group Ltd. Looking Forward
Looking Forward
Calian has demonstrated the ability to consistently
operations or well-being. This has reflected our
grow the business while maintaining our profitability
updated mission statement: “We help the world
and making targeted investments in our growth
communicate, innovate, learn, and lead safe and
posture. Our growth
through 2021 was both
healthy lives—today and tomorrow.”
challenging and rewarding. The company’s resilience
was clearly evident as our diversified essential
services and solutions helped the company report
solid results amid the historic public health crisis.
Looking forward, the company is well-positioned to
continue building on our record accomplishments.
The corporate leadership team is well-poised to
drive customer diversification, innovation, product
Stability remains key to our
investment value
offerings and overall growth. The entire Calian team
proposition: Stability
through diversity, growth
is excited about the opportunity to capitalize on
through
innovation. Strategic acquisitions and
potential in the months and years to come.
targeted investments have expanded our products,
solutions and customer base
in Canada and
internationally—and through this growth we have
maintained our stability. We were very happy to
finish the fiscal year reporting our 80th consecutive
profitable quarter, that’s 20 years of consistent
profitable execution.
We are excited about the potential of this company
as we continue our pivot to innovation, growth and
global markets. We remain proud of the impact of
our services, which have been critical to customers’
The team will continue to embrace diversity and the
four-segment structure at Calian. For our customers,
it comes down to continuously improving and
expanding the products, services and solutions that
our team of experts can deliver for critical industries.
It has been an exciting journey to date, and as we
often say at Calian, we’re just getting started.
Calian has demonstrated the ability to consistently
grow the business while maintaining our profitability
and making targeted investments in our growth
posture. Our growth
through 2021 was both
challenging and rewarding. The company’s resilience
was clearly evident as our diversified essential
services and solutions helped the company report
solid results amid the historic public health crisis.
investment value
Stability remains key to our
through diversity, growth
proposition: Stability
innovation. Strategic acquisitions and
through
targeted investments have expanded our products,
solutions and customer base
in Canada and
internationally—and through this growth we have
maintained our stability. We were very happy to
finish the fiscal year reporting our 80th consecutive
profitable quarter, that’s 20 years of consistent
profitable execution.
We are excited about the potential of this company
as we continue our pivot to innovation, growth and
global markets. We remain proud of the impact of
our services, which have been critical to customers’
operations or well-being. This has reflected our
updated mission statement: “We help the world
communicate, innovate, learn, and lead safe and
healthy lives—today and tomorrow.”
Looking forward, the company is well-positioned to
continue building on our record accomplishments.
The corporate leadership team is well-poised to
drive customer diversification, innovation, product
offerings and overall growth. The entire Calian team
is excited about the opportunity to capitalize on
potential in the months and years to come.
The team will continue to embrace diversity and the
four-segment structure at Calian. For our customers,
it comes down to continuously improving and
expanding the products, services and solutions that
our team of experts can deliver for critical industries.
It has been an exciting journey to date, and as we
often say at Calian, we’re just getting started.
Corporate Leadership Team
Corporate Leadership Team
Kevin Ford,
CEO
Patrick Houston,
Sue Ivay,
Jerry Johnston,
Michele Bedford,
Seann Hamer,
CHRO
CIO
CCO
CTO
CFO and
Corporate
Secretary
Kevin Ford,
CEO
Patrick Houston,
CFO and
Corporate
Secretary
Sue Ivay,
CHRO
Jerry Johnston,
CIO
Michele Bedford,
CCO
Seann Hamer,
CTO
23
23
Calian Group Ltd.2021 Annual ReportCalian Group Ltd.2021 Annual Report IFRS and non-GAAP measures:
to the most comparable IFRS measure.
Forward-Looking Statements
The following Management’s Discussion and Analysis is dated November 24, 2021 (this “MD&A”) and should be read
in conjunction with the unaudited interim condensed consolidated financial statements. The Company’s accounting
policies are in accordance with IFRS. As in the unaudited interim condensed consolidated financial statements, all
dollar amounts in this MD&A are expressed in thousands of Canadian dollars unless otherwise noted.
The following Management’s Discussion and Analysis is dated November 24, 2021 (this “MD&A”) and should be read
in conjunction with the unaudited interim condensed consolidated financial statements. The Company’s accounting
policies are in accordance with IFRS. As in the unaudited interim condensed consolidated financial statements, all
dollar amounts in this MD&A are expressed in thousands of Canadian dollars unless otherwise noted.
This MD&A is the responsibility of management and has been reviewed and approved by the Board of
Directors of the Company. This MD&A has been prepared in accordance with the requirements of the
Canadian Securities Administrators. The Board of Directors is responsible for ensuring that management
fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving
the MD&A. The Board of Directors carries out this responsibility principally through its Audit Committee.
This MD&A is the responsibility of management and has been reviewed and approved by the Board of
Directors of the Company. This MD&A has been prepared in accordance with the requirements of the
Canadian Securities Administrators. The Board of Directors is responsible for ensuring that management
fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving
the MD&A. The Board of Directors carries out this responsibility principally through its Audit Committee.
This MD&A contains both IFRS and non-GAAP measures. Non-GAAP measures are defined and reconciled
This MD&A contains both IFRS and non-GAAP measures. Non-GAAP measures are defined and reconciled
to the most comparable IFRS measure.
IFRS and non-GAAP measures:
The Company cautions that this MD&A contains forward-looking statements. These forward-looking statements
are based on certain assumptions made by the Company that may prove to be inaccurate. Forward-looking
statements includes those identified by the expressions “anticipate,” “believe,” “plan,” “estimate,” “expect,”
“intend” and similar expressions. Forward-looking statements are not historical facts, but reflect the Company’s
current intentions, plans, expectations and assumptions regarding future results or events. Forward-looking
statements are intended to assist readers in understanding management’s expectations as of the date of this
MD&A and may not be suitable for other purposes.
Forward-Looking Statements
The Company cautions that this MD&A contains forward-looking statements. These forward-looking statements
are based on certain assumptions made by the Company that may prove to be inaccurate. Forward-looking
statements includes those identified by the expressions “anticipate,” “believe,” “plan,” “estimate,” “expect,”
“intend” and similar expressions. Forward-looking statements are not historical facts, but reflect the Company’s
current intentions, plans, expectations and assumptions regarding future results or events. Forward-looking
statements are intended to assist readers in understanding management’s expectations as of the date of this
MD&A and may not be suitable for other purposes.
Forward-looking statements are based on assumptions, including assumptions as to the following factors:
Forward-looking statements are based on assumptions, including assumptions as to the following factors:
• customer demand for the Company’s services;
• customer demand for the Company’s services;
• the Company’s ability to maintain and enhance customer relationships;
• the Company’s ability to maintain and enhance customer relationships;
• the Company’s ability to bring to market products and services; and
• the Company’s ability to bring to market products and services; and
• the Company’s ability to execute on its acquisition program including successful integration of previously
• the Company’s ability to execute on its acquisition program including successful integration of previously
acquired businesses; and
• the Company’s ability to deliver to customers throughout the COVID-19 pandemic, and any government
• the Company’s ability to deliver to customers throughout the COVID-19 pandemic, and any government
• market conditions;
• levels of government spending;
The Company cautions that the forward-looking statements in this MD&A are based on current expectations
as at November 24, 2021 that are subject to change and to risks and uncertainties, including those set out
under the heading “Risks and Uncertainties” below, many of which are outside the Company’s control. Actual
results may materially differ from such forward-looking information due to factors such as customer demand,
customer relationships, new service offerings, delivery schedules, revenue mix, competition, pricing pressure,
foreign currency fluctuations and uncertainty in the markets in which the Company conducts business. Additional
information identifying risks and uncertainties is contained in the Company’s filings with securities regulators.
The Company does not assume any intention or obligation to publicly update or revise any forward-looking
statements or forward-looking information, whether as a result of new information, future events or otherwise,
except as required by applicable law. Readers should not place undue reliance on the Company’s forward-looking
regulations limiting business activities.
The Company cautions that the forward-looking statements in this MD&A are based on current expectations
as at November 24, 2021 that are subject to change and to risks and uncertainties, including those set out
under the heading “Risks and Uncertainties” below, many of which are outside the Company’s control. Actual
results may materially differ from such forward-looking information due to factors such as customer demand,
customer relationships, new service offerings, delivery schedules, revenue mix, competition, pricing pressure,
foreign currency fluctuations and uncertainty in the markets in which the Company conducts business. Additional
information identifying risks and uncertainties is contained in the Company’s filings with securities regulators.
The Company does not assume any intention or obligation to publicly update or revise any forward-looking
statements or forward-looking information, whether as a result of new information, future events or otherwise,
except as required by applicable law. Readers should not place undue reliance on the Company’s forward-looking
statements.
• market conditions;
• levels of government spending;
acquired businesses; and
regulations limiting business activities.
The outbreak of the coronavirus, or COVID-19, which was declared a pandemic by the World Health Organization
on March 11, 2020, has spread across the globe and is impacting worldwide economic activity. A public health
pandemic, including COVID-19, poses the risk that the Company and its employees, contractors, suppliers, and
The outbreak of the coronavirus, or COVID-19, which was declared a pandemic by the World Health Organization
on March 11, 2020, has spread across the globe and is impacting worldwide economic activity. A public health
pandemic, including COVID-19, poses the risk that the Company and its employees, contractors, suppliers, and
24
statements.
24
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. objectives.
Calian primary operating segments are:
• Advanced Technologies
• Health
• Learning
• IT and Cyber Solutions (“ITCS”)
other partners may be prevented from conducting business activities. This can especially be the case where
government authorities mandate shutdowns. Certain countries may also be more heavily impacted where travel
restrictions continue for longer periods and full quarantines are in effect. The extent to which the COVID-19
outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot
be predicted, including new information that may emerge concerning the severity of the virus and the actions to
contain its impact. The Company and its employees have transitioned to working remotely where possible and
customer delivery has not been materially impacted. The Company is reliant on this alternative work arrangement
in order to minimize the impact of outbreak on its financial results.
other partners may be prevented from conducting business activities. This can especially be the case where
government authorities mandate shutdowns. Certain countries may also be more heavily impacted where travel
restrictions continue for longer periods and full quarantines are in effect. The extent to which the COVID-19
outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot
be predicted, including new information that may emerge concerning the severity of the virus and the actions to
contain its impact. The Company and its employees have transitioned to working remotely where possible and
customer delivery has not been materially impacted. The Company is reliant on this alternative work arrangement
in order to minimize the impact of outbreak on its financial results.
Business Overview and Strategic Direction
Business Overview and Strategic Direction
Calian is a diverse product and services company providing innovative solutions for customers and stakeholders in
the healthcare, communications, learning and security sectors. For nearly 40 years, Calian has helped customers
solve significant and complex customer problems, so they are better able to succeed and deliver on their
Calian is a diverse product and services company providing innovative solutions for customers and stakeholders in
the healthcare, communications, learning and security sectors. For nearly 40 years, Calian has helped customers
solve significant and complex customer problems, so they are better able to succeed and deliver on their
objectives.
Calian primary operating segments are:
• Advanced Technologies
• Health
• Learning
• IT and Cyber Solutions (“ITCS”)
The four-segment operating model is pivotal to the Company’s success as it provides balance and diversity. By
serving many customers in wide-ranging and geographically varied markets, Calian is able to capitalize on unique
opportunities and upturns in a number of markets while at the same time weathering the downturns experienced in
others. This diversity is most evident when comparing the business and operating models of the four segments.
The four-segment operating model is pivotal to the Company’s success as it provides balance and diversity. By
serving many customers in wide-ranging and geographically varied markets, Calian is able to capitalize on unique
opportunities and upturns in a number of markets while at the same time weathering the downturns experienced in
others. This diversity is most evident when comparing the business and operating models of the four segments.
While Calian services are diverse, our growth strategy is anchored in a common four-pillar framework:
While Calian services are diverse, our growth strategy is anchored in a common four-pillar framework:
1. Customer retention: through continued delivery excellence, maintain a valued relationship with our current
1. Customer retention: through continued delivery excellence, maintain a valued relationship with our current
customer base.
sectors.
2. Customer diversification: through increasing the percentage of revenues derived from new business in
adjacent and non-government markets, balance customer revenue into numerous global and domestic
customer base.
2. Customer diversification: through increasing the percentage of revenues derived from new business in
adjacent and non-government markets, balance customer revenue into numerous global and domestic
sectors.
3. Innovation: continue investment in service offerings to increase differentiation and improve gross margins.
3. Innovation: continue investment in service offerings to increase differentiation and improve gross margins.
4. Continuous improvement: leverage innovation to improve how the company operates with a goal to
4. Continuous improvement: leverage innovation to improve how the company operates with a goal to
streamline processes and provide for a scalable back-office support capability.
streamline processes and provide for a scalable back-office support capability.
The Calian growth strategy can be summarized as follows: winning new contracts, expanding the scope of
existing contracts, capitalizing on innovation demonstrated in each of the operating segments, and Mergers and
We have continued to demonstrate our ability to win new contracts and evolve. For example, our footprint in
Europe is continuously expanding, having won strategic training contracts with NATO, French Ministry of Defence
Acquisitions.
and others.
The Calian growth strategy can be summarized as follows: winning new contracts, expanding the scope of
existing contracts, capitalizing on innovation demonstrated in each of the operating segments, and Mergers and
Acquisitions.
We have continued to demonstrate our ability to win new contracts and evolve. For example, our footprint in
Europe is continuously expanding, having won strategic training contracts with NATO, French Ministry of Defence
and others.
Further, we have demonstrated the ability to expand the scope of services with existing customers through
service line cross pollination and growth. This has continued to be a focus as we have brought on newly acquired
companies to ensure that we are broadening their portfolio of customers through our networks.
Further, we have demonstrated the ability to expand the scope of services with existing customers through
service line cross pollination and growth. This has continued to be a focus as we have brought on newly acquired
companies to ensure that we are broadening their portfolio of customers through our networks.
Innovation in the new products and services we develop, as well as innovation in the way we deliver those services
are key in maintaining our market position and winning new customers. Our recent acquisition of SimFront
Simulation Systems Corporation means we are able to offer the latest augmented, virtual and mixed reality
solutions to customers seeking immersive training support.
Innovation in the new products and services we develop, as well as innovation in the way we deliver those services
are key in maintaining our market position and winning new customers. Our recent acquisition of SimFront
Simulation Systems Corporation means we are able to offer the latest augmented, virtual and mixed reality
solutions to customers seeking immersive training support.
25
25
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Finally, with seventeen successful acquisitions in the last ten years, we continue to demonstrate an ability to grow
and expand, both in terms of geography and service offerings.
Finally, with seventeen successful acquisitions in the last ten years, we continue to demonstrate an ability to grow
and expand, both in terms of geography and service offerings.
This growth strategy led to continued profitable growth in 2021, and record revenues for another annual period.
Revenue grew 20% in the annual period ended September 30, 2021 when compared to the same period of the
prior fiscal year, continuing to drive Company profitability. Each of the Company’s four operating segments
experienced revenue growth in the year ended September 30, 2021, with Health, Learning and ITCS achieving
over 20% revenue growth when compared to the same period of the previous year, and Advanced Technologies
achieving 9% revenue growth over the previous year.
This growth strategy led to continued profitable growth in 2021, and record revenues for another annual period.
Revenue grew 20% in the annual period ended September 30, 2021 when compared to the same period of the
prior fiscal year, continuing to drive Company profitability. Each of the Company’s four operating segments
experienced revenue growth in the year ended September 30, 2021, with Health, Learning and ITCS achieving
over 20% revenue growth when compared to the same period of the previous year, and Advanced Technologies
achieving 9% revenue growth over the previous year.
Calian is headquartered in Ottawa, Ontario and operates at locations across Canada as well as Europe (Germany,
Norway and UK).
Calian is headquartered in Ottawa, Ontario and operates at locations across Canada as well as Europe (Germany,
Norway and UK).
Historically our core competencies, common across all operating segments, are project, contract and workforce
management; however, the segments continue to evolve their services to incorporate technology, allowing us to
offer full solutions to customers.
Historically our core competencies, common across all operating segments, are project, contract and workforce
management; however, the segments continue to evolve their services to incorporate technology, allowing us to
offer full solutions to customers.
A large portion of our revenues are derived from Canadian sources in the public and private sectors, particularly
the Department of National Defence. Through our diversification strategy, we have developed a well-established
private sector customer base across Indigenous communities, oil and gas, nuclear, aerospace, defence, satellite,
telecom, electric vehicle manufacturing and numerous others. For example, our Health service line includes
the administration of over 150 medical clinics across Canada on behalf of Loblaw, as well as the provision of
health care services to oil and gas customers. Historically, our Learning segment was predominantly generating
revenue from Canadian federal government customers. Now, the customer base has expanded to include
municipalities, First Nations, healthcare, private industry, and NATO, primarily as a result of the 2020 acquisitions
of Comprehensive Training Solutions and Cadence Consultancy. Our Advanced Technologies segment supports
global satellite communications and continues to leverage a large global customer base.
A large portion of our revenues are derived from Canadian sources in the public and private sectors, particularly
the Department of National Defence. Through our diversification strategy, we have developed a well-established
private sector customer base across Indigenous communities, oil and gas, nuclear, aerospace, defence, satellite,
telecom, electric vehicle manufacturing and numerous others. For example, our Health service line includes
the administration of over 150 medical clinics across Canada on behalf of Loblaw, as well as the provision of
health care services to oil and gas customers. Historically, our Learning segment was predominantly generating
revenue from Canadian federal government customers. Now, the customer base has expanded to include
municipalities, First Nations, healthcare, private industry, and NATO, primarily as a result of the 2020 acquisitions
of Comprehensive Training Solutions and Cadence Consultancy. Our Advanced Technologies segment supports
global satellite communications and continues to leverage a large global customer base.
26
26
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. Revenue growth from new contract opportunities is largely dependent on the issuance of the initial proposal
request and the ultimate timing of the related contract award. The Company has significant realizable backlog at
$1,270 million that spans over 10 years in length. Our historically high renewal rate combined with our win strategy
provides management confidence in the ability to retain customers.
Revenue growth from new contract opportunities is largely dependent on the issuance of the initial proposal
request and the ultimate timing of the related contract award. The Company has significant realizable backlog at
$1,270 million that spans over 10 years in length. Our historically high renewal rate combined with our win strategy
provides management confidence in the ability to retain customers.
While federal government spending priorities fluctuate, particularly because of the global pandemic, profitable
business does exist for companies who have the financial strength to accommodate slowdowns in government
spending, and the discipline to adjust costs to declines in revenue. Our strong back-office capabilities, along with
our emphasis on continuous improvement and business development, ensures we are able to identify and win new
business opportunities and scale accordingly.
Of note, as our segments operate in niche areas within large markets, there exists minimal third-party data to
compare with the Company’s performance. While analyzing general market trends provides some insight into the
potential opportunities within and strength of those markets, it is not always indicative of the health, demand, and
funding of the individual customers of the Company. To compensate for the limited amount of information, and
to provide an indication of future revenue potential, this MD&A provides a detailed overview of the Company’s
backlog by segment showing both contracted backlog and option renewals by fiscal year. In addition, the following
discussion, which refers to the type of contracts performed by each of the four segments will provide some insight
into the level of customer-specific demand for our services.
The Company’s operations are subject to some quarterly seasonality due to the timing of vacation periods,
statutory holidays, industry-specific seasonal cycles and the timing and delivery of milestones for significant
projects. Typically, the Company’s first and last quarter will be negatively impacted because of the Christmas
season and summer vacation period. During these periods, the Company can only invoice or recognize revenue
for work performed and is also required to pay for statutory holidays. With travel restrictions easing in a number
of countries, this impact may be seen to increase in any given period as more vacation and travel is taken. This
results in reduced levels of revenues and in a drop in gross margins. This seasonality may not be apparent in the
overall results of the Company, depending on the impact of the realized sales mix of its various projects. This is
slightly offset in the summer months with higher sales for IntraGrain, but further adds to the seasonality in the first
quarter results.
While federal government spending priorities fluctuate, particularly because of the global pandemic, profitable
business does exist for companies who have the financial strength to accommodate slowdowns in government
spending, and the discipline to adjust costs to declines in revenue. Our strong back-office capabilities, along with
our emphasis on continuous improvement and business development, ensures we are able to identify and win new
business opportunities and scale accordingly.
Of note, as our segments operate in niche areas within large markets, there exists minimal third-party data to
compare with the Company’s performance. While analyzing general market trends provides some insight into the
potential opportunities within and strength of those markets, it is not always indicative of the health, demand, and
funding of the individual customers of the Company. To compensate for the limited amount of information, and
to provide an indication of future revenue potential, this MD&A provides a detailed overview of the Company’s
backlog by segment showing both contracted backlog and option renewals by fiscal year. In addition, the following
discussion, which refers to the type of contracts performed by each of the four segments will provide some insight
into the level of customer-specific demand for our services.
The Company’s operations are subject to some quarterly seasonality due to the timing of vacation periods,
statutory holidays, industry-specific seasonal cycles and the timing and delivery of milestones for significant
projects. Typically, the Company’s first and last quarter will be negatively impacted because of the Christmas
season and summer vacation period. During these periods, the Company can only invoice or recognize revenue
for work performed and is also required to pay for statutory holidays. With travel restrictions easing in a number
of countries, this impact may be seen to increase in any given period as more vacation and travel is taken. This
results in reduced levels of revenues and in a drop in gross margins. This seasonality may not be apparent in the
overall results of the Company, depending on the impact of the realized sales mix of its various projects. This is
slightly offset in the summer months with higher sales for IntraGrain, but further adds to the seasonality in the first
quarter results.
27
27
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Selected quarterly financial data
(Canadian dollars in millions, except per share data)
Selected quarterly financial data
(Canadian dollars in millions, except per share data)
Q4/21
Q3/21
Q2/21
Q1/21
Q4/20 Q3/20
Q2/20 Q1/20
Q4/21
Q3/21
Q2/21
Q1/21
Q4/20 Q3/20
Q2/20 Q1/20
Revenues
Advanced Technologies
$ 42.6
$ 43.8
$
42.8
$ 37.3
$ 37.6
$ 35.9
$ 39.9
$ 40.0
Advanced Technologies
$ 42.6
$ 43.8
$
42.8
$ 37.3
$ 37.6
$ 35.9
$ 39.9
$ 40.0
Health
Learning
ITCS
Total revenue
Cost of revenue
Gross profit
Selling and marketing
General and administration
Research and development
Profit before under noted
items
Depreciation of equipment
and application software
Depreciation of right of use
asset
Amortization of acquired
intangible assets
Other changes in fair value
Deemed Compensation
Changes in fair value related
to contingent earn-out
Profit before interest and
income tax expense
Lease interest expense
Interest expense (income)
Profit before income tax
expense
Income tax expense
44.1
17.6
23.2
50.8
18.1
23.4
52.9
20.9
21.9
47.1
18.0
13.8
56.8
14.3
14.4
43.9
11.1
14.6
32.2
17.3
15.1
30.0
15.1
14.1
$ 127.5
$ 136.1
$ 138.5
$ 116.2
$ 123.1
$ 105.5
$ 104.5
$ 99.2
94.5
33.0
4.4
14.2
2.0
102.2
105.0
33.9
4.5
13.3
1.2
33.5
4.0
14.4
1.0
90.0
26.2
3.4
11.6
0.8
12.4
14.9
14.1
10.4
1.2
0.8
3.4
-
0.8
3.6
2.6
0.1
0.2
2.3
1.4
1.1
0.7
3.2
-
0.8
5.1
4.0
0.1
0.1
3.8
1.7
1.0
0.8
3.0
-
0.5
1.3
7.5
0.1
0.2
7.2
1.7
5.5
1.0
0.7
2.1
-
1.9
0.4
4.3
0.1
-
4.2
1.7
100.2
22.9
3.0
10.0
0.7
9.2
1.0
0.7
1.7
-
-
83.0
22.5
3.2
9.8
0.5
9.0
0.9
0.7
1.4
-
-
81.0
23.5
3.3
9.5
0.4
79.0
20.2
2.8
8.6
0.4
10.3
8.4
0.6
0.5
0.7
0.7
1.2
-
-
0.9
(0.1)
-
(2.8)
0.4
0.3
0.2
8.6
0.1
-
8.5
1.6
5.6
0.1
(0.1)
5.6
1.8
7.5
0.1
0.2
7.2
1.8
6.2
0.1
0.1
6.0
1.7
$
0.9
$
2.1
$
$
2.5
$
6.9
$
3.8
$
5.4
$ 4.3
Net profit
$
0.9
$
2.1
$
$
2.5
$
6.9
$
3.8
$
5.4
$ 4.3
Weighted average shares
outstanding - Basic
Weighted average shares
outstanding - Diluted
Net profit per share
Basic
Diluted
Adjusted EBITDA per share
Basic
Diluted
28
11.3M
11.2M
10.1M
9.8M
9.0M
8.8M
8.8M
7.9M
11.3M
11.3M
10.2M
9.9M
9.1M
8.9M
8.9M
8.0M
$ 0.10
$ 0.18
$ 0.10
$ 0.18
$ 1.10
$ 1.33
$ 1.09
$ 1.32
$
$
$
$
0.55
0.54
1.40
1.39
$ 0.25
$ 0.71
$ 0.40
$ 0.60
$ 0.55
$ 0.25
$ 0.70
$ 0.40
$ 0.59
$ 0.54
$ 1.06
$ 0.95
$ 0.93
$ 1.16
$ 1.04
$ 1.05
$ 0.93
$ 0.92
$ 1.14
$ 1.03
Revenues
Health
Learning
ITCS
Total revenue
Cost of revenue
Gross profit
Selling and marketing
General and administration
Research and development
Profit before under noted
items
asset
Depreciation of equipment
and application software
Depreciation of right of use
Amortization of acquired
intangible assets
Other changes in fair value
Deemed Compensation
Changes in fair value related
to contingent earn-out
Profit before interest and
income tax expense
Lease interest expense
Interest expense (income)
Profit before income tax
Income tax expense
expense
Net profit
Weighted average shares
outstanding - Basic
Weighted average shares
outstanding - Diluted
Net profit per share
Adjusted EBITDA per share
Basic
Diluted
Basic
Diluted
28
12.4
14.9
14.1
10.4
10.3
8.4
$ 127.5
$ 136.1
$ 138.5
$ 116.2
$ 123.1
$ 105.5
$ 104.5
$ 99.2
102.2
105.0
44.1
17.6
23.2
94.5
33.0
4.4
14.2
2.0
1.2
0.8
3.4
-
0.8
3.6
2.6
0.1
0.2
2.3
1.4
50.8
18.1
23.4
33.9
4.5
13.3
1.2
1.1
0.7
3.2
-
0.8
5.1
4.0
0.1
0.1
3.8
1.7
52.9
20.9
21.9
33.5
4.0
14.4
1.0
1.0
0.8
3.0
-
0.5
1.3
7.5
0.1
0.2
7.2
1.7
5.5
47.1
18.0
13.8
90.0
26.2
3.4
11.6
0.8
-
1.0
0.7
2.1
1.9
0.4
4.3
0.1
-
4.2
1.7
56.8
14.3
14.4
100.2
22.9
3.0
10.0
0.7
9.2
1.0
0.7
1.7
-
-
8.6
0.1
-
8.5
1.6
43.9
11.1
14.6
83.0
22.5
3.2
9.8
0.5
9.0
0.9
0.7
1.4
-
-
5.6
0.1
(0.1)
5.6
1.8
32.2
17.3
15.1
81.0
23.5
3.3
9.5
0.4
30.0
15.1
14.1
79.0
20.2
2.8
8.6
0.4
0.6
0.5
0.7
0.7
1.2
-
-
7.5
0.1
0.2
7.2
1.8
0.9
(0.1)
-
6.2
0.1
0.1
6.0
1.7
(2.8)
0.4
0.3
0.2
11.3M
11.2M
10.1M
9.8M
9.0M
8.8M
8.8M
7.9M
11.3M
11.3M
10.2M
9.9M
9.1M
8.9M
8.9M
8.0M
$ 0.10
$ 0.18
$ 0.10
$ 0.18
$ 0.25
$ 0.71
$ 0.40
$ 0.60
$ 0.55
$ 0.25
$ 0.70
$ 0.40
$ 0.59
$ 0.54
$ 1.10
$ 1.33
$ 1.09
$ 1.32
$ 1.06
$ 0.95
$ 0.93
$ 1.16
$ 1.04
$ 1.05
$ 0.93
$ 0.92
$ 1.14
$ 1.03
$
$
$
$
0.55
0.54
1.40
1.39
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. Fourth Quarter Financial Summary
This fourth quarter unaudited interim condensed consolidated financial summary should be read in conjunction with
the annual financial statements along with accompanying notes thereto.
Fourth Quarter Financial Summary
This fourth quarter unaudited interim condensed consolidated financial summary should be read in conjunction with
the annual financial statements along with accompanying notes thereto.
Consolidated Statements of Net Profit
Consolidated Statements of Net Profit
For the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share data):
For the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share data):
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
Advanced Technologies
$
$
$
166,591
$
Advanced Technologies
$
Revenue
Health
Learning
ITCS
Total Revenue
Cost of revenues
Gross profit
Selling and marketing
General and administration
Research and development
Profit before under noted items
Depreciation of equipment, application
software and research and development
Depreciation of right of use asset
Amortization of acquired intangible assets
Other changes in fair value
Deemed compensation
Changes in fair value related to contingent
earn-out
Profit before interest income and
income tax expense
Lease obligations interest expense
Interest expense (income)
Profit before income tax expense
Income tax expense – current
Income tax expense (recovery) – deferred
Total income tax expense
NET PROFIT
Net profit per share:
Basic
Diluted
$
$
$
Revenue
Health
Learning
ITCS
Total Revenue
Cost of revenues
Gross profit
Selling and marketing
General and administration
Research and development
Profit before under noted items
Depreciation of equipment, application
software and research and development
Depreciation of right of use asset
Amortization of acquired intangible assets
Other changes in fair value
Deemed compensation
Changes in fair value related to contingent
earn-out
Profit before interest income and
income tax expense
Lease obligations interest expense
Interest expense (income)
Profit before income tax expense
Income tax expense – current
Income tax expense (recovery) – deferred
Total income tax expense
NET PROFIT
Net profit per share:
Basic
Diluted
127,639
123,057
42,728
44,167
17,561
23,183
94,535
33,104
4,451
14,223
2,007
12,423
1,112
781
3,374
-
906
3,556
2,694
107
63
2,524
1,752
(321)
1,431
1,093
0.10
0.10
37,570
56,848
14,282
14,357
100,190
22,867
3,028
9,978
658
9,203
969
734
1,684
-
-
(2,772)
8,588
123
19
8,446
2,122
(562)
1,560
6,886
0.70
0.70
194,936
74,622
82,255
518,404
391,667
126,737
16,334
53,454
5,020
51,929
4,285
3,054
11,731
-
4,006
10,336
18,517
450
360
17,707
8,399
(1,847)
6,552
11,155
1.08
1.07
$
$
$
$
$
$
$
$
$
$
$
$
153,382
163,035
57,834
58,069
432,320
343,164
89,156
12,336
38,012
1,998
36,810
2,976
2,771
5,166
(101)
-
(1,882)
27,880
475
185
27,220
8,171
(1,311)
6,860
20,360
2.25
2.23
29
$
166,591
$
$
42,728
44,167
17,561
23,183
37,570
56,848
14,282
14,357
127,639
123,057
94,535
33,104
4,451
14,223
2,007
12,423
1,112
781
3,374
-
906
3,556
2,694
107
63
2,524
1,752
(321)
1,431
1,093
0.10
0.10
$
$
$
100,190
22,867
3,028
9,978
658
9,203
969
734
1,684
-
-
(2,772)
8,588
123
19
8,446
2,122
(562)
1,560
6,886
0.70
0.70
$
$
$
194,936
74,622
82,255
518,404
391,667
126,737
16,334
53,454
5,020
51,929
4,285
3,054
11,731
-
4,006
10,336
18,517
450
360
17,707
8,399
(1,847)
6,552
11,155
1.08
1.07
$
$
$
153,382
163,035
57,834
58,069
432,320
343,164
89,156
12,336
38,012
1,998
36,810
2,976
2,771
5,166
(101)
-
(1,882)
27,880
475
185
27,220
8,171
(1,311)
6,860
20,360
2.25
2.23
29
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report
Consolidated Statements of Cash Flows
For the years ended September 30, 2021 and 2020 (Canadian dollars in thousands):
Consolidated Statements of Cash Flows
For the years ended September 30, 2021 and 2020 (Canadian dollars in thousands):
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
$
1,093
$
6,886
$
11,155
$
20,360
12,896
9,560
63
3,556
107
1,431
45
428
5,267
906
-
(384)
29,052
1,513
(496)
(10,022)
(3,297)
29,262
(170)
(1,426)
27,666
1,005
(3,156)
-
(782)
(2,933)
-
351
(93)
(2,430)
(2,172)
22,561
56,050
19
(2,772)
123
1,560
78
279
3,387
-
-
7,256
(8,508)
1,225
(133)
2,233
(12,314)
(681)
(142)
1,059
236
1,589
(2,747)
(656)
(1,814)
-
-
(18,855)
(107)
(1,521)
(20,483)
(22,061)
46,296
360
10,336
450
6,552
399
1,935
19,070
4,006
-
54,263
(24,114)
30,934
(2,752)
(446)
(6,381)
6,781
58,285
(810)
(10,933)
46,542
79,299
(11,826)
(3,033)
64,440
-
-
(48,757)
(430)
(7,419)
(56,606)
54,376
24,235
$
$
$
$
$
$
$
$
185
(1,882)
475
6,860
199
1,163
10,913
-
(101)
38,172
(11,676)
(44,911)
(1,271)
(328)
17,251
4,501
1,738
(678)
(3,813)
(2,753)
70,488
(9,938)
(13,000)
(2,508)
45,042
(100)
(29,288)
(1,227)
(4,574)
(35,189)
7,100
17,135
ACTIVITIES
Net profit
Items not affecting cash:
Interest expense (income)
Lease obligations interest expense
Income tax expense
Employee share purchase plan expense
Share based compensation expense
Depreciation and amortization
Deemed compensation
Other changes in fair value
Change in non-cash working capital
Accounts receivable
Work in process
Prepaid expenses
Inventory
Accounts payable and accrued liabilities
Unearned contract revenue
Interest received (paid)
Income tax recovered (paid)
CASH FLOWS GENERATED FROM FINANCING
ACTIVITIES
Dividends
Issuance of common shares net of costs
Draw (repayment) on line of credit
Payment of lease obligations
CASH FLOWS USED IN INVESTING ACTIVITIES
Investments and loan receivable
Business acquisitions
Capitalized research and development
Equipment and application software
NET CASH (OUTFLOW) INFLOW
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
30
CASH FLOWS GENERATED FROM OPERATING
CASH FLOWS GENERATED FROM OPERATING
ACTIVITIES
Net profit
Items not affecting cash:
Interest expense (income)
Changes in fair value related to contingent earn-out
Changes in fair value related to contingent earn-out
Lease obligations interest expense
Income tax expense
Employee share purchase plan expense
Share based compensation expense
Depreciation and amortization
Deemed compensation
Other changes in fair value
Change in non-cash working capital
Accounts receivable
Work in process
Prepaid expenses
Inventory
Accounts payable and accrued liabilities
Unearned contract revenue
Interest received (paid)
Income tax recovered (paid)
CASH FLOWS GENERATED FROM FINANCING
ACTIVITIES
Issuance of common shares net of costs
Dividends
Draw (repayment) on line of credit
Payment of lease obligations
CASH FLOWS USED IN INVESTING ACTIVITIES
Investments and loan receivable
Business acquisitions
Capitalized research and development
Equipment and application software
NET CASH (OUTFLOW) INFLOW
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD
78,611
24,235
78,611
24,235
CASH AND CASH EQUIVALENTS, END OF PERIOD
30
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
$
1,093
$
6,886
$
11,155
$
20,360
63
3,556
107
1,431
45
428
5,267
906
-
19
(2,772)
123
1,560
78
279
3,387
-
-
12,896
9,560
(384)
29,052
1,513
(496)
(10,022)
(3,297)
29,262
(170)
(1,426)
27,666
1,005
(3,156)
-
(782)
(2,933)
-
351
(93)
(2,430)
(2,172)
22,561
56,050
78,611
$
$
7,256
(8,508)
1,225
(133)
2,233
(12,314)
(681)
(142)
1,059
236
1,589
(2,747)
-
(656)
(1,814)
-
(18,855)
(107)
(1,521)
(20,483)
(22,061)
46,296
24,235
$
$
$
$
360
10,336
450
6,552
399
1,935
19,070
4,006
-
54,263
(24,114)
30,934
(2,752)
(446)
(6,381)
6,781
58,285
(810)
(10,933)
46,542
79,299
(11,826)
-
(3,033)
64,440
-
(48,757)
(430)
(7,419)
(56,606)
54,376
24,235
78,611
185
(1,882)
475
6,860
199
1,163
10,913
-
(101)
38,172
(11,676)
(44,911)
(1,271)
(328)
17,251
4,501
1,738
(678)
(3,813)
(2,753)
70,488
(9,938)
(13,000)
(2,508)
45,042
(100)
(29,288)
(1,227)
(4,574)
(35,189)
7,100
17,135
24,235
$
$
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. The diluted weighted average number of shares has been calculated as follows:
The diluted weighted average number of shares has been calculated as follows:
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
shares – basic
$ 11,271,536
$
9,732,754
$ 10,599,693
$
9,044,588
Weighted average number of common
Additions to reflect the dilutive effect of
employee stock options and RSU’s
Weighted average number of common
shares – diluted
11,346,869
9,855,357
10,640,428
9,104,498
75,333
122,603
40,735
59,910
Weighted average number of common
shares – basic
Additions to reflect the dilutive effect of
employee stock options and RSU’s
Weighted average number of common
shares – diluted
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
$ 11,271,536
$
9,732,754
$ 10,599,693
$
9,044,588
75,333
122,603
40,735
59,910
11,346,869
9,855,357
10,640,428
9,104,498
The following table presents the revenue of the Company for the year ended September 30, 2021 and 2020 (Canadian
dollars in thousands):
The following table presents the revenue of the Company for the year ended September 30, 2021 and 2020 (Canadian
dollars in thousands):
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
Advanced Technologies
$
29,731
$
$
113,878
$
109,532
Advanced Technologies
$
29,731
$
Product revenue
Total product revenue
45,712
$
131,624
$
143,073
Total product revenue
Health
Learning
ITCS
Total revenue
127,639
123,057
518,404
432,320
Total revenue
Service revenue
Advanced Technologies
Health
Learning
ITCS
Total service revenue
147
-
3,391
33,269
12,997
44,020
17,561
19,792
94,370
127,639
$
$
$
$
$
$
$
$
26,420
17,534
-
1,758
$
113,878
$
109,532
4,658
-
13,088
25,184
-
8,357
45,712
$
131,624
$
143,073
11,150
39,314
14,282
12,599
77,345
123,057
$
52,713
$
190,278
74,622
69,167
386,780
518,404
$
$
$
$
43,850
137,851
57,834
49,712
289,247
432,320
Product revenue
Health
Learning
ITCS
Service revenue
Advanced Technologies
Health
Learning
ITCS
Total service revenue
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
147
-
3,391
33,269
12,997
44,020
17,561
19,792
94,370
$
$
$
$
$
$
$
$
26,420
17,534
-
1,758
11,150
39,314
14,282
12,599
77,345
4,658
-
13,088
190,278
74,622
69,167
386,780
$
52,713
$
$
$
$
$
25,184
-
8,357
43,850
137,851
57,834
49,712
289,247
31
31
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report
2021
Revenue
Cost of revenues
Gross profit
Gross profit %
$
42,728 $ 44,167 $
17,561 $
23,183 $
- $ 127,639
31,449
11,279
33,070
11,097
13,713
3,848
16,303
6,880
26 %
25 %
22 %
30 %
26 %
-
-
-
N/A
852
6,374
94,535
33,104
4,451
14,223
2,007
Selling and marketing
General and administration
Research and development
1,975
2,519
1,243
790
2,919
115
181
1,043
-
653
1,368
649
13 %
16 %
15 %
18 %
N/A
10 %
Segmented information is as follows for three months ended September 30, 2021 (Canadian dollars in thousands):
Segmented information is as follows for three months ended September 30, 2021 (Canadian dollars in thousands):
For the year ended September 30,
Advanced
Technologies
Health
Learning
ITCS
Shared
Services
Total
For the year ended September 30,
2021
Advanced
Technologies
Health
Learning
ITCS
Shared
Services
Total
Profit before under noted items $
5,542 $
7,273 $
2,624 $
4,210 $
(7,226) $
12,423
Profit before under noted items $
5,542 $
7,273 $
2,624 $
4,210 $
(7,226) $
12,423
Revenue
Cost of revenues
Gross profit
Gross profit %
Selling and marketing
General and administration
Research and development
$
42,728 $ 44,167 $
17,561 $
23,183 $
- $ 127,639
31,449
11,279
33,070
11,097
13,713
3,848
16,303
6,880
-
-
94,535
33,104
26 %
25 %
22 %
30 %
1,975
2,519
1,243
790
2,919
115
181
1,043
-
653
1,368
649
N/A
852
6,374
-
26 %
4,451
14,223
2,007
Profit before under noted items %
Depreciation of equipment,
application software and R&D
Depreciation of right of use
asset
Amortization of acquired
intangibles
Other changes in fair value
Deemed compensation
Changes in fair value related
to contingent earn-out
Profit before interest
income and income tax
expense
expense
Lease obligations interest
Interest expense (income)
Profit before income tax
expense
Income tax expense – current
Income tax expense –
deferred
Total income tax expense
NET PROFIT FOR THE
PERIOD
1,112
781
3,374
-
906
3,556
2,694
107
63
2,524
1,752
(321)
1,431
$
1,093
Profit before under noted items %
Depreciation of equipment,
application software and R&D
Depreciation of right of use
asset
Amortization of acquired
intangibles
Other changes in fair value
Deemed compensation
Changes in fair value related
to contingent earn-out
Profit before interest
income and income tax
expense
Lease obligations interest
expense
Interest expense (income)
Profit before income tax
expense
Income tax expense – current
Income tax expense –
deferred
Total income tax expense
NET PROFIT FOR THE
PERIOD
13 %
16 %
15 %
18 %
N/A
10 %
1,112
781
3,374
-
906
3,556
2,694
107
63
2,524
1,752
(321)
1,431
$
1,093
32
32
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. Segmented information is as follows for three months ended September 30, 2020 (Canadian dollars in thousands):
Segmented information is as follows for three months ended September 30, 2020 (Canadian dollars in thousands):
For the year ended September 30,
Advanced
Technologies
Health
Learning
ITCS
Shared
Services
Total
For the year ended September 30,
2021
Advanced
Technologies
Health
Learning
ITCS
Shared
Services
Total
Profit before under noted items $
3,834 $
7,117 $
2,319 $
1,088 $
(5,155) $
9,203
Profit before under noted items $
3,834 $
7,117 $
2,319 $
1,088 $
(5,155) $
9,203
Revenue
Cost of revenues
Gross profit
Gross profit %
Selling and marketing
General and administration
Research and development
$
37,570 $ 56,848 $
14,282 $
14,357 $
- $ 123,057
30,544
7,026
46,976
9,872
10,955
3,327
11,715
2,642
-
-
100,190
22,867
19 %
17 %
23 %
18 %
1,136
1,559
497
526
2,069
160
230
778
-
724
829
1
N/A
412
4,743
-
19 %
3,028
9,978
658
969
734
1,684
-
(2,772)
8,588
123
19
8,446
2,122
(562)
1,560
$
6,886
Profit before under noted items %
Depreciation of equipment,
application software and R&D
Depreciation of right of use
asset
Amortization of acquired
intangibles
Other changes in fair value
Changes in fair value related
to contingent earn-out
Profit before interest
income and income tax
expense
Lease obligations interest
expense
Interest expense (income)
Profit before income tax
expense
Income tax expense – current
Income tax expense –
deferred
Total income tax expense
NET PROFIT FOR THE
PERIOD
10 %
13 %
16 %
8 %
N/A
7 %
969
734
1,684
-
(2,772)
8,588
123
19
8,446
2,122
(562)
1,560
$
6,886
$
37,570 $ 56,848 $
14,282 $
14,357 $
- $ 123,057
30,544
7,026
46,976
9,872
10,955
3,327
11,715
2,642
19 %
17 %
23 %
18 %
1,136
1,559
497
526
2,069
160
230
778
-
724
829
1
-
-
-
N/A
412
4,743
100,190
22,867
19 %
3,028
9,978
658
10 %
13 %
16 %
8 %
N/A
7 %
2021
Revenue
Cost of revenues
Gross profit
Gross profit %
Selling and marketing
General and administration
Research and development
Profit before under noted items %
Depreciation of equipment,
application software and R&D
Depreciation of right of use
asset
Amortization of acquired
intangibles
Other changes in fair value
Changes in fair value related
to contingent earn-out
Profit before interest
income and income tax
expense
expense
Lease obligations interest
Interest expense (income)
Profit before income tax
expense
Income tax expense – current
Income tax expense –
deferred
Total income tax expense
NET PROFIT FOR THE
PERIOD
Calian Consolidated Results
Calian Consolidated Results
During 2021, the Company continued to make progress on its four-pillar growth strategy through continued
diversification, customer retention and innovation. Overall consolidated revenue growth was 20% for the annual
period ending September 30, 2021 when compared to the same period of the previous year. Revenue growth was
achieved across all service lines, with the most significant growth coming from our ITCS segment, where revenues
have increased by 42% from the year prior. The revenue growth was not achieved by compromising margins. In
fact, the consolidated gross margin of 24% represents the highest annual gross margin performance in company
history. In the three-month period ended September 30, 2021, the Company signed $85 million in contracts and
ended the period with a realizable backlog of $1,270 million.
During 2021, the Company continued to make progress on its four-pillar growth strategy through continued
diversification, customer retention and innovation. Overall consolidated revenue growth was 20% for the annual
period ending September 30, 2021 when compared to the same period of the previous year. Revenue growth was
achieved across all service lines, with the most significant growth coming from our ITCS segment, where revenues
have increased by 42% from the year prior. The revenue growth was not achieved by compromising margins. In
fact, the consolidated gross margin of 24% represents the highest annual gross margin performance in company
history. In the three-month period ended September 30, 2021, the Company signed $85 million in contracts and
ended the period with a realizable backlog of $1,270 million.
33
33
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Revenue
Gross profit
Selling and marketing
General and administration
Research and development
Revenue
Three months ended
Year ended
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
$
127,639
$
123,057
$
518,404
$
432,320
33,104
4,451
14,223
2,007
22,867
3,028
9,978
658
126,737
16,334
53,454
5,020
89,156
12,336
38,012
1,998
Revenue
Gross profit
Selling and marketing
General and administration
Research and development
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
$
127,639
$
123,057
$
518,404
$
432,320
33,104
4,451
14,223
2,007
22,867
3,028
9,978
658
126,737
16,334
53,454
5,020
89,156
12,336
38,012
1,998
Profit before under noted items
$
12,423
$
9,203
$
51,929
$
36,810
Profit before under noted items
$
12,423
$
9,203
$
51,929
$
36,810
Consolidated revenues grew 4% in the three-month period, and 20% in the twelve-month period ended September
30, 2021 when compared to the same periods in the previous year. The increase in revenue can be attributed to 8%
acquisitive growth, and a 4% decrease in organic revenues for the three-month period, and 12% from acquisitive
growth and 8% from organic growth for the twelve-month period. The organic growth is impacted by the one-time
delivery of Mobile Respiratory Care Units with the COVID-19 response effort in the fourth quarter of the previous
fiscal year. Calian measures growth through acquisition on a trailing twelve-month basis; once the acquisition has
been included in our results for twelve months, their contribution is included in the organic growth metric.
IT and Cyber Solutions saw growth of 42% for the year ended September 30, 2021 when compared to the same
period of the previous year, which can be primarily attributed to contributions from Dapasoft and iSecurity, acquired
in Q2’21.
Learning posted growth of 29% for the year ended September 30, 2021 when compared to the same period of
the previous year. Learning was impacted in the previous year with stay at home orders and government imposed
restrictions on customers sites. This was mostly recovered in the current year by adapting to restrictions and
changing the method of customer delivery. Comprehensive Training Solutions (CTS) and Cadence Consultancy
were acquired in Q4’20 and Q1’21, respectively, and contributed to Learning revenue growth.
Revenue
Consolidated revenues grew 4% in the three-month period, and 20% in the twelve-month period ended September
30, 2021 when compared to the same periods in the previous year. The increase in revenue can be attributed to 8%
acquisitive growth, and a 4% decrease in organic revenues for the three-month period, and 12% from acquisitive
growth and 8% from organic growth for the twelve-month period. The organic growth is impacted by the one-time
delivery of Mobile Respiratory Care Units with the COVID-19 response effort in the fourth quarter of the previous
fiscal year. Calian measures growth through acquisition on a trailing twelve-month basis; once the acquisition has
been included in our results for twelve months, their contribution is included in the organic growth metric.
IT and Cyber Solutions saw growth of 42% for the year ended September 30, 2021 when compared to the same
period of the previous year, which can be primarily attributed to contributions from Dapasoft and iSecurity, acquired
in Q2’21.
Learning posted growth of 29% for the year ended September 30, 2021 when compared to the same period of
the previous year. Learning was impacted in the previous year with stay at home orders and government imposed
restrictions on customers sites. This was mostly recovered in the current year by adapting to restrictions and
changing the method of customer delivery. Comprehensive Training Solutions (CTS) and Cadence Consultancy
were acquired in Q4’20 and Q1’21, respectively, and contributed to Learning revenue growth.
Health revenue increased by 20% over the previous year, of which 7% is attributable to the Q2’20 acquisiton of Alio
and Allphase, organic growth across a number of existing customers, and COVID-19 response.
Health revenue increased by 20% over the previous year, of which 7% is attributable to the Q2’20 acquisiton of Alio
and Allphase, organic growth across a number of existing customers, and COVID-19 response.
Advanced Technologies posted growth of 9% over the previous year, largely due to market diversification strategies
and acquisitive revenue growth.
Advanced Technologies posted growth of 9% over the previous year, largely due to market diversification strategies
and acquisitive revenue growth.
The revenue mix continues to shift, with 51% from government and 49% from private sector. Comparatively, in FY
2020, this mix was 53% government and 47% private sector and in FY 2019, it was 69% government and 31%
private sector. Total non-government revenue grew by 31% compared to FY 2020 and by 140% compared to FY
2019—all while revenue from government contracts increased year over year.
The revenue mix continues to shift, with 51% from government and 49% from private sector. Comparatively, in FY
2020, this mix was 53% government and 47% private sector and in FY 2019, it was 69% government and 31%
private sector. Total non-government revenue grew by 31% compared to FY 2020 and by 140% compared to FY
2019—all while revenue from government contracts increased year over year.
The impacts of COVID-19 continue insofar as in-person delivery and travel restrictions impact the delivery to the
customer. This has resulted in additional costs incurred to deliver existing contracts for satellite ground systems.
Increased costs for travel and quarantine, availability of trained staff and supply chain issues contributed to these
additional costs. These circumstances are expected to continue throughout 2022 and this is reflected in Calian
estimates. Despite the business impacts, COVID-19 has generated new opportunities in the Health segment,
including the execution of pop-up vaccine clinics, rapid testing initiatives, telehealth services and virtual care.
The impacts of COVID-19 continue insofar as in-person delivery and travel restrictions impact the delivery to the
customer. This has resulted in additional costs incurred to deliver existing contracts for satellite ground systems.
Increased costs for travel and quarantine, availability of trained staff and supply chain issues contributed to these
additional costs. These circumstances are expected to continue throughout 2022 and this is reflected in Calian
estimates. Despite the business impacts, COVID-19 has generated new opportunities in the Health segment,
including the execution of pop-up vaccine clinics, rapid testing initiatives, telehealth services and virtual care.
As can be seen in the detailed discussions of each segment, performance and gross margin by segment varies
greatly from 18% to 25%, and the business mix in turn affects the consolidated gross margin. Gross margins for the
Company’s fourth quarter were 26% and for the annual period ending September 30, 2021 were 24%—new highs
As can be seen in the detailed discussions of each segment, performance and gross margin by segment varies
greatly from 18% to 25%, and the business mix in turn affects the consolidated gross margin. Gross margins for the
Company’s fourth quarter were 26% and for the annual period ending September 30, 2021 were 24%—new highs
Gross Profit
34
Gross Profit
34
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.
for the company for each respective period. This is the result of several initiatives, among them: higher margins
for acquisition products and services, organic growth focus on market verticals where margins are higher, and
innovation and introduction of products which command higher margins. These factors were partially offset by some
lower margins from large satellite ground system projects, and increased costs from COVID-19.
for the company for each respective period. This is the result of several initiatives, among them: higher margins
for acquisition products and services, organic growth focus on market verticals where margins are higher, and
innovation and introduction of products which command higher margins. These factors were partially offset by some
lower margins from large satellite ground system projects, and increased costs from COVID-19.
The volatility of the Canadian dollar is always an influencing factor for margins on new work in the Advanced
Technologies segment, to the extent that work is denominated in foreign currencies.
The volatility of the Canadian dollar is always an influencing factor for margins on new work in the Advanced
Technologies segment, to the extent that work is denominated in foreign currencies.
Operating Expenses
Operating Expenses
Selling and marketing costs increased $1,423 for the three-month period and $3,998 for the twelve-month period
ended September 30, 2021, compared to the same periods of the prior year. The overall increase in cost and activity
is primarily due to selling and marketing costs from recent acquisitions. This is compared to a period in the prior year
where selling and marketing efforts were significantly reduced due to COVID-19 restrictions.
Selling and marketing costs increased $1,423 for the three-month period and $3,998 for the twelve-month period
ended September 30, 2021, compared to the same periods of the prior year. The overall increase in cost and activity
is primarily due to selling and marketing costs from recent acquisitions. This is compared to a period in the prior year
where selling and marketing efforts were significantly reduced due to COVID-19 restrictions.
General and administration costs increased by 43% for the three-month period and 41% for the twelve-month
period ended September 30, 2021, compared to the same periods of the previous year. The increase is the result
of investments within the four operating segments to enable project delivery, as well as cost acquired through
recent acquisitions, increased costs in relation to share equity plans and the one-time costs of $2,000 incurred in
the twelve-month period ended September 30, 2021 relating to acquisitions costs incurred in the year, including the
acquisitions of Cadence, InterTronic and Dapasoft. The balance of the increase is the result of investments in our
corporate capabilities in human resources and information technology.
General and administration costs increased by 43% for the three-month period and 41% for the twelve-month
period ended September 30, 2021, compared to the same periods of the previous year. The increase is the result
of investments within the four operating segments to enable project delivery, as well as cost acquired through
recent acquisitions, increased costs in relation to share equity plans and the one-time costs of $2,000 incurred in
the twelve-month period ended September 30, 2021 relating to acquisitions costs incurred in the year, including the
acquisitions of Cadence, InterTronic and Dapasoft. The balance of the increase is the result of investments in our
corporate capabilities in human resources and information technology.
Research and development costs increased $1,349 in the three-month period, and $3,022 for the twelve-month
period ended September 30, 2021, compared to the same periods in the prior year. The additional costs are solely
the result of research and development costs from recent acquisitions.
Research and development costs increased $1,349 in the three-month period, and $3,022 for the twelve-month
period ended September 30, 2021, compared to the same periods in the prior year. The additional costs are solely
the result of research and development costs from recent acquisitions.
Below is a discussion of the performance of the four operating segments for the fourth quarter, including:
Below is a discussion of the performance of the four operating segments for the fourth quarter, including:
Revenue
42,728 +14% $
44,167 -22% $
17,561 +23% $
23,183 +61%
Advanced
Technologies
$
$
$
$
7% / 7%
11,279
31,858
179,845
Organic / acquisitive
Gross margin
New contract signings
Backlog
Health
Learning
IT & Cyber
-22% / Nil
22% / 1%
9% / 52%
$
$
$
11,097
31,187
898,439
$
$
$
3,848
4,100
319,283
$
$
$
6,880
17,469
124,039
Advanced
Technologies
Health
Learning
IT & Cyber
Revenue
Organic / acquisitive
Gross margin
New contract signings
Backlog
$
$
$
$
42,728 +14% $
44,167 -22% $
17,561 +23% $
23,183 +61%
7% / 7%
11,279
31,858
179,845
-22% / Nil
22% / 1%
9% / 52%
$
$
$
11,097
31,187
898,439
$
$
$
3,848
4,100
319,283
$
$
$
6,880
17,469
124,039
*Comparisons in the above table are made to the three month period ended September 30, 2020 where appropriate.
*Comparisons in the above table are made to the three month period ended September 30, 2020 where appropriate.
35
35
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Advanced Technologies
Advanced Technologies
The Advanced Technologies segment offers internally developed products, engineering services and solutions for
the space, communications, nuclear, agriculture, defence, automotive and government sectors. Capabilities are
wide-ranging, covering software development, product development, custom manufacturing, full life-cycle support,
studies, requirements analysis, project management, multi-discipline engineered system solutions, and training.
The Advanced Technologies segment is a full-service organization offering turnkey solutions for industry-leading
customers.
A supplier of communication systems and products for terrestrial and satellite networks, Calian operates a center of
excellence in communication ground systems for satellite and cable network operators around the world. Advanced
Technologies provides satellite gateways which can include large aperture radio frequency (“RF”) antennas,
telemetry tracking and control, as well as high-availability software solutions for managing and monitoring these
networks. The segment’s software tools enable network operators to manage, plan and analyze network resources,
including satellite power and frequencies. With an international reputation for supporting space missions, Advanced
Technologies delivers custom communication solutions and systems engineering capabilities to customers in
Canada and around the world.
Manufacturing capability includes a surface mount electronics manufacturing line with automated inspection and
X-ray. Advanced Technologies offers a composite carbon fiber manufacturing capability as well as an extruded
cable manufacturing line. These are complemented by engineering capabilities that support custom build-to-print
manufacturing services for commercial and defence clients. Calian AgTech products and solutions are manufactured
in-house for the agriculture sector, helping to protect assets such as stored crops, fuel and water.
Tallysman, an acquisition, manufactures Global Navigation Satellite System products that have a wide range of
uses across many industries, including electric vehicle manufacturing. The acquisition of InterTronics enhances the
Company’s current capabilities in the RF ground system business line with state-of-the-art, high-precision antenna
solutions that include high-accuracy, high-speed motion systems used by military, scientific and commercial
customers.
36
The Advanced Technologies segment offers internally developed products, engineering services and solutions for
the space, communications, nuclear, agriculture, defence, automotive and government sectors. Capabilities are
wide-ranging, covering software development, product development, custom manufacturing, full life-cycle support,
studies, requirements analysis, project management, multi-discipline engineered system solutions, and training.
The Advanced Technologies segment is a full-service organization offering turnkey solutions for industry-leading
customers.
A supplier of communication systems and products for terrestrial and satellite networks, Calian operates a center of
excellence in communication ground systems for satellite and cable network operators around the world. Advanced
Technologies provides satellite gateways which can include large aperture radio frequency (“RF”) antennas,
telemetry tracking and control, as well as high-availability software solutions for managing and monitoring these
networks. The segment’s software tools enable network operators to manage, plan and analyze network resources,
including satellite power and frequencies. With an international reputation for supporting space missions, Advanced
Technologies delivers custom communication solutions and systems engineering capabilities to customers in
Canada and around the world.
Manufacturing capability includes a surface mount electronics manufacturing line with automated inspection and
X-ray. Advanced Technologies offers a composite carbon fiber manufacturing capability as well as an extruded
cable manufacturing line. These are complemented by engineering capabilities that support custom build-to-print
manufacturing services for commercial and defence clients. Calian AgTech products and solutions are manufactured
in-house for the agriculture sector, helping to protect assets such as stored crops, fuel and water.
Tallysman, an acquisition, manufactures Global Navigation Satellite System products that have a wide range of
uses across many industries, including electric vehicle manufacturing. The acquisition of InterTronics enhances the
Company’s current capabilities in the RF ground system business line with state-of-the-art, high-precision antenna
solutions that include high-accuracy, high-speed motion systems used by military, scientific and commercial
customers.
36
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. $
42,728
$
37,570
$
166,591
$
Revenue
Gross profit
Selling and marketing
General and administration
Research and development
Profit before under noted items
$
$
3,834
$
20,855
$
21,003
Profit before under noted items
$
$
3,834
$
20,855
$
21,003
Calian engineering and technical services support clients across the system engineering process, including
concept development for the design and implementation of next-generation critical systems and full life-cycle
support for propulsion, electrical and electronic systems, computer systems, naval architecture, and aerospace
and nuclear systems. Associated services are provided in integrated logistics support, drafting, and other technical
services. The nuclear services team develops and executes comprehensive and cost-effective waste management
and decommissioning solutions, and provides a systematic approach to identifying hazards, determining their
consequences, and providing recommendations to mitigate identified risks. The scope of these nuclear services
includes decommissioning programs, radioactive waste management programs and remediation.
Calian engineering and technical services support clients across the system engineering process, including
concept development for the design and implementation of next-generation critical systems and full life-cycle
support for propulsion, electrical and electronic systems, computer systems, naval architecture, and aerospace
and nuclear systems. Associated services are provided in integrated logistics support, drafting, and other technical
services. The nuclear services team develops and executes comprehensive and cost-effective waste management
and decommissioning solutions, and provides a systematic approach to identifying hazards, determining their
consequences, and providing recommendations to mitigate identified risks. The scope of these nuclear services
includes decommissioning programs, radioactive waste management programs and remediation.
Financial performance
Financial performance
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
Revenue
Gross profit
Selling and marketing
General and administration
Research and development
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
$
42,728
$
37,570
$
166,591
$
7,026
1,136
1,559
497
41,576
7,496
9,683
3,542
153,382
33,991
4,995
6,457
1,536
11,279
1,975
2,519
1,243
5,542
Advanced Technologies’ revenues increased by 14% for the three-month period, and 9% for the twelve-month
period ended September 30, 2021 compared to the same periods in the previous year. The revenue increase in
the three-month period is primarily attributable to acquisitive revenue, which makes up 7% of the total increase,
and reflects 9% in the twelve-month period ending September 30, 2021 when compared to the same period of the
previous year. Acquisitive revenue is attributable to revenue from the acquisitions of InterTronic and Tallysman. In
addition to acquisitive growth, the Company has demonstrated growth in AgTech product sales, and continued
expansion and growth in European ground system products. The fourth quarter was a record for SatCom Product
Decimator spectrum analyzer sales and saw increased signings for software defined solutions, in addition to strong
growth in other legacy Advanced Technologies products. The Advanced Technologies segment continues to be
impacted by COVID-19. This is evident in both the decrease of product delivery volumes for the mobile wireless
product to a Tier 1 North American mobile customer where travel restrictions are impeding the ability to complete
installations and communication ground systems project slowdowns with the inability to travel to site to complete
on-site engineering work. Internally developed product sales continue to be a focus for the Company, contributing
positively to revenue growth and higher margins in the future.
Advanced Technologies’ revenues increased by 14% for the three-month period, and 9% for the twelve-month
period ended September 30, 2021 compared to the same periods in the previous year. The revenue increase in
the three-month period is primarily attributable to acquisitive revenue, which makes up 7% of the total increase,
and reflects 9% in the twelve-month period ending September 30, 2021 when compared to the same period of the
previous year. Acquisitive revenue is attributable to revenue from the acquisitions of InterTronic and Tallysman. In
addition to acquisitive growth, the Company has demonstrated growth in AgTech product sales, and continued
expansion and growth in European ground system products. The fourth quarter was a record for SatCom Product
Decimator spectrum analyzer sales and saw increased signings for software defined solutions, in addition to strong
growth in other legacy Advanced Technologies products. The Advanced Technologies segment continues to be
impacted by COVID-19. This is evident in both the decrease of product delivery volumes for the mobile wireless
product to a Tier 1 North American mobile customer where travel restrictions are impeding the ability to complete
installations and communication ground systems project slowdowns with the inability to travel to site to complete
on-site engineering work. Internally developed product sales continue to be a focus for the Company, contributing
positively to revenue growth and higher margins in the future.
Gross margin percentage increased from 19% to 26% for the three-month period and increased from 22% to 25%
for the twelve-month period ended September 30, 2021, when compared to the same periods of the prior year. This
change is primarily due to the revenue mix being impacted by a lower proportion of revenues coming from a large
ground system project along with higher margins from acquisitive revenue and product sales.
Gross margin percentage increased from 19% to 26% for the three-month period and increased from 22% to 25%
for the twelve-month period ended September 30, 2021, when compared to the same periods of the prior year. This
change is primarily due to the revenue mix being impacted by a lower proportion of revenues coming from a large
ground system project along with higher margins from acquisitive revenue and product sales.
Selling and marketing expenses increased by $839 for the three-month period and $2,501 for the twelve-month
period ended September 30, 2021, compared to the same periods in the year prior. Increases in the current year can
be attributed to consolidation of costs stemming from the acquisition of Tallysman and InterTronic and additional
spend in the current year where selling and marketing expenses were significantly reduced by shutdowns and travel
restrictions due to COVID-19.
General and administration expenses increased by $960 for the three-month and $3,266 for the twelve-month
periods ended September 30, 2021, compared to the same periods in the year prior due to consolidation of operating
costs of recent acquisitions, current year acquisition costs for InterTronic, along with investments in headcount and
technological capabilities where the prior year’s uncertainty around COVID-19 resulted in cost control measures in
place throughout the segment.
Selling and marketing expenses increased by $839 for the three-month period and $2,501 for the twelve-month
period ended September 30, 2021, compared to the same periods in the year prior. Increases in the current year can
be attributed to consolidation of costs stemming from the acquisition of Tallysman and InterTronic and additional
spend in the current year where selling and marketing expenses were significantly reduced by shutdowns and travel
restrictions due to COVID-19.
General and administration expenses increased by $960 for the three-month and $3,266 for the twelve-month
periods ended September 30, 2021, compared to the same periods in the year prior due to consolidation of operating
costs of recent acquisitions, current year acquisition costs for InterTronic, along with investments in headcount and
technological capabilities where the prior year’s uncertainty around COVID-19 resulted in cost control measures in
place throughout the segment.
37
37
7,026
1,136
1,559
497
41,576
7,496
9,683
3,542
153,382
33,991
4,995
6,457
1,536
11,279
1,975
2,519
1,243
5,542
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Research and development costs increased by $746 for the three-month period, and $2,006 for the twelve-month
period ended September 30, 2021, when compared to the same periods of the previous year due to additional
research costs incurred from recent acquisitions.
Research and development costs increased by $746 for the three-month period, and $2,006 for the twelve-month
period ended September 30, 2021, when compared to the same periods of the previous year due to additional
research costs incurred from recent acquisitions.
Profitability increased for the three- and twelve-month periods ended September 30, 2021, which is a result of
acquisitive revenue, and higher gross margins from acquisitions.
Profitability increased for the three- and twelve-month periods ended September 30, 2021, which is a result of
acquisitive revenue, and higher gross margins from acquisitions.
Fourth Quarter Highlights
Record Quarter For Decimator Spectrum Analyzer
Sales of the Decimator D4 spectrum analyzer reached $1 million this quarter—a record quarter of sales for the
product line since it was introduced over seven years ago. The D4 is an innovative evolution to the spectrum analyzer
product line, providing additional signal monitoring capabilities and new software applications for customers to
improve their service monitoring.
SaskPower Small Modular Reactor Win
for use by 2030.
Strong Antenna Portfolio
SaskPower selected Calian to provide engineering and technical services to support the work required to maintain
nuclear power from small modular reactors. The planned outcome is a potential zero emissions power source, ready
Fourth Quarter Highlights
Record Quarter For Decimator Spectrum Analyzer
Sales of the Decimator D4 spectrum analyzer reached $1 million this quarter—a record quarter of sales for the
product line since it was introduced over seven years ago. The D4 is an innovative evolution to the spectrum analyzer
product line, providing additional signal monitoring capabilities and new software applications for customers to
improve their service monitoring.
SaskPower Small Modular Reactor Win
SaskPower selected Calian to provide engineering and technical services to support the work required to maintain
nuclear power from small modular reactors. The planned outcome is a potential zero emissions power source, ready
for use by 2030.
Strong Antenna Portfolio
Tallysman continues to see growth in many of its antenna product lines. The team adapted and refined Accutenna
technology for an electric vehicle manufacturer, resulting in a patented antenna that meets exacting requirements
for phase-based positioning. The Tallysman portfolio of GNSS application antennas, along with Calian large aperture
composite fibre and Intronic steel antenna lines have expanded Calian market reach.
Tallysman continues to see growth in many of its antenna product lines. The team adapted and refined Accutenna
technology for an electric vehicle manufacturer, resulting in a patented antenna that meets exacting requirements
for phase-based positioning. The Tallysman portfolio of GNSS application antennas, along with Calian large aperture
composite fibre and Intronic steel antenna lines have expanded Calian market reach.
Expansion of Defence Product Development and Manufacturing
Expansion of Defence Product Development and Manufacturing
Our customers continue to gain confidence in our ability to provide them with reliable components for the military
vehicles that they manufacture. US and Canadian defence prime contractors use Calian components, assemblies
and harnesses in an increasing number of vehicle models, resulting in $1.5 million in sales this quarter.
Our customers continue to gain confidence in our ability to provide them with reliable components for the military
vehicles that they manufacture. US and Canadian defence prime contractors use Calian components, assemblies
and harnesses in an increasing number of vehicle models, resulting in $1.5 million in sales this quarter.
Images From Mercury
Images From Mercury
The European Space Agency BepiColumbo probe was able to capture its first pictures of Mercury, thanks to Calian
antennas that transmit commands to the spacecraft and receive images back as they track the probe through space.
The European Space Agency BepiColumbo probe was able to capture its first pictures of Mercury, thanks to Calian
antennas that transmit commands to the spacecraft and receive images back as they track the probe through space.
Full Fiscal Year Highlights
Evolving Products
Full Fiscal Year Highlights
Evolving Products
Calian has partnered with another cable test solution provider to develop capabilities to test DOCSIS 4.0 equipment,
built on Calian DOCSIS 3.1 intellectual property. This resulted in a development contract of just under $1 million and
the beginning of a partnership with another key player in the cable network industry.
Calian has partnered with another cable test solution provider to develop capabilities to test DOCSIS 4.0 equipment,
built on Calian DOCSIS 3.1 intellectual property. This resulted in a development contract of just under $1 million and
the beginning of a partnership with another key player in the cable network industry.
Custom Software Development
Custom Software Development
Customers like Inmarsat and SiriusXM continue to rely on Advanced Technologies for the provision of highly complex
solutions to enable the critical services that they offer. Using a systems engineering approach, Calian subject matter
experts work closely with customers to provide solutions that increase the performance of their satellite networks.
Customer signings have increased software development backlogs to record levels.
Customers like Inmarsat and SiriusXM continue to rely on Advanced Technologies for the provision of highly complex
solutions to enable the critical services that they offer. Using a systems engineering approach, Calian subject matter
experts work closely with customers to provide solutions that increase the performance of their satellite networks.
Customer signings have increased software development backlogs to record levels.
38
38
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. Prioritized Customer Retention
Prioritized Customer Retention
Despite the challenges posed by COVID-19, the team adapted to continue supporting customers worldwide,
deploying radio frequency (RF) systems to installations around the globe. These RF systems provide critical satellite
communications infrastructure and generate solid revenue for Advanced Technologies.
Despite the challenges posed by COVID-19, the team adapted to continue supporting customers worldwide,
deploying radio frequency (RF) systems to installations around the globe. These RF systems provide critical satellite
communications infrastructure and generate solid revenue for Advanced Technologies.
Increased Demand for Custom Software Solutions
Increased Demand for Custom Software Solutions
The software development and systems engineering team has grown substantially to support the increased demand
for custom software solutions. Particularly, customers are interested in solutions that leverage Calian systems
expertise in satellite resource management and network management.
The software development and systems engineering team has grown substantially to support the increased demand
for custom software solutions. Particularly, customers are interested in solutions that leverage Calian systems
expertise in satellite resource management and network management.
Health
Health
Calian has the largest diversified Health footprint in Canada, with over 20 years of experience in the management of
health care professionals and health programs, as well as the management of primary care and occupational health
clinics. With a network of over 2,400 healthcare professionals, Calian supports over six million patient visits per
year at over 180 Primacy clinic locations across Canada, located in Loblaw grocery stores (including Real Canadian
Superstore®, Zehrs®, Loblaws® and No Frills®).
Calian has the largest diversified Health footprint in Canada, with over 20 years of experience in the management of
health care professionals and health programs, as well as the management of primary care and occupational health
clinics. With a network of over 2,400 healthcare professionals, Calian supports over six million patient visits per
year at over 180 Primacy clinic locations across Canada, located in Loblaw grocery stores (including Real Canadian
Superstore®, Zehrs®, Loblaws® and No Frills®).
The Department of National Defence is the largest customer, with health and psychological services also provided to
police, correctional institutions and border services agencies in the Canadian market. The Health team has expanded
operations with government and private customers across Canada in response to the COVID-19 pandemic, offering
vaccination programs, screening, monitoring, contact tracing, education and more.
The Department of National Defence is the largest customer, with health and psychological services also provided to
police, correctional institutions and border services agencies in the Canadian market. The Health team has expanded
operations with government and private customers across Canada in response to the COVID-19 pandemic, offering
vaccination programs, screening, monitoring, contact tracing, education and more.
39
39
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Financial performance
Financial performance
Revenue
Gross profit
Selling and marketing
General and administration
Research and development
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
$
44,167
$
56,848
$
194,936
$
11,097
790
2,919
115
9,872
526
2,069
160
47,843
2,636
9,848
573
163,035
32,370
1,699
6,815
460
Revenue
Gross profit
Selling and marketing
General and administration
Research and development
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
$
44,167
$
56,848
$
194,936
$
11,097
790
2,919
115
9,872
526
2,069
160
47,843
2,636
9,848
573
163,035
32,370
1,699
6,815
460
Profit before under noted items
$
7,273
$
7,117
$
34,786
$
23,396
Profit before under noted items
$
7,273
$
7,117
$
34,786
$
23,396
Revenues decreased 22% for the three-month period and increased 20% for the twelve-month period ended
September 30, 2021 when compared to the same periods of the previous year. The decrease in the current quarter
is primarily a result of the one-time depoloyment of Mobile Respiratory Care Units for the pandemic response in the
fourth quarter of the prior year, which was completed in the first quarter of the current fiscal year. Revenue growth
in the year is a result of expanding scope with existing customers, continued pandemic response, and acquisitive
revenue. Acquisitive growth represented an increase of 7% for the twelve-month period ended September 30, 2021
when compared to the same period of the prior year. Growth through acquisition is measured on a trailing twelve-
month basis; once the acquisition has been included in results for twelve-months, their contribution is included in
the organic growth metric.
Revenues decreased 22% for the three-month period and increased 20% for the twelve-month period ended
September 30, 2021 when compared to the same periods of the previous year. The decrease in the current quarter
is primarily a result of the one-time depoloyment of Mobile Respiratory Care Units for the pandemic response in the
fourth quarter of the prior year, which was completed in the first quarter of the current fiscal year. Revenue growth
in the year is a result of expanding scope with existing customers, continued pandemic response, and acquisitive
revenue. Acquisitive growth represented an increase of 7% for the twelve-month period ended September 30, 2021
when compared to the same period of the prior year. Growth through acquisition is measured on a trailing twelve-
month basis; once the acquisition has been included in results for twelve-months, their contribution is included in
the organic growth metric.
The Company has seen increased demand from new and existing opportunities in clinician services and services to
remote locations in Northern Canada. Organic growth year over year can be attributed to COVID-19 screening and
vaccination program support. COVID-19 driven growth was also evident in the increased demand in the health care
practitioners’ contract with the Government of Canada.
The Company has seen increased demand from new and existing opportunities in clinician services and services to
remote locations in Northern Canada. Organic growth year over year can be attributed to COVID-19 screening and
vaccination program support. COVID-19 driven growth was also evident in the increased demand in the health care
practitioners’ contract with the Government of Canada.
Gross margin percentage increased from 17% to 25% for the three-month period and increased from 20% to 25% for
the twelve-month period ended September 30, 2021 when compared to the same periods of the prior year. The increase
in margin is primarily in relation to acquisitive revenue. The fourth quarter of the previous fiscal year was also impacted
by the pandemic response related to the Mobile Respiratory Care Units, which was recognized at lower margins.
Gross margin percentage increased from 17% to 25% for the three-month period and increased from 20% to 25% for
the twelve-month period ended September 30, 2021 when compared to the same periods of the prior year. The increase
in margin is primarily in relation to acquisitive revenue. The fourth quarter of the previous fiscal year was also impacted
by the pandemic response related to the Mobile Respiratory Care Units, which was recognized at lower margins.
Selling and marketing expenses increased by $937 for the twelve-month period ended September 30, 2021 when
compared to the same period of the previous year due to consolidation of costs from the acquisition of Alio and
Allphase and additional spend to grow the customer base in new regions or pursue new customers.
Selling and marketing expenses increased by $937 for the twelve-month period ended September 30, 2021 when
compared to the same period of the previous year due to consolidation of costs from the acquisition of Alio and
Allphase and additional spend to grow the customer base in new regions or pursue new customers.
General and administration expenses increased by $850 for the three-month period and $3,033 for the twelve-
month period ended September 30, 2021 when compared to the same periods of the prior year, due to increases in
headcount to support new contracts and new headcount from the acquisition of Alio and Allphase, acquired in the
General and administration expenses increased by $850 for the three-month period and $3,033 for the twelve-
month period ended September 30, 2021 when compared to the same periods of the prior year, due to increases in
headcount to support new contracts and new headcount from the acquisition of Alio and Allphase, acquired in the
second quarter of fiscal year 2020.
In the fourth quarter, Calian announced an expansion of clinical trial and patient support programs to pharmaceutical
customers in eight new markets—the US, Belgium, France, Germany, Hungary, Netherlands, Poland and Spain. The
expansion was a direct result of overarchieving industry target metrics during a 2020 pharmaceutical clinical trial
pilot program, and brings timely, high-quality care to patients in Europe and the US.
In the fourth quarter, Calian announced an expansion of clinical trial and patient support programs to pharmaceutical
customers in eight new markets—the US, Belgium, France, Germany, Hungary, Netherlands, Poland and Spain. The
expansion was a direct result of overarchieving industry target metrics during a 2020 pharmaceutical clinical trial
pilot program, and brings timely, high-quality care to patients in Europe and the US.
Psychological Services Contract
Psychological Services Contract
Royal Canadian Mounted Police awarded a multi-year contract for Psychological Services. At $8 million over five
years, this is the largest Psychological Assessments win to date.
Royal Canadian Mounted Police awarded a multi-year contract for Psychological Services. At $8 million over five
years, this is the largest Psychological Assessments win to date.
40
40
Fourth Quarter Highlights
Expansion to Europe
second quarter of fiscal year 2020.
Fourth Quarter Highlights
Expansion to Europe
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. Full Fiscal Year Highlights
COVID-19 Response
Full Fiscal Year Highlights
COVID-19 Response
Calian is proud to have played a key role in the response to COVID-19, vaccinating over 300,000 Canadians at 21
different pop-up clinics. 25,000 of these Canadians were vaccinated as part of Operation Remote Immunity, an
initiative that ensured access to the COVID-19 vaccine for residents of First Nations’ elder care homes and members
of Indigenous communities in 31 fly-in northern Ontario locations and Moosonee. Calian was also selected by the
Government of Nunavut to provide telehealth services as part of the government’s long-term pandemic preparedness
strategy. The COVID-19 hotline is staffed by Calian nurses and offers screening, education, monitoring and contact
tracing for Nunavummiut, who often live in remote locations a great distance from healthcare services.
Calian is proud to have played a key role in the response to COVID-19, vaccinating over 300,000 Canadians at 21
different pop-up clinics. 25,000 of these Canadians were vaccinated as part of Operation Remote Immunity, an
initiative that ensured access to the COVID-19 vaccine for residents of First Nations’ elder care homes and members
of Indigenous communities in 31 fly-in northern Ontario locations and Moosonee. Calian was also selected by the
Government of Nunavut to provide telehealth services as part of the government’s long-term pandemic preparedness
strategy. The COVID-19 hotline is staffed by Calian nurses and offers screening, education, monitoring and contact
tracing for Nunavummiut, who often live in remote locations a great distance from healthcare services.
Supporting Health needs of Military Families and Veterans
Supporting Health needs of Military Families and Veterans
While the Canadian Armed Forces (CAF) provides serving members with complete health care, their family members
rely on the provincial health systems, presenting a unique challenge for military families who relocate frequently due
to postings. Created in partnership with Military Family Services, a division of Canadian Forces Morale and Welfare
Services, the Military Family Doctor Network uses the Calian network of health clinics to help connect military family
members with participating physicians. To date, MFDN has referred more than 3,500 family members to physicians.
In 2021, Calian initiated two new pilots to support military families and veterans. The first is the Military Family Patient
Support Program, delivered in collaboration with Canadian Forces Morale Welfare Services. This program provides
on-demand home care for dependents when active-duty military are called away to meet the demands of their roles.
The Veteran Care pilot is focused on the western Ontario catchment of the Operation Stress Injury (OSI) Clinic.
Calian assists veterans in securing a family doctor when they are released from the OSI Clinic program, easing their
transition to their home community and ensuring continuity of care. To support this program, Calian, in collaboration
with Queen’s University researchers, produced culturally informed, evidence-based guides for healthcare providers
meeting with veterans and veterans meeting with healthcare providers. These guides have been provided to VAC for
wider use and distribution.
Learning
While the Canadian Armed Forces (CAF) provides serving members with complete health care, their family members
rely on the provincial health systems, presenting a unique challenge for military families who relocate frequently due
to postings. Created in partnership with Military Family Services, a division of Canadian Forces Morale and Welfare
Services, the Military Family Doctor Network uses the Calian network of health clinics to help connect military family
members with participating physicians. To date, MFDN has referred more than 3,500 family members to physicians.
In 2021, Calian initiated two new pilots to support military families and veterans. The first is the Military Family Patient
Support Program, delivered in collaboration with Canadian Forces Morale Welfare Services. This program provides
on-demand home care for dependents when active-duty military are called away to meet the demands of their roles.
The Veteran Care pilot is focused on the western Ontario catchment of the Operation Stress Injury (OSI) Clinic.
Calian assists veterans in securing a family doctor when they are released from the OSI Clinic program, easing their
transition to their home community and ensuring continuity of care. To support this program, Calian, in collaboration
with Queen’s University researchers, produced culturally informed, evidence-based guides for healthcare providers
meeting with veterans and veterans meeting with healthcare providers. These guides have been provided to VAC for
wider use and distribution.
Learning
41
41
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Calian is a trusted provider of specialized training services and solutions for the Canadian Armed Forces, NATO and
clients in the defence, health and energy sectors and enables clients to reach competency and validate learning
plans and team performance. Calian provides consulting services in emergency management, training and advanced
training technologies to federal and provincial governments, municipalities, Indigenous communities, and the private
sector, primarily in domestic markets.
Calian is a trusted provider of specialized training services and solutions for the Canadian Armed Forces, NATO and
clients in the defence, health and energy sectors and enables clients to reach competency and validate learning
plans and team performance. Calian provides consulting services in emergency management, training and advanced
training technologies to federal and provincial governments, municipalities, Indigenous communities, and the private
sector, primarily in domestic markets.
Learning offers full-service training programs and services ranging from needs analysis and program design,
development and delivery to administration and evaluation. The goal is to help clients reduce student time-to-
competency. Calian training consulting services help clients achieve learning outcomes and optimize their workforce.
Learning offers full-service training programs and services ranging from needs analysis and program design,
development and delivery to administration and evaluation. The goal is to help clients reduce student time-to-
competency. Calian training consulting services help clients achieve learning outcomes and optimize their workforce.
Complementing the training services are products and technology. Calian MaestroEDE™ is a tool used to design,
develop and deliver high-fidelity, collective training exercises for military customers. Calian ResponseReady™ is an
online platform and simulation tool that supports emergency management training exercise delivery and evaluation.
Recently-acquired SimFront offers augmented, virtual and mixed reality technology for immersive training solutions.
Complementing the training services are products and technology. Calian MaestroEDE™ is a tool used to design,
develop and deliver high-fidelity, collective training exercises for military customers. Calian ResponseReady™ is an
online platform and simulation tool that supports emergency management training exercise delivery and evaluation.
Recently-acquired SimFront offers augmented, virtual and mixed reality technology for immersive training solutions.
Financial performance
Financial performance
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
Profit before under noted items
$
2,624
$
2,319
$
12,435
$
Profit before under noted items
$
2,624
$
2,319
$
12,435
$
Revenue
Gross profit
Selling and marketing
General and administration
Research and development
$
17,561
$
14,282
$
74,622
$
3,848
181
1,043
-
3,327
230
778
-
17,337
866
4,036
-
57,834
12,451
987
2,882
-
8,582
Revenue increased by 23% for the three-month period and 29% for the twelve-month period ended September
30, 2021 when compared to the same periods of the prior year. Acquisitive growth from Cadence Consultancy and
Custom Training Solutions (“CTS”) for the three-month period ended September 30, 2021 was 1% and twelve-
month periods ended September 30, 2021 was 9% when compared to the same periods of the previous year.
Organic growth comes largely from existing customers where in the prior year the Learning segment was impacted
significantly with government-imposed stay at home orders causing shutdowns at customer sites. The Segment has
pivoted over the last 12 months to deliver more services remotely for customers who are willing to do so.
Gross margin has decreased from 23% to 22% for the three-month period and increased from 22% to 23% for the
twelve-month period ended September 30, 2021 due to a focus on margin efficiency for ongoing projects along with
revenue from recent acquisitions being earned at a higher margin. General and administration spending increased
by $265 for the three-month period and $1,154 for the twelve-month period ending September 30, 2021 when
compared to the same periods of the prior year, resulting from costs attributable to acquisitions completed within
the past twelve months and the consolidation of costs related to the acquired entities.
Revenue
Gross profit
Selling and marketing
General and administration
Research and development
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
$
17,561
$
14,282
$
74,622
$
3,848
181
1,043
-
3,327
230
778
-
17,337
866
4,036
-
57,834
12,451
987
2,882
-
8,582
Revenue increased by 23% for the three-month period and 29% for the twelve-month period ended September
30, 2021 when compared to the same periods of the prior year. Acquisitive growth from Cadence Consultancy and
Custom Training Solutions (“CTS”) for the three-month period ended September 30, 2021 was 1% and twelve-
month periods ended September 30, 2021 was 9% when compared to the same periods of the previous year.
Organic growth comes largely from existing customers where in the prior year the Learning segment was impacted
significantly with government-imposed stay at home orders causing shutdowns at customer sites. The Segment has
pivoted over the last 12 months to deliver more services remotely for customers who are willing to do so.
Gross margin has decreased from 23% to 22% for the three-month period and increased from 22% to 23% for the
twelve-month period ended September 30, 2021 due to a focus on margin efficiency for ongoing projects along with
revenue from recent acquisitions being earned at a higher margin. General and administration spending increased
by $265 for the three-month period and $1,154 for the twelve-month period ending September 30, 2021 when
compared to the same periods of the prior year, resulting from costs attributable to acquisitions completed within
the past twelve months and the consolidation of costs related to the acquired entities.
Fourth Quarter Highlights
European Expansion
Fourth Quarter Highlights
European Expansion
The Calian footprint continues to grow, with strategic wins in Europe—NATO Command Structure and Battle Staff
training, French Ministry of Defence and NATO Security Force Assistance Centre of Excellence, to name a few.
Calian is now a leading training provider for NATO.
The Calian footprint continues to grow, with strategic wins in Europe—NATO Command Structure and Battle Staff
training, French Ministry of Defence and NATO Security Force Assistance Centre of Excellence, to name a few.
Calian is now a leading training provider for NATO.
42
42
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. Acquisition of SimFront Simulation Systems Corporation
Acquisition of SimFront Simulation Systems Corporation
With the acquisition of Canadian-based SimFront in Q1’22, Calian now offers end-to-end military training
and simulation solutions—a “one stop shop” for customers. This acquisition also allows Calian to pursue new
opportunities with customers seeking integration and immersive training support, not just in the defence industry but
in the healthcare, oil and gas, retail industries and beyond. SimFront augmented, virtual and mixed reality solutions
elevate Calian capabilities.
With the acquisition of Canadian-based SimFront in Q1’22, Calian now offers end-to-end military training
and simulation solutions—a “one stop shop” for customers. This acquisition also allows Calian to pursue new
opportunities with customers seeking integration and immersive training support, not just in the defence industry but
in the healthcare, oil and gas, retail industries and beyond. SimFront augmented, virtual and mixed reality solutions
elevate Calian capabilities.
Donation to Northern Alberta Institute of Technology (NAIT)
Donation to Northern Alberta Institute of Technology (NAIT)
ResponseReady™ is the industry-leading exercise management and simulation platform that supports the creation,
delivery and evaluation of highly realistic exercises that range from large-scale exercises to smaller organizational
exercises and drills. Calian donated ResponseReady™ (value of $500,000) to NAIT, ensuring that students will be
fully prepared to respond to disaster, emergency and crisis events.
ResponseReady™ is the industry-leading exercise management and simulation platform that supports the creation,
delivery and evaluation of highly realistic exercises that range from large-scale exercises to smaller organizational
exercises and drills. Calian donated ResponseReady™ (value of $500,000) to NAIT, ensuring that students will be
fully prepared to respond to disaster, emergency and crisis events.
Full Fiscal Year Highlights
Acquisition of Cadence Consultancy Limited
Full Fiscal Year Highlights
Acquisition of Cadence Consultancy Limited
In the first quarter, Calian acquired UK-based training firm Cadence, which designs, develops and delivers complex
training exercises for Joint Forces Training Centre, one of the two multi-national and multi-service collective training
centres in NATO, and to the wider NATO audience across Europe. Cadence also delivered operational training
to members of the NATO Mission Iraq and NATO Resolute Support Mission in Afghanistan. This acquisition has
accelerated the Calian expansion into Europe, allowing Calian to build upon the existing, strong relationship Cadence
has with NATO.
Re-Win of Significant Learning Contract
In the first quarter, Calian acquired UK-based training firm Cadence, which designs, develops and delivers complex
training exercises for Joint Forces Training Centre, one of the two multi-national and multi-service collective training
centres in NATO, and to the wider NATO audience across Europe. Cadence also delivered operational training
to members of the NATO Mission Iraq and NATO Resolute Support Mission in Afghanistan. This acquisition has
accelerated the Calian expansion into Europe, allowing Calian to build upon the existing, strong relationship Cadence
has with NATO.
Re-Win of Significant Learning Contract
Calian re-won a contract valued at up to $32.5 million, to provide research assistant services to the Royal Military
College of Canada (RMC), a Calian customer for over 20 years. Customer retention is the first pillar of the Calian
growth strategy and under this agreement Calian helps RMC University professors equip, prepare and deliver
innovative solutions to Canada’s extended defence community.
Calian re-won a contract valued at up to $32.5 million, to provide research assistant services to the Royal Military
College of Canada (RMC), a Calian customer for over 20 years. Customer retention is the first pillar of the Calian
growth strategy and under this agreement Calian helps RMC University professors equip, prepare and deliver
innovative solutions to Canada’s extended defence community.
Transition to Distributed Learning Model
Transition to Distributed Learning Model
For the Canadian Army Simulation Centre, the realities of the global pandemic have accelerated the transition to a
distributed learning model. With a distributed learning model, training can be done independently or with a cohort—
particularly helpful for those who are deployed. Customers can reach the same level of readiness without having to
pull students into a centralized location. The transition to this distributed learning model has enabled contract growth
and supported global training initiatives with partners like Directorate of Military Training and Cooperation (DMTC).
For the Canadian Army Simulation Centre, the realities of the global pandemic have accelerated the transition to a
distributed learning model. With a distributed learning model, training can be done independently or with a cohort—
particularly helpful for those who are deployed. Customers can reach the same level of readiness without having to
pull students into a centralized location. The transition to this distributed learning model has enabled contract growth
and supported global training initiatives with partners like Directorate of Military Training and Cooperation (DMTC).
43
43
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Information Technology and Cyber Solutions
Information Technology and Cyber Solutions
Calian IT services support customer requirements for subject matter expertise in the delivery of their complex
IT solutions. With a primary focus on cloud migration, IT development, support services, SAP consulting and
cybersecurity solutions, Calian supports customers at all levels of government and the private sector in the domestic
market.
Calian IT services support customer requirements for subject matter expertise in the delivery of their complex
IT solutions. With a primary focus on cloud migration, IT development, support services, SAP consulting and
cybersecurity solutions, Calian supports customers at all levels of government and the private sector in the domestic
market.
Cybersecurity Solutions provides public and private sector organizations with the right people, processes and
technology to build actionable plans and keep their environments safe and secure.
Cybersecurity Solutions provides public and private sector organizations with the right people, processes and
technology to build actionable plans and keep their environments safe and secure.
Financial performance
Financial performance
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
Profit before under noted items
$
4,210
$
1,088
$
9,978
$
Profit before under noted items
$
4,210
$
1,088
$
9,978
$
Revenue
Gross profit
Selling and marketing
General and administration
Research and development
$
23,183
$
14,357
$
82,255
$
6,880
653
1,368
649
2,642
724
829
1
19,981
3,027
6,071
905
58,069
10,344
2,770
2,785
2
4,787
Revenue
Gross profit
Selling and marketing
General and administration
Research and development
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
$
23,183
$
14,357
$
82,255
$
6,880
653
1,368
649
2,642
724
829
1
19,981
3,027
6,071
905
58,069
10,344
2,770
2,785
2
4,787
Revenues increased by 61% for the three-month period and 42% for the twelve-month period ended September 30,
2021, compared to the same periods of the previous year. The growth related to acquisitive revenue is 52% for the
three-month period and 35% for the twelve-month period. The additional organic growth can be attributed to the
growth in demand for Cyber services.
Revenues increased by 61% for the three-month period and 42% for the twelve-month period ended September 30,
2021, compared to the same periods of the previous year. The growth related to acquisitive revenue is 52% for the
three-month period and 35% for the twelve-month period. The additional organic growth can be attributed to the
growth in demand for Cyber services.
44
44
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. Gross margin increased from 18% to 30% in the three-month period and from 18% to 24% for the twelve-month
period ended September 30, 2021 when compared to the same periods of the previous year. This is primarily related
to a higher margin percentage earned from acquisitive revenue.
Gross margin increased from 18% to 30% in the three-month period and from 18% to 24% for the twelve-month
period ended September 30, 2021 when compared to the same periods of the previous year. This is primarily related
to a higher margin percentage earned from acquisitive revenue.
General and administrative expenses increased by $539 in the three-month period and $3,286 for the twelve-month
period ended September 30, 2021 when compared to the same periods of the previous year. This increase directly
relates to one-time acquisition related costs of $1,792 in the twelve-month period ended September 30, 2021 and
additional general and administrative expenses from the consolidation of recent acquisitions. Excluding the one-time
costs related to the acquisition of Dapasoft, EBITDA margins were 14% for the twelve-months ended September 30,
2021, which compares to 8% in the same period of the previous year.
General and administrative expenses increased by $539 in the three-month period and $3,286 for the twelve-month
period ended September 30, 2021 when compared to the same periods of the previous year. This increase directly
relates to one-time acquisition related costs of $1,792 in the twelve-month period ended September 30, 2021 and
additional general and administrative expenses from the consolidation of recent acquisitions. Excluding the one-time
costs related to the acquisition of Dapasoft, EBITDA margins were 14% for the twelve-months ended September 30,
2021, which compares to 8% in the same period of the previous year.
Fourth Quarter Highlights
New President, IT and Cyber Solutions
Fourth Quarter Highlights
New President, IT and Cyber Solutions
Sacha Gera joined Calian as the new President, ITCS in the fourth quarter. Mr. Gera has nearly twenty years of
experience in SaaS industries, professional services and M&A, working in technology for both start-ups and large
multinational organizations, such as IBM, Nortel and CGI. He plans to build on the momentum created by Sandra
Cote—who is retiring at the end of the calendar year—to expand the portfolio and position Calian as a cyber and
cloud leader in the Canadian, US and European markets.
Sacha Gera joined Calian as the new President, ITCS in the fourth quarter. Mr. Gera has nearly twenty years of
experience in SaaS industries, professional services and M&A, working in technology for both start-ups and large
multinational organizations, such as IBM, Nortel and CGI. He plans to build on the momentum created by Sandra
Cote—who is retiring at the end of the calendar year—to expand the portfolio and position Calian as a cyber and
cloud leader in the Canadian, US and European markets.
Winner of 2021 Microsoft Canada Healthcare Impact Award
Winner of 2021 Microsoft Canada Healthcare Impact Award
These annual Canadian awards recognize Microsoft partners that have focused on bettering the lives of Canadians
and demonstrated excellence in delivering customer solutions based on Microsoft technology. Dapasoft, a Calian
acquisition, won for the third consecutive year, this time for Corolar Virtual Care (CVC), which helps acute care
providers quickly roll out premium virtual clinic services.
These annual Canadian awards recognize Microsoft partners that have focused on bettering the lives of Canadians
and demonstrated excellence in delivering customer solutions based on Microsoft technology. Dapasoft, a Calian
acquisition, won for the third consecutive year, this time for Corolar Virtual Care (CVC), which helps acute care
providers quickly roll out premium virtual clinic services.
iSecurity Wins
and retail industries.
iSecurity, a recent acquisition in the Managed Security Service Provider (MSSP) space, landed contracts with five
new and four existing customers, exemplifying the Calian focus on customer retention and diversification. These
contracts range from five to 24 months in length. Contracts span the healthcare, financial, government, insurance
iSecurity Wins
iSecurity, a recent acquisition in the Managed Security Service Provider (MSSP) space, landed contracts with five
new and four existing customers, exemplifying the Calian focus on customer retention and diversification. These
contracts range from five to 24 months in length. Contracts span the healthcare, financial, government, insurance
and retail industries.
Improving maternal-child health outcomes in Ontario
Improving maternal-child health outcomes in Ontario
In the fourth quarter, Calian signed a multi-year extension to an agreement with BORN Ontario. Calian was selected
to integrate data from five providers into a single system, ensuring that each individual baby born in Ontario has
received all relevant testing to help improve maternal-child health outcomes. The result is better care for Ontario
families, and Ontario is positioned as a world leader in prenatal and newborn research.
In the fourth quarter, Calian signed a multi-year extension to an agreement with BORN Ontario. Calian was selected
to integrate data from five providers into a single system, ensuring that each individual baby born in Ontario has
received all relevant testing to help improve maternal-child health outcomes. The result is better care for Ontario
families, and Ontario is positioned as a world leader in prenatal and newborn research.
Full Fiscal Year Highlights
Dapasoft Acquisition
Full Fiscal Year Highlights
Dapasoft Acquisition
Since being acquired in the second quarter, Dapasoft has made significant, positive contributions, particularly with
regard to the Corolar Virtual Care (CVC) solution. CVC was adopted by five healthcare networks serving more than
five million Canadians, allowing healthcare providers to offer a premium virtual care experience for patients.
Since being acquired in the second quarter, Dapasoft has made significant, positive contributions, particularly with
regard to the Corolar Virtual Care (CVC) solution. CVC was adopted by five healthcare networks serving more than
five million Canadians, allowing healthcare providers to offer a premium virtual care experience for patients.
45
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Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Increased Demand for Virtual Care Technologies
Increased Demand for Virtual Care Technologies
Calian continues to benefit from the convergence of two healthcare industry trends: the need for virtual care
technologies that enable a seamless patient experience and the rising pressure on hospitals and health teams to
increase efficiencies and scale expertise across their networks through care collaboration. Early in the COVID-19
pandemic, we saw customers quickly adopting virtual care as part of their delivery. Now, customers are looking for
a strategic partner to help them implement a sustainable model that leverages existing investments while adapting
to the changing needs of their communities. An example of this integrated care model is the fourth quarter pilot
program for Fraser Health in British Columbia, part of a national focus on finding new ways to deliver mental health
services. The Dapasoft solution incorporated integration with the Electric Health Record (EHR) system to eliminate
the need for manual patient data entry and online intake forms, reducing time spent on administrative tasks. The
result is an improved patient experience with better coordination of care and the option to include multiple providers
and family members in a single session.
Calian continues to benefit from the convergence of two healthcare industry trends: the need for virtual care
technologies that enable a seamless patient experience and the rising pressure on hospitals and health teams to
increase efficiencies and scale expertise across their networks through care collaboration. Early in the COVID-19
pandemic, we saw customers quickly adopting virtual care as part of their delivery. Now, customers are looking for
a strategic partner to help them implement a sustainable model that leverages existing investments while adapting
to the changing needs of their communities. An example of this integrated care model is the fourth quarter pilot
program for Fraser Health in British Columbia, part of a national focus on finding new ways to deliver mental health
services. The Dapasoft solution incorporated integration with the Electric Health Record (EHR) system to eliminate
the need for manual patient data entry and online intake forms, reducing time spent on administrative tasks. The
result is an improved patient experience with better coordination of care and the option to include multiple providers
and family members in a single session.
Summary
Summary
In summary, 2021 continued to be a trying time for most, navigating pandemic restrictions and supply chain
issues. Despite these challenges, strong leadership and a first-in-class team has led to the Company’s strongest
performance in its history from both a revenue and gross margin perspective. The Company was quick to pivot
delivery methods and service offerings,to continue to deliver trusted products and solutions with a focus on growth.
All operating segments saw growth in revenue and margin percentage in the year as they all continue to execute
on their innovation strategies. Additionally, the Company signed over $448,000 in new contract value in the year to
increase backlog to $1,270 million entering into fiscal 2022.
In summary, 2021 continued to be a trying time for most, navigating pandemic restrictions and supply chain
issues. Despite these challenges, strong leadership and a first-in-class team has led to the Company’s strongest
performance in its history from both a revenue and gross margin perspective. The Company was quick to pivot
delivery methods and service offerings,to continue to deliver trusted products and solutions with a focus on growth.
All operating segments saw growth in revenue and margin percentage in the year as they all continue to execute
on their innovation strategies. Additionally, the Company signed over $448,000 in new contract value in the year to
increase backlog to $1,270 million entering into fiscal 2022.
While COVID-19 presented challenges, it also presented opportunities for the Health and ITCS segments. Through
pop-up vaccination clinics, rapid testing and screening opportunities and virtual clinic set-ups, the Company was
able to deliver over $15,000 in COVID-19 related services in 2021. These customer requirements will not cease in
the near term, rather, they will change as the pandemic continues to evolve.
While COVID-19 presented challenges, it also presented opportunities for the Health and ITCS segments. Through
pop-up vaccination clinics, rapid testing and screening opportunities and virtual clinic set-ups, the Company was
able to deliver over $15,000 in COVID-19 related services in 2021. These customer requirements will not cease in
the near term, rather, they will change as the pandemic continues to evolve.
2021 was an exciting and prosperous year for Calian, with continued growth from M&A through three acquisitions,
including the Company’s largest acquisition to date in Dapasoft. The company continues to leverage market
opportunities for M&A to expand service offerings. This is aligned with the three-year plan to expand customer base
and reach new geographies while increasing margins.
2021 was an exciting and prosperous year for Calian, with continued growth from M&A through three acquisitions,
including the Company’s largest acquisition to date in Dapasoft. The company continues to leverage market
opportunities for M&A to expand service offerings. This is aligned with the three-year plan to expand customer base
and reach new geographies while increasing margins.
The Calian team remains focused on finding additional leverage across each of the segments as they expand their
presence, as well as work within Calian to help customers solve significant and complex problems—problems that
stand in the way of better health, communications, learning and security.
The Calian team remains focused on finding additional leverage across each of the segments as they expand their
presence, as well as work within Calian to help customers solve significant and complex problems—problems that
stand in the way of better health, communications, learning and security.
The Company continues to invest in infrastructure to maintain a profitable growth agenda. This includes investment in
sales & marketing, research and development and information systems infrastructure to enable staff to be effective,
in the office, at home and at customer locations.
The Company continues to invest in infrastructure to maintain a profitable growth agenda. This includes investment in
sales & marketing, research and development and information systems infrastructure to enable staff to be effective,
in the office, at home and at customer locations.
Calian is a diverse company which has consistently demonstrated the ability to provide excellent returns for
shareholders. Under the framework of a common strategy, each segment of the company has the ability, capacity
and management focus to control and manage their respective business segment. Calian is an innovative company,
proudly Canadian, and focused on sustaining this positive momentum into the next fiscal year.
Calian is a diverse company which has consistently demonstrated the ability to provide excellent returns for
shareholders. Under the framework of a common strategy, each segment of the company has the ability, capacity
and management focus to control and manage their respective business segment. Calian is an innovative company,
proudly Canadian, and focused on sustaining this positive momentum into the next fiscal year.
Reconciliation of non-GAAP measures to most comparable IFRS measures
Reconciliation of non-GAAP measures to most comparable IFRS measures
These non-GAAP measures are mainly derived from the consolidated financial statements, but do not have a
standardized meaning prescribed by IFRS; therefore, others using these terms may calculate them differently.
The exclusion of certain items from non-GAAP performance measures does not imply that these are necessarily
nonrecurring. From time to time, we may exclude additional items if we believe doing so would result in a more
transparent and comparable disclosure. Other entities may define the above measures differently than we do. In
those cases, it may be difficult to use similarly named non-GAAP measures of other entities to compare performance
of those entities to the Company’s performance.
These non-GAAP measures are mainly derived from the consolidated financial statements, but do not have a
standardized meaning prescribed by IFRS; therefore, others using these terms may calculate them differently.
The exclusion of certain items from non-GAAP performance measures does not imply that these are necessarily
nonrecurring. From time to time, we may exclude additional items if we believe doing so would result in a more
transparent and comparable disclosure. Other entities may define the above measures differently than we do. In
those cases, it may be difficult to use similarly named non-GAAP measures of other entities to compare performance
of those entities to the Company’s performance.
46
46
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. Management believes that providing certain non-GAAP performance measures, in addition to IFRS measures,
provides users of the Company’s financial reports with enhanced understanding of the Company’s results and related
trends and increases transparency and clarity into the core results of the business. Adjusted EBITDA excludes items
that do not reflect, in our opinion, the Company’s core performance and helps users of our MD&A to better analyze
our results, enabling comparability of our results from one period to another.
Management believes that providing certain non-GAAP performance measures, in addition to IFRS measures,
provides users of the Company’s financial reports with enhanced understanding of the Company’s results and related
trends and increases transparency and clarity into the core results of the business. Adjusted EBITDA excludes items
that do not reflect, in our opinion, the Company’s core performance and helps users of our MD&A to better analyze
our results, enabling comparability of our results from one period to another.
Adjusted EBITDA
Adjusted EBITDA
Net profit
$
1,093
$
6,886
$
11,155
$
20,360
Net profit
$
1,093
$
6,886
$
11,155
$
20,360
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
Depreciation of equipment and
application software
Depreciation of right of use asset
Amortization of acquired intangible
assets
Lease interest expense
Changes in fair value related to
contingent earn-out
Interest expense (income)
Deemed Compensation
Other changes in fair value
Income tax
Adjusted EBITDA
1,112
781
3,374
107
3,556
63
906
-
1,431
$
12,423
$
969
734
1,684
123
(2,772)
19
-
-
1,560
9,203
4,285
3,054
11,731
450
10,336
360
4,006
-
6,552
$
51,929
$
2,976
2,771
5,166
475
(1,882)
185
-
(101)
6,860
36,810
Adjusted Net Profit and Adjusted EPS
Adjusted Net Profit and Adjusted EPS
Net profit
$
1,093
$
6,886
$
11,155
$
20,360
Net profit
$
1,093
$
6,886
$
11,155
$
20,360
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
Other changes in fair value
Changes in fair value related to
contingent earn-out
Deemed Compensation
Amortization of intangibles
Adjusted net profit
Weighted average number of common
shares basic
Adjusted EPS Basic
Adjusted EPS Diluted
-
3,556
906
3,374
8,929
-
(2,772)
-
1,684
5,798
-
(101)
10,336
4,006
11,731
37,228
(1,882)
-
5,166
23,543
11,271,536
9,732,754
10,599,693
9,044,588
0.79
0.79
$
0.60
0.59
$
3.51
3.50
$
$
2.60
2.59
47
47
Depreciation of equipment and
application software
Depreciation of right of use asset
Amortization of acquired intangible
assets
Lease interest expense
Changes in fair value related to
contingent earn-out
Interest expense (income)
Deemed Compensation
Other changes in fair value
Income tax
Adjusted EBITDA
Other changes in fair value
Changes in fair value related to
contingent earn-out
Deemed Compensation
Amortization of intangibles
Adjusted net profit
Weighted average number of common
shares basic
Adjusted EPS Basic
Adjusted EPS Diluted
$
12,423
$
$
51,929
$
1,112
781
3,374
107
3,556
63
906
-
1,431
-
3,556
906
3,374
8,929
969
734
1,684
123
(2,772)
19
-
-
1,560
9,203
-
-
(2,772)
1,684
5,798
4,285
3,054
11,731
450
10,336
360
4,006
-
6,552
2,976
2,771
5,166
475
(1,882)
185
-
(101)
6,860
36,810
-
(101)
10,336
4,006
11,731
37,228
(1,882)
-
5,166
23,543
11,271,536
9,732,754
10,599,693
9,044,588
0.79
0.79
$
0.60
0.59
$
3.51
3.50
$
$
2.60
2.59
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report
The Company uses adjusted net profit and adjusted earnings per share, which remove the impact of our acquisition
amortization and gains, resulting in accounting for acquisitions and changes in fair value to measure our performance.
These measurements better align the reporting of our results and improve comparability against our peers. We believe
that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation
of issuers. Management also uses non-GAAP measures in order to facilitate operating performance comparisons
from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure
and working capital requirements. Adjusted profit and adjusted earnings per share are not recognized, defined or
standardized measures under the International Financial Reporting Standards. Our definition of adjusted profit and
adjusted earnings per share will likely differ from that used by other companies (including our peers) and therefore
comparability may be limited. Non-GAAP measures should not be considered a substitute for or be considered in
isolation from measures prepared in accordance with International Financial Reporting Standards. Investors are
encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue
reliance on non-GAAP measures and view them in conjunction with the most comparable International Financial
Reporting Standards financial measures. The Company has reconciled adjusted profit to the most comparable
International Financial Reporting Standards financial measure as shown above.
The Company uses adjusted net profit and adjusted earnings per share, which remove the impact of our acquisition
amortization and gains, resulting in accounting for acquisitions and changes in fair value to measure our performance.
These measurements better align the reporting of our results and improve comparability against our peers. We believe
that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation
of issuers. Management also uses non-GAAP measures in order to facilitate operating performance comparisons
from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure
and working capital requirements. Adjusted profit and adjusted earnings per share are not recognized, defined or
standardized measures under the International Financial Reporting Standards. Our definition of adjusted profit and
adjusted earnings per share will likely differ from that used by other companies (including our peers) and therefore
comparability may be limited. Non-GAAP measures should not be considered a substitute for or be considered in
isolation from measures prepared in accordance with International Financial Reporting Standards. Investors are
encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue
reliance on non-GAAP measures and view them in conjunction with the most comparable International Financial
Reporting Standards financial measures. The Company has reconciled adjusted profit to the most comparable
International Financial Reporting Standards financial measure as shown above.
Consolidated Net Income and Other Selected Financial Information
Consolidated Net Income and Other Selected Financial Information
Profit before under noted items
$
12,423
$
9,203
$
51,929
$
36,810
Profit before under noted items
$
12,423
$
9,203
$
51,929
$
36,810
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
Depreciation of equipment and
application software
Depreciation of right of use asset
Amortization of acquired intangible
assets
Other changes in fair value
Deemed Compensation
Changes in fair value related to
contingent earn-out
Profit before interest income and
income tax expense
Lease interest expense
Interest expense (income)
Income tax expense
Net profit
Net profit per share, basic
Total assets
Dividends per share
(2,772)
10,336
(1,882)
1,112
781
3,374
-
906
3,556
2,694
107
63
1,431
1,093
0.10
969
734
1,684
-
-
8,588
123
19
1,560
6,886
0.71
4,285
3,054
11,731
-
4,006
18,517
450
360
6,552
11,155
1.05
457,969
2,976
2,771
5,166
(101)
-
27,880
475
185
6,860
20,360
2.25
331,053
1.12
457,969
331,053
$
0.28
$
0.28
$
1.12
$
Depreciation of equipment and
application software
Depreciation of right of use asset
Amortization of acquired intangible
assets
Other changes in fair value
Deemed Compensation
Changes in fair value related to
contingent earn-out
Profit before interest income and
income tax expense
Lease interest expense
Interest expense (income)
Income tax expense
Net profit
Net profit per share, basic
Total assets
Dividends per share
1,112
781
3,374
-
906
3,556
2,694
107
63
1,431
1,093
0.10
969
734
1,684
-
-
4,285
3,054
11,731
-
4,006
2,976
2,771
5,166
(101)
-
(2,772)
10,336
(1,882)
8,588
123
19
1,560
6,886
0.71
18,517
450
360
6,552
11,155
1.05
457,969
27,880
475
185
6,860
20,360
2.25
331,053
1.12
457,969
331,053
$
0.28
$
0.28
$
1.12
$
Depreciation increased by $143 in the three-month period, and $1,309 in the twelve-month period ended September
30, 2021 when compared to the same periods in the year prior due to higher balances of assets across the organization,
depreciation of the capitalized research and development asset which began in the prior year subsequent to the first
quarter, and capital expenditures to sustain the Company’s growth.
Depreciation increased by $143 in the three-month period, and $1,309 in the twelve-month period ended September
30, 2021 when compared to the same periods in the year prior due to higher balances of assets across the organization,
depreciation of the capitalized research and development asset which began in the prior year subsequent to the first
quarter, and capital expenditures to sustain the Company’s growth.
Depreciation of right of use assets increased by $283 in the twelve-month period ended September 30, 2021 when
compared to the same period in the year prior due to lease additions that occurred within the 12 months prior, and
newly acquired entities with leases in the 12 month period. Further information regarding the lease accounting and
depreciation can be found in the third quarter 2021 financial statements in note 11.
Depreciation of right of use assets increased by $283 in the twelve-month period ended September 30, 2021 when
compared to the same period in the year prior due to lease additions that occurred within the 12 months prior, and
newly acquired entities with leases in the 12 month period. Further information regarding the lease accounting and
depreciation can be found in the third quarter 2021 financial statements in note 11.
48
48
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.
Amortization of acquired intangible assets has increased by $1,690 in the three-month period and $6,565 in the
twleve-month period ending September 30, 2021 when compared to the same periods of the previous year due
to acquisitions in the prior year of Alio and Allphase, Comprehensive Training Solutions AS, EMSEC Solutions,
Tallyman Wireless, and current year intangibles acquired through Cadence, InterTronic and Dapasoft.
Amortization of acquired intangible assets has increased by $1,690 in the three-month period and $6,565 in the
twleve-month period ending September 30, 2021 when compared to the same periods of the previous year due
to acquisitions in the prior year of Alio and Allphase, Comprehensive Training Solutions AS, EMSEC Solutions,
Tallyman Wireless, and current year intangibles acquired through Cadence, InterTronic and Dapasoft.
Changes in fair value related to contingent earn out has increased by $6,328 in the three-month period and $12,218
in the twelve-month period ended September 30, 2021 when compared to the same periods of the previous year.
This increase is attributable to a change in estimate of Dapasoft contingent earn out payable as the company
is outperforming initial expectations, along with an increase in share price for Calian Group Ltd., which causes
revaluation of the earn out payable in shares of the company, additional value adjustments to bring the earn out
amounts from present value to their fair values anticipated to be paid, slightly offset by a change in estimate of the
contingent earn out to pay for EMSEC Solutions who has been underperforming initial expectations and InterTronic
Solutions change in estimate relating to the contingent earn out amounts recognized at acquisition date. Deemed
compensation increased by $906 for the three-month period, and $4,006 for the twelve-month period ended
September 30, 2021 when compared to the same periods of the previous year. The change in fair value of contingent
payments and deemed compensation are explained further in note 26 of the Financial Statements.
Finally, the Company reports its results on a fully taxed basis. The provision for income taxes for the three-month
period ended September 30, 2021 was $1,431, which compares to the $1,560, in the same period of the previous
fiscal year. The provision for income taxes for the twelve-month period ended September 30, 2021 was $6,552
which compares to the $6,860, in the same period of the previous fiscal year. The difference in effective tax rates is
primarily due to the increase in non-taxable items in the statement of profit and loss including intangible amortization
and changes in fair value related to contingent earnout amounts which are quite significant to the company, and
account for significant fluctuations in tax rate where income tax is a percentage of earnings before tax.
Changes in fair value related to contingent earn out has increased by $6,328 in the three-month period and $12,218
in the twelve-month period ended September 30, 2021 when compared to the same periods of the previous year.
This increase is attributable to a change in estimate of Dapasoft contingent earn out payable as the company
is outperforming initial expectations, along with an increase in share price for Calian Group Ltd., which causes
revaluation of the earn out payable in shares of the company, additional value adjustments to bring the earn out
amounts from present value to their fair values anticipated to be paid, slightly offset by a change in estimate of the
contingent earn out to pay for EMSEC Solutions who has been underperforming initial expectations and InterTronic
Solutions change in estimate relating to the contingent earn out amounts recognized at acquisition date. Deemed
compensation increased by $906 for the three-month period, and $4,006 for the twelve-month period ended
September 30, 2021 when compared to the same periods of the previous year. The change in fair value of contingent
payments and deemed compensation are explained further in note 26 of the Financial Statements.
Finally, the Company reports its results on a fully taxed basis. The provision for income taxes for the three-month
period ended September 30, 2021 was $1,431, which compares to the $1,560, in the same period of the previous
fiscal year. The provision for income taxes for the twelve-month period ended September 30, 2021 was $6,552
which compares to the $6,860, in the same period of the previous fiscal year. The difference in effective tax rates is
primarily due to the increase in non-taxable items in the statement of profit and loss including intangible amortization
and changes in fair value related to contingent earnout amounts which are quite significant to the company, and
account for significant fluctuations in tax rate where income tax is a percentage of earnings before tax.
Backlog
Backlog
The Company’s realizable backlog at September 30, 2021 was $1,270 million with terms extending to fiscal 2030.
Contracted backlog represents maximum potential revenues remaining to be earned on signed contracts, whereas
option renewals represent customers’ options to further extend existing contracts under similar terms and conditions.
The Company’s realizable backlog at September 30, 2021 was $1,270 million with terms extending to fiscal 2030.
Contracted backlog represents maximum potential revenues remaining to be earned on signed contracts, whereas
option renewals represent customers’ options to further extend existing contracts under similar terms and conditions.
During the three-month period ended September 30, 2021 the following contracts were the major contributors to
the Company’s backlog. These contracts are further described in the business overview section of this Management
Discussion and Analysis.
During the three-month period ended September 30, 2021 the following contracts were the major contributors to
the Company’s backlog. These contracts are further described in the business overview section of this Management
Discussion and Analysis.
• $2M Communication Ground Systems contract amendment
• $2M Communication Ground Systems contract amendment
• $7M Data Remediation and Marking of Serialy Managed Material contract amendment
• $7M Data Remediation and Marking of Serialy Managed Material contract amendment
• $3M Ainsworthiness contract extension
• $3M COVID-19 Isolation Hubs contract win
• $5M Virtual COVID-19 Program Services contract win
• $8M RCMP Psychological Evaluations contract win
• $13M Tele-Nursing Services contract win
• $3M Ainsworthiness contract extension
• $3M COVID-19 Isolation Hubs contract win
• $5M Virtual COVID-19 Program Services contract win
• $8M RCMP Psychological Evaluations contract win
• $13M Tele-Nursing Services contract win
There were no contracts which were cancelled unexpectedly that would have resulted in a significant decrease in
our backlog.
There were no contracts which were cancelled unexpectedly that would have resulted in a significant decrease in
our backlog.
Most fee-for-service contracts provide the customer with the ability to adjust the timing and level of effort throughout
the contract life and as such the amount actually realized could be materially different from the original contract
value. The following table represents management’s best estimate of the backlog realization for fiscal year 2021,
fiscal year 2022 and beyond based on management’s current visibility into customers’ existing requirements.
Most fee-for-service contracts provide the customer with the ability to adjust the timing and level of effort throughout
the contract life and as such the amount actually realized could be materially different from the original contract
value. The following table represents management’s best estimate of the backlog realization for fiscal year 2021,
fiscal year 2022 and beyond based on management’s current visibility into customers’ existing requirements.
Management’s estimate of the realizable portion (current utilization rates and known customer requirements) is less
than the total value of signed contracts and related options by approximately $251 million. The Company’s policy
is to reduce the reported contractual backlog once it receives confirmation from the customer that indicates the
utilization of the full contract value may not materialize.
Management’s estimate of the realizable portion (current utilization rates and known customer requirements) is less
than the total value of signed contracts and related options by approximately $251 million. The Company’s policy
is to reduce the reported contractual backlog once it receives confirmation from the customer that indicates the
utilization of the full contract value may not materialize.
49
49
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Contract Backlog as of September 30, 2021
Contract Backlog as of September 30, 2021
Contracted backlog
Option renewals
Management estimate of unrealizable portion
Estimated Realizable Backlog
$
$
$
660,606
860,999
1,521,605
(251,485)
1,270,120
Contracted backlog
Option renewals
Management estimate of unrealizable portion
Estimated Realizable Backlog
$
$
$
660,606
860,999
1,521,605
(251,485)
1,270,120
Estimated recognition of Estimated Realizable Backlog
Estimated recognition of Estimated Realizable Backlog
Advanced Technologies
$
95,275
$
28,611
$
26,778
$
150,664
Advanced Technologies
$
95,275
$
28,611
$
26,778
$
150,664
October 1, 2021
October 1, 2022
Beyond
to September
to September
September 30,
Total
30, 2022
30, 2023
2023
October 1, 2021
to September
30, 2022
October 1, 2022
to September
30, 2023
Beyond
September 30,
2023
Total
144,786
58,175
49,767
120,816
50,103
17,856
510,145
156,433
11,375
775,747
264,711
78,998
Health
Learning
Information Technology
144,786
58,175
49,767
120,816
50,103
17,856
510,145
156,433
11,375
775,747
264,711
78,998
$
348,003
$
217,386
$
704,731
$ 1,270,120
Total
$
348,003
$
217,386
$
704,731
$ 1,270,120
Statement of Cash Flows
Three months ended
Year ended
September 30,
2021
September 30,
2020
September 30,
2021
September 30,
2020
Increase (decrease) in cash
$
22,561
$
(22,061)
$
54,376
$
Increase (decrease) in cash
$
22,561
$
(22,061)
$
54,376
$
Cash flows from operating activities
before changes in working capital
$
Changes in working capital
Cash flows from (used in) operating
activities
Cash flows from (used in) financing
activities
Cash flows from (used in) investing
activities
11,300
16,366
27,666
$
10,477
$
(10,241)
236
42,520
4,022
46,542
$
33,681
(36,434)
(2,753)
(2,933)
(1,814)
64,440
45,042
(2,172)
(20,483)
(56,606)
(35,189)
7,100
Health
Learning
Total
Information Technology
Statement of Cash Flows
Three months ended
Year ended
September 30,
September 30,
September 30,
September 30,
2021
2020
2021
2020
Cash flows from operating activities
$
$
$
$
before changes in working capital
Changes in working capital
Cash flows from (used in) operating
activities
activities
activities
Cash flows from (used in) financing
Cash flows from (used in) investing
11,300
16,366
27,666
10,477
(10,241)
236
42,520
4,022
46,542
(2,933)
(1,814)
64,440
45,042
(2,172)
(20,483)
(56,606)
33,681
(36,434)
(2,753)
(35,189)
7,100
Operating Activities
Operating Activities
Cash inflows from operating activities for the three-month period ended September 30, 2021 were $27,666 compared
to cash inflows of $236 in the same period of the prior year. On a twelve-month basis, cash inflows total $46,542 for
the period ended September 30, 2021 when compared to outflows of $2,753 for the same period of the previous year.
Cash inflows from operating activities for the three-month period ended September 30, 2021 were $27,666 compared
to cash inflows of $236 in the same period of the prior year. On a twelve-month basis, cash inflows total $46,542 for
the period ended September 30, 2021 when compared to outflows of $2,753 for the same period of the previous year.
Working capital (accounts receivable, work in process, inventory, prepaid expenses and other, inventory, accounts
payable and accrued liabilities, provisions and unearned contract revenue) has a positive affect on cash flows by a
increase of $16,366 in the three-month period ended September 30, 2021, and stood at a net balance of $89,998,
which is at its lowest level in over 4 quarters.
Working capital (accounts receivable, work in process, inventory, prepaid expenses and other, inventory, accounts
payable and accrued liabilities, provisions and unearned contract revenue) has a positive affect on cash flows by a
increase of $16,366 in the three-month period ended September 30, 2021, and stood at a net balance of $89,998,
which is at its lowest level in over 4 quarters.
Factors related to the overall change in working capital were: decrease in work in process in the current three-month
period of $29,000 as larger projects are rapidly hitting milestones in the fourth quarter. Accounts receivable is flat,
even with the $29,000 of billings from work in process which were predominantly collected by year end. This is offset
by a decrease in accounts payable of $6,000 as previous quarterly cash management had come due.
Factors related to the overall change in working capital were: decrease in work in process in the current three-month
period of $29,000 as larger projects are rapidly hitting milestones in the fourth quarter. Accounts receivable is flat,
even with the $29,000 of billings from work in process which were predominantly collected by year end. This is offset
by a decrease in accounts payable of $6,000 as previous quarterly cash management had come due.
50
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Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.
Financing Activities
Lease payments
Dividend
Debt
Shares
prior year.
The Company has made payments of $782 for the three-month period and $3,033 for the twelve-month period
ended September 30, 2021 when compared to the payments of $656 and $2,508, respectively for the same periods
of the previous year which relate to leases accounted for in accordance with IFRS 16. Increases relate to new leases
signed in the current year, and additional leases brought on through acquisitions.
The Company has maintained its dividend for the three-month period ended September 30, 2021. The Company paid
dividends totaling $3,156 for the three-month period ended September 30, 2021 or $0.28 cents per share, and $11,826
for the twelve-month period then ended, or $1.12 cents per share compared to the same periods of the previous year
when the Company paid $2,747 and $9,938, respectively, in dividends or the same amount per share as the current
periods. The increase in dividends paid is due to a higher number of common shares outstanding year over year.
In the three and twelve month periods ended September 30, 2021, the Company had NIL drawn or paid on its
credit facility This compares to the twelve-month period ended September 30, 2021 where the company repaid its
previous credit facility, resulting in a outflow of $13,000.
Exercises of stock options and issuances of shares under the employee share purchase plan has resulted in cash
inflows of $1,005 for the three-month period, and $3,299 for the twelve-month period ended September 30, 2021
when compared to an inflow of $1,589 and $5,782, respectively, for the same activities in the same period of the
On March 17, 2021 the Company announced that it had completed a bought deal public offering, under which, a
total of 1,318,000 common shares were sold at a price of $60.50 per common share for aggregate gross proceeds
of $79,739, including common shares issued pursuant to the partial exercise of the over-allotment option granted to
the underwriters. The Offering was conducted by a syndicate of underwriters co-led by Desjardins Capital Markers
and Acumen Capital Finance Partners Limited, and included Canaccord Genuity Corp., CIBC Capital Markets, Stifel
GMP, Echelon Capital Markets, Laurentian Bank Securities and Cormark Securities Inc.
Equipment expenditures and Capitalized Research and Development
The Company invested $2,430 in the three-month period and $7,419 for the twelve-month period ended September
30, 2021, when compared to $1,521 and $4,574, respectively, for the same periods of the prior year. Acquisitions
of equipment in the current period are mainly attributed to the Company’s ERP implementation and general capital
The Company invested $93 in capitalized research and development in the three-month period and $430 in the
twelve-month period ended September 30, 2021, when compared to $107 and $1,227, respectively, for the same
expenditures.
periods of the prior year.
Acquisitions
The company had no acquisitions in the three-month period, but had incoming receipt from the settlement of closing
transaction price with Dapasoft which resulted in a cash inflow of $351 in the three-month period ended September
30, 2021. In addition, the company acquired InterTronic, Dapasoft and Cadence in the twelve-month period, resulting
in a total cash outflow of $48,757 for the twleve-month period ended September 30, 2021. In the twleve-month
period of the previous year, the company had acquired Alio and Allphase, CTS and EMSEC which resulted in a cash
outflow of $29,288.
Financing Activities
Lease payments
The Company has made payments of $782 for the three-month period and $3,033 for the twelve-month period
ended September 30, 2021 when compared to the payments of $656 and $2,508, respectively for the same periods
of the previous year which relate to leases accounted for in accordance with IFRS 16. Increases relate to new leases
signed in the current year, and additional leases brought on through acquisitions.
Dividend
The Company has maintained its dividend for the three-month period ended September 30, 2021. The Company paid
dividends totaling $3,156 for the three-month period ended September 30, 2021 or $0.28 cents per share, and $11,826
for the twelve-month period then ended, or $1.12 cents per share compared to the same periods of the previous year
when the Company paid $2,747 and $9,938, respectively, in dividends or the same amount per share as the current
periods. The increase in dividends paid is due to a higher number of common shares outstanding year over year.
Debt
In the three and twelve month periods ended September 30, 2021, the Company had NIL drawn or paid on its
credit facility This compares to the twelve-month period ended September 30, 2021 where the company repaid its
previous credit facility, resulting in a outflow of $13,000.
Shares
Exercises of stock options and issuances of shares under the employee share purchase plan has resulted in cash
inflows of $1,005 for the three-month period, and $3,299 for the twelve-month period ended September 30, 2021
when compared to an inflow of $1,589 and $5,782, respectively, for the same activities in the same period of the
prior year.
On March 17, 2021 the Company announced that it had completed a bought deal public offering, under which, a
total of 1,318,000 common shares were sold at a price of $60.50 per common share for aggregate gross proceeds
of $79,739, including common shares issued pursuant to the partial exercise of the over-allotment option granted to
the underwriters. The Offering was conducted by a syndicate of underwriters co-led by Desjardins Capital Markers
and Acumen Capital Finance Partners Limited, and included Canaccord Genuity Corp., CIBC Capital Markets, Stifel
GMP, Echelon Capital Markets, Laurentian Bank Securities and Cormark Securities Inc.
Investing activities
Investing activities
Equipment expenditures and Capitalized Research and Development
The Company invested $2,430 in the three-month period and $7,419 for the twelve-month period ended September
30, 2021, when compared to $1,521 and $4,574, respectively, for the same periods of the prior year. Acquisitions
of equipment in the current period are mainly attributed to the Company’s ERP implementation and general capital
expenditures.
The Company invested $93 in capitalized research and development in the three-month period and $430 in the
twelve-month period ended September 30, 2021, when compared to $107 and $1,227, respectively, for the same
periods of the prior year.
Acquisitions
The company had no acquisitions in the three-month period, but had incoming receipt from the settlement of closing
transaction price with Dapasoft which resulted in a cash inflow of $351 in the three-month period ended September
30, 2021. In addition, the company acquired InterTronic, Dapasoft and Cadence in the twelve-month period, resulting
in a total cash outflow of $48,757 for the twleve-month period ended September 30, 2021. In the twleve-month
period of the previous year, the company had acquired Alio and Allphase, CTS and EMSEC which resulted in a cash
outflow of $29,288.
51
51
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Investments
Investments
No investment was made in the current period compared to a $100 minority investment made in the twelve-month
period ended September 30, 2020 in Cliniconex as described in Note 12 of the Financial Statements.
No investment was made in the current period compared to a $100 minority investment made in the twelve-month
period ended September 30, 2020 in Cliniconex as described in Note 12 of the Financial Statements.
Liquidity and Capital Resources
Cash
30, 2020.
Capital resources
Calian cash and cash equivalent position was $78,611 at September 30, 2021, compared to $24,235 at September
At September 30, 2021, the Company had a credit facility of $80,000 with a Canadian chartered bank that bears
interest at prime and is secured by assets of the Company.
Management believes that the company has sufficient cash resources to continue to finance its working capital
requirements and pay a quarterly dividend.
Off-balance sheet arrangements
There were no off-balance sheet arrangements at September 30, 2021.
Related-party transactions
During the year ended September 30, 2021 (2020), the Company had sales of $1,729 ($1,160) to GrainX in which
Calian holds a non-controlling equity investment. At September 30, 2021 (2020), the Company had an accounts
receivable balance with GrainX of $66 ($130) which is included in accounts receivable. The terms and conditions
of the related party sales are within the Company’s normal course of operations and are measured at the exchange
amounts agreed to by both parties.
Critical accounting judgements and key sources of estimation uncertainty
Estimates:
The preparation of financial statements in conformity with IFRS requires the Company’s management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting periods presented. Actual results could
differ from those estimates.
Project completion for revenue
A significant portion of the revenue is derived from fixed-price contracts which can extend over more than one
reporting period. Revenue from these fixed-price projects is recognized over time using the input method using
management’s best estimate of the costs and related risks associated with completing the projects. The greatest
risk on fixed-price contracts is the possibility of cost overruns. Management’s approach to revenue recognition
is tightly linked to detailed project management processes and controls. The information provided by the project
management system combined with a knowledgeable assessment of technical complexities and risks are used in
estimating the percentage complete.
Impairment of goodwill and intangible assets
Determining whether goodwill or acquired intangibles assets are impaired requires an estimation of the value in use
of the cash-generating units to which goodwill has been allocated. The value in use calculation requires management
to estimate the future cash flows expected to arise from the cash-generating unit, and a suitable discount rate in
order to calculate present value.
Income taxes
The Company records deferred income tax assets and liabilities related to deductible or taxable temporary differences.
The Company assesses the value of these assets and liabilities based on the likelihood of the realization as well as
the timing of reversal given management assessments of future taxable income.
Liquidity and Capital Resources
Cash
Calian cash and cash equivalent position was $78,611 at September 30, 2021, compared to $24,235 at September
30, 2020.
Capital resources
At September 30, 2021, the Company had a credit facility of $80,000 with a Canadian chartered bank that bears
interest at prime and is secured by assets of the Company.
Management believes that the company has sufficient cash resources to continue to finance its working capital
requirements and pay a quarterly dividend.
Off-balance sheet arrangements
There were no off-balance sheet arrangements at September 30, 2021.
Related-party transactions
During the year ended September 30, 2021 (2020), the Company had sales of $1,729 ($1,160) to GrainX in which
Calian holds a non-controlling equity investment. At September 30, 2021 (2020), the Company had an accounts
receivable balance with GrainX of $66 ($130) which is included in accounts receivable. The terms and conditions
of the related party sales are within the Company’s normal course of operations and are measured at the exchange
amounts agreed to by both parties.
Critical accounting judgements and key sources of estimation uncertainty
Estimates:
The preparation of financial statements in conformity with IFRS requires the Company’s management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting periods presented. Actual results could
differ from those estimates.
Project completion for revenue
A significant portion of the revenue is derived from fixed-price contracts which can extend over more than one
reporting period. Revenue from these fixed-price projects is recognized over time using the input method using
management’s best estimate of the costs and related risks associated with completing the projects. The greatest
risk on fixed-price contracts is the possibility of cost overruns. Management’s approach to revenue recognition
is tightly linked to detailed project management processes and controls. The information provided by the project
management system combined with a knowledgeable assessment of technical complexities and risks are used in
estimating the percentage complete.
Impairment of goodwill and intangible assets
Determining whether goodwill or acquired intangibles assets are impaired requires an estimation of the value in use
of the cash-generating units to which goodwill has been allocated. The value in use calculation requires management
to estimate the future cash flows expected to arise from the cash-generating unit, and a suitable discount rate in
order to calculate present value.
Income taxes
The Company records deferred income tax assets and liabilities related to deductible or taxable temporary differences.
The Company assesses the value of these assets and liabilities based on the likelihood of the realization as well as
the timing of reversal given management assessments of future taxable income.
52
52
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. From time-to-time the Company is involved in claims in the normal course of business. Management assesses such
claims and where considered probable to result in an exposure and, where the amount of the claim can be measured
reliably, provisions for loss are made based on management’s assessment of the likely outcome.
The Company has extensive commercial history upon which to base its provision for doubtful accounts receivable.
Due to the nature of the industry in which the Company operates, the Company does not create a general provision
for bad debts but rather determines bad debts on a specific account basis.
Contingent liabilities
Loss allowance
Judgments:
Financial instruments
The Company’s accounting policy with regards to financial instruments is described in Note 2 of the September 30,
2021 annual financial statements. In applying this policy, judgments are made in applying the criteria set out in IFRS
9 – Financial instruments, to record financial instruments at fair value through profit or loss, and the assessments of
the classification of financial instruments and effectiveness of hedging relationships.
Business combinations
The consideration transferred for an acquired business is assigned to the identifiable tangible and intangible assets
purchased, along with liabilities assumed on the basis of their acquisition date fair values. The identification of assets
purchased and liabilities assumed and the valuation thereof is specialized and judgemental. Where appropriate, the
Company engages external business valuators to assist in the valuation of tangible and intangible assets acquired.
When a business combination involved contingent consideration, an amount equal to the fair value of the contingent
consideration is recorded as a liability at the time of acquisition. The key assumptions utilized in deremining the fair
value of contingent consideration may include probabilities associated with the occurrence of specified future events,
financial projections of the acquired buesinss, the timing of future cash flows, and the appropriate discount rate.
Accounting policy for equipment and intangible assets
Management makes judgments in determining the most appropriate methodology for amortizing long-lived assets
over their useful lives. The method chosen is intended to mirror, to the best extent possible, the consumption of the
asset.
Deferred income taxes
The Company’s accounting policy with regards to income taxes is described in Note 2 of the September 30, 2021
annual financial statements. In applying this policy, judgments are made in determining the probability of whether
deductions or tax credits can be utilized and related timing of such items.
Input methodology for project completion
The Company uses judgment in determining the most appropriate basis on which to determine percentage of
completion. Options available to the Company include the proportion that contract costs incurred for work performed
to date bear to the estimated total contract costs, surveys of work performed, and completion of a physical proportion
of the contract work. While the Company considers the costs to complete, the stage of completion is assessed
based upon the assessment of the proportion of the contract completed. Judgments are also made in determining
what costs are project costs for determining the percentage complete.
Management conclusion on the effectiveness of disclosure controls
The Chief Executive Officer and the Chief Financial Officer of the Company, after evaluating the effectiveness of the
Company’s disclosure controls and procedures as of September 30, 2021, have concluded that the Company’s
disclosure controls and procedures were adequate and effective to ensure that material information relating to the
Company and its consolidated subsidiaries would have been known to them and that information required to be
disclosed by the Company is recorded, processed, summarized and reported within the time periods specified in
the securities legislation.
Contingent liabilities
From time-to-time the Company is involved in claims in the normal course of business. Management assesses such
claims and where considered probable to result in an exposure and, where the amount of the claim can be measured
reliably, provisions for loss are made based on management’s assessment of the likely outcome.
Loss allowance
The Company has extensive commercial history upon which to base its provision for doubtful accounts receivable.
Due to the nature of the industry in which the Company operates, the Company does not create a general provision
for bad debts but rather determines bad debts on a specific account basis.
Judgments:
Financial instruments
The Company’s accounting policy with regards to financial instruments is described in Note 2 of the September 30,
2021 annual financial statements. In applying this policy, judgments are made in applying the criteria set out in IFRS
9 – Financial instruments, to record financial instruments at fair value through profit or loss, and the assessments of
the classification of financial instruments and effectiveness of hedging relationships.
Business combinations
The consideration transferred for an acquired business is assigned to the identifiable tangible and intangible assets
purchased, along with liabilities assumed on the basis of their acquisition date fair values. The identification of assets
purchased and liabilities assumed and the valuation thereof is specialized and judgemental. Where appropriate, the
Company engages external business valuators to assist in the valuation of tangible and intangible assets acquired.
When a business combination involved contingent consideration, an amount equal to the fair value of the contingent
consideration is recorded as a liability at the time of acquisition. The key assumptions utilized in deremining the fair
value of contingent consideration may include probabilities associated with the occurrence of specified future events,
financial projections of the acquired buesinss, the timing of future cash flows, and the appropriate discount rate.
Accounting policy for equipment and intangible assets
Management makes judgments in determining the most appropriate methodology for amortizing long-lived assets
over their useful lives. The method chosen is intended to mirror, to the best extent possible, the consumption of the
asset.
Deferred income taxes
The Company’s accounting policy with regards to income taxes is described in Note 2 of the September 30, 2021
annual financial statements. In applying this policy, judgments are made in determining the probability of whether
deductions or tax credits can be utilized and related timing of such items.
Input methodology for project completion
The Company uses judgment in determining the most appropriate basis on which to determine percentage of
completion. Options available to the Company include the proportion that contract costs incurred for work performed
to date bear to the estimated total contract costs, surveys of work performed, and completion of a physical proportion
of the contract work. While the Company considers the costs to complete, the stage of completion is assessed
based upon the assessment of the proportion of the contract completed. Judgments are also made in determining
what costs are project costs for determining the percentage complete.
Management conclusion on the effectiveness of disclosure controls
The Chief Executive Officer and the Chief Financial Officer of the Company, after evaluating the effectiveness of the
Company’s disclosure controls and procedures as of September 30, 2021, have concluded that the Company’s
disclosure controls and procedures were adequate and effective to ensure that material information relating to the
Company and its consolidated subsidiaries would have been known to them and that information required to be
disclosed by the Company is recorded, processed, summarized and reported within the time periods specified in
the securities legislation.
53
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Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Management conclusion on the effectiveness of internal control over financial reporting
Management conclusion on the effectiveness of internal control over financial reporting
The Chief Executive Officer and the Chief Financial Officer of the Company, after evaluating the effectiveness of the
Company’s internal control over financial reporting as of September 30, 2021, have concluded that the Company’s
internal controls over financial reporting provide reasonable assurance regarding the reliability of financial reporting
for external purposes in accordance with IFRS.
The Chief Executive Officer and the Chief Financial Officer of the Company, after evaluating the effectiveness of the
Company’s internal control over financial reporting as of September 30, 2021, have concluded that the Company’s
internal controls over financial reporting provide reasonable assurance regarding the reliability of financial reporting
for external purposes in accordance with IFRS.
During the most recent interim quarter ending September 30, 2021, there have been no changes in the design of the
Company’s internal controls over financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal controls over financial reporting.
During the most recent interim quarter ending September 30, 2021, there have been no changes in the design of the
Company’s internal controls over financial reporting that has materially affected, or is reasonably likely to materially
affect, the Company’s internal controls over financial reporting.
Risk and Uncertainties
Risk and Uncertainties
We are exposed to risks and uncertainties in our business, including the risk factors set forth below:
We are exposed to risks and uncertainties in our business, including the risk factors set forth below:
• Downturn or slowed growth in the global or Canadian economy could affect customers’ ability to purchase the
• Downturn or slowed growth in the global or Canadian economy could affect customers’ ability to purchase the
Company’s products and services.
Company’s products and services.
• The recent delays in the global supply chain and scarcity of materials may impact the Company’s ability
to secure the materials and components required to meet customers’ needs and contractual obligations.
Inflationary prices may also cause a decrease in customer spending which would negatively impact future
sales.
• The international response to the spread of COVID-19 has led to significant restrictions on travel, temporary
closures, quarantines, global stock market and financial market volatility, declining trade and market sentiment;
all of which have and could further effect on interest rates, credit ratings and credit risk. The continued spread
of COVID-19 in Canada, and globally, could adversely impact the Company’s business including without
limitation, employee health, workforce productivity, increased insurance premiums, limitations on travel, the
availability of industry experts and personnel, and other factors that will depend on future developments
beyond the Company’s control, which may have a material and adverse effect on the business, financial
condition and results of operations.
the acquired business.
• The Company has experienced significant growth in recent years, due to a combination of numerous acquisitions,
its ability to generate new business, entry into new domestic and international markets, the diversification of
product and service offerings, and customers’ increased demand for the Company’s products and services.
The Company’s future growth could be impeded by external factors such as slow economic growth, inflation,
redundancy of certain products or services, loss of market share to competitors, limited resources to funds
growth, or a variety of other factors. Moreover, the business could be harmed if the Company fails to manage
its growth effectively.
• The recent delays in the global supply chain and scarcity of materials may impact the Company’s ability
to secure the materials and components required to meet customers’ needs and contractual obligations.
Inflationary prices may also cause a decrease in customer spending which would negatively impact future
sales.
• The international response to the spread of COVID-19 has led to significant restrictions on travel, temporary
closures, quarantines, global stock market and financial market volatility, declining trade and market sentiment;
all of which have and could further effect on interest rates, credit ratings and credit risk. The continued spread
of COVID-19 in Canada, and globally, could adversely impact the Company’s business including without
limitation, employee health, workforce productivity, increased insurance premiums, limitations on travel, the
availability of industry experts and personnel, and other factors that will depend on future developments
beyond the Company’s control, which may have a material and adverse effect on the business, financial
condition and results of operations.
• The Company conducts acquisitions and faces risks associated with those acquisitions and the integration of
• The Company conducts acquisitions and faces risks associated with those acquisitions and the integration of
the acquired business.
• The Company has experienced significant growth in recent years, due to a combination of numerous acquisitions,
its ability to generate new business, entry into new domestic and international markets, the diversification of
product and service offerings, and customers’ increased demand for the Company’s products and services.
The Company’s future growth could be impeded by external factors such as slow economic growth, inflation,
redundancy of certain products or services, loss of market share to competitors, limited resources to funds
growth, or a variety of other factors. Moreover, the business could be harmed if the Company fails to manage
its growth effectively.
• The Company must compete for qualified employees for its own operations and must have ready access to a
• The Company must compete for qualified employees for its own operations and must have ready access to a
large pool of qualified professionals to satisfy contractual arrangements with customers.
large pool of qualified professionals to satisfy contractual arrangements with customers.
• In the event that an operating segment cannot secure an appropriate workforce, such operating segment may
• In the event that an operating segment cannot secure an appropriate workforce, such operating segment may
not be in a position to bid on or secure certain contracts.
not be in a position to bid on or secure certain contracts.
• The Company’s success depends on the engagement and contributions of senior management personnel,
including the Chief Executive Officers. Any changes to the management team, including the hiring or departing
of executives, could be disruptive to the business.
• The Company’s success depends on the engagement and contributions of senior management personnel,
including the Chief Executive Officers. Any changes to the management team, including the hiring or departing
of executives, could be disruptive to the business.
• The markets for the Company’s services are very competitive, rapidly evolving and subject to technological
• The markets for the Company’s services are very competitive, rapidly evolving and subject to technological
changes.
changes.
• The Company has certain ongoing contracts that account for a significant portion of the Company’s revenues
and if these contracts are not renewed at expiry or should a competitor win the renewal, the Company’s future
revenue stream and overall profitability could be significantly reduced.
• The Company has certain ongoing contracts that account for a significant portion of the Company’s revenues
and if these contracts are not renewed at expiry or should a competitor win the renewal, the Company’s future
revenue stream and overall profitability could be significantly reduced.
54
54
Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. • There is a risk in all fixed-priced contracts that the Company will be unable to deliver the system within the time
• There is a risk in all fixed-priced contracts that the Company will be unable to deliver the system within the time
specified and at the expected cost.
specified and at the expected cost.
• The Company’s business is often dependent on performance by third parties and subcontractors in connection
• The Company’s business is often dependent on performance by third parties and subcontractors in connection
with contracts for which the Company is the prime contractor.
with contracts for which the Company is the prime contractor.
• The markets in which the Company operates are characterized by changing technology and evolving industry
standards and the Company’s ability to anticipate changes in technology, technical standards and service
offerings will be a significant factor in the Company’s ability to compete or expand into new markets.
• The markets in which the Company operates are characterized by changing technology and evolving industry
standards and the Company’s ability to anticipate changes in technology, technical standards and service
offerings will be a significant factor in the Company’s ability to compete or expand into new markets.
• Erosion of our customers’ market share for a particular product could have a direct impact on the Company’s
• Erosion of our customers’ market share for a particular product could have a direct impact on the Company’s
revenues and profitability.
revenues and profitability.
• As newly formed entities in certain markets and industries are restructured and consolidated from time to
time, opportunities for the Company may be diminished or work currently performed by the Company could
be repatriated, resulting a loss of revenue.
• The government may change its policies, priorities or funding levels through agency or program budget
reductions or impose budgetary constraints, which could have a direct impact on the Company’s revenues
and profitability.
• Most fee-for-service contracts provide the applicable customer with the ability to adjust the timing and level of
effort throughout the contract life so the amount actually realized by the Company could be materially different
from the original contract value.
• As newly formed entities in certain markets and industries are restructured and consolidated from time to
time, opportunities for the Company may be diminished or work currently performed by the Company could
be repatriated, resulting a loss of revenue.
• The government may change its policies, priorities or funding levels through agency or program budget
reductions or impose budgetary constraints, which could have a direct impact on the Company’s revenues
and profitability.
• Most fee-for-service contracts provide the applicable customer with the ability to adjust the timing and level of
effort throughout the contract life so the amount actually realized by the Company could be materially different
from the original contract value.
• There is a risk that as the Company grows, credit risk increases with respect to accounts receivable.
• There is a risk that as the Company grows, credit risk increases with respect to accounts receivable.
• The Company is subject to foreign exchange risk in that approximately 22% of the Company’s revenues are
derived from non-Canadian sources, which can have a direct impact on the profitability of the Company.
• The Company is subject to foreign exchange risk in that approximately 22% of the Company’s revenues are
derived from non-Canadian sources, which can have a direct impact on the profitability of the Company.
• The Company is exposed to a range of risks related to its foreign operations.
• The Company is exposed to a range of risks related to its foreign operations.
• The Company’s brand and reputation play an important role in its ability to maintain existing customers and
generate new business. Any public criticism of the Company’s operations could be distracting to management,
costly, time consuming and harm the brand and reputation.
• Many of the Company’s solutions rely upon imbedded or external software to deliver goods and services.
Any software defects or security vulnerabilities could lead to service interruptions and impact the Company’s
ability to deliver its products and services.
• Any fraudulent, malicious or accident breach of the Company’s data security could result in unintentional
disclosure of, or unauthorized access to, third party, customer, vendor, employee or other confidential or
sensitive data or information, which could potentially result in additional costs to the Company to enhance
security or to respond to occurrences, lost sales, violations of privacy or other laws, penalties, fines, regulatory
action or litigation.
• The Company is dependent upon information technology systems in the conduct of our operations and we
collect, store and use certain sensitive data, intellectual property, our proprietary business information and
certain personally identifiable information of our employees and customers on our networks.
• The Company’s brand and reputation play an important role in its ability to maintain existing customers and
generate new business. Any public criticism of the Company’s operations could be distracting to management,
costly, time consuming and harm the brand and reputation.
• Many of the Company’s solutions rely upon imbedded or external software to deliver goods and services.
Any software defects or security vulnerabilities could lead to service interruptions and impact the Company’s
ability to deliver its products and services.
• Any fraudulent, malicious or accident breach of the Company’s data security could result in unintentional
disclosure of, or unauthorized access to, third party, customer, vendor, employee or other confidential or
sensitive data or information, which could potentially result in additional costs to the Company to enhance
security or to respond to occurrences, lost sales, violations of privacy or other laws, penalties, fines, regulatory
action or litigation.
• The Company is dependent upon information technology systems in the conduct of our operations and we
collect, store and use certain sensitive data, intellectual property, our proprietary business information and
certain personally identifiable information of our employees and customers on our networks.
• The Company competes in industries that are subject to many intellectual property rights including patents.
• The Company competes in industries that are subject to many intellectual property rights including patents.
• The Company’s insurance policies may not be sufficient to insure itself for all events that could arise in the
• The Company’s insurance policies may not be sufficient to insure itself for all events that could arise in the
course of the Company’s business and operations.
course of the Company’s business and operations.
• The Company operates in the health services sector and faces the risks inherent in that sector.
• The Company operates in the health services sector and faces the risks inherent in that sector.
• The Company is exposed to environmental and health and safety regulations associated with its manufacturing
• The Company is exposed to environmental and health and safety regulations associated with its manufacturing
activities.
activities.
A comprehensive discussion of risks, including risks not specifically listed above, can be found in our most recently
filed Annual Information Form. Additional risks and uncertainties not presently known to us or that we currently
consider immaterial also may impair our business and operations and cause the price of our shares to decline. If any
of the noted risks actually occur, our business may be harmed and our financial condition and results of operations
may suffer significantly.
A comprehensive discussion of risks, including risks not specifically listed above, can be found in our most recently
filed Annual Information Form. Additional risks and uncertainties not presently known to us or that we currently
consider immaterial also may impair our business and operations and cause the price of our shares to decline. If any
of the noted risks actually occur, our business may be harmed and our financial condition and results of operations
may suffer significantly.
55
55
Management’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual ReportManagement’s Discussion and Analysis of Financial Condition and Results of OperationsCalian Group Ltd.2021 Annual Report Short-term outlook
Revenue
Adjusted EBITDA
Adjusted net profit
Long-term outlook
customer base;
attainment;
Guidance
Low
High
$
$
$
$
$
$
57,000
39,250
61,000
42,750
Short-term outlook
550,000
590,000
Revenue
Adjusted EBITDA
Adjusted net profit
Long-term outlook
Guidance
Low
550,000
57,000
39,250
$
$
$
High
590,000
61,000
42,750
$
$
$
Management is confident that the Company is well positioned for sustained growth in the long term. The Company’s
strong contract backlog provides a solid base for the realization of future revenues. Leveraging the Company’s
diverse services offerings, the Company operates in global and domestic markets that will continue to require the
services that the Company offers. To ensure the Company is positioned to respond to market requirements, the
Company will focus on the execution of its four-pillar growth strategy:
Management is confident that the Company is well positioned for sustained growth in the long term. The Company’s
strong contract backlog provides a solid base for the realization of future revenues. Leveraging the Company’s
diverse services offerings, the Company operates in global and domestic markets that will continue to require the
services that the Company offers. To ensure the Company is positioned to respond to market requirements, the
Company will focus on the execution of its four-pillar growth strategy:
• Customer retention: through continued delivery excellence, maintain a valued relationship with current
• Customer retention: through continued delivery excellence, maintain a valued relationship with current
customer base;
• Customer diversification: through increasing the percentage of its revenues derived from new business in
adjacent and non-government markets, balance customer revenue into numerous global and domestic sectors;
• Customer diversification: through increasing the percentage of its revenues derived from new business in
adjacent and non-government markets, balance customer revenue into numerous global and domestic sectors;
• Innovation: continue investment in service offerings to increase differentiation and improve gross margin
• Innovation: continue investment in service offerings to increase differentiation and improve gross margin
attainment;
• Continuous improvement: leverage innovation to improve how the company operates with a goal to
• Continuous improvement: leverage innovation to improve how the company operates with a goal to
streamline processes and provide for a scalable back office support capability.
streamline processes and provide for a scalable back office support capability.
The Company has completed twelve acquisitions in the past nine years and will proactively look for companies that
can accelerate its growth strategy with a focus on customer diversification and innovation.
The Company has completed twelve acquisitions in the past nine years and will proactively look for companies that
can accelerate its growth strategy with a focus on customer diversification and innovation.
Calian Advanced Technologies segment has been working within a sustainable satellite sector and is expecting
opportunities to continue to arise as systems adopting the latest technologies will be required by customers wishing
to maintain and improve their service offerings and react to an increasing demand for bandwidth. We continue
to invest in communications products, software development and manufacturing equipment to strengthen the
segment’s competitive position and diversify its customer base in the agriculture, cable and defence sectors. In
the short-term, activity levels in custom manufacturing will continue to be directly dependent upon the segment’s
customer requirements and continuing volatility in orders is anticipated as both government and commercial
customers continue to re-examine their traditional spending patterns. The delays, deferrals and cancellations of
DND capital procurements have created intense competition for available manufacturing work. Finally, changes
in the relative value of the Canadian dollar may negatively or positively impact the segment’s competitiveness on
projects denominated in foreign currencies.
The Health, Learning and ITCS segments’ professional services are adaptable to many different markets. Currently,
the strength of these segments lies in providing professional services, solutions, and delivery services across Canada
with a significant portion of this work currently with the Department of National Defence. Recently these segments
have been successful in diversifying their customer base and evolving their service offerings. Management believes
that for the long term, the public and private sector will continue to require Health, Learning and ITCS services from
private enterprise to achieve their business outcomes. As to the current outlook, the federal government continues to
spend on priority programs and, while there is general uncertainty as to the extent of demand from this customer, at
least in the short-term, spending seems to have stabilized. With recent investments in sales, marketing, acquisitions
and success in new markets outside of the federal government, these segments are better positioned to manage
through any potential government spending downturns. Recent acquisitions have also bolstered the performance
of these segments and it is expected that, overall, the acquired companies will continue to meet and exceed the
financial targets established as part of the acquisitions.
Calian Advanced Technologies segment has been working within a sustainable satellite sector and is expecting
opportunities to continue to arise as systems adopting the latest technologies will be required by customers wishing
to maintain and improve their service offerings and react to an increasing demand for bandwidth. We continue
to invest in communications products, software development and manufacturing equipment to strengthen the
segment’s competitive position and diversify its customer base in the agriculture, cable and defence sectors. In
the short-term, activity levels in custom manufacturing will continue to be directly dependent upon the segment’s
customer requirements and continuing volatility in orders is anticipated as both government and commercial
customers continue to re-examine their traditional spending patterns. The delays, deferrals and cancellations of
DND capital procurements have created intense competition for available manufacturing work. Finally, changes
in the relative value of the Canadian dollar may negatively or positively impact the segment’s competitiveness on
projects denominated in foreign currencies.
The Health, Learning and ITCS segments’ professional services are adaptable to many different markets. Currently,
the strength of these segments lies in providing professional services, solutions, and delivery services across Canada
with a significant portion of this work currently with the Department of National Defence. Recently these segments
have been successful in diversifying their customer base and evolving their service offerings. Management believes
that for the long term, the public and private sector will continue to require Health, Learning and ITCS services from
private enterprise to achieve their business outcomes. As to the current outlook, the federal government continues to
spend on priority programs and, while there is general uncertainty as to the extent of demand from this customer, at
least in the short-term, spending seems to have stabilized. With recent investments in sales, marketing, acquisitions
and success in new markets outside of the federal government, these segments are better positioned to manage
through any potential government spending downturns. Recent acquisitions have also bolstered the performance
of these segments and it is expected that, overall, the acquired companies will continue to meet and exceed the
financial targets established as part of the acquisitions.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd.Management’s Discussion and Analysis of Financial Condition and Results of Operations2021 Annual ReportCalian Group Ltd. Independent Auditor’s Report
Independent Auditor’s Report
To the Shareholders and the Board of Directors of Calian Group Ltd.
To the Shareholders and the Board of Directors of Calian Group Ltd.
Opinion
We have audited the consolidated financial statements of Calian Group Ltd. (the “Company”), which comprise the
consolidated statements of financial position as at September 30, 2021 and 2020, and the consolidated statements
of net profit, comprehensive income, changes in equity and cash flows for the years then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the
“financial statements”).
Opinion
We have audited the consolidated financial statements of Calian Group Ltd. (the “Company”), which comprise the
consolidated statements of financial position as at September 30, 2021 and 2020, and the consolidated statements
of net profit, comprehensive income, changes in equity and cash flows for the years then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the
“financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of
the Company as at September 30, 2021 and 2020, and its financial performance and its cash flows for the years then
ended in accordance with International Financial Reporting Standards (“IFRS”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of
the Company as at September 30, 2021 and 2020, and its financial performance and its cash flows for the years then
ended in accordance with International Financial Reporting Standards (“IFRS”).
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Key Audit Matters
statements
Key Audit Matter Description
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements for the year ended September 30, 2021. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Revenue - Advanced Technologies fixed price uncompleted contracts - Refer to Notes 2, 3, 20 to the financial
The Company recognizes revenue on Advanced Technologies fixed price contracts over time using the input method
using management’s best estimate of the costs and related risks associated with completing the contracts. The
accounting for fixed price contracts that are not complete at the reporting date (“fixed price uncompleted contracts”)
involves judgment, particularly as it relates to estimating total anticipated costs at completion. Total anticipated
costs at completion includes both incurred costs to date as well as anticipated costs to complete which could
include contingencies and reserves. These costs are impacted by a variety of factors including labour, productivity,
subcontractors and materials. Given the length of fixed price contracts, these assumptions could change over time,
as the contract is completed.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements for the year ended September 30, 2021. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Revenue - Advanced Technologies fixed price uncompleted contracts - Refer to Notes 2, 3, 20 to the financial
statements
Key Audit Matter Description
The Company recognizes revenue on Advanced Technologies fixed price contracts over time using the input method
using management’s best estimate of the costs and related risks associated with completing the contracts. The
accounting for fixed price contracts that are not complete at the reporting date (“fixed price uncompleted contracts”)
involves judgment, particularly as it relates to estimating total anticipated costs at completion. Total anticipated
costs at completion includes both incurred costs to date as well as anticipated costs to complete which could
include contingencies and reserves. These costs are impacted by a variety of factors including labour, productivity,
subcontractors and materials. Given the length of fixed price contracts, these assumptions could change over time,
as the contract is completed.
Given the significant judgments necessary and complexity to account for the fixed price uncompleted contracts,
auditing the costs to complete required a high degree of auditor attention and an increased audit effort when
performing audit procedures and evaluating the results of those procedures.
Given the significant judgments necessary and complexity to account for the fixed price uncompleted contracts,
auditing the costs to complete required a high degree of auditor attention and an increased audit effort when
performing audit procedures and evaluating the results of those procedures.
How the Key Audit Matter Was Addressed in the Audit
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures related to the costs to complete for fixed price uncompleted contracts included the following,
among others:
Our audit procedures related to the costs to complete for fixed price uncompleted contracts included the following,
among others:
• Evaluated management’s ability to estimate costs by comparing actual costs to management’s historical
• Evaluated management’s ability to estimate costs by comparing actual costs to management’s historical
estimates for contracts that have been completed.
• For a selection of fixed price uncompleted contracts we:
o Obtained and inspected the executed contract agreements;
estimates for contracts that have been completed.
• For a selection of fixed price uncompleted contracts we:
o Obtained and inspected the executed contract agreements;
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Independent Auditor’s Report
o Conducted inquiries with management and project personnel to gain an understanding of the status of
o Conducted inquiries with management and project personnel to gain an understanding of the status of
project activities, including any changes to the initial plan
project activities, including any changes to the initial plan
o Compared the estimates to management’s work plans, engineering specifications, supplier contracts or
o Compared the estimates to management’s work plans, engineering specifications, supplier contracts or
communications with customers, as applicable;
communications with customers, as applicable;
o Tested the key components of the costs to complete estimates, including materials, labor, and
subcontractor costs and estimated project contingencies for a sample of new contracts at initiation;
o Tested the key components of the costs to complete estimates, including materials, labor, and
subcontractor costs and estimated project contingencies for a sample of new contracts at initiation;
o Compared management’s estimated margins to those of similar contracts, when applicable;
o Compared management’s estimated margins to those of similar contracts, when applicable;
o Compared costs incurred to date to the initial costs to complete estimate;
o Compared costs incurred to date to the initial costs to complete estimate;
o Compared costs at complete estimates at the end of the fiscal year to the initial estimates at the
inception of the contract, and to prior year estimates for ongoing contracts, in order to assess the
appropriateness of costs to complete estimates based on current status of the project.
Acquisitions- Intangible Assets and Contingent Consideration– Refer to Notes 2, 3 and 25 to the financial
statements
Key Audit Matter Description
The Company acquired 100% of the equity of Dapasoft Inc. and InterTronic Solutions Inc. (“InterTronic”) and
recognized the assets acquired and the liabilities assumed at fair value, including intangible assets for customer
relationships, technology and trademarks (“intangible assets”). The transactions include contingent consideration
arrangements (“contingent earn-out”) which are based on the acquired entity attaining specified levels of EBITDA
for future years. The InterTronic transaction also includes an earn-out contingent on the achievement of a certain
level of contracts signed within a specified time period. In determining the fair value of the contingent earn-out
and intangible assets, management was required to make assumptions around probabilities associated with the
occurrence of specified future events, financial projections of the acquired business, the timing of future cash flows,
and the appropriate discount rate.
o Compared costs at complete estimates at the end of the fiscal year to the initial estimates at the
inception of the contract, and to prior year estimates for ongoing contracts, in order to assess the
appropriateness of costs to complete estimates based on current status of the project.
Acquisitions- Intangible Assets and Contingent Consideration– Refer to Notes 2, 3 and 25 to the financial
statements
Key Audit Matter Description
The Company acquired 100% of the equity of Dapasoft Inc. and InterTronic Solutions Inc. (“InterTronic”) and
recognized the assets acquired and the liabilities assumed at fair value, including intangible assets for customer
relationships, technology and trademarks (“intangible assets”). The transactions include contingent consideration
arrangements (“contingent earn-out”) which are based on the acquired entity attaining specified levels of EBITDA
for future years. The InterTronic transaction also includes an earn-out contingent on the achievement of a certain
level of contracts signed within a specified time period. In determining the fair value of the contingent earn-out
and intangible assets, management was required to make assumptions around probabilities associated with the
occurrence of specified future events, financial projections of the acquired business, the timing of future cash flows,
and the appropriate discount rate.
While there are several estimates and assumptions that are required to determine the fair value of contingent earn-
out and intangible assets, the estimates and assumptions with the highest degree of subjectivity are forecasted
future revenues and EBITDA margins, the ability to achieve a certain level of
While there are several estimates and assumptions that are required to determine the fair value of contingent earn-
out and intangible assets, the estimates and assumptions with the highest degree of subjectivity are forecasted
future revenues and EBITDA margins, the ability to achieve a certain level of
contracts signed within a specified time period, and discount rates. This required a high degree of auditor judgment
and an increased extent of audit effort, including the involvement of fair value specialists.
contracts signed within a specified time period, and discount rates. This required a high degree of auditor judgment
and an increased extent of audit effort, including the involvement of fair value specialists.
How the Key Audit Matter Was Addressed in the Audit
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures related to the assumptions used to determine the fair value of the contingent earn-out and
intangible assets included the following, among others:
Our audit procedures related to the assumptions used to determine the fair value of the contingent earn-out and
intangible assets included the following, among others:
• Evaluated the reasonableness of forecasted future revenues and EBITDA margins by comparing the
• Evaluated the reasonableness of forecasted future revenues and EBITDA margins by comparing the
forecasts to:
o Historical results of the acquired entities;
o Actual results of the acquired entities post acquisition to assess estimation accuracy;
o Actual results of the acquired entities post acquisition to assess estimation accuracy;
o Underlying management analyses detailing growth plans;
o Industry and peer data, as applicable.
• Evaluated the reasonableness of the ability to achieve a certain level of contracts signed in a specified time
• Evaluated the reasonableness of the ability to achieve a certain level of contracts signed in a specified time
period by comparing estimates to:
o Historical results related to similar contract bids;
o Underlying management project proposal detailing expected contract achievement plans;
o Underlying management project proposal detailing expected contract achievement plans;
o Inquiries with acquired entity personnel on their contract execution strategy;
o Inquiries with acquired entity personnel on their contract execution strategy;
o Actual contract execution progress post-acquisition.
o Actual contract execution progress post-acquisition.
forecasts to:
o Historical results of the acquired entities;
o Underlying management analyses detailing growth plans;
o Industry and peer data, as applicable.
period by comparing estimates to:
o Historical results related to similar contract bids;
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• With the assistance of fair value specialists, evaluated the reasonableness of the discount rates used by
testing the source information underlying the determination of the discount rates and developing a range of
independent estimates and comparing those to the discount rates selected by management.
• With the assistance of fair value specialists, evaluated the reasonableness of the discount rates used by
testing the source information underlying the determination of the discount rates and developing a range of
independent estimates and comparing those to the discount rates selected by management.
Other Information
Management is responsible for the other information. The other information comprises:
Other Information
Management is responsible for the other information. The other information comprises:
• Management’s Discussion and Analysis
• Management’s Discussion and Analysis
• The information, other than the financial statements and our auditor’s report thereon, in the Annual Report.
• The information, other than the financial statements and our auditor’s report thereon, in the Annual Report.
Our opinion on the financial statements does not cover the other information and we do not and will not express any
form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is
to read the other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
Our opinion on the financial statements does not cover the other information and we do not and will not express any
form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is
to read the other information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the
work we have performed on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.
We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the
work we have performed on this other information, we conclude that there is a material misstatement of this other
information, we are required to report that fact in this auditor’s report. We have nothing to report in this regard.
The Annual Report is expected to be made available to us after the date of the auditor’s report. If, based on the work
we will perform on this other information, we conclude that there is a material misstatement of this other information,
we are required to report that fact to those charged with governance.
The Annual Report is expected to be made available to us after the date of the auditor’s report. If, based on the work
we will perform on this other information, we conclude that there is a material misstatement of this other information,
we are required to report that fact to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
IFRS, and for such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
IFRS, and for such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
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forgery, intentional omissions, misrepresentations, or the override of internal control.
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall
presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain solely responsible for our audit
presentation.
opinion.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall
presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Benoit Patry.
The engagement partner on the audit resulting in this independent auditor’s report is Benoit Patry.
Chartered Professional Accountants
Licensed Public Accountants
Ottawa, Canada
November 24, 2021
Chartered Professional Accountants
Licensed Public Accountants
Ottawa, Canada
November 24, 2021
60 2021 Annual Report
Calian Group Ltd.
60 2021 Annual Report
Calian Group Ltd.
Calian Group Ltd. Consolidated Statements of Financial Position
As at September 30, 2021 and 2020
(Canadian dollars in thousands, except per share data)
Calian Group Ltd. Consolidated Statements of Financial Position
As at September 30, 2021 and 2020
(Canadian dollars in thousands, except per share data)
September 30,
September 30,
NOTES
2021
2020
NOTES
September 30,
2021
September 30,
2020
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities
$
$
NON-CURRENT ASSETS
Capitalized research and development
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Accounts receivable
Work in process
Inventory
Prepaid expenses
Derivative assets
Total current assets
Equipment
Application software
Right of use asset
Investments
Acquired intangible assets
Deferred tax asset
Goodwill
Total non-current assets
TOTAL ASSETS
Contingent earn-out
Provisions
Unearned contract revenue
Derivative liabilities
Lease obligations
Total current liabilities
NON-CURRENT LIABILITIES
Lease obligations
Contingent earn-out
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
SHAREHOLDERS’ EQUITY
Issued capital
Contributed surplus
Retained earnings
5
6
9
7
8
24
10
10
10
11
12
13
22
14
15
26
16
9
24
11
11
26
22
18
$
$
262,174
202,636
78,611
111,138
55,307
6,617
9,891
610
3,217
12,411
8,015
15,383
670
54,519
1,477
100,103
195,795
457,969
68,093
25,038
1,541
23,321
158
3,029
121,180
14,449
13,224
16,756
44,429
165,609
194,960
5,224
91,359
817
292,360
457,969
24,235
81,109
84,132
6,095
6,707
358
3,924
11,655
3,092
17,595
670
36,191
-
55,290
128,417
331,053
72,007
3,251
1,038
13,435
152
2,790
92,673
16,800
11,913
9,261
37,974
130,647
107,931
2,002
92,030
(1,557)
200,406
331,053
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Accounts receivable
Work in process
Inventory
Prepaid expenses
Derivative assets
Total current assets
NON-CURRENT ASSETS
Capitalized research and development
Equipment
Application software
Right of use asset
Investments
Acquired intangible assets
Deferred tax asset
Goodwill
Total non-current assets
TOTAL ASSETS
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities
Contingent earn-out
Provisions
Unearned contract revenue
Derivative liabilities
Lease obligations
Total current liabilities
NON-CURRENT LIABILITIES
Lease obligations
Contingent earn-out
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
SHAREHOLDERS’ EQUITY
Issued capital
Contributed surplus
Retained earnings
Accumulated other comprehensive income (loss)
TOTAL SHAREHOLDERS’ EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
Number of common shares issued and outstanding
The accompanying notes are an integral part
of the audited annual consolidated financial statements.
Approved by the Board on November 24, 2021:
5
6
9
7
8
24
10
10
10
11
12
13
22
14
15
26
16
9
24
11
11
26
22
18
18
$
$
78,611
111,138
55,307
6,617
9,891
610
262,174
3,217
12,411
8,015
15,383
670
54,519
1,477
100,103
195,795
457,969
68,093
25,038
1,541
23,321
158
3,029
121,180
14,449
13,224
16,756
44,429
165,609
$
$
24,235
81,109
84,132
6,095
6,707
358
202,636
3,924
11,655
3,092
17,595
670
36,191
-
55,290
128,417
331,053
72,007
3,251
1,038
13,435
152
2,790
92,673
16,800
11,913
9,261
37,974
130,647
194,960
5,224
91,359
817
292,360
457,969
11,285,828
$
107,931
2,002
92,030
(1,557)
200,406
331,053
9,760,032
$
Accumulated other comprehensive income (loss)
TOTAL SHAREHOLDERS’ EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
Number of common shares issued and outstanding
The accompanying notes are an integral part
of the audited annual consolidated financial statements.
Approved by the Board on November 24, 2021:
$
$
18
11,285,828
9,760,032
Calian Group Ltd.
2021 Annual Report 61
Calian Group Ltd.
2021 Annual Report 61
George Weber
Chairman
Ray Basler
Director
George Weber
Chairman
Ray Basler
Director
Calian Group Ltd. Consolidated Statements of Net Profit
For the years ended September 30, 2021 and 2020
(Canadian dollars in thousands, except per share data)
Calian Group Ltd. Consolidated Statements of Net Profit
For the years ended September 30, 2021 and 2020
(Canadian dollars in thousands, except per share data)
Advanced Technologies
$
166,591
$
153,382
Year ended September 30,
NOTES
2021
2020
Revenue
Health
Learning
ITCS
Total Revenue
Cost of revenues
Gross profit
Selling and marketing
General and administration
Research and development
Profit before under noted items
Depreciation of equipment, application software and research and
development
Depreciation of right of use asset
Amortization of acquired intangible assets
Other changes in fair value
Deemed compensation
Changes in fair value related to contingent earn-out
Profit before interest and income tax expense
Lease obligations interest expense
Interest expense (income)
Profit before income tax expense
Income tax expense – current
Income tax expense (recovery) – deferred
Total income tax expense
NET PROFIT
Net profit per share:
Basic
Diluted
194,936
74,622
82,255
518,404
391,667
126,737
16,334
53,454
5,020
51,929
4,285
3,054
11,731
-
4,006
10,336
18,517
450
360
8,399
(1,847)
6,552
163,035
57,834
58,069
432,320
343,164
89,156
12,336
38,012
1,998
36,810
2,976
2,771
5,166
(101)
-
(1,882)
27,880
475
185
8,171
(1,311)
6,860
17,707
27,220
$
$
$
11,155
$
20,360
1.08
1.07
$
$
2.25
2.23
20
10
11
13
11
22
21
21
25, 26
26
Revenue
Advanced Technologies
Health
Learning
ITCS
Total Revenue
Cost of revenues
Gross profit
Selling and marketing
General and administration
Research and development
Profit before under noted items
Depreciation of equipment, application software and research and
development
Depreciation of right of use asset
Amortization of acquired intangible assets
Other changes in fair value
Deemed compensation
Changes in fair value related to contingent earn-out
Profit before interest and income tax expense
Lease obligations interest expense
Interest expense (income)
Profit before income tax expense
Income tax expense – current
Income tax expense (recovery) – deferred
Total income tax expense
NET PROFIT
Net profit per share:
Basic
Diluted
Year ended September 30,
NOTES
2021
2020
$
166,591
$
153,382
194,936
74,622
82,255
518,404
391,667
126,737
16,334
53,454
5,020
51,929
4,285
3,054
11,731
-
4,006
10,336
18,517
450
360
163,035
57,834
58,069
432,320
343,164
89,156
12,336
38,012
1,998
36,810
2,976
2,771
5,166
(101)
-
(1,882)
27,880
475
185
17,707
27,220
8,399
(1,847)
6,552
8,171
(1,311)
6,860
11,155
$
20,360
1.08
1.07
$
$
2.25
2.23
$
$
$
20
10
11
13
25, 26
26
11
22
21
21
The accompanying notes are an integral part of the audited annual consolidated financial statements.
The accompanying notes are an integral part of the audited annual consolidated financial statements.
62 2021 Annual Report
Calian Group Ltd.
62 2021 Annual Report
Calian Group Ltd.
Calian Group Ltd. Consolidated Statements of Comprehensive Income
For the years ended September 30, 2021 and 2020
(Canadian dollars in thousands)
Calian Group Ltd. Consolidated Statements of Comprehensive Income
For the years ended September 30, 2021 and 2020
(Canadian dollars in thousands)
Year ended September 30,
2021
2020
$
11,155
$
20,360
(243)
2,617
2,374
238
(929)
(691)
NET PROFIT
Items that will be reclassified subsequently to net profit
Cumulative translation adjustment
Change in deferred gain on derivatives designated as cash
flow hedges, net of tax of $995 (2020 $335)
Other comprehensive income (loss), net of tax
Year ended September 30,
2021
2020
$
11,155
$
20,360
(243)
2,617
2,374
238
(929)
(691)
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
$
13,529
$
19,669
COMPREHENSIVE INCOME
$
13,529
$
19,669
NET PROFIT
Items that will be reclassified subsequently to net profit
Cumulative translation adjustment
Change in deferred gain on derivatives designated as cash
flow hedges, net of tax of $995 (2020 $335)
Other comprehensive income (loss), net of tax
COMPREHENSIVE INCOME
Calian Group Ltd.
2021 Annual Report 63
Calian Group Ltd.
2021 Annual Report 63
Net profit and comprehensive
income
Dividend paid ($1.12 per share)
Shares issued under employee
share plans
acquisition
Shares issued through
Shares issued under public
offering net of issuance costs
Contingent earn-out
Shares issued under employee
stock purchase plan
Share-based compensation
expense
Balance October 1, 2019
Comprehensive income
Dividend paid ($1.12 per share)
Shares issued under employee
share plans
sition
Shares issued through acqui-
Shares issued under public
offering net of issuance costs
Shares issued under employee
stock purchase plan
Share based compensation
expense
18
18
18
26
18
19
18
18
18
18
19
3,064
(1,340)
5,000
76,991
1,974
-
2,627
1,935
-
-
-
-
-
-
5,323
(978)
2,500
65,847
1,746
-
1,163
-
-
-
-
-
-
-
-
-
11,155
(11,826)
2,374
13,529
-
(11,826)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,724
5,000
76,991
2,627
1,974
1,935
(9,938)
4,345
2,500
65,847
1,746
1,163
Notes
Issued
capital
Contributed
surplus
Retained
earnings
Other Com-
prehensive
Income
Total
$
32,515 $
1,817 $
81,608 $
(866) $
115,074
20,360
(691)
19,669
(9,938)
Calian Group Ltd. Consolidated Statements of Changes in Equity
For the years ended September 30, 2021 and 2020
(Canadian dollars in thousands, except per share data)
Calian Group Ltd. Consolidated Statements of Changes in Equity
For the years ended September 30, 2021 and 2020
(Canadian dollars in thousands, except per share data)
Notes
Issued
capital
Contributed
surplus
Retained
earnings
Other Com-
prehensive
Income
Total
Notes
Issued
capital
Contributed
surplus
Retained
earnings
Other Com-
prehensive
Income
Total
Balance October 1, 2020
$ 107,931
$
2,002
$
92,030
$
(1,557) $ 200,406
Balance October 1, 2020
$ 107,931
$
2,002
$
92,030
$
(1,557) $ 200,406
Balance September 30, 2021
$ 194,960
$
5,224
$
91,359
$
817
$ 292,360
Balance September 30, 2021
$ 194,960
$
5,224
$
91,359
$
817
$ 292,360
Net profit and comprehensive
income
Dividend paid ($1.12 per share)
Shares issued under employee
share plans
Shares issued through
acquisition
Shares issued under public
offering net of issuance costs
Contingent earn-out
Shares issued under employee
stock purchase plan
Share-based compensation
expense
18
18
18
26
18
19
-
-
-
-
11,155
(11,826)
2,374
13,529
-
(11,826)
3,064
(1,340)
5,000
76,991
-
-
-
2,627
1,974
-
-
1,935
-
-
-
-
-
-
-
-
-
-
1,724
5,000
76,991
2,627
1,974
1,935
Balance October 1, 2019
Comprehensive income
Dividend paid ($1.12 per share)
Shares issued under employee
share plans
Shares issued through acqui-
sition
Shares issued under public
offering net of issuance costs
Shares issued under employee
stock purchase plan
Share based compensation
expense
Notes
Issued
capital
Contributed
surplus
Retained
earnings
Other Com-
prehensive
Income
Total
$
32,515 $
1,817 $
81,608 $
(866) $
115,074
-
-
-
-
5,323
(978)
2,500
65,847
1,746
-
-
-
-
1,163
18
18
18
18
19
20,360
(691)
19,669
(9,938)
-
-
-
-
-
-
-
-
-
-
-
(9,938)
4,345
2,500
65,847
1,746
1,163
Balance September 30, 2020
$ 107,931 $
2,002 $
92,030 $
(1,557) $
200,406
Balance September 30, 2020
$ 107,931 $
2,002 $
92,030 $
(1,557) $
200,406
The accompanying notes are an integral part of the audited annual consolidated financial statements.
The accompanying notes are an integral part of the audited annual consolidated financial statements.
64 2021 Annual Report
Calian Group Ltd.
64 2021 Annual Report
Calian Group Ltd.
Calian Group Ltd. Consolidated Statements of Cash Flows
For the years ended September 30, 2021 and 2020
(Canadian dollars in thousands)
Calian Group Ltd. Consolidated Statements of Cash Flows
For the years ended September 30, 2021 and 2020
(Canadian dollars in thousands)
CASH FLOWS GENERATED FROM OPERATING ACTIVITIES
CASH FLOWS GENERATED FROM OPERATING ACTIVITIES
$
11,155
$
20,360
Net profit
$
11,155
$
20,360
Year ended September 30,
NOTES
2021
2020
Year ended September 30,
NOTES
2021
2020
26
11
22
19
19
10, 13
25, 26
Items not affecting cash:
Interest expense (income)
Changes in fair value related to contingent earn-out
Lease obligations interest expense
Income tax expense
Employee share purchase plan expense
Share based compensation expense
Depreciation and amortization
Deemed compensation
Other changes in fair value
Change in non-cash working capital
Accounts receivable
Work in process
Prepaid expenses
Inventory
Accounts payable and accrued liabilities
Unearned contract revenue
Interest received (paid)
Income tax recovered (paid)
CASH FLOWS GENERATED FROM FINANCING ACTIVITIES
Issuance of common shares net of costs
18, 19
CASH FLOWS GENERATED FROM FINANCING ACTIVITIES
Issuance of common shares net of costs
18, 19
Dividends
Draw (repayment) on line of credit
Payment of lease obligations
CASH FLOWS USED IN INVESTING ACTIVITIES
Investments and loan receivable
Business acquisitions
Capitalized research and development
Equipment and application software
17
12
25
10
10
360
10,336
450
6,552
399
1,935
19,070
4,006
-
54,263
(24,114)
30,934
(2,752)
(446)
(6,381)
6,781
58,285
(810)
(10,933)
46,542
79,299
(11,826)
-
(3,033)
64,440
-
(48,757)
(430)
(7,419)
(56,606)
NET CASH (OUTFLOW) INFLOW
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
$
54,376
24,235
78,611
$
$
NET CASH (OUTFLOW) INFLOW
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
$
54,376
24,235
78,611
$
$
The accompanying notes are an integral part of the audited annual consolidated financial statements.
The accompanying notes are an integral part of the audited annual consolidated financial statements.
185
(1,882)
475
6,860
199
1,163
10,913
-
(101)
38,172
(11,676)
(44,911)
(1,271)
(328)
17,251
4,501
1,738
(678)
(3,813)
(2,753)
70,488
(9,938)
(13,000)
(2,508)
45,042
(100)
(29,288)
(1,227)
(4,574)
(35,189)
7,100
17,135
24,235
Net profit
Items not affecting cash:
Interest expense (income)
Changes in fair value related to contingent earn-out
Lease obligations interest expense
Income tax expense
Employee share purchase plan expense
Share based compensation expense
Depreciation and amortization
Deemed compensation
Other changes in fair value
Change in non-cash working capital
Accounts receivable
Work in process
Prepaid expenses
Inventory
Accounts payable and accrued liabilities
Unearned contract revenue
Interest received (paid)
Income tax recovered (paid)
Dividends
Draw (repayment) on line of credit
Payment of lease obligations
CASH FLOWS USED IN INVESTING ACTIVITIES
Investments and loan receivable
Business acquisitions
Capitalized research and development
Equipment and application software
26
11
22
19
19
10, 13
25, 26
17
12
25
10
10
360
10,336
450
6,552
399
1,935
19,070
4,006
-
54,263
(24,114)
30,934
(2,752)
(446)
(6,381)
6,781
58,285
(810)
(10,933)
46,542
79,299
(11,826)
(3,033)
64,440
-
-
(48,757)
(430)
(7,419)
(56,606)
185
(1,882)
475
6,860
199
1,163
10,913
-
(101)
38,172
(11,676)
(44,911)
(1,271)
(328)
17,251
4,501
1,738
(678)
(3,813)
(2,753)
70,488
(9,938)
(13,000)
(2,508)
45,042
(100)
(29,288)
(1,227)
(4,574)
(35,189)
7,100
17,135
24,235
Calian Group Ltd.
2021 Annual Report 65
Calian Group Ltd.
2021 Annual Report 65
Calian Group Ltd. Notes to the Consolidated Financial Statements
For the years ended September 30, 2019 and 2018
(Canadian dollars in thousands)
Calian Group Ltd. Notes to the Consolidated Financial Statements
For the years ended September 30, 2019 and 2018
(Canadian dollars in thousands)
1. Basis of Preparation
Calian Group Ltd. (“the Company”) is incorporated under the Canada Business Corporations Act. The address of its
registered office and principal place of business is 770 Palladium Drive, Ottawa, Ontario K2V 1C8. The company’s
capabilities are diverse with services and solutions delivered through four segments: Advanced Technologies,
Health, Learning and IT and Cyber Solutions (“ITCS”). Headquartered in Ottawa, Calian provides business services
and solutions to both industry and government customers in the areas of health, defence, security, aerospace,
engineering, AgTech and IT.
Statement of compliance
1. Basis of Preparation
Calian Group Ltd. (“the Company”) is incorporated under the Canada Business Corporations Act. The address of its
registered office and principal place of business is 770 Palladium Drive, Ottawa, Ontario K2V 1C8. The company’s
capabilities are diverse with services and solutions delivered through four segments: Advanced Technologies,
Health, Learning and IT and Cyber Solutions (“ITCS”). Headquartered in Ottawa, Calian provides business services
and solutions to both industry and government customers in the areas of health, defence, security, aerospace,
engineering, AgTech and IT.
Statement of compliance
These consolidated financial statements are expressed in Canadian dollars and have been prepared in accordance
with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standard Board
(“IASB”) and in place for September 30, 2021. These consolidated financial statements were prepared using the
accounting policies as described in Note 2 – Summary of significant accounting policies.
These consolidated financial statements are expressed in Canadian dollars and have been prepared in accordance
with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standard Board
(“IASB”) and in place for September 30, 2021. These consolidated financial statements were prepared using the
accounting policies as described in Note 2 – Summary of significant accounting policies.
These consolidated financial statements were authorized for issuance by the Board of Directors on November 24, 2021.
These consolidated financial statements were authorized for issuance by the Board of Directors on November 24, 2021.
2. Summary of Significant Accounting Policies
The accounting policies below have been applied consistently to all periods presented in these consolidated financial
statements unless otherwise stated.
Basis of consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries
Calian Ltd. located in Ottawa, Ontario, Primacy Management Inc. (“Primacy”), located in Burlington, Ontario, DWP
Solutions Inc. (“DWP”), located in Ottawa, Ontario, IntraGrain Technologies Inc. (“IntraGrain”) located in Regina,
Saskatchewan, SatService Gesellschaft für Kommunikationssysteme mbH (“SatService”) located in Steisslingen,
Germany, Allphase Clinical Research Services Inc., located in Ottawa, Ontario, Alio Health Services Inc., located in
Ottawa, Ontario (Collectively “Allphase/Alio”), Comprehensive Training Solutions AS (“CTS”) located in Stavanger,
Norway, EMSEC Solutions Inc. (“EMSEC”) located in Ottawa, Ontario, Tallysman Wireless Inc. (“Tallysman”) located
in Ottawa, Ontario, Cadence Consultancy Limited (“Cadence”) located in London, England, InterTronic Solutions Inc.
(“InterTronic”) located in Vaudreuil-Dorion, Quebec and Dapasoft Inc. (“Dapasoft”) located in Toronto, Ontario. All
transactions and balances between these companies have been eliminated on consolidation.
2. Summary of Significant Accounting Policies
The accounting policies below have been applied consistently to all periods presented in these consolidated financial
statements unless otherwise stated.
Basis of consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries
Calian Ltd. located in Ottawa, Ontario, Primacy Management Inc. (“Primacy”), located in Burlington, Ontario, DWP
Solutions Inc. (“DWP”), located in Ottawa, Ontario, IntraGrain Technologies Inc. (“IntraGrain”) located in Regina,
Saskatchewan, SatService Gesellschaft für Kommunikationssysteme mbH (“SatService”) located in Steisslingen,
Germany, Allphase Clinical Research Services Inc., located in Ottawa, Ontario, Alio Health Services Inc., located in
Ottawa, Ontario (Collectively “Allphase/Alio”), Comprehensive Training Solutions AS (“CTS”) located in Stavanger,
Norway, EMSEC Solutions Inc. (“EMSEC”) located in Ottawa, Ontario, Tallysman Wireless Inc. (“Tallysman”) located
in Ottawa, Ontario, Cadence Consultancy Limited (“Cadence”) located in London, England, InterTronic Solutions Inc.
(“InterTronic”) located in Vaudreuil-Dorion, Quebec and Dapasoft Inc. (“Dapasoft”) located in Toronto, Ontario. All
transactions and balances between these companies have been eliminated on consolidation.
Basis of presentation
The consolidated financial statements are presented at historical cost unless otherwise noted. Historical cost is
generally based on the fair value of the consideration given in exchange for the asset or liability.
The consolidated financial statements are presented at historical cost unless otherwise noted. Historical cost is
generally based on the fair value of the consideration given in exchange for the asset or liability.
The Company recognizes revenue from the following sources, although this list is not exhaustive:
The Company recognizes revenue from the following sources, although this list is not exhaustive:
Revenue recognition
• Advanced Technologies support services across a number of industries, and product development
• Advanced Technologies support services across a number of industries, and product development
• Healthcare services including clinic management, healthcare practitioner support, COVID-19 response
• Healthcare services including clinic management, healthcare practitioner support, COVID-19 response
services and psychological assessments
services and psychological assessments
• Learning services including, custom training for the military, emergency preparedness and simulation training
• Learning services including, custom training for the military, emergency preparedness and simulation training
• IT services including IT support services, systems implementation services, and cyber security consulting
• IT services including IT support services, systems implementation services, and cyber security consulting
services and cyber security monitoring
services and cyber security monitoring
Service revenue
66 2021 Annual Report
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66 2021 Annual Report
Calian Group Ltd.
Basis of presentation
Revenue recognition
Service revenue
2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
Product revenue
Product revenue
• Sale of internally developed hardware and software products
• Resale of radio frequency communications product
• Sale of healthcare products
• Resale of IT product which can include hardware and software
• Manufacturing and installation of large satellite antennae ground systems
• Licensing of cyber product solutions
(a) Revenue recognition:
• Sale of internally developed hardware and software products
• Resale of radio frequency communications product
• Sale of healthcare products
• Resale of IT product which can include hardware and software
• Manufacturing and installation of large satellite antennae ground systems
• Licensing of cyber product solutions
(a) Revenue recognition:
Revenue is recognized in profit or loss in accordance with the pattern of satisfying the Company’s performance
obligations under a contract. This satisfaction occurs when control of a good or service transfers to the customer. In
the majority of the Company’s fixed price contracts, the customer controls the work in process as evidenced by the
right to payment for work performed to date plus a reasonable profit to deliver products or services that do not have
an alternative use to the Company. Based on the nature of these contractual arrangements, control is transferred
over time and revenue is recognized over time.
For each performance obligation satisfied over time, the Company will recognize revenue by measuring progress
toward complete satisfaction of that performance obligation using the input method. In this way, the Company
recognizes revenue in a pattern that reflects the transfer of control of the promised goods or services to the customer.
Fixed price contracts are recognized using the input method with reference to costs incurred. Revenue from cost
plus arrangements is recognized as services are performed and costs are incurred.
Revenue is recognized in profit or loss in accordance with the pattern of satisfying the Company’s performance
obligations under a contract. This satisfaction occurs when control of a good or service transfers to the customer. In
the majority of the Company’s fixed price contracts, the customer controls the work in process as evidenced by the
right to payment for work performed to date plus a reasonable profit to deliver products or services that do not have
an alternative use to the Company. Based on the nature of these contractual arrangements, control is transferred
over time and revenue is recognized over time.
For each performance obligation satisfied over time, the Company will recognize revenue by measuring progress
toward complete satisfaction of that performance obligation using the input method. In this way, the Company
recognizes revenue in a pattern that reflects the transfer of control of the promised goods or services to the customer.
Fixed price contracts are recognized using the input method with reference to costs incurred. Revenue from cost
plus arrangements is recognized as services are performed and costs are incurred.
Revenue from generic product sales, or product that does not meet criteria for over time recognition is measured at a
point in time following the transfer of control of such products to the customer, which typically occurs upon shipment
or delivery depending on the terms of the underlying contracts.
Revenue from generic product sales, or product that does not meet criteria for over time recognition is measured at a
point in time following the transfer of control of such products to the customer, which typically occurs upon shipment
or delivery depending on the terms of the underlying contracts.
Revenue from contract modifications, commonly referred to as change orders or purchase orders issued on contracts,
will be recognized to the extent that the contract modifications have been approved by the customer and the amount
can be measured reliably. In cases where the contract modification is approved, but the price has not been finalized,
the Company will account for the contract modification using variable consideration guidance described below.
Revenue from contract modifications, commonly referred to as change orders or purchase orders issued on contracts,
will be recognized to the extent that the contract modifications have been approved by the customer and the amount
can be measured reliably. In cases where the contract modification is approved, but the price has not been finalized,
the Company will account for the contract modification using variable consideration guidance described below.
For a portion of customer arrangements, the customer contracts with the Company to provide a significant service
of integrating a complex set of tasks and components into a single project or capability (even if that single project
results in the delivery of multiple units). The Company therefore considers that the entire contract results in the
delivery of a single performance obligation. Less commonly, the Company may promise to provide distinct goods
or services within a contract in which case the contract is separated into the associated performance obligations as
assessed from the customer’s perspective. If a contract contains multiple performance obligations, the Company
allocates the total transaction price to each performance obligation in an amount based on the estimated relative
standalone selling prices of the promised goods or services underlying each performance obligation. When the
Company is contracted to construct customer specific projects, the budgets and overall transaction prices are built
up using the Company’s best estimate of costs associated to complete the customized project using the appropriate
overhead and subcontractor rates for a given project and location. This approach to estimate the overall costs
and associated revenues is considered the most appropriate assessment of the standalone selling price for the
associated performance obligations.
For a portion of customer arrangements, the customer contracts with the Company to provide a significant service
of integrating a complex set of tasks and components into a single project or capability (even if that single project
results in the delivery of multiple units). The Company therefore considers that the entire contract results in the
delivery of a single performance obligation. Less commonly, the Company may promise to provide distinct goods
or services within a contract in which case the contract is separated into the associated performance obligations as
assessed from the customer’s perspective. If a contract contains multiple performance obligations, the Company
allocates the total transaction price to each performance obligation in an amount based on the estimated relative
standalone selling prices of the promised goods or services underlying each performance obligation. When the
Company is contracted to construct customer specific projects, the budgets and overall transaction prices are built
up using the Company’s best estimate of costs associated to complete the customized project using the appropriate
overhead and subcontractor rates for a given project and location. This approach to estimate the overall costs
and associated revenues is considered the most appropriate assessment of the standalone selling price for the
associated performance obligations.
In certain contracts for products, the Company may agree to provide warranty and maintenance services for periods
that can extend up to 5 years. Warranty and maintenance are often included in the transaction price and is an
after–sales service. Upon expiration, the warranty period may be extended at the customer’s option. Regardless of
whether a renewal option exists in a contract, the Company does not account for a renewal option until this option is
In certain contracts for products, the Company may agree to provide warranty and maintenance services for periods
that can extend up to 5 years. Warranty and maintenance are often included in the transaction price and is an
after–sales service. Upon expiration, the warranty period may be extended at the customer’s option. Regardless of
whether a renewal option exists in a contract, the Company does not account for a renewal option until this option is
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
agreed upon. This is subsequently accounted for at the agreed upon price on renewal. Consequently, the option to
extend the renewal period does not provide customers with any advantage when they enter into the initial contract
and therefore no revenue has been deferred relating to this renewal option.
agreed upon. This is subsequently accounted for at the agreed upon price on renewal. Consequently, the option to
extend the renewal period does not provide customers with any advantage when they enter into the initial contract
and therefore no revenue has been deferred relating to this renewal option.
The maintenance or warranty service is considered to be a distinct service when it is both regularly supplied by
the Company to other customers on a stand-alone basis and is available for customers from other providers in
the market. When these criteria are met, the warranty is considered a service type warranty where a portion of the
transaction price is allocated to the maintenance services based on the stand-alone selling price of those services.
Revenue relating to the maintenance services is recognized over time as the service is provided and incurs warranty
costs over the satisfaction of the performance obligation. Assurance type warranties are those that promise to the
customer that the delivered product will function as intended and will comply with agreed-upon specifications.
Assurance type warranty costs are recognized as a provision in accordance with IAS 37 Provisions, Contingent
Liabilities and Contingent Assets, based on the progress of the other performance obligations in the contract, and
the provision recognized is reduced as costs are incurred or reversed if no longer required.
If estimated total costs on any contract, including any inefficient costs, are greater than the net contract revenues,
IFRS15, Revenue from Contracts with Customers indicates IAS37, Provisions, Contingent Liabilities and Contingent
Assets, should be applied as the contract is considered onerous. IAS37 however contains no further requirements
as to the measurement of onerous contracts. On adoption of IFRS15, all loss provisions for contracts with customers
follow the same policy for the definition of unavoidable costs to fulfilling the contract. The Company defines
unavoidable costs as the costs that the Company cannot avoid because it has the contract (for example, this would
include an allocation of overhead costs if those costs are incurred for activities required to complete the contract).
The maintenance or warranty service is considered to be a distinct service when it is both regularly supplied by
the Company to other customers on a stand-alone basis and is available for customers from other providers in
the market. When these criteria are met, the warranty is considered a service type warranty where a portion of the
transaction price is allocated to the maintenance services based on the stand-alone selling price of those services.
Revenue relating to the maintenance services is recognized over time as the service is provided and incurs warranty
costs over the satisfaction of the performance obligation. Assurance type warranties are those that promise to the
customer that the delivered product will function as intended and will comply with agreed-upon specifications.
Assurance type warranty costs are recognized as a provision in accordance with IAS 37 Provisions, Contingent
Liabilities and Contingent Assets, based on the progress of the other performance obligations in the contract, and
the provision recognized is reduced as costs are incurred or reversed if no longer required.
If estimated total costs on any contract, including any inefficient costs, are greater than the net contract revenues,
IFRS15, Revenue from Contracts with Customers indicates IAS37, Provisions, Contingent Liabilities and Contingent
Assets, should be applied as the contract is considered onerous. IAS37 however contains no further requirements
as to the measurement of onerous contracts. On adoption of IFRS15, all loss provisions for contracts with customers
follow the same policy for the definition of unavoidable costs to fulfilling the contract. The Company defines
unavoidable costs as the costs that the Company cannot avoid because it has the contract (for example, this would
include an allocation of overhead costs if those costs are incurred for activities required to complete the contract).
(b) Contract assets and liabilities
(b) Contract assets and liabilities
Any excess of costs and estimated earnings over progress billings on construction contracts is carried as a contract
asset in the financial statements. Any excess of progress billings over earned revenue on construction contracts is
carried as a contract liability in the financial statements.
Any excess of costs and estimated earnings over progress billings on construction contracts is carried as a contract
asset in the financial statements. Any excess of progress billings over earned revenue on construction contracts is
carried as a contract liability in the financial statements.
Contract assets and liabilities (or “work in process” and “unearned contract revenue”, respectively) are reported in
a net position on a contract-by-contract basis at the end of each reporting period. All contract assets and liabilities
are classified as current in the financial statements as they are expected to be settled within the Company’s normal
operating cycle.
(c) Provisions:
Contract assets and liabilities (or “work in process” and “unearned contract revenue”, respectively) are reported in
a net position on a contract-by-contract basis at the end of each reporting period. All contract assets and liabilities
are classified as current in the financial statements as they are expected to be settled within the Company’s normal
operating cycle.
(c) Provisions:
Provisions are recognized when, at the financial statement date, the Company has a present obligation as a result
of a past event, and it is more likely than not that the Company will be required to settle that obligation and the cash
outflow can be estimated reliably. The amount recognized for provisions is the best estimate of the expenditure to
be incurred. Provisions are measured at their present value.
Provisions are recognized when, at the financial statement date, the Company has a present obligation as a result
of a past event, and it is more likely than not that the Company will be required to settle that obligation and the cash
outflow can be estimated reliably. The amount recognized for provisions is the best estimate of the expenditure to
be incurred. Provisions are measured at their present value.
Provisions include:
Provisions include:
i. Provisions for potential warranty claims relating to construction projects. These claims are usually settled during
the project’s warranty period. A provision is recognized when it is more likely than not that a warranty claim will
arise. The amount recognized is the best estimate of the amount required to settle the warranty issue.
i. Provisions for potential warranty claims relating to construction projects. These claims are usually settled during
the project’s warranty period. A provision is recognized when it is more likely than not that a warranty claim will
arise. The amount recognized is the best estimate of the amount required to settle the warranty issue.
ii. Provisions for loss contracts are recorded when costs are determined to be greater than total revenues for the
contract. Losses from any construction contracts are recognized in full in the period the loss becomes apparent.
The loss provision will be net of management’s estimate of probable expected recoveries, which differs from the
criterion used for revenue recognition.
ii. Provisions for loss contracts are recorded when costs are determined to be greater than total revenues for the
contract. Losses from any construction contracts are recognized in full in the period the loss becomes apparent.
The loss provision will be net of management’s estimate of probable expected recoveries, which differs from the
criterion used for revenue recognition.
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
Share-based compensation
Share-based compensation
The Company has a stock option plan for executives and other key employees. The Company measures and
recognizes compensation expense based on the grant date fair-value of the stock options issued using the Black-
Scholes pricing model. The offsetting credit is recorded in contributed surplus. Each tranche of an award is considered
a separate award with its own vesting period and grant date fair value. Compensation expense for each tranche is
recorded on a straight-line basis over the vesting period based on the Company’s estimate of share options that will
ultimately vest. At each reporting period, the Company revises its estimate of the stock options expected to vest.
The impact on the change in estimate, if any, is recognized over the remaining vesting period. Consideration paid
by employees on the exercise of options and related amounts of contributed surplus are recorded as issued capital
when the shares are issued.
The Company has a restricted share unit plan for executives and other key employees. The Company measures
and recognizes compensation expense based on the grant date fair-value of the units issued using the market
value based on the price at the date preceding the grant. The offsetting credit is recorded in contributed surplus.
Each tranche of an award is considered a separate award with its own vesting period and grant date fair value.
Compensation expense for each tranche is recorded on a straight-line basis over the vesting period based on the
Company’s estimate of units that will ultimately vest. At each reporting period, the Company revises its estimate of
the units expected to vest. The impact on the change in estimate, if any, is recognized over the remaining vesting
The Company has a stock option plan for executives and other key employees. The Company measures and
recognizes compensation expense based on the grant date fair-value of the stock options issued using the Black-
Scholes pricing model. The offsetting credit is recorded in contributed surplus. Each tranche of an award is considered
a separate award with its own vesting period and grant date fair value. Compensation expense for each tranche is
recorded on a straight-line basis over the vesting period based on the Company’s estimate of share options that will
ultimately vest. At each reporting period, the Company revises its estimate of the stock options expected to vest.
The impact on the change in estimate, if any, is recognized over the remaining vesting period. Consideration paid
by employees on the exercise of options and related amounts of contributed surplus are recorded as issued capital
when the shares are issued.
The Company has a restricted share unit plan for executives and other key employees. The Company measures
and recognizes compensation expense based on the grant date fair-value of the units issued using the market
value based on the price at the date preceding the grant. The offsetting credit is recorded in contributed surplus.
Each tranche of an award is considered a separate award with its own vesting period and grant date fair value.
Compensation expense for each tranche is recorded on a straight-line basis over the vesting period based on the
Company’s estimate of units that will ultimately vest. At each reporting period, the Company revises its estimate of
the units expected to vest. The impact on the change in estimate, if any, is recognized over the remaining vesting
period.
The Company has an employee stock purchase plan available to all employees of the Company. The plan provides
for a discount to the fair market value at the date the shares are issued. Compensation expense representing the
discount is recorded as general and administration expenses with an offsetting amount to issued capital.
The Company has an employee stock purchase plan available to all employees of the Company. The plan provides
for a discount to the fair market value at the date the shares are issued. Compensation expense representing the
discount is recorded as general and administration expenses with an offsetting amount to issued capital.
Leases
At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company has elected to apply the practical expedient to account for each lease component and any non-lease
components as a single lease component. The Company recognizes a right-of-use asset and a lease liability at the
lease commencement date. The right-of-use asset is initially measured based on the initial amount of the lease
liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or
the site on which it is located, less any lease incentives received. The assets are depreciated to the earlier of the end
of the useful life of the right-of-use asset, or the lease term using the straight-line method as this most closely reflects
the expected pattern of consumption of the future economic benefits. The lease term includes periods covered by
an option to extend if the Company is reasonably certain to exercise that option.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the Company’s incremental borrowing rate. Variable lease payments that do not depend on
an index or rate are not included in the measurement of the lease liability. The lease liability is measured at amortized
cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from
a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable
under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase,
extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is
made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero. The Company has elected to apply the practical expedient not to
recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less
and leases of low-value assets. The lease payments associated with these leases are recognized as an expense on
a straight-line basis over the lease term.
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period.
Leases
At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company has elected to apply the practical expedient to account for each lease component and any non-lease
components as a single lease component. The Company recognizes a right-of-use asset and a lease liability at the
lease commencement date. The right-of-use asset is initially measured based on the initial amount of the lease
liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or
the site on which it is located, less any lease incentives received. The assets are depreciated to the earlier of the end
of the useful life of the right-of-use asset, or the lease term using the straight-line method as this most closely reflects
the expected pattern of consumption of the future economic benefits. The lease term includes periods covered by
an option to extend if the Company is reasonably certain to exercise that option.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the Company’s incremental borrowing rate. Variable lease payments that do not depend on
an index or rate are not included in the measurement of the lease liability. The lease liability is measured at amortized
cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from
a change in an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable
under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase,
extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is
made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the
right-of-use asset has been reduced to zero. The Company has elected to apply the practical expedient not to
recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less
and leases of low-value assets. The lease payments associated with these leases are recognized as an expense on
a straight-line basis over the lease term.
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report Income taxes
Current tax
Deferred tax
2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
Income tax expense comprises current and deferred tax. Income tax expense is recognized in net profit, except
when it relates to items that are recognized in other comprehensive income or directly in equity, in which case, the
current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where
current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in
the accounting for the business combination.
Income tax expense comprises current and deferred tax. Income tax expense is recognized in net profit, except
when it relates to items that are recognized in other comprehensive income or directly in equity, in which case, the
current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where
current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in
the accounting for the business combination.
Income taxes
The tax currently payable is based on taxable income for the period using tax rates enacted or substantively enacted
as at each reporting period and any adjustments to tax payable related to previous years. Taxable profit differs from
profit as reported in the consolidated statement of net profit because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are never taxable or deductible.
The tax currently payable is based on taxable income for the period using tax rates enacted or substantively enacted
as at each reporting period and any adjustments to tax payable related to previous years. Taxable profit differs from
profit as reported in the consolidated statement of net profit because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are never taxable or deductible.
Deferred tax is recognized using the balance sheet method, providing for differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the corresponding tax bases used for taxation purposes
calculated using the tax rates in effect when the differences are expected to reverse.
Deferred tax is recognized using the balance sheet method, providing for differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the corresponding tax bases used for taxation purposes
calculated using the tax rates in effect when the differences are expected to reverse.
Deferred tax
Current tax
Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are
generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will
be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not
recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting
profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries,
except where the Company is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with such investments are only recognized to the extent that it is probable that there will be
sufficient taxable profits against which to utilize the benefits of the temporary differences, and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting period and reduced to the extent that it is
no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realized, based on tax rates that have been enacted or substantively enacted at each
reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount
of its assets and liabilities.
Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are
generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will
be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not
recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting
profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries,
except where the Company is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with such investments are only recognized to the extent that it is probable that there will be
sufficient taxable profits against which to utilize the benefits of the temporary differences, and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting period and reduced to the extent that it is
no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the
liability is settled or the asset realized, based on tax rates that have been enacted or substantively enacted at each
reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount
of its assets and liabilities.
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
Capitalized Research and Development (“R&D”)
Capitalized Research and Development (“R&D”)
Research costs are expensed as incurred. Internally developed internal-use asset costs incurred in the development
phase of a project are capitalized. Certain costs incurred in connection with the development of assets to be used
internally are capitalized once a project has progressed beyond a conceptual, preliminary stage to that of development.
Development costs that are directly attributable to the design and testing of identifiable assets controlled by the
Company are recognized as assets when the following criteria are met:
Research costs are expensed as incurred. Internally developed internal-use asset costs incurred in the development
phase of a project are capitalized. Certain costs incurred in connection with the development of assets to be used
internally are capitalized once a project has progressed beyond a conceptual, preliminary stage to that of development.
Development costs that are directly attributable to the design and testing of identifiable assets controlled by the
Company are recognized as assets when the following criteria are met:
• it is technically feasible to complete the asset so that it will be available for use;
• there is an ability and management intends to complete the asset for use or sale;
• it is technically feasible to complete the asset so that it will be available for use;
• there is an ability and management intends to complete the asset for use or sale;
• it can be demonstrated how the asset will generate probable future economic benefits;
• it can be demonstrated how the asset will generate probable future economic benefits;
• adequate technical, financial and other resources to complete the development and to use or sell the asset
• adequate technical, financial and other resources to complete the development and to use or sell the asset
are available; and
are available; and
• the expenditure attributable to the asset during its development can be reliably measured.
• the expenditure attributable to the asset during its development can be reliably measured.
Costs that qualify for capitalization include both internal and external costs, but are limited to those that are
directly related to the specific project. Capitalized development expenditure is measured at cost less accumulated
amortization and accumulated impairment losses. Amortization is recognized in net profit over the estimated useful
life of the underlying assets.
Costs that qualify for capitalization include both internal and external costs, but are limited to those that are
directly related to the specific project. Capitalized development expenditure is measured at cost less accumulated
amortization and accumulated impairment losses. Amortization is recognized in net profit over the estimated useful
life of the underlying assets.
Capitalized R&D is measured at cost and depreciated over the useful life of the assets which is determined to be 5
years. Costs include expenditures that are directly attributable to its construction.
Capitalized R&D is measured at cost and depreciated over the useful life of the assets which is determined to be 5
years. Costs include expenditures that are directly attributable to its construction.
Equipment
Equipment
Equipment, comprising furniture and computer equipment, along with leasehold improvements, is stated at cost
less accumulated depreciation and impairment losses, if any. The carrying value is net of any related government
assistance and investment tax credits. Depreciation is recognized in net profit on a straight-line basis over the
estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the term of
the leases. The estimated useful lives are as follows:
• Equipment:
5 to 10 years
Equipment, comprising furniture and computer equipment, along with leasehold improvements, is stated at cost
less accumulated depreciation and impairment losses, if any. The carrying value is net of any related government
assistance and investment tax credits. Depreciation is recognized in net profit on a straight-line basis over the
estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the term of
the leases. The estimated useful lives are as follows:
• Equipment:
5 to 10 years
The estimated useful lives, residual values and depreciation methods are reviewed annually, with the effect of any
changes in estimate accounted for on a prospective basis.
The estimated useful lives, residual values and depreciation methods are reviewed annually, with the effect of any
changes in estimate accounted for on a prospective basis.
Application software
reviewed annually.
Application software is measured at cost less accumulated depreciation and is amortized on a straight-line basis
over its estimated useful life not exceeding five years. The amortization method and estimate of useful lives are
Application software
Application software is measured at cost less accumulated depreciation and is amortized on a straight-line basis
over its estimated useful life not exceeding five years. The amortization method and estimate of useful lives are
reviewed annually.
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
Acquired intangible assets
Acquired intangible assets
Acquired intangible assets are measured at cost less accumulated amortization. Amortization is recognized in net
profit over the estimated useful lives of the underlying assets. The estimated useful lives are as follows:
Acquired intangible assets are measured at cost less accumulated amortization. Amortization is recognized in net
profit over the estimated useful lives of the underlying assets. The estimated useful lives are as follows:
• Customer relationship Primacy:
indefinite
• Other customer relationships:
3 to 14 years
• Contracts with customers:
3 to 5 years
• Non-competition agreements:
2 to 5 years
• Technology and Trademarks:
2 to 9 years
• Customer relationship Primacy:
indefinite
• Other customer relationships:
3 to 14 years
• Contracts with customers:
3 to 5 years
• Non-competition agreements:
2 to 5 years
• Technology and Trademarks:
2 to 9 years
The customer relationship from the Primacy acquisition, representing expected renewals of the acquired contract, is
considered to have an indefinite life based on the fact that the contract is renewable on an annual basis indefinitely.
The amortization method and estimate of useful life for all other intangible assets is reviewed annually.
The customer relationship from the Primacy acquisition, representing expected renewals of the acquired contract, is
considered to have an indefinite life based on the fact that the contract is renewable on an annual basis indefinitely.
The amortization method and estimate of useful life for all other intangible assets is reviewed annually.
Impairment of equipment, application software and intangible assets
Impairment of equipment, application software and intangible assets
At each reporting period, management reviews the carrying amounts of its equipment, application software and
acquired intangible assets to determine whether there is any indication that those assets have suffered an impairment
loss. Intangible assets with an indefinite life are also tested for impairment annually or more frequently if events or
changes in circumstances indicate that the asset might be impaired. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not
possible to estimate the recoverable amount of an individual asset, management estimates the recoverable amount
of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual cash-generating units. The Company performs its annual
review of acquired intangible assets with an indefinite life on September 30th each year.
At each reporting period, management reviews the carrying amounts of its equipment, application software and
acquired intangible assets to determine whether there is any indication that those assets have suffered an impairment
loss. Intangible assets with an indefinite life are also tested for impairment annually or more frequently if events or
changes in circumstances indicate that the asset might be impaired. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where it is not
possible to estimate the recoverable amount of an individual asset, management estimates the recoverable amount
of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual cash-generating units. The Company performs its annual
review of acquired intangible assets with an indefinite life on September 30th each year.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.
The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates of
future cash flows have not been adjusted.
If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the
carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is
recognized immediately in profit or loss.
Impairment of goodwill
Goodwill arising on the acquisition of a business represents the excess of the purchase price over the net fair
value of identifiable assets, liabilities and contingent liabilities of the acquired businesses recognized at the date of
the acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any
accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to the cash-generating
units expected to benefit from the synergies of the combination. Cash-generating units or groups of cash generating
units to which goodwill has been allocated are tested for impairment annually or more frequently if events or changes
in circumstances indicate that the unit might be impaired. For purposes of impairment testing of goodwill, cash-
generating units or groups of cash generating units correspond to the Company’s reporting segments as disclosed
If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the
carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is
recognized immediately in profit or loss.
Impairment of goodwill
Goodwill arising on the acquisition of a business represents the excess of the purchase price over the net fair
value of identifiable assets, liabilities and contingent liabilities of the acquired businesses recognized at the date of
the acquisition. Goodwill is initially recognized as an asset at cost and is subsequently measured at cost less any
accumulated impairment losses. For the purpose of impairment testing, goodwill is allocated to the cash-generating
units expected to benefit from the synergies of the combination. Cash-generating units or groups of cash generating
units to which goodwill has been allocated are tested for impairment annually or more frequently if events or changes
in circumstances indicate that the unit might be impaired. For purposes of impairment testing of goodwill, cash-
generating units or groups of cash generating units correspond to the Company’s reporting segments as disclosed
in Note 23.
When the recoverable amount of the cash-generating unit is less than the carrying amount of the cash-generating
unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and
When the recoverable amount of the cash-generating unit is less than the carrying amount of the cash-generating
unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and
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in Note 23.
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
then to the other assets of the cash-generating unit on a pro-rata basis. An impairment loss recognized for goodwill
is not reversed in a subsequent period. The Company performs its annual review of goodwill on September 30th
each year.
then to the other assets of the cash-generating unit on a pro-rata basis. An impairment loss recognized for goodwill
is not reversed in a subsequent period. The Company performs its annual review of goodwill on September 30th
each year.
At September 30, 2021 and 2020, management assessed the recoverable amount of goodwill and concluded that a
goodwill impairment charge was not required.
At September 30, 2021 and 2020, management assessed the recoverable amount of goodwill and concluded that a
goodwill impairment charge was not required.
For the years ended September 30, 2021 and 2020, various assumptions were taken to arrive at estimated values per
segment, including discount rates in the range of 7% to 12% and a growth rate assumption of 5%. Outlook for the
next fiscal year was used as the basis for the future cash flow estimates and the future estimated growth rates were
validated by comparing to average growth levels for the previous 3 years.
For the years ended September 30, 2021 and 2020, various assumptions were taken to arrive at estimated values per
segment, including discount rates in the range of 7% to 12% and a growth rate assumption of 5%. Outlook for the
next fiscal year was used as the basis for the future cash flow estimates and the future estimated growth rates were
validated by comparing to average growth levels for the previous 3 years.
Business acquisition
Business acquisition
Acquisition of businesses is accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the
assets transferred by the Company, and liabilities incurred by the Company to the former owners of the acquiree in
exchange for control of the acquiree. Acquisition-related costs are generally expensed in profit or loss as incurred.
Acquisition of businesses is accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the
assets transferred by the Company, and liabilities incurred by the Company to the former owners of the acquiree in
exchange for control of the acquiree. Acquisition-related costs are generally expensed in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired, and the liabilities assumed are recognised at their fair value,
except that deferred tax assets or liabilities are recognised and measured in accordance with IAS 12 Income Taxes.
At the acquisition date, the identifiable assets acquired, and the liabilities assumed are recognised at their fair value,
except that deferred tax assets or liabilities are recognised and measured in accordance with IAS 12 Income Taxes.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any)
over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed
exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and
the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately
in profit or loss as a bargain purchase gain.
When the consideration transferred by the Company in a business combination includes a payment subject to the
retention of the principal shareholders, the amount is deemed to represent deferred compensation payable to such
shareholders and therefore is excluded from the total consideration of the purchase, and is expensed on a straight-
line basis over the retention period in the Company’s consolidated statement of net profit as deemed compensation
related to acquisitions.
When the consideration transferred by the Company in a business combination includes assets or liabilities resulting
from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair
value and included as part of the consideration transferred in a business combination. Changes in the fair value of
the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with
corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from
additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition
date) about facts and circumstances that existed at the acquisition date.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling
interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any)
over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after
reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed
exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and
the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately
in profit or loss as a bargain purchase gain.
When the consideration transferred by the Company in a business combination includes a payment subject to the
retention of the principal shareholders, the amount is deemed to represent deferred compensation payable to such
shareholders and therefore is excluded from the total consideration of the purchase, and is expensed on a straight-
line basis over the retention period in the Company’s consolidated statement of net profit as deemed compensation
related to acquisitions.
When the consideration transferred by the Company in a business combination includes assets or liabilities resulting
from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair
value and included as part of the consideration transferred in a business combination. Changes in the fair value of
the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with
corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from
additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition
date) about facts and circumstances that existed at the acquisition date.
Foreign currency translation
Foreign currency translation
Transactions in currencies other than the Company’s functional currency (foreign currencies) are recorded at the
rates of exchange prevailing at the dates of the transactions. Income and expense items are translated at the average
exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the
exchange rates at the dates of the transactions are used. At each reporting period, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at each reporting period. Non-monetary items which are
measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognized
Transactions in currencies other than the Company’s functional currency (foreign currencies) are recorded at the
rates of exchange prevailing at the dates of the transactions. Income and expense items are translated at the average
exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the
exchange rates at the dates of the transactions are used. At each reporting period, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at each reporting period. Non-monetary items which are
measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences are recognized
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
in net profit in the period in which they arise except for exchange differences on transactions entered into in order to
hedge certain foreign currencies (see note below for hedging policy).
in net profit in the period in which they arise except for exchange differences on transactions entered into in order to
hedge certain foreign currencies (see note below for hedging policy).
The functional currency of the parent company and its subsidiaries is the Canadian dollar, except for SatService
which is in Euro, CTS which is in Norwegian Krone, and Cadence which is in Pound Sterling.
The functional currency of the parent company and its subsidiaries is the Canadian dollar, except for SatService
which is in Euro, CTS which is in Norwegian Krone, and Cadence which is in Pound Sterling.
Financial instruments
the instrument.
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of
Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities
at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial
assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Financial instruments
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of
the instrument.
Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities
at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial
assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Financial assets
Financial assets
All financial assets are recognized and de-recognized on trade date. The classification of financial assets depends
on the business model for managing the financial assets and the contractual cash flow characteristics of the financial
asset. A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold
assets to collect contractual cash flows, and its contractual terms give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
All financial assets are recognized and de-recognized on trade date. The classification of financial assets depends
on the business model for managing the financial assets and the contractual cash flow characteristics of the financial
asset. A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold
assets to collect contractual cash flows, and its contractual terms give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
The Company’s financial assets are classified as follows:
Cash
Accounts receivable
Amortized cost
Amortized cost
Investment and loan receivable
Fair value through profit and loss
Derivative assets
Fair value through other comprehensive income (“OCI”)
The Company’s financial assets are classified as follows:
Cash
Accounts receivable
Investment and loan receivable
Derivative assets
Amortized cost
Amortized cost
Fair value through profit and loss
Fair value through other comprehensive income (“OCI”)
Amortized cost
Amortized cost
Subsequent to initial recognition, financial assets at amortized cost are measured using the effective interest method,
less any impairment. Interest income is recognized by applying the effective interest rate except for accounts
receivable, where the interest revenue would be immaterial. Interest income, foreign exchange gains and losses,
and impairment and any gain or loss on de-recognition are recognized in profit and loss.
Subsequent to initial recognition, financial assets at amortized cost are measured using the effective interest method,
less any impairment. Interest income is recognized by applying the effective interest rate except for accounts
receivable, where the interest revenue would be immaterial. Interest income, foreign exchange gains and losses,
and impairment and any gain or loss on de-recognition are recognized in profit and loss.
Impairment of financial assets
Impairment of financial assets
The company measures a loss allowance based on the lifetime expected credit losses. Lifetime expected credit
losses are estimated based on factors such as the Company’s past experience of collecting payments, observable
changes in national or local economic conditions that correlate with default on receivables, financial difficulties of
the borrower, and it becoming probable that the borrower will enter bankruptcy or financial re-organization. Financial
assets are written off when there is no reasonable expectation of recovery.
The company measures a loss allowance based on the lifetime expected credit losses. Lifetime expected credit
losses are estimated based on factors such as the Company’s past experience of collecting payments, observable
changes in national or local economic conditions that correlate with default on receivables, financial difficulties of
the borrower, and it becoming probable that the borrower will enter bankruptcy or financial re-organization. Financial
assets are written off when there is no reasonable expectation of recovery.
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
The Company determines the classification of its financial liabilities at initial recognition. The Company’s financial
Financial liabilities
liabilities are as follows:
Contingent earn-out
Provisions
Derivative liabilities
Fair value hierarchy
Line of credit
Accounts payable and accrued liabilities
Amortized cost
Amortized cost
Fair value through profit and loss
Amortized cost
Fair value through OCI
Financial liabilities
The Company determines the classification of its financial liabilities at initial recognition. The Company’s financial
liabilities are as follows:
Line of credit
Accounts payable and accrued liabilities
Contingent earn-out
Provisions
Derivative liabilities
Amortized cost
Amortized cost
Fair value through profit and loss
Amortized cost
Fair value through OCI
Fair value hierarchy
The Company’s fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The
three levels of the fair value hierarchy are:
The Company’s fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The
three levels of the fair value hierarchy are:
Level 1 values are based on unadjusted quoted prices in active markets that are accessible at the measurement date
for identical assets or liabilities.
Level 1 values are based on unadjusted quoted prices in active markets that are accessible at the measurement date
for identical assets or liabilities.
Level 2 values are based on quoted prices in markets that are not active or model inputs that are observable either
directly or indirectly for substantially the full term of the asset or liability.
Level 2 values are based on quoted prices in markets that are not active or model inputs that are observable either
directly or indirectly for substantially the full term of the asset or liability.
Level 3 values are based on prices or valuation techniques that require inputs that are both unobservable and
significant to the overall fair value measurement.
Level 3 values are based on prices or valuation techniques that require inputs that are both unobservable and
significant to the overall fair value measurement.
When the inputs used to measure fair value fall within more than one level of the hierarchy, the level within which the
fair value measurement is categorized is based on the Company’s assessment of the lowest level input that is the
most significant to the fair value measurement.
When the inputs used to measure fair value fall within more than one level of the hierarchy, the level within which the
fair value measurement is categorized is based on the Company’s assessment of the lowest level input that is the
most significant to the fair value measurement.
Derivative financial instruments and risk management
Derivative financial instruments and risk management
The Company enters into derivative financial instruments, mainly foreign exchange forward contracts to manage
its foreign exchange rate risk. The Company’s policy does not allow management to enter into derivative financial
instruments for trading or speculative purposes. Foreign exchange forward contracts are entered into to manage the
foreign exchange rate risk on foreign denominated financial assets and liabilities and foreign denominated forecasted
transactions.
Derivatives are initially recognized at fair value at the date a derivative contract is entered into with transaction costs
recognized in profit and loss. Derivatives are subsequently re-measured to their fair value at each reporting period.
The resulting gain or loss is recognized in net profit immediately unless the derivative is designated and effective as
a hedging instrument, in which event the effective portion of changes in the fair value of the derivative is recorded in
other comprehensive income and is recognized in net profit when the hedged item affects net profit. The Company
expenses transaction costs related to its foreign exchange contracts. Fair value of the forward exchange contracts
reflects the cash flows due to or from the Company if settlement had taken place at the end of the period. A derivative
is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than
12 months and it is not expected to be realized or settled within 12 months.
The Company enters into derivative financial instruments, mainly foreign exchange forward contracts to manage
its foreign exchange rate risk. The Company’s policy does not allow management to enter into derivative financial
instruments for trading or speculative purposes. Foreign exchange forward contracts are entered into to manage the
foreign exchange rate risk on foreign denominated financial assets and liabilities and foreign denominated forecasted
transactions.
Derivatives are initially recognized at fair value at the date a derivative contract is entered into with transaction costs
recognized in profit and loss. Derivatives are subsequently re-measured to their fair value at each reporting period.
The resulting gain or loss is recognized in net profit immediately unless the derivative is designated and effective as
a hedging instrument, in which event the effective portion of changes in the fair value of the derivative is recorded in
other comprehensive income and is recognized in net profit when the hedged item affects net profit. The Company
expenses transaction costs related to its foreign exchange contracts. Fair value of the forward exchange contracts
reflects the cash flows due to or from the Company if settlement had taken place at the end of the period. A derivative
is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than
12 months and it is not expected to be realized or settled within 12 months.
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
Hedge accounting
(cash flow hedges).
Management designates its foreign exchange forward contracts as either hedges of the fair value of recognized
assets or liabilities (fair value hedges) or hedges of highly probable forecast transactions and firm commitments
At the inception of the hedge relationship, the Company documents the relationship between the hedging instruments
and the hedged items, as well as its risk management objective and strategy for undertaking various hedge
transactions. Furthermore, both at the hedge’s inception and on an on-going basis, the Company also assesses
whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values
or cash flows of hedged items.
Hedge accounting
Management designates its foreign exchange forward contracts as either hedges of the fair value of recognized
assets or liabilities (fair value hedges) or hedges of highly probable forecast transactions and firm commitments
(cash flow hedges).
At the inception of the hedge relationship, the Company documents the relationship between the hedging instruments
and the hedged items, as well as its risk management objective and strategy for undertaking various hedge
transactions. Furthermore, both at the hedge’s inception and on an on-going basis, the Company also assesses
whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values
or cash flows of hedged items.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in net profit
immediately, together with any changes in the fair value of the hedged item that are attributable to the hedged risk.
The change in the fair value of the hedging instrument and the change in the hedged item attributable to the hedged
risk are recognized in the line of the income statement relating to the hedged item.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in net profit
immediately, together with any changes in the fair value of the hedged item that are attributable to the hedged risk.
The change in the fair value of the hedging instrument and the change in the hedged item attributable to the hedged
risk are recognized in the line of the income statement relating to the hedged item.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
are deferred in other comprehensive income and accumulated under the heading of cash flow hedging reserve.
The gain or loss relating to the ineffective portion is recognized immediately in net profit, and is included in other
gains and losses, if any. Amounts deferred in other comprehensive income are recycled in net profit in the periods
when the hedged item is recognized in net profit, in the same line of the consolidated statement of net profit as the
recognized hedged item.
Hedge accounting is discontinued when management revokes the hedging relationship; the hedging instrument is
terminated or no longer qualifies for hedge accounting. For fair value hedges, the adjustment to the carrying amount
of the hedged item arising from the hedged risk is amortized to net profit from that date. For cash flow hedges, any
cumulative gain or loss deferred in other comprehensive income at that time remains in other comprehensive income
and is recognized when the forecast transaction is ultimately recognized in net profit. When a forecast transaction
is no longer expected to occur, the cumulative gain or loss that was deferred in other comprehensive income is
recognized immediately in net profit.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges
are deferred in other comprehensive income and accumulated under the heading of cash flow hedging reserve.
The gain or loss relating to the ineffective portion is recognized immediately in net profit, and is included in other
gains and losses, if any. Amounts deferred in other comprehensive income are recycled in net profit in the periods
when the hedged item is recognized in net profit, in the same line of the consolidated statement of net profit as the
recognized hedged item.
Hedge accounting is discontinued when management revokes the hedging relationship; the hedging instrument is
terminated or no longer qualifies for hedge accounting. For fair value hedges, the adjustment to the carrying amount
of the hedged item arising from the hedged risk is amortized to net profit from that date. For cash flow hedges, any
cumulative gain or loss deferred in other comprehensive income at that time remains in other comprehensive income
and is recognized when the forecast transaction is ultimately recognized in net profit. When a forecast transaction
is no longer expected to occur, the cumulative gain or loss that was deferred in other comprehensive income is
recognized immediately in net profit.
Note 24 sets out details of the fair values of the derivative instruments used for hedging purposes. Movements in the
hedging reserve in equity are also detailed in the consolidated statement of changes in equity.
Note 24 sets out details of the fair values of the derivative instruments used for hedging purposes. Movements in the
hedging reserve in equity are also detailed in the consolidated statement of changes in equity.
3. Critical Accounting Judgments and Key Sources of Estimation Uncertainty
3. Critical Accounting Judgments and Key Sources of Estimation Uncertainty
Estimates:
Estimates:
The preparation of financial statements in conformity with IFRS requires the Company’s management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting periods presented. Actual results could
differ from those estimates.
Project completion for revenue
the percentage complete.
76
The Company enters into fixed-price contracts which can extend over more than one reporting period. Revenue from
these fixed-price projects is recognized over time using the input method using management’s best estimate of the
costs and related risks associated with completing the projects. Management’s approach to revenue recognition
is tightly linked to detailed project management processes and controls. The information provided by the project
managers combined with a knowledgeable assessment of technical complexities and risks are used in estimating
The preparation of financial statements in conformity with IFRS requires the Company’s management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements,
and the reported amounts of revenues and expenses during the reporting periods presented. Actual results could
differ from those estimates.
Project completion for revenue
The Company enters into fixed-price contracts which can extend over more than one reporting period. Revenue from
these fixed-price projects is recognized over time using the input method using management’s best estimate of the
costs and related risks associated with completing the projects. Management’s approach to revenue recognition
is tightly linked to detailed project management processes and controls. The information provided by the project
managers combined with a knowledgeable assessment of technical complexities and risks are used in estimating
the percentage complete.
76
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. Income taxes
Contingent liabilities
Loss allowance
Judgments:
Financial instruments
of hedging relationships.
Business combinations
3. Critical Accounting Judgments and Key Sources of Estimation Un-
3. Critical Accounting Judgments and Key Sources of Estimation Un-
certainty (continued)
Impairment of goodwill and intangible assets
certainty (continued)
Impairment of goodwill and intangible assets
Determining whether goodwill or acquired intangibles assets are impaired requires an estimation of the value of
the cash-generating units. This was done through the value in use calculation. The value in use calculation requires
management to estimate the future cash flows expected to arise from the cash-generating unit, and a suitable
discount rate in order to calculate present value.
Determining whether goodwill or acquired intangibles assets are impaired requires an estimation of the value of
the cash-generating units. This was done through the value in use calculation. The value in use calculation requires
management to estimate the future cash flows expected to arise from the cash-generating unit, and a suitable
discount rate in order to calculate present value.
The Company records deferred income tax assets and liabilities related to deductible or taxable temporary differences.
The Company assesses the value of these assets and liabilities based on the likelihood of the realization as well as
the timing of reversal given management assessments of future taxable income.
The Company records deferred income tax assets and liabilities related to deductible or taxable temporary differences.
The Company assesses the value of these assets and liabilities based on the likelihood of the realization as well as
the timing of reversal given management assessments of future taxable income.
From time-to-time the Company is involved in claims in the normal course of business. Management assesses such
claims and where considered probable to result in an exposure and, where the amount of the claim can be measured
reliably, provisions for loss are made based on management’s assessment of the likely outcome.
From time-to-time the Company is involved in claims in the normal course of business. Management assesses such
claims and where considered probable to result in an exposure and, where the amount of the claim can be measured
reliably, provisions for loss are made based on management’s assessment of the likely outcome.
Contingent liabilities
The Company has extensive commercial history upon which to base its provision for doubtful accounts receivable.
Due to the nature of the industry in which the Company operates, the Company does not create a general provision
for bad debts but rather determines bad debts on a specific account basis.
The Company has extensive commercial history upon which to base its provision for doubtful accounts receivable.
Due to the nature of the industry in which the Company operates, the Company does not create a general provision
for bad debts but rather determines bad debts on a specific account basis.
Loss allowance
Income taxes
The Company’s accounting policy with regards to financial instruments is described in Note 2. In applying this policy,
judgments are made in applying the criteria set out in IFRS9, Financial Instruments, to record financial instruments at
fair value through profit or loss, and the assessments of the classification of financial instruments and effectiveness
The consideration transferred for an acquired business is assigned to the identifiable tangible and intangible assets
purchased, along with liabilities assumed on the basis of their acquisition date fair values. The identification of assets
purchased and liabilities assumed and the valuation thereof is specialized and judgmental. Where appropriate, the
Company engages external business valuators to assist in the valuation of tangible and intangible assets acquired.
When a business combination involves contingent consideration, an amount equal to the fair value of the contingent
consideration is recorded as a liability at the time of acquisition. The key assumptions utilized in determining fair
value of contingent consideration may include probabilities associated with the occurrence of specified future events,
financial projections of the acquired business, the timing of future cash flows, and the appropriate discount rate.
Judgments:
Financial instruments
The Company’s accounting policy with regards to financial instruments is described in Note 2. In applying this policy,
judgments are made in applying the criteria set out in IFRS9, Financial Instruments, to record financial instruments at
fair value through profit or loss, and the assessments of the classification of financial instruments and effectiveness
of hedging relationships.
Business combinations
The consideration transferred for an acquired business is assigned to the identifiable tangible and intangible assets
purchased, along with liabilities assumed on the basis of their acquisition date fair values. The identification of assets
purchased and liabilities assumed and the valuation thereof is specialized and judgmental. Where appropriate, the
Company engages external business valuators to assist in the valuation of tangible and intangible assets acquired.
When a business combination involves contingent consideration, an amount equal to the fair value of the contingent
consideration is recorded as a liability at the time of acquisition. The key assumptions utilized in determining fair
value of contingent consideration may include probabilities associated with the occurrence of specified future events,
financial projections of the acquired business, the timing of future cash flows, and the appropriate discount rate.
Accounting policy for equipment and intangible assets
Accounting policy for equipment and intangible assets
Management makes judgments in determining the most appropriate methodology for amortizing long-lived assets
over their useful lives. The method chosen is intended to mirror, to the best extent possible, the consumption of the
asset.
Management makes judgments in determining the most appropriate methodology for amortizing long-lived assets
over their useful lives. The method chosen is intended to mirror, to the best extent possible, the consumption of the
asset.
77
77
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 3. Critical Accounting Judgments and Key Sources of Estimation Un-
3. Critical Accounting Judgments and Key Sources of Estimation Un-
certainty (continued)
Deferred income taxes
timing of such items.
Input methodology for project completion
The Company’s accounting policy with regards to income taxes is described in Note 2. In applying this policy,
judgments are made in determining the probability of whether deductions or tax credits can be utilized and related
The Company uses judgment in determining the most appropriate basis on which to determine the completion of
projects. Options available to the Company include the proportion that contract costs incurred for work performed to
date bear to the estimated total contract costs, surveys of work performed, and completion of a physical proportion
of the contract work. While the Company considers the costs to complete, the stage of completion is assessed
based upon the assessment of the proportion of the contract completed. Judgments are also made in determining
what costs are project costs for determining the percentage complete.
4. Seasonality
The results of operations for the interim periods are not necessarily indicative of the results of operations for the full
year. The Company’s revenues and earnings have historically been subject to some quarterly seasonality due to
the timing of vacation periods, statutory holidays, industry specific seasonal cycles and the timing and delivery of
milestones for significant projects.
certainty (continued)
Deferred income taxes
The Company’s accounting policy with regards to income taxes is described in Note 2. In applying this policy,
judgments are made in determining the probability of whether deductions or tax credits can be utilized and related
timing of such items.
Input methodology for project completion
The Company uses judgment in determining the most appropriate basis on which to determine the completion of
projects. Options available to the Company include the proportion that contract costs incurred for work performed to
date bear to the estimated total contract costs, surveys of work performed, and completion of a physical proportion
of the contract work. While the Company considers the costs to complete, the stage of completion is assessed
based upon the assessment of the proportion of the contract completed. Judgments are also made in determining
what costs are project costs for determining the percentage complete.
4. Seasonality
The results of operations for the interim periods are not necessarily indicative of the results of operations for the full
year. The Company’s revenues and earnings have historically been subject to some quarterly seasonality due to
the timing of vacation periods, statutory holidays, industry specific seasonal cycles and the timing and delivery of
milestones for significant projects.
5. Cash and Cash Equivalents
The following table presents cash and cash equivalents by currency:
5. Cash and Cash Equivalents
The following table presents cash and cash equivalents by currency:
Total cash and cash equivalents September 30, 2021
Total cash and cash equivalents September 30, 2021
CAD
USD
GBP
EUR
CHF
NOK
CAD
USD
GBP
EUR
CHF
NOK
Local
Currency
$
57,281
10,463
237
4,256
295
6,220
4,534
78
2,906
421
7,958
$
11,771
Foreign
Exchange
Presentation
Currency
1.00
1.27
1.71
1.48
1.37
0.15
1.00
1.33
1.72
1.56
1.45
0.14
$
$
$
57,281
13,288
406
6,299
404
933
78,611
11,771
6,048
135
4,542
609
1,130
Local
Currency
$
57,281
10,463
237
4,256
295
6,220
$
11,771
4,534
78
2,906
421
7,958
Foreign
Exchange
Presentation
Currency
1.00
1.27
1.71
1.48
1.37
0.15
1.00
1.33
1.72
1.56
1.45
0.14
$
$
$
57,281
13,288
406
6,299
404
933
78,611
11,771
6,048
135
4,542
609
1,130
Total cash and cash equivalents September 30, 2020
$
24,235
Total cash and cash equivalents September 30, 2020
$
24,235
78
CAD
USD
GBP
EUR
CHF
NOK
CAD
USD
GBP
EUR
CHF
NOK
78
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.
Other
Loss Allowance
7. Inventory
6. Accounts Receivable
The following table presents the trade and other receivables as at:
6. Accounts Receivable
The following table presents the trade and other receivables as at:
Trade and accounts receivable
$
106,312
$
78,788
Trade and accounts receivable
$
106,312
$
78,788
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
Tax and Scientific Research and Development receivable
Tax and Scientific Research and Development receivable
Other
Loss Allowance
2,753
2,118
111,183
(45)
1,563
803
81,154
(45)
2,753
2,118
111,183
(45)
1,563
803
81,154
(45)
Bad debt expense recognized in the year ended September 30, 2021 (2020) is $510 (NIL). Bad debt recovery
recognized in the year ended September 30, 2021 (2020) is NIL ($2).
Bad debt expense recognized in the year ended September 30, 2021 (2020) is $510 (NIL). Bad debt recovery
recognized in the year ended September 30, 2021 (2020) is NIL ($2).
$
111,138
$
81,109
$
111,138
$
81,109
Inventories are recorded at the lower of cost or net realizable value. Cost is calculated based on the weighted
average cost method. Write-downs are taken for excess and obsolete inventory and for a reduction in the carrying
value of inventory to reflect realizable value based on current cost, production and sales estimates. Cost comprises
all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location
and condition.
The following table presents inventories as at:
September 30, 2021
September 30, 2020
Raw materials
Work in process inventory
Finished goods
7. Inventory
Inventories are recorded at the lower of cost or net realizable value. Cost is calculated based on the weighted
average cost method. Write-downs are taken for excess and obsolete inventory and for a reduction in the carrying
value of inventory to reflect realizable value based on current cost, production and sales estimates. Cost comprises
all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location
and condition.
The following table presents inventories as at:
Raw materials
Work in process inventory
Finished goods
September 30, 2021
September 30, 2020
$
$
4,810
611
1,196
6,617
$
3,677
957
1,461
6,095
$
Inventory recognized as cost of revenues in the year ended September 30, 2021 (2020) is $14,453 ($6,942). No
inventory provisions have been recognized in years ended September 30, 2021 (2020).
Inventory recognized as cost of revenues in the year ended September 30, 2021 (2020) is $14,453 ($6,942). No
inventory provisions have been recognized in years ended September 30, 2021 (2020).
8. Prepaid Expenses
The following table presents prepaid expenses as at:
8. Prepaid Expenses
The following table presents prepaid expenses as at:
Prepaid maintenance
Other prepaid expenses
Prepaid maintenance
Other prepaid expenses
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
$
$
5,703
4,188
9,891
$
$
3,080
3,627
6,707
79
$
$
$
$
4,810
611
1,196
6,617
5,703
4,188
9,891
$
3,677
957
1,461
6,095
$
$
$
3,080
3,627
6,707
79
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report
9. Contract assets and liabilities
The following table presents net contract assets as at:
9. Contract assets and liabilities
The following table presents net contract assets as at:
Net Contract Assets
September 30, 2021
September 30, 2020
$
$
55,307
(23,321)
31,986
$
$
84,132
(13,435)
70,697
Changes in Net Contract Assets
September 30, 2021
September 30, 2020
114,446
(152,161)
(996)
128,772
(88,362)
(156)
$
31,986
$
70,697
Work in process
Unearned contract revenue
Net contract assets
Net Contract Assets
September 30, 2021
September 30, 2020
$
$
55,307
(23,321)
31,986
$
$
84,132
(13,435)
70,697
The following table presents changes in net contract assets for the period ended:
The following table presents changes in net contract assets for the period ended:
Opening balance, October 1
$
70,697
$
30,443
Opening balance, October 1
Additions
Billings
Acquisitions
Ending balance
Changes in Net Contract Assets
September 30, 2021
September 30, 2020
$
70,697
$
30,443
114,446
(152,161)
(996)
128,772
(88,362)
(156)
$
31,986
$
70,697
A continuity of the property and equipment for the year ended September 30, 2021 is as follows:
10. Equipment
A continuity of the property and equipment for the year ended September 30, 2021 is as follows:
Cost
Depreciation
Carrying Value
Cost
Depreciation
Carrying Value
Cost
Acquisitions
Total
Depreciation
Additions/
Disposals
Accumulated
September
September
Depreciation
30, 2021
30, 2020
Cost
Additions/
Disposals
Acquisitions
Total
Depreciation
Accumulated
Depreciation
September
30, 2021
September
30, 2020
2,537
24,829
(150) $
159
- $
2,828
2,546
27,657
(254)
(2,405)
(833)
(16,959)
1,713
10,698
1,870
9,785
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
27,366
(150) $
2,987
30,203
(2,659)
(17,792)
12,411
11,655
7,084
2,810
$
1,458
11,352
(489)
(3,337)
8,015
3,092
$
$
$
$
4,444
$
430
$
-
$
4,874
$
(1,137)
$
(1,657)
$
3,217
$
3,924
Leasehold
improvements
Equipment
Total equipment
Application
software
Capitalized
research and
development
$
$
$
$
$
2,537
24,829
27,366
7,084
$
$
$
$
(150) $
159
- $
2,828
(150) $
2,987
2,810
$
1,458
$
$
$
$
2,546
27,657
30,203
11,352
$
$
$
$
(254)
(2,405)
(2,659)
(489)
$
$
$
$
(833)
(16,959)
(17,792)
(3,337)
$
$
$
$
1,713
10,698
12,411
8,015
$
$
$
$
1,870
9,785
11,655
3,092
4,444
$
430
$
-
$
4,874
$
(1,137)
$
(1,657)
$
3,217
$
3,924
Work in process
Unearned contract revenue
Net contract assets
Additions
Billings
Acquisitions
Ending balance
10. Equipment
Leasehold
improvements
Equipment
Total equipment
Application
software
Capitalized
research and
development
$
$
$
$
$
80
80
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.
11. Right-of-Use Assets and Lease Obligations
The following table presents the right-of-use assets for the Company:
11. Right-of-Use Assets and Lease Obligations
The following table presents the right-of-use assets for the Company:
Years ended
September 30, 2021
September 30, 2020
$
17,595
$
18,416
Balance October 1
842
-
(3,054)
2,045
(95)
(2,771)
Additions
Disposals
Depreciation
Years ended
September 30, 2021
September 30, 2020
$
17,595
$
18,416
842
-
(3,054)
2,045
(95)
(2,771)
The Company’s leases are for office and manufacturing space. The Company has included renewal options in the
measurement of lease obligations when it is reasonably certain to exercise the renewal option.
The Company’s leases are for office and manufacturing space. The Company has included renewal options in the
measurement of lease obligations when it is reasonably certain to exercise the renewal option.
The following table presents lease obligations for the Company:
The following table presents lease obligations for the Company:
$
15,383
$
17,595
Balance September 30
$
15,383
$
17,595
Years ended
September 30, 2021
September 30, 2020
$
19,590
$
20,259
Balance at October 1
Additions
Disposals
Principal payments
Balance at September 30
Current
Non-current
Total
Years ended
September 30, 2021
September 30, 2020
$
19,590
$
20,259
921
-
(3,033)
1,969
(130)
(2,508)
$
17,478
$
19,590
3,029
14,449
17,478
$
2,790
16,800
$
19,590
The following table presents the contractual undiscounted cash flows for lease obligations as at September 30, 2021:
The following table presents the contractual undiscounted cash flows for lease obligations as at September 30, 2021:
Total Undiscounted Lease Obligations
Total Undiscounted Lease Obligations
Less than one year
One to five years
More than five years
Total undiscounted lease obligations
$
3,441
10,266
5,456
$
19,163
Total cash outflow for leases in the year ended September 30, 2021 (2020) was $3,483 ($2,983), including principal
payments relating to lease obligations of $3,033 ($2,508), interest expense on lease obligations was $450 ($475).
Expenses relating to short-term leases recognized in general and administration expenses were $72 ($219) for the
year ended September 30, 2021 (2020).
Total cash outflow for leases in the year ended September 30, 2021 (2020) was $3,483 ($2,983), including principal
payments relating to lease obligations of $3,033 ($2,508), interest expense on lease obligations was $450 ($475).
Expenses relating to short-term leases recognized in general and administration expenses were $72 ($219) for the
year ended September 30, 2021 (2020).
921
-
(3,033)
3,029
14,449
17,478
$
$
17,478
$
19,590
1,969
(130)
(2,508)
2,790
16,800
$
19,590
$
3,441
10,266
5,456
$
19,163
Balance October 1
Additions
Disposals
Depreciation
Balance September 30
Balance at October 1
Additions
Disposals
Principal payments
Balance at September 30
Current
Non-current
Total
Less than one year
One to five years
More than five years
Total undiscounted lease obligations
81
81
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report
12. Investments
Cliniconex
12. Investments
Cliniconex
Cliniconex Inc., is an Ottawa-based patient outreach solutions vendor. In 2017, the Company invested $250, which
included $100 in common shares, and $150 in convertible debt. In 2018, the Company invested an additional $150
in the form of a convertible loan. In Fiscal 2020, the Company elected to exchange its existing convertible debt into
preferred shares, as well as invest a further $100 in preferred shares. The Company recognizes the investment at fair
value, and has adjusted its common and preferred shares to the most recent fair value, resulting in a gain of $101
recognized in the prior fiscal year.
13. Acquired Intangible Assets
A continuity of the intangible assets for the year ended September 30, 2021 is as follows:
Cliniconex Inc., is an Ottawa-based patient outreach solutions vendor. In 2017, the Company invested $250, which
included $100 in common shares, and $150 in convertible debt. In 2018, the Company invested an additional $150
in the form of a convertible loan. In Fiscal 2020, the Company elected to exchange its existing convertible debt into
preferred shares, as well as invest a further $100 in preferred shares. The Company recognizes the investment at fair
value, and has adjusted its common and preferred shares to the most recent fair value, resulting in a gain of $101
recognized in the prior fiscal year.
13. Acquired Intangible Assets
A continuity of the intangible assets for the year ended September 30, 2021 is as follows:
September 30, 2021
Opening
Balance
Additions
(Note 25)
Amortization
Closing
Balance
September 30, 2021
Opening
Balance
Additions
(Note 25)
Amortization
Closing
Balance
Customer relationship - Primacy
$
1,909
$
-
$
-
Customer relationship - Primacy
$
1,909
$
-
$
-
Customer relationships
17,661
15,619
(5,578)
Customer relationships
17,661
15,619
(5,578)
Discrete contracts with customers & Non-competition
agreements
Technology and trademarks
1,057
15,564
-
14,440
(340)
(5,813)
Discrete contracts with customers & Non-competition
agreements
Technology and trademarks
1,057
15,564
-
14,440
(340)
(5,813)
1,909
27,702
717
24,191
$ 36,191
$
30,059
$
(11,731)
$
54,519
$ 36,191
$
30,059
$
(11,731)
$
54,519
A continuity of the intangible assets for the year ended September 30, 2020 is as follows:
A continuity of the intangible assets for the year ended September 30, 2020 is as follows:
September 30, 2020
Opening
Balance
Additions
(Note 25)
Amortization
Closing
Balance
September 30, 2020
Opening
Balance
Additions
(Note 25)
Amortization
Closing
Balance
Customer relationship - Primacy
$
1,909
$
-
$
-
Customer relationship - Primacy
$
1,909
$
-
$
-
Customer relationships
8,055
12,449
(2,843)
Customer relationships
8,055
12,449
(2,843)
Discrete contracts with customers & Non-competition
agreements
Technology and trademarks
1,083
5,652
373
11,836
(399)
(1,924)
Discrete contracts with customers & Non-competition
agreements
Technology and trademarks
1,083
5,652
373
11,836
(399)
(1,924)
1,909
17,661
1,057
15,564
$ 16,699
$
24,658
$
(5,166)
$
36,191
$ 16,699
$
24,658
$
(5,166)
$
36,191
1,909
27,702
717
24,191
1,909
17,661
1,057
15,564
82
82
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.
14. Goodwill
Opening balance
Additions:
Acquisition of Cadence Consultancy Ltd.
Acquisition of InterTronic Solutions Inc.
Acquisition of Dapasoft Inc.
Ending balance
Opening balance
Additions:
Acquisition of Alio/Allphase
Acquisition of Comprehensive Training Solutions
Acquisition of EMSEC Solutions
Acquisition of Tallysman Wireless
Ending balance
Trade accounts payable
Payroll accruals
Income tax payable
Other accruals
The following table presents the goodwill for the Company for the year ended September 30, 2021:
14. Goodwill
The following table presents the goodwill for the Company for the year ended September 30, 2021:
The following table presents the goodwill for the Company for the year ended September 30, 2020:
The following table presents the goodwill for the Company for the year ended September 30, 2020:
Opening balance
Additions:
Acquisition of Cadence Consultancy Ltd.
Acquisition of InterTronic Solutions Inc.
Acquisition of Dapasoft Inc.
Ending balance
September 30, 2021
$
55,290
1,921
4,473
38,419
$
100,103
Opening balance
Additions:
Acquisition of Alio/Allphase
Acquisition of Comprehensive Training Solutions
Acquisition of EMSEC Solutions
Acquisition of Tallysman Wireless
Ending balance
September 30, 2020
$
33,702
8,566
1,003
2,557
9,462
55,290
$
September 30, 2021
$
55,290
1,921
4,473
38,419
$
100,103
September 30, 2020
$
33,702
8,566
1,003
2,557
9,462
55,290
$
15. Accounts Payable and Accrued Liabilities
The following table presents the accounts payable and accrued liabilities for the Company as at:
15. Accounts Payable and Accrued Liabilities
The following table presents the accounts payable and accrued liabilities for the Company as at:
September 30,
September 30,
2021
2020
$
$
43,668
16,554
1,913
5,958
47,827
14,785
4,906
4,489
$
68,093
$
72,007
Trade accounts payable
Payroll accruals
Income tax payable
Other accruals
September 30,
2021
September 30,
2020
$
$
43,668
16,554
1,913
5,958
47,827
14,785
4,906
4,489
$
68,093
$
72,007
83
83
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report
16. Provisions
Changes in provisions for the year ended September 30, 2021 were as follows:
16. Provisions
Changes in provisions for the year ended September 30, 2021 were as follows:
113
$
$
1,541
-
(10)
103
1,038
1,345
(842)
Severance
Other
Total
$
$
280
581
(176)
685
$
$
Balance at October 1, 2020
Additions
Utilization/Reversals
Balance at September 30, 2021
Product
Warranties
$
$
645
764
(656)
753
Balance at October 1, 2020
Additions
Utilization/Reversals
Balance at September 30, 2021
Balance at October 1, 2019
Additions
Utilization/Reversals
Balance at September 30, 2020
17. Debt Agreement
Product
Warranties
Severance
Other
Total
$
$
$
$
645
764
(656)
753
801
646
(802)
645
$
$
$
$
280
581
(176)
685
301
436
(457)
280
$
$
$
$
113
$
-
(10)
103
1,038
1,345
(842)
$
1,541
27
86
-
$
1,129
1,168
(1,259)
113
$
1,038
Product
Warranties
Severance
Other
Total
On January 6, 2021 the Company signed a debt facility that provides the Company with the ability to draw up to
$80,000 CAD. The agreement has a three year term, which will mature on January 5, 2024. At September 30, 2021
(2020), the Company utilized $NIL (NIL) of the facility. The facility is secured against the Company’s assets and is
interest bearing at the Royal Bank of Canada’s Prime Rate plus applicable margin.
Changes in provisions for the year ended September 30, 2020 were as follows:
Changes in provisions for the year ended September 30, 2020 were as follows:
Balance at October 1, 2019
Additions
Utilization/Reversals
Balance at September 30, 2020
Product
Warranties
$
$
801
646
(802)
645
Severance
Other
Total
$
$
301
436
(457)
280
$
$
27
86
-
$
1,129
1,168
(1,259)
113
$
1,038
17. Debt Agreement
On January 6, 2021 the Company signed a debt facility that provides the Company with the ability to draw up to
$80,000 CAD. The agreement has a three year term, which will mature on January 5, 2024. At September 30, 2021
(2020), the Company utilized $NIL (NIL) of the facility. The facility is secured against the Company’s assets and is
interest bearing at the Royal Bank of Canada’s Prime Rate plus applicable margin.
18. Issued Capital and Reserves
Issued capital
18. Issued Capital and Reserves
Issued capital
The Company is authorized to issue an unlimited number of Common Shares and an unlimited number of preferred
shares. The holders of Common Shares are entitled to dividends if, as and when declared by the Board, to one
vote per share at the meetings of holders of Common Shares and, upon liquidation, to receive such assets of the
Company as are distributable to the holders of the Common Shares. No Preferred Shares are outstanding as of the
September 30, 2021.
Common shares issued and outstanding:
The Company is authorized to issue an unlimited number of Common Shares and an unlimited number of preferred
shares. The holders of Common Shares are entitled to dividends if, as and when declared by the Board, to one
vote per share at the meetings of holders of Common Shares and, upon liquidation, to receive such assets of the
Company as are distributable to the holders of the Common Shares. No Preferred Shares are outstanding as of the
September 30, 2021.
Common shares issued and outstanding:
September 30, 2021
September 30, 2020
Shares
Amount
Shares
Amount
September 30, 2021
September 30, 2020
Shares
Amount
Shares
Amount
Balance October 1
9,760,032
$
107,931
7,929,238
$
32,515
Balance October 1
9,760,032
$
107,931
7,929,238
$
32,515
Shares issued under employee share plans
Shares issued under employee share purchase plan
Shares issued through acquisition
90,064
32,017
85,715
3,064
1,974
5,000
153,222
46,918
62,054
5,323
1,746
2,500
Shares issued under employee share plans
Shares issued under employee share purchase plan
Shares issued through acquisition
90,064
32,017
85,715
3,064
1,974
5,000
153,222
46,918
62,054
5,323
1,746
2,500
Shares issued under public offering
1,318,000
76,991
1,568,600
65,847
Shares issued under public offering
1,318,000
76,991
1,568,600
65,847
Issued capital
11,285,828
$
194,960
9,760,032
$
107,931
Issued capital
11,285,828
$
194,960
9,760,032
$
107,931
On March 17, 2021 the Company completed an upsized bought deal offering, under which a total of 1,318,000
Common Shares were sold at a price of $60.50 per Common Share for aggregate gross proceeds of $79,739,
On March 17, 2021 the Company completed an upsized bought deal offering, under which a total of 1,318,000
Common Shares were sold at a price of $60.50 per Common Share for aggregate gross proceeds of $79,739,
84
84
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.
December 22, 2021.
Contributed surplus
19. Share-Based Compensation
Employee Share Purchase Plan
18. Issued Capital and Reserves (continued)
18. Issued Capital and Reserves (continued)
including shares issued pursuant to the partial exercise of the over-allotment option granted to the Underwriters. Net
proceeds after commissions, issuance costs and deferred tax relating to issuance costs were $76,991.
including shares issued pursuant to the partial exercise of the over-allotment option granted to the Underwriters. Net
proceeds after commissions, issuance costs and deferred tax relating to issuance costs were $76,991.
Subsequent to the date of the statement of financial position, on November 24, 2021, the date of issuance of
these consolidated financial statements, the Company declared a dividend of $0.28 per common share payable on
Subsequent to the date of the statement of financial position, on November 24, 2021, the date of issuance of
these consolidated financial statements, the Company declared a dividend of $0.28 per common share payable on
December 22, 2021.
Contributed surplus comprises the value of share-based compensation expense related to options granted that have
not been exercised or have expired unexercised.
Contributed surplus comprises the value of share-based compensation expense related to options granted that have
not been exercised or have expired unexercised.
Contributed surplus
19. Share-Based Compensation
Employee Share Purchase Plan
During the year ended September 30, 2021 (2020), the Company issued NIL (28,754) shares under the Company’s
previous Employee Share Purchase Plan at an average price of NIL ($24.70). The Company received NIL ($710) in
proceeds and recorded an expense of NIL ($136).
During the year ended September 30, 2021 (2020), the Company issued NIL (28,754) shares under the Company’s
previous Employee Share Purchase Plan at an average price of NIL ($24.70). The Company received NIL ($710) in
proceeds and recorded an expense of NIL ($136).
On February 6, 2020, the Company adopted a new Employee Share Purchase Plan (the “2020 Employee Share
Purchase Plan”). This new plan replaces the previous Employee Share Plan. Under the 2020 Employee Share
Purchase Plan, shares are issued monthly using the volume weighted average price for the last 5 days of the month
for the contributions made by employees in that month. The Company provides matching shares at 25% for all
employee contributions each month. Pursuant to the plan, 500,000 Common Shares are reserved for issuance, as of
September 30, 2021 the Company can issue 449,819 shares.
On February 6, 2020, the Company adopted a new Employee Share Purchase Plan (the “2020 Employee Share
Purchase Plan”). This new plan replaces the previous Employee Share Plan. Under the 2020 Employee Share
Purchase Plan, shares are issued monthly using the volume weighted average price for the last 5 days of the month
for the contributions made by employees in that month. The Company provides matching shares at 25% for all
employee contributions each month. Pursuant to the plan, 500,000 Common Shares are reserved for issuance, as of
September 30, 2021 the Company can issue 449,819 shares.
During the year ended September 30, 2021 (2020) under the 2020 Employee Share Purchase Plan, the Company
issued 32,017 (18,164) shares at an average price of $61.66 ($49.58). The Company received $1,575 ($720) in
proceeds and recorded an expense of $399 ($180).
During the year ended September 30, 2021 (2020) under the 2020 Employee Share Purchase Plan, the Company
issued 32,017 (18,164) shares at an average price of $61.66 ($49.58). The Company received $1,575 ($720) in
proceeds and recorded an expense of $399 ($180).
Stock Options
Stock Options
The Company has an established stock option plan. Under the plan, eligible directors and employees are granted the
right to purchase shares of common stock at a price established by the Board of Directors on the date the options
are granted but in no circumstances below fair market value of the shares at the date of grant. Stock options are
issued at market value based on the price at the date preceding the grant, and can have a contractual term of up
to ten years and generally vest over 3 years. The maximum number of common shares reserved for issuance under
the plan is equal to an aggregate 9% (1,015,725) of the Company’s issued and outstanding shares from time to time
less the aggregate number of shares reserved for issuance or issuable under any other security-based compensation
arrangement for the Company.
The Company has an established stock option plan. Under the plan, eligible directors and employees are granted the
right to purchase shares of common stock at a price established by the Board of Directors on the date the options
are granted but in no circumstances below fair market value of the shares at the date of grant. Stock options are
issued at market value based on the price at the date preceding the grant, and can have a contractual term of up
to ten years and generally vest over 3 years. The maximum number of common shares reserved for issuance under
the plan is equal to an aggregate 9% (1,015,725) of the Company’s issued and outstanding shares from time to time
less the aggregate number of shares reserved for issuance or issuable under any other security-based compensation
arrangement for the Company.
As at September 30, 2021, the Company has 245,737 stock options and RSUs outstanding. As a result, the Company
could grant up to 769,988 additional stock options or RSU’s pursuant to the plan.
As at September 30, 2021, the Company has 245,737 stock options and RSUs outstanding. As a result, the Company
could grant up to 769,988 additional stock options or RSU’s pursuant to the plan.
The weighted average fair value of options granted during the year ended September 30, 2021 was $10.22 per
option calculated using the Black-Scholes option pricing model. Where relevant, the expected life of the options was
based on historical data for similar issuance and adjusted based on management’s best estimate for the effects of
non-transferability, exercises restrictions and behavioural considerations. Expected volatility is based on historical
price volatility over the past 5 years. To allow for the effects of early exercise, it was assumed that options would be
exercised on average 2 years after vesting.
The weighted average fair value of options granted during the year ended September 30, 2021 was $10.22 per
option calculated using the Black-Scholes option pricing model. Where relevant, the expected life of the options was
based on historical data for similar issuance and adjusted based on management’s best estimate for the effects of
non-transferability, exercises restrictions and behavioural considerations. Expected volatility is based on historical
price volatility over the past 5 years. To allow for the effects of early exercise, it was assumed that options would be
exercised on average 2 years after vesting.
85
85
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 19. Share-Based Compensation (continued)
19. Share-Based Compensation (continued)
The following assumptions were used to determine the fair value of the options granted in the year ended September
30, 2021:
The following assumptions were used to determine the fair value of the options granted in the year ended September
30, 2021:
Grant date share price
Exercise price
Expected price volatility
Expected option life
Expected dividend yield
Risk-free interest rate
Forfeiture rate
Outstanding October 1
Exercised
Forfeited
Granted
Outstanding September 30
Weighted Average Options Granted
September 30, 2021
September 30, 2020
$
$
%
yrs
%
%
%
61.11
61.11
27.4
3.33
1.84
0.33
0
$
$
%
yrs
%
%
%
36.49
36.49
22.8
4.00
2.85
1.50
0
September 30, 2021
September 30, 2020
Number of
Options
230,638
(54,900)
-
29,175
204,913
Weighted Avg.
Exercise Price
$
$
43.69
31.40
-
61.11
49.46
Number of
Options
239,400
(139,300)
(2,000)
132,538
230,638
Weighted Avg.
Exercise Price
$
$
30.57
31.17
29.55
54.01
43.69
Grant date share price
Exercise price
Expected price volatility
Expected option life
Expected dividend yield
Risk-free interest rate
Forfeiture rate
Outstanding October 1
Exercised
Forfeited
Granted
Outstanding September 30
Weighted Average Options Granted
September 30, 2021
September 30, 2020
$
$
%
yrs
%
%
%
61.11
61.11
27.4
3.33
1.84
0.33
0
$
$
%
yrs
%
%
%
36.49
36.49
22.8
4.00
2.85
1.50
0
September 30, 2021
September 30, 2020
Number of
Options
230,638
(54,900)
-
29,175
204,913
Weighted Avg.
Exercise Price
$
$
43.69
31.40
-
61.11
49.46
Number of
Options
239,400
(139,300)
(2,000)
132,538
230,638
Weighted Avg.
Exercise Price
$
$
30.57
31.17
29.55
54.01
43.69
The following share-based payment arrangements are in existence:
The following share-based payment arrangements are in existence:
Option series:
(1) Issued May 17, 2017
Grant date
May 17, 2017
Expiry date
May 17, 2022
(2) Issued November 24, 2017
November 24, 2017
November 24, 2022
(3) Issued March 27, 2018
(4) Issued November 19, 2018
(5) Issued November 25, 2019
(6) Issued August 13, 2020
March 27, 2018
March 27, 2023
November 19, 2018
November 19, 2023
November 25, 2019
November 25, 2024
August 13, 2020
August 13, 2025
Number of
Options
1,000
7,700
6,000
47,500
16,000
97,538
27,358
1,817
(7) Issued November 24, 2020
November 24, 2020
November 24, 2025
$ 61.16
$ 10.24
(8) Issued February 9, 2021
February 9, 2021
February 9, 2026
$ 60.35
9.92
Exercise
price
$ 27.30
$ 34.58
$ 31.54
$ 29.55
$ 36.49
$ 60.30
Fair
value at
grant date
3.42
4.53
4.62
3.96
5.18
8.44
$
$
$
$
$
$
$
Option series:
(1) Issued May 17, 2017
(2) Issued November 24, 2017
(3) Issued March 27, 2018
(4) Issued November 19, 2018
(5) Issued November 25, 2019
(6) Issued August 13, 2020
(7) Issued November 24, 2020
(8) Issued February 9, 2021
Number of
Options
1,000
7,700
6,000
47,500
16,000
97,538
27,358
1,817
Grant date
May 17, 2017
Expiry date
May 17, 2022
November 24, 2017
November 24, 2022
March 27, 2018
March 27, 2023
November 19, 2018
November 19, 2023
November 25, 2019
November 25, 2024
August 13, 2020
August 13, 2025
Exercise
price
$ 27.30
$ 34.58
$ 31.54
$ 29.55
$ 36.49
$ 60.30
Fair
value at
grant date
$
$
$
$
$
$
3.42
4.53
4.62
3.96
5.18
8.44
November 24, 2020
November 24, 2025
$ 61.16
$ 10.24
February 9, 2021
February 9, 2026
$ 60.35
$
9.92
For the options issued on November 24, 2020, vesting occurs quarterly through to November 24, 2021. For the
options issued on February 9, 2021, Vesting occurs quarterly through to February 9, 2022.
For the options issued on November 24, 2020, vesting occurs quarterly through to November 24, 2021. For the
options issued on February 9, 2021, Vesting occurs quarterly through to February 9, 2022.
At September 30, 2021 (2020) the weighted average remaining contractual life of options outstanding is 3.14
(3.85) years of which 164,604 (98,100) options are exercisable at a weighted average price of $46.77 ($31.73). The
Company has recorded $931 ($324) of share-based compensation expense in the year ended September 30, 2021
(2020) related to the options that have been granted. The Company has total unrecognized compensation expense
of $133 (2020 - $766) that will be recorded in the next two fiscal years.
At September 30, 2021 (2020) the weighted average remaining contractual life of options outstanding is 3.14
(3.85) years of which 164,604 (98,100) options are exercisable at a weighted average price of $46.77 ($31.73). The
Company has recorded $931 ($324) of share-based compensation expense in the year ended September 30, 2021
(2020) related to the options that have been granted. The Company has total unrecognized compensation expense
of $133 (2020 - $766) that will be recorded in the next two fiscal years.
86
86
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.
19. Share-Based Compensation (continued)
Restricted share units:
The Company has an established a restricted stock unit (“RSU”) plan. Under the RSU plan, the maximum number
of common shares reserved for issuance is equal to 9% of the Company’s issued and outstanding shares from
time to time less the aggregate number of shares reserved for issuance or issuable under any other security-based
compensation arrangement for the Company. Share units may be awarded to any officer or employee of the Company.
Each restricted share unit will vest on the date or dates designated for that unit, conditional on any vesting conditions
being met. Participants in the RSU plan may elect to redeem their share units either by the Company issuing the
participant one common share for each whole vested share unit or, subject to the consent by the Company, elect to
receive an amount in cash. The cash amount is equal to the number of vested share units to be redeemed multiplied
by the value of the common shares otherwise issuable on redemption of the share units.
19. Share-Based Compensation (continued)
Restricted share units:
The Company has an established a restricted stock unit (“RSU”) plan. Under the RSU plan, the maximum number
of common shares reserved for issuance is equal to 9% of the Company’s issued and outstanding shares from
time to time less the aggregate number of shares reserved for issuance or issuable under any other security-based
compensation arrangement for the Company. Share units may be awarded to any officer or employee of the Company.
Each restricted share unit will vest on the date or dates designated for that unit, conditional on any vesting conditions
being met. Participants in the RSU plan may elect to redeem their share units either by the Company issuing the
participant one common share for each whole vested share unit or, subject to the consent by the Company, elect to
receive an amount in cash. The cash amount is equal to the number of vested share units to be redeemed multiplied
by the value of the common shares otherwise issuable on redemption of the share units.
The following table summarizes information about the RSU’s as of September 30, 2021:
The following table summarizes information about the RSU’s as of September 30, 2021:
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
Balance at October 1
Exercised
Forfeited
Granted
Balance at September 30
Number of
RSUs
56,039
(35,164)
(40)
19,989
40,824
Weighted Avg.
Grant Date
Fair Value
$
$
32.67
31.52
59.35
59.26
46.65
Number of
RSUs
47,736
(13,922)
(790)
23,015
56,039
Weighted Avg.
Grant Date
Fair Value
$
$
30.11
30.28
31.99
36.49
32.67
Balance at October 1
Exercised
Forfeited
Granted
Balance at September 30
Number of
RSUs
56,039
(35,164)
(40)
19,989
40,824
Weighted Avg.
Grant Date
Fair Value
$
$
32.67
31.52
59.35
59.26
46.65
Number of
RSUs
47,736
(13,922)
(790)
23,015
56,039
Weighted Avg.
Grant Date
Fair Value
$
$
30.11
30.28
31.99
36.49
32.67
Of the units issued in the current year under the RSU plan, nil have vested as of September 30, 2021. The Company
has recorded $978 ($899) of share-based compensation expense in the year ended September 30, 2021 (2020)
related to the RSUs that have been granted. The Company has total unrecognized compensation expense of $644
at September 30, 2021 (2020 - $475) that will be recorded over the next two years.
Of the units issued in the current year under the RSU plan, nil have vested as of September 30, 2021. The Company
has recorded $978 ($899) of share-based compensation expense in the year ended September 30, 2021 (2020)
related to the RSUs that have been granted. The Company has total unrecognized compensation expense of $644
at September 30, 2021 (2020 - $475) that will be recorded over the next two years.
The following unvested RSU-based payment arrangements are in existence:
The following unvested RSU-based payment arrangements are in existence:
RSU series:
(1) Issued November 16, 2018
(2) Issued February 7, 2019
(3) Issued November 25, 2019
(4) Issued November 24, 2020
(5) Issued February 9, 2021
(6) Issued May 12, 2021
(6) Issued August 10, 2021
Deferred share unit plan
Number of
RSUs
5,479
225
15,171
18,972
246
678
53
Grant date
Vest through
November 16, 2018
November 15, 2021
February 7, 2019
November 15, 2021
November 25, 2019
November 15, 2022
November 24, 2020
November 15, 2023
February 9, 2021
November 15, 2023
May 12, 2021
November 15, 2023
August 10, 2021
November 15, 2023
Fair value
at grant date
$
$
$
$
$
$
$
29.55
29.06
36.49
59.35
59.74
56.32
63.25
RSU series:
(1) Issued November 16, 2018
(2) Issued February 7, 2019
(3) Issued November 25, 2019
(4) Issued November 24, 2020
(5) Issued February 9, 2021
(6) Issued May 12, 2021
(6) Issued August 10, 2021
Deferred share unit plan
Number of
RSUs
5,479
225
15,171
18,972
246
678
53
Grant date
Vest through
November 16, 2018
November 15, 2021
February 7, 2019
November 15, 2021
November 25, 2019
November 15, 2022
November 24, 2020
November 15, 2023
February 9, 2021
November 15, 2023
May 12, 2021
November 15, 2023
August 10, 2021
November 15, 2023
Fair value
at grant date
$
$
$
$
$
$
$
29.55
29.06
36.49
59.35
59.74
56.32
63.25
During the year ended September 30, 2021 (2020) the Company granted 2,716 (3,738) deferred share units (“DSU”).
During the year ended September 30, 2021 (2020) the Company granted 2,716 (3,738) deferred share units (“DSU”).
87
87
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report
19. Share-Based Compensation (continued)
19. Share-Based Compensation (continued)
The Company recorded share-based compensation of $148 ($141) related to the DSUs in the year ended September
30, 2021 (2020). Each DSU entitles the participant to receive the value of one Common Share. The DSUs vest
immediately as the participants are entitled to the shares upon termination of their service.
The Company recorded share-based compensation of $148 ($141) related to the DSUs in the year ended September
30, 2021 (2020). Each DSU entitles the participant to receive the value of one Common Share. The DSUs vest
immediately as the participants are entitled to the shares upon termination of their service.
There are 22,516 (24,652) DSUs outstanding at September 30, 2021 (2020). The fair value of the DSUs outstanding
at September 30, 2021 (2020) was $55.83 ($61.71) per unit using the fair value of a Common Share at period end.
There are 22,516 (24,652) DSUs outstanding at September 30, 2021 (2020). The fair value of the DSUs outstanding
at September 30, 2021 (2020) was $55.83 ($61.71) per unit using the fair value of a Common Share at period end.
20. Revenue
The following table presents the revenue of the Company for the year ended September 30, 2021 and 2020
20. Revenue
The following table presents the revenue of the Company for the year ended September 30, 2021 and 2020
Year ended
September 30, 2021
September 30, 2020
$
113,878
$
109,532
4,658
-
13,088
131,624
52,713
190,278
74,622
69,167
386,780
518,404
$
$
$
$
25,184
-
8,357
143,073
43,850
137,851
57,834
49,712
289,247
432,320
$
$
$
$
Product revenue
Advanced Technologies
Health
Learning
ITCS
Total product revenue
Service revenue
Advanced Technologies
Health
Learning
ITCS
Total service revenue
Total revenue
Year ended
September 30, 2021
September 30, 2020
$
113,878
$
109,532
4,658
-
13,088
131,624
52,713
190,278
74,622
69,167
386,780
518,404
$
$
$
$
25,184
-
8,357
143,073
43,850
137,851
57,834
49,712
289,247
432,320
$
$
$
$
Remaining performance obligations
Remaining performance obligations
The following table presents the aggregate amount of the revenues expected to be realized in the future from
partially or fully unsatisfied performance obligations as at September 30, 2021 for contracts recognized over time.
The amounts disclosed below represent the value of the firm orders only. Such orders may be subject to future
modifications that might impact the amount and/or timing of revenue recognition. The amounts disclosed below do
not include unexercised options or letters of intent.
Revenues expected to be recognized in:
The following table presents the aggregate amount of the revenues expected to be realized in the future from
partially or fully unsatisfied performance obligations as at September 30, 2021 for contracts recognized over time.
The amounts disclosed below represent the value of the firm orders only. Such orders may be subject to future
modifications that might impact the amount and/or timing of revenue recognition. The amounts disclosed below do
not include unexercised options or letters of intent.
Revenues expected to be recognized in:
September 30, 2021
$
$
454,292
206,313
660,605
Less than 24 months
Thereafter
Total
88
September 30, 2021
$
$
454,292
206,313
660,605
Product revenue
Advanced Technologies
Total product revenue
Service revenue
Advanced Technologies
Health
Learning
ITCS
Health
Learning
ITCS
Total service revenue
Total revenue
Less than 24 months
Thereafter
Total
88
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.
21. Net Profit per Share
The diluted weighted average number of shares has been calculated as follows:
21. Net Profit per Share
The diluted weighted average number of shares has been calculated as follows:
Weighted average number of common shares – basic
Additions to reflect the dilutive effect of employee stock options
and RSU’s
Weighted average number of common shares – diluted
Year ended September 30
2021
10,599,693
40,735
10,640,428
2020
9,044,588
59,910
9,104,498
Weighted average number of common shares – basic
Additions to reflect the dilutive effect of employee stock options
and RSU’s
Weighted average number of common shares – diluted
Year ended September 30
2021
10,599,693
40,735
10,640,428
2020
9,044,588
59,910
9,104,498
Options that are anti-dilutive because the exercise price was greater than the average market price of the common
shares are not included in the computation of diluted net profit per share. For the year ended September 30, 2021
(2020), 97,538 (NIL) options and NIL (NIL) RSU’s were excluded from the above computation. Net profit is the
measure of profit or loss used to calculate profit per share.
Options that are anti-dilutive because the exercise price was greater than the average market price of the common
shares are not included in the computation of diluted net profit per share. For the year ended September 30, 2021
(2020), 97,538 (NIL) options and NIL (NIL) RSU’s were excluded from the above computation. Net profit is the
measure of profit or loss used to calculate profit per share.
22. Income Taxes
Current Income Taxes
22. Income Taxes
Current Income Taxes
The following table reconciles the difference between the income taxes that would result solely by applying statutory
tax rates to pre-tax income and the reported income tax expenses:
The following table reconciles the difference between the income taxes that would result solely by applying statutory
tax rates to pre-tax income and the reported income tax expenses:
Profit before income taxes
Profit before income taxes
2021
2020
$
17,707
$ 27,220
2021
2020
$
17,707
$ 27,220
Tax provision at the combined basic Canadian federal and provincial
income tax rate of 26.9% (2020: 26.9%)
4,763
7,322
Tax provision at the combined basic Canadian federal and provincial
income tax rate of 26.9% (2020: 26.9%)
4,763
7,322
Increase (decrease) resulting from:
Effect of expenses that are not deductible in determining taxable
Impact of rate reductions on valuation of deferred income tax assets
Other income not taxable in determining net profit
profits
Other
3,258
(2,226)
1,048
(291)
489
(236)
(854)
139
Income tax expense
$
6,552
$
6,860
Increase (decrease) resulting from:
Effect of expenses that are not deductible in determining taxable
profits
Impact of rate reductions on valuation of deferred income tax assets
Other income not taxable in determining net profit
Other
Income tax expense
3,258
(2,226)
1,048
(291)
489
(236)
(854)
139
$
6,552
$
6,860
89
89
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report
22. Income Taxes (continued)
Deferred Income Taxes
22. Income Taxes (continued)
Deferred Income Taxes
Reconciliation of deferred tax assets and liabilities are shown below:
Reconciliation of deferred tax assets and liabilities are shown below:
Deferred tax assets (liabilities)
Other
Total
Deferred tax assets (liabilities)
Equipment
and
application
software
Acquired
intangible
assets
Bought
deal costs
Cash flow
hedging
reserve
Other
Total
Deferred tax liability at
September 30, 2019
Current year acquisition
Bought Deal Offering
Recovery (expensed) to
statement of net profit
Recovery (expensed) to other
comprehensive income
Deferred tax liability at
September 30, 2020
Current year acquisition
Bought Deal Offering
Recovery (expensed) to
statement of net profit
Recovery (expensed) to other
comprehensive income
Deferred tax liability at
September 30, 2021
Investments in subsidiaries
$
(1,302)
$
(4,608)
$
-
-
(6,409)
-
1,027
(674)
1,313
(111)
-
-
$
207
$
178
$
(5,525)
-
-
-
-
-
(6,409)
1,027
783
1,311
$
-
$
-
$
-
$
335
$
-
$
335
(1,976)
-
-
(9,704)
(7,893)
916
-
-
1,023
(670)
3,134
(462)
542
961
-
-
(9,261)
(7,893)
1,023
(155)
1,847
-
-
-
-
-
-
(995)
-
(995)
$
(2,646)
$
(14,463)
$
1,477
$
(453)
$
806
$
(15,279)
Equipment
and
application
software
Acquired
intangible
assets
Bought
deal costs
Cash flow
hedging
reserve
$
(1,302)
$
(4,608)
$
$
207
$
178
$
(5,525)
-
-
(6,409)
-
1,027
(674)
1,313
(111)
783
1,311
$
-
$
-
$
-
$
335
$
-
$
335
(1,976)
(9,704)
(7,893)
542
961
(6,409)
1,027
(9,261)
(7,893)
1,023
(670)
3,134
(462)
(155)
1,847
-
(995)
(995)
$
(2,646)
$
(14,463)
$
1,477
$
(453)
$
806
$
(15,279)
916
-
1,023
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Deferred tax liability at
September 30, 2019
Current year acquisition
Bought Deal Offering
Recovery (expensed) to
statement of net profit
comprehensive income
Deferred tax liability at
September 30, 2020
Current year acquisition
Bought Deal Offering
Recovery (expensed) to other
Recovery (expensed) to
statement of net profit
Recovery (expensed) to other
comprehensive income
Deferred tax liability at
September 30, 2021
Investments in subsidiaries
As at September 30, 2021 (2020), the Company had temporary differences of -$3,174 ($8,396) associated with
investments in subsidiaries for which no deferred tax liabilities have been recognized as it is not probable that these
differences will reverse in the foreseeable future.
As at September 30, 2021 (2020), the Company had temporary differences of -$3,174 ($8,396) associated with
investments in subsidiaries for which no deferred tax liabilities have been recognized as it is not probable that these
differences will reverse in the foreseeable future.
23. Segmented Information
Operating segments are identified as components of an enterprise about which separate discrete financial information
is available for evaluation by the chief operating decision maker, regarding how to allocate resources and assess
performance. The Company’s chief operating decision maker is the Chief Executive Officer (“CEO”). The Company’s
23. Segmented Information
Operating segments are identified as components of an enterprise about which separate discrete financial information
is available for evaluation by the chief operating decision maker, regarding how to allocate resources and assess
performance. The Company’s chief operating decision maker is the Chief Executive Officer (“CEO”). The Company’s
90
90
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.
23. Segmented Information (continued)
23. Segmented Information (continued)
segments are categorized as follows: Advanced Technologies, Health, Learning, and IT and Cyber Solutions (“ITCS”).
Shared Services are aggregated and incurred to support all segments. These include, but are not limited to, the
Finance, Human Resources, IT support, Corporate development, Legal, Corporate marketing, and administrative
functions, facilities costs, costs of operating a public company, and other costs.
segments are categorized as follows: Advanced Technologies, Health, Learning, and IT and Cyber Solutions (“ITCS”).
Shared Services are aggregated and incurred to support all segments. These include, but are not limited to, the
Finance, Human Resources, IT support, Corporate development, Legal, Corporate marketing, and administrative
functions, facilities costs, costs of operating a public company, and other costs.
The Company evaluates performance and allocates resources based on profit before interest income and income
The Company evaluates performance and allocates resources based on profit before interest income and income
tax expense.
Profit before under noted items $
20,855 $ 34,786 $
12,435 $
9,978 $
(26,125) $
51,929
Profit before under noted items $
20,855 $ 34,786 $
12,435 $
9,978 $
(26,125) $
51,929
Profit before under noted items %
13 %
18 %
17 %
12 %
N/A
10 %
Profit before under noted items %
13 %
18 %
17 %
12 %
N/A
10 %
For the year ended September 30, 2021:
For the year ended September 30,
2021
Advanced
Technologies
Health
Learning
ITCS
Shared
Services
Total
Revenue
Cost of revenues
Gross profit
Gross profit %
$ 166,591 $ 194,936 $
74,622 $
82,255 $
- $ 518,404
125,015
147,093
41,576
47,843
57,285
17,337
62,274
19,981
-
-
391,667
126,737
25 %
25 %
23 %
24 %
N/A
24 %
Selling and marketing
General and administration
Research and development
7,496
9,683
3,542
2,636
9,848
573
866
4,036
-
3,027
6,071
905
2,309
23,816
-
16,334
53,454
5,020
tax expense.
For the year ended September 30, 2021:
For the year ended September 30,
Advanced
2021
Revenue
Cost of revenues
Gross profit
Gross profit %
Technologies
Health
Learning
ITCS
Shared
Services
Total
$ 166,591 $ 194,936 $
74,622 $
82,255 $
- $ 518,404
125,015
147,093
41,576
47,843
57,285
17,337
62,274
19,981
25 %
25 %
23 %
24 %
N/A
24 %
Selling and marketing
General and administration
Research and development
7,496
9,683
3,542
2,636
9,848
573
866
4,036
-
3,027
6,071
905
-
-
-
2,309
23,816
391,667
126,737
16,334
53,454
5,020
Depreciation of equipment,
application software and R&D
Depreciation of right of use
asset
Amortization of acquired
intangibles
Other changes in fair value
Deemed compensation
Changes in fair value related
to contingent earn-out
Profit before interest
income and income tax
expense
expense
Lease obligations interest
Interest expense (income)
Profit before income tax
expense
Income tax expense – current
Income tax expense
(recovery) – deferred
Total income tax expense
NET PROFIT FOR THE
PERIOD
4,285
3,054
11,731
-
4,006
10,336
18,517
450
360
17,707
8,399
(1,847)
6,552
$
11,155
91
Depreciation of equipment,
application software and R&D
Depreciation of right of use
asset
Amortization of acquired
intangibles
Other changes in fair value
Deemed compensation
Changes in fair value related
to contingent earn-out
Profit before interest
income and income tax
expense
Lease obligations interest
expense
Interest expense (income)
Profit before income tax
expense
Income tax expense – current
Income tax expense
(recovery) – deferred
Total income tax expense
NET PROFIT FOR THE
PERIOD
4,285
3,054
11,731
-
4,006
10,336
18,517
450
360
17,707
8,399
(1,847)
6,552
$
11,155
91
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 23. Segmented Information (continued)
For the year ended September 30, 2020:
For the year ended September 30,
Advanced
2020
Revenue
Cost of revenues
Gross profit
Gross profit %
Technologies
Health
Learning
ITCS
Shared
Services
Total
$ 153,382 $ 163,035 $
57,834 $
58,069 $
- $ 432,320
119,391
130,665
33,991
32,370
45,383
12,451
47,725
10,344
22 %
20 %
22 %
18 %
N/A
21 %
Selling and marketing
General and administration
Research and development
4,995
6,457
1,536
1,699
6,815
460
987
2,882
-
2,770
2,785
2
-
-
-
1,885
19,073
343,164
89,156
12,336
38,012
1,998
23. Segmented Information (continued)
For the year ended September 30, 2020:
For the year ended September 30,
2020
Advanced
Technologies
Health
Learning
ITCS
Shared
Services
Total
Revenue
Cost of revenues
Gross profit
Gross profit %
$ 153,382 $ 163,035 $
57,834 $
58,069 $
- $ 432,320
119,391
130,665
33,991
32,370
45,383
12,451
47,725
10,344
-
-
343,164
89,156
22 %
20 %
22 %
18 %
N/A
21 %
Selling and marketing
General and administration
Research and development
4,995
6,457
1,536
1,699
6,815
460
987
2,882
-
2,770
2,785
2
1,885
19,073
-
12,336
38,012
1,998
Profit before under noted items $
21,003 $ 23,396 $
8,582 $
4,787 $
(20,958) $
36,810
Profit before under noted items $
21,003 $ 23,396 $
8,582 $
4,787 $
(20,958) $
36,810
Profit before under noted items %
14 %
14 %
15 %
8 %
N/A
9 %
Profit before under noted items %
14 %
14 %
15 %
8 %
N/A
9 %
Depreciation of equipment,
application software and R&D
Depreciation of right of use
asset
Amortization of acquired
intangibles
Other changes in fair value
Changes in fair value related
to contingent earn-out
Profit before interest
income and income tax
expense
expense
Lease obligations interest
Interest expense (income)
Profit before income tax
expense
Income tax expense – current
Income tax expense
(recovery) – deferred
Total income tax expense
NET PROFIT FOR THE
PERIOD
2,976
2,771
5,166
(101.00)
(1,882)
27,880
475
185
27,220
8,171
(1,311)
6,860
$
20,360
Depreciation of equipment,
application software and R&D
Depreciation of right of use
asset
Amortization of acquired
intangibles
Other changes in fair value
Changes in fair value related
to contingent earn-out
Profit before interest
income and income tax
expense
Lease obligations interest
expense
Interest expense (income)
Profit before income tax
expense
Income tax expense – current
Income tax expense
(recovery) – deferred
Total income tax expense
NET PROFIT FOR THE
PERIOD
92
92
2,976
2,771
5,166
(101.00)
(1,882)
27,880
475
185
27,220
8,171
(1,311)
6,860
$
20,360
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. 23. Segmented Information (continued)
23. Segmented Information (continued)
The Company operates in Canada but provides services to customers in various countries. Revenues from external
customers for the year ended September 30 are attributed as follows:
The Company operates in Canada but provides services to customers in various countries. Revenues from external
customers for the year ended September 30 are attributed as follows:
Canada
United States
Europe
Other
September 30, 2021
September 30, 2020
September 30, 2021
September 30, 2020
78%
11%
10%
1%
75%
19%
6%
-
Canada
United States
Europe
Other
78%
11%
10%
1%
75%
19%
6%
-
Revenues are attributed to foreign countries based on the location of the customer. Revenues from various
departments and agencies of the Canadian federal, provincial and municipal governments for the year ended
September 30, 2021 (2020) represented 51% (53%) of the Company’s total revenues. All four operating segments
conduct business with this category of customer.
Revenues are attributed to foreign countries based on the location of the customer. Revenues from various
departments and agencies of the Canadian federal, provincial and municipal governments for the year ended
September 30, 2021 (2020) represented 51% (53%) of the Company’s total revenues. All four operating segments
conduct business with this category of customer.
24. Financial Instruments and Risk Management
24. Financial Instruments and Risk Management
Capital Risk Management
Capital Risk Management
The Company’s objective is to maintain a strong capital base in order to maintain investor, creditor and market
confidence and to sustain future development of the business and provide the ability to continue as a going concern.
Management defines capital as the Company’s shareholders’ equity excluding accumulated other comprehensive
income relating to cash flow hedges. The Company uses both debt and equity to fund working capital and its
investment initiatives. Net profits generated from operations are available to repay debt and reinvestment in the
Company or distribution to the Company’s shareholders. The Board of Directors does not establish quantitative
return on capital criteria for management; but rather promotes year-over-year sustainable profitable growth. The
Board of Directors also reviews on a quarterly basis the level of dividends paid to the Company’s shareholders and
monitors the share repurchase program activities. The Company does not have a defined share repurchase plan
and buy and sell decisions are made on a specific transaction basis and depend on market prices and regulatory
restrictions. There were no changes in the Company’s approach to capital management during the period. Neither
the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
The Company’s objective is to maintain a strong capital base in order to maintain investor, creditor and market
confidence and to sustain future development of the business and provide the ability to continue as a going concern.
Management defines capital as the Company’s shareholders’ equity excluding accumulated other comprehensive
income relating to cash flow hedges. The Company uses both debt and equity to fund working capital and its
investment initiatives. Net profits generated from operations are available to repay debt and reinvestment in the
Company or distribution to the Company’s shareholders. The Board of Directors does not establish quantitative
return on capital criteria for management; but rather promotes year-over-year sustainable profitable growth. The
Board of Directors also reviews on a quarterly basis the level of dividends paid to the Company’s shareholders and
monitors the share repurchase program activities. The Company does not have a defined share repurchase plan
and buy and sell decisions are made on a specific transaction basis and depend on market prices and regulatory
restrictions. There were no changes in the Company’s approach to capital management during the period. Neither
the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
Market risk is the risk that changes in market prices, such as foreign exchange rates, and interest rates will affect the
Company’s income or the value of its holding of financial instruments.
Market risk is the risk that changes in market prices, such as foreign exchange rates, and interest rates will affect the
Company’s income or the value of its holding of financial instruments.
Foreign currency risk related to contracts
Foreign currency risk related to contracts
The Company is exposed to foreign currency exchange fluctuations on its cash balance, accounts receivable,
accounts payable and accrued liabilities, contingent earn-out and future cash flows related to contracts denominated
in a foreign currency. Future cash flows will be realized over the life of the contracts. The Company utilizes derivative
financial instruments, principally in the form of forward exchange contracts, in the management of the majority
of its foreign currency exposures. The Company’s objective is to manage and control exposures and secure the
Company’s profitability on existing contracts and therefore, the Company’s policy is to hedge the majority of its
foreign currency exposure. The company hedges long term projects in foreign currencies. Other foreign currency
exposure is evaluated on an individual basis to assess the associated risks and costs to hedge. The Company
does not utilize derivative financial instruments for trading or speculative purposes. The Company applies hedge
The Company is exposed to foreign currency exchange fluctuations on its cash balance, accounts receivable,
accounts payable and accrued liabilities, contingent earn-out and future cash flows related to contracts denominated
in a foreign currency. Future cash flows will be realized over the life of the contracts. The Company utilizes derivative
financial instruments, principally in the form of forward exchange contracts, in the management of the majority
of its foreign currency exposures. The Company’s objective is to manage and control exposures and secure the
Company’s profitability on existing contracts and therefore, the Company’s policy is to hedge the majority of its
foreign currency exposure. The company hedges long term projects in foreign currencies. Other foreign currency
exposure is evaluated on an individual basis to assess the associated risks and costs to hedge. The Company
does not utilize derivative financial instruments for trading or speculative purposes. The Company applies hedge
93
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 24. Financial Instruments and Risk Management (continued)
24. Financial Instruments and Risk Management (continued)
accounting when appropriate documentation and effectiveness criteria are met.
accounting when appropriate documentation and effectiveness criteria are met.
The Company formally documents all relationships between hedging instruments and hedged items, as well as its
risk management objective and strategy for undertaking various hedge transactions. This process includes linking
all derivatives to specific firm contractually related commitments on projects.
The Company formally documents all relationships between hedging instruments and hedged items, as well as its
risk management objective and strategy for undertaking various hedge transactions. This process includes linking
all derivatives to specific firm contractually related commitments on projects.
The Company also formally assesses, both at the hedge’s inception and on an on-going basis, whether the derivatives
that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged
items. Hedge ineffectiveness has historically been insignificant. The forward foreign exchange contracts primarily
require the Company to purchase or sell certain foreign currencies with or for Canadian dollars at contractual rates.
The Company also formally assesses, both at the hedge’s inception and on an on-going basis, whether the derivatives
that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged
items. Hedge ineffectiveness has historically been insignificant. The forward foreign exchange contracts primarily
require the Company to purchase or sell certain foreign currencies with or for Canadian dollars at contractual rates.
The functional currency of each of the Company’s entities is determined using the currency of the primary economic
environment in which that entity operates. The Company’s functional currency is the Canadian dollar while the
functional currency of its German subsidiary is the European Euro (“EUR”), the functional currency of its Norwegian
subsidiary is the Norwegian Krone (“NOK”), and the functional currency of its U.K. based subsidiary is the Pound
sterling (“GBP”). The presentation currency of these financial statements is the Canadian dollar.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rate of exchange prevailing at the dates of the transactions.
At each reporting date, monetary items denominated in foreign currencies are retranslated at rates prevailing at the
reporting dates and are recognized in profit and loss in the period in which they arise. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated.
For the purpose of preparing consolidated financial statements, the assets and liabilities of the Company’s German
operations, Norwegian operations, and U.K. operations are first expressed in the Companies’ EUR, NOK and GBP
functional currencies, respectively, using exchange rates prevailing at the reporting date which are then translated
into the Company’s reporting currency using prevailing rates at the reporting date. Income and expense items are
translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that
period, in which case the exchange rates at the dates of the transactions are used. Translation differences are
recognized in other comprehensive income and recorded in the “cumulative translation adjustment”.
The functional currency of each of the Company’s entities is determined using the currency of the primary economic
environment in which that entity operates. The Company’s functional currency is the Canadian dollar while the
functional currency of its German subsidiary is the European Euro (“EUR”), the functional currency of its Norwegian
subsidiary is the Norwegian Krone (“NOK”), and the functional currency of its U.K. based subsidiary is the Pound
sterling (“GBP”). The presentation currency of these financial statements is the Canadian dollar.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recorded at the rate of exchange prevailing at the dates of the transactions.
At each reporting date, monetary items denominated in foreign currencies are retranslated at rates prevailing at the
reporting dates and are recognized in profit and loss in the period in which they arise. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated.
For the purpose of preparing consolidated financial statements, the assets and liabilities of the Company’s German
operations, Norwegian operations, and U.K. operations are first expressed in the Companies’ EUR, NOK and GBP
functional currencies, respectively, using exchange rates prevailing at the reporting date which are then translated
into the Company’s reporting currency using prevailing rates at the reporting date. Income and expense items are
translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that
period, in which case the exchange rates at the dates of the transactions are used. Translation differences are
recognized in other comprehensive income and recorded in the “cumulative translation adjustment”.
At September 30, 2021, the Company had the following forward foreign exchange contracts:
At September 30, 2021, the Company had the following forward foreign exchange contracts:
Notional
Currency
Maturity
$
92,135
6,992
296
$
24,948
1,005
294
Equivalent
Cdn. Dollars
Fair Value
September 30,
2021
USD
EURO
CHF
USD
EURO
CHF
October 2021
$ 116,707
October 2021
October 2021
10,263
402
October 2021
$
31,602
October 2021
October 2021
1,475
400
$
$
$
$
535
73
2
610
(145)
(11)
(2)
(158)
Derivative assets
Derivative liabilities
Type
SELL
SELL
SELL
BUY
BUY
BUY
94
Type
SELL
SELL
SELL
Derivative assets
BUY
BUY
BUY
Derivative liabilities
94
Notional
Currency
Maturity
Equivalent
Cdn. Dollars
Fair Value
September 30,
2021
$
92,135
6,992
296
$
24,948
1,005
294
USD
EURO
CHF
USD
EURO
CHF
October 2021
$ 116,707
October 2021
October 2021
10,263
402
October 2021
$
31,602
October 2021
October 2021
1,475
400
$
$
$
$
535
73
2
610
(145)
(11)
(2)
(158)
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. September 30,
2021
$
7,739
6,895
765
826
$
16,225
September 30,
2021
$
1,082
16
3
3
$
1,104
24. Financial Instruments and Risk Management (continued)
24. Financial Instruments and Risk Management (continued)
A 10% strengthening of the Canadian dollar against the following currencies at September 30, 2021 would have
decreased other comprehensive income as related to the forward foreign exchange contracts by the amounts shown
A 10% strengthening of the Canadian dollar against the following currencies at September 30, 2021 would have
decreased other comprehensive income as related to the forward foreign exchange contracts by the amounts shown
below.
A 10% strengthening against the Canadian dollar of the currencies to which the Company had exposure that is not
related to forward foreign exchange contracts would have increased Net Profit (a 10% weakening against the USD
would have had the opposite effect) by the amounts shown below.
A 10% strengthening against the Canadian dollar of the currencies to which the Company had exposure that is not
related to forward foreign exchange contracts would have increased Net Profit (a 10% weakening against the USD
would have had the opposite effect) by the amounts shown below.
USD
EURO
CHF
NOK
Total
September 30,
2021
$
7,739
6,895
765
826
$
16,225
USD
EURO
GBP
SEK
Total
Credit risk
September 30,
2021
$
1,082
16
3
3
$
1,104
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails
to meet its contractual obligations and arises principally from the Company’s accounts receivable and its foreign
exchange contracts.
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails
to meet its contractual obligations and arises principally from the Company’s accounts receivable and its foreign
exchange contracts.
The Company’s exposure to credit risk with its customers is influenced mainly by the individual characteristics of
each customer. The Company’s customers are for the most part, federal and provincial government departments and
large private companies. A significant portion of the Company’s accounts receivable is from long-time customers. At
September 30, 2021 (2020), 50% (56%) of its accounts’ receivable were due from various departments and agencies
of the Canadian federal government. Over the last five years the Company has not suffered any significant credit
The Company limits its exposure to credit risks from counter-parties to derivative financial instruments by dealing
only with major Canadian financial institutions. Management does not expect any counter-parties to fail to meet their
The Company’s exposure to credit risk with its customers is influenced mainly by the individual characteristics of
each customer. The Company’s customers are for the most part, federal and provincial government departments and
large private companies. A significant portion of the Company’s accounts receivable is from long-time customers. At
September 30, 2021 (2020), 50% (56%) of its accounts’ receivable were due from various departments and agencies
of the Canadian federal government. Over the last five years the Company has not suffered any significant credit
related losses.
The Company limits its exposure to credit risks from counter-parties to derivative financial instruments by dealing
only with major Canadian financial institutions. Management does not expect any counter-parties to fail to meet their
obligations.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at the reporting date was:
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk at the reporting date was:
below.
USD
EURO
CHF
NOK
Total
USD
EURO
GBP
SEK
Total
Credit risk
related losses.
obligations.
95
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report
24. Financial Instruments and Risk Management (continued)
24. Financial Instruments and Risk Management (continued)
Cash and cash equivalents
Accounts receivable
Derivative assets
Total
Current
Past due (61-120 days)
Past due (> 120 days)
Total
Liquidity risk
September 30,
September 30,
2021
2020
78,611 $
111,138
610
24,235
81,109
358
190,359 $
105,702
September 30,
September 30,
2021
2020
97,830 $
76,470
8,886
4,422
3,305
1,334
111,138 $
81,109
$
$
$
$
The aging of accounts receivable at the reporting date was:
The aging of accounts receivable at the reporting date was:
Cash and cash equivalents
Accounts receivable
Derivative assets
Total
Current
Past due (61-120 days)
Past due (> 120 days)
Total
Liquidity risk
September 30,
2021
September 30,
2020
$
$
78,611 $
111,138
610
24,235
81,109
358
190,359 $
105,702
September 30,
2021
September 30,
2020
$
$
97,830 $
76,470
8,886
4,422
3,305
1,334
111,138 $
81,109
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company’s approach to managing liquidity risk is to ensure, as much as possible, that it will always have sufficient
liquidity to meet liabilities when due. At September 30, 2021, the company has a secured credit facility that matures
on January 5, 2024 that allows the Company to draw up to $80,000 CAD. At as September 30, 2021, the company
had $78,611 cash on hand and NIL was drawn on the facility for current operations and for temporary use through
acquisitions, and Nil was drawn to issue letters of credit to meet customer contractual requirements.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company’s approach to managing liquidity risk is to ensure, as much as possible, that it will always have sufficient
liquidity to meet liabilities when due. At September 30, 2021, the company has a secured credit facility that matures
on January 5, 2024 that allows the Company to draw up to $80,000 CAD. At as September 30, 2021, the company
had $78,611 cash on hand and NIL was drawn on the facility for current operations and for temporary use through
acquisitions, and Nil was drawn to issue letters of credit to meet customer contractual requirements.
Fair Value
observable:
Fair Value
The fair value of accounts receivable, accounts payable and accrued liabilities approximates their carrying values
due to their short-term maturity. Fair value of the forward exchange contracts reflects the cash flows due to or from
the Company if settlement had taken place on September 30, 2021 and represent the difference between the hedge
rate and the exchange rate at the end of the reporting period.
The fair value of accounts receivable, accounts payable and accrued liabilities approximates their carrying values
due to their short-term maturity. Fair value of the forward exchange contracts reflects the cash flows due to or from
the Company if settlement had taken place on September 30, 2021 and represent the difference between the hedge
rate and the exchange rate at the end of the reporting period.
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition
at fair value, grouped into Levels 1 to 3 of the fair value hierarchy based on the degree to which the fair value is
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition
at fair value, grouped into Levels 1 to 3 of the fair value hierarchy based on the degree to which the fair value is
observable:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities;
from prices); and
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
identical assets or liabilities;
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices); and
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset
or liability that are not based on observable market data (unobservable inputs).
or liability that are not based on observable market data (unobservable inputs).
96
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.
24. Financial Instruments and Risk Management (continued)
24. Financial Instruments and Risk Management (continued)
Cash and cash equivalents
Investment and loan receivable
Derivative financial assets
Contingent earn-out
Derivative financial liabilities
Total
Cash and cash equivalents
Investment and loan receivable
Derivative financial assets
Contingent earn-out
Derivative financial liabilities
Total
September 30, 2021
Level 1
Level 2
Level 3
$
78,611
$
$
(38,673)
Total
$
78,611
$
Cash and cash equivalents
Investment and loan receivable
Derivative financial assets
Contingent earn-out
Derivative financial liabilities
$
78,611
$
-
-
-
-
-
-
610
-
(158)
452
$
-
670
-
(39,343)
-
$
(38,673)
$
24,235
$
$
(14,494)
Total
$
24,235
$
Cash and cash equivalents
Investment and loan receivable
Derivative financial assets
Contingent earn-out
Derivative financial liabilities
$
24,235
$
-
-
-
-
-
-
358
-
(152)
206
$
-
670
-
(15,164)
-
$
(14,494)
September 30, 2020
Level 1
Level 2
Level 3
September 30, 2021
Level 1
Level 2
Level 3
$
78,611
$
$
-
-
-
-
-
-
-
-
-
-
-
610
(158)
452
-
-
-
358
(152)
206
670
(39,343)
670
(15,164)
-
-
-
-
-
-
September 30, 2020
Level 1
Level 2
Level 3
$
24,235
$
$
There were no transfers between Level 1, Level 2 and level 3 during the year ended September 30, 2021.
There were no transfers between Level 1, Level 2 and level 3 during the year ended September 30, 2021.
25. Acquisitions
IntraGrain Technologies Inc. (“IntraGrain”)
On November 1, 2018, the Company acquired all of the outstanding shares of IntraGrain for a purchase price of up
to $17,000. Of this amount, $11,000 was paid on the date of closing and $6,000 is payable contingently. IntraGrain
is the maker of the BIN-SENSE® grain storage solution. The technology combines Internet of Things (connectivity
with bin sensors to protect grain quality and eliminate the risk of stored grain spoilage and is reported as part of the
Advanced Technologies operating segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
IntraGrain an additional $2,500 and $3,500 if IntraGrain attains specified levels of EBITDA for the years ending
October 31, 2019 and 2020, respectively. IntraGrain did not achieve the level of EBITDA required for the year 1 earn-
out. This resulted in a decrease of the first year earn out liability in the amount of $2,447 which was recognized in
fiscal year 2019. At September 30, 2020, it was estimated that IntraGrain would not achieve its second year targeted
EBITDA to meet the earn-out criteria, which resulted in a decrease of the second year earn-out liability in the amount
of $3,288 reflected in ‘other changes in fair value related to contingent earn out’ in Q4 of fiscal year 2020. As at
October 31, 2020, the second earn out period was completed which resulted in no additional payment. No remaining
contingent consideration is outstanding at September 30, 2021.
25. Acquisitions
IntraGrain Technologies Inc. (“IntraGrain”)
On November 1, 2018, the Company acquired all of the outstanding shares of IntraGrain for a purchase price of up
to $17,000. Of this amount, $11,000 was paid on the date of closing and $6,000 is payable contingently. IntraGrain
is the maker of the BIN-SENSE® grain storage solution. The technology combines Internet of Things (connectivity
with bin sensors to protect grain quality and eliminate the risk of stored grain spoilage and is reported as part of the
Advanced Technologies operating segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
IntraGrain an additional $2,500 and $3,500 if IntraGrain attains specified levels of EBITDA for the years ending
October 31, 2019 and 2020, respectively. IntraGrain did not achieve the level of EBITDA required for the year 1 earn-
out. This resulted in a decrease of the first year earn out liability in the amount of $2,447 which was recognized in
fiscal year 2019. At September 30, 2020, it was estimated that IntraGrain would not achieve its second year targeted
EBITDA to meet the earn-out criteria, which resulted in a decrease of the second year earn-out liability in the amount
of $3,288 reflected in ‘other changes in fair value related to contingent earn out’ in Q4 of fiscal year 2020. As at
October 31, 2020, the second earn out period was completed which resulted in no additional payment. No remaining
contingent consideration is outstanding at September 30, 2021.
Sat Service, Gesellschaft für Kommunikationssysteme mbH. (“SatService”)
Sat Service, Gesellschaft für Kommunikationssysteme mbH. (“SatService”)
On April 1, 2019, the Company acquired all of the outstanding shares of SatService for a purchase price of $16,036.
Of this amount, $9,810 (6,450 EURO) was paid on the date of closing, $931 (618 EURO) was paid upon settlement of
net equity and $5,295 (3,550 EURO) is payable contingently. SatService offers innovative engineering solutions and
products for the satellite communications market and is reported as a part of the Advanced Technologies operating
segment.
On April 1, 2019, the Company acquired all of the outstanding shares of SatService for a purchase price of $16,036.
Of this amount, $9,810 (6,450 EURO) was paid on the date of closing, $931 (618 EURO) was paid upon settlement of
net equity and $5,295 (3,550 EURO) is payable contingently. SatService offers innovative engineering solutions and
products for the satellite communications market and is reported as a part of the Advanced Technologies operating
segment.
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97
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report
25. Acquisitions (continued)
25. Acquisitions (continued)
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
SatService an additional $2,014 and $3,282 (1,350 EURO and 2,200 EURO) if SatService attains specified levels of
EBITDA for the nine-month period ended December 31, 2019 and for the twelve-month period ending December 31,
2020. SatService did not achieve the level of EBITDA required for the year 1 earn-out. This resulted in a decrease
of the first year earn out liability in the amount of $1,925 which was recognized in fiscal year 2019. At September
30, 2020, it was estimated that SatService would not achieve its second year targeted EBITDA to meet the earn-out
criteria, which resulted in a decrease of the second year earn-out liability in the amount of $2,987 reflected in ‘other
changes in fair value related to contingent earn out’ in Q4 of fiscal year 2020. As at December 31, 2020, the second
earn out period was completed which resulted in no additional payment. No remaining contingent consideration is
outstanding at September 30, 2021.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
SatService an additional $2,014 and $3,282 (1,350 EURO and 2,200 EURO) if SatService attains specified levels of
EBITDA for the nine-month period ended December 31, 2019 and for the twelve-month period ending December 31,
2020. SatService did not achieve the level of EBITDA required for the year 1 earn-out. This resulted in a decrease
of the first year earn out liability in the amount of $1,925 which was recognized in fiscal year 2019. At September
30, 2020, it was estimated that SatService would not achieve its second year targeted EBITDA to meet the earn-out
criteria, which resulted in a decrease of the second year earn-out liability in the amount of $2,987 reflected in ‘other
changes in fair value related to contingent earn out’ in Q4 of fiscal year 2020. As at December 31, 2020, the second
earn out period was completed which resulted in no additional payment. No remaining contingent consideration is
outstanding at September 30, 2021.
Allphase Clinical Research Services Inc. and Alio Health Services Inc. (collectively “Alio/Allphase”)
Allphase Clinical Research Services Inc. and Alio Health Services Inc. (collectively “Alio/Allphase”)
On January 30, 2020, the Company acquired all of the outstanding shares of Alio/Allphase for a purchase price of
up to $25,056. Of this amount, $10,500 was paid in cash on the date of closing, $56 was paid in cash on settlement
of net equity, $2,500 was paid in common shares, and $12,000 is payable contingently, of which $3,000 is included
in the initial accounting of the purchase price. Alio/Allphase provides clinical trial services, specialty medication
support and community care and other services and is reported as a part of the Health operating segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
Alio/Allphase an additional $3,616, $4,192 and $4,192 if Alio/Allphase attains specified levels of EBITDA for the
years ending January 30, 2021, 2022, 2023, respectively. The Company revises its estimate of total contingent
consideration owed based on actual results and forecasts for future periods. As at September 30, the company has
paid $3,616 based on achievement of the first year EBITDA under the agreement, and has accrued $6,941 to be
paid in future periods.
A portion of the first and second year earn out payable amounts is subject to the retention of the principal shareholders
for a period of two years from the date of acquisition. This amount is deemed to represent deferred compensation
payable to such shareholders and therefore is excluded from the total consideration of the purchase price, and will
be expensed in the Company’s consolidated statement of net profit as deemed compensation related to acquisitions
on a straight-line basis over the retention period. The Company recorded deemed compensation expense of $3,850
in the twelve-month period ended September 30, 2021.
The Company recognized $395 in the year ended September 30, 2021, related to changes in fair value of contingent
earn out.
EMSEC Solutions Inc. (“EMSEC”)
On July 14, 2020, the Company acquired all of the outstanding shares of EMSEC for a purchase price of up to
$4,809. Of this amount, $3,009 was paid in cash on the date of closing, and $1,800 is payable contingently. EMSEC’s
customized services include vulnerability assessments, monitoring, training, risk mitigation and countermeasure
sweeps. The firm’s emission analyzer software product, provides automated and manual signal analysis supporting
production testing, equipment certification, as well as troubleshooting, investigation and research. EMSEC is
reported as part of the ITCS operating segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of EMSEC
an additional $900 and $900 if EMSEC attains specific levels of EBITDA for the years ending December 31, 2021 and
December 31, 2022, respectively. In the current year it was determined by management that EMSEC is unlikely to
achieve the level of EBITDA to achieve the targets set out for the first or second year relating to the earn outs. This
has resulted in an adjustment to the changes of fair value related to contingent earn out in the amount of $1,551 in
the year ended September 30, 2021.
On January 30, 2020, the Company acquired all of the outstanding shares of Alio/Allphase for a purchase price of
up to $25,056. Of this amount, $10,500 was paid in cash on the date of closing, $56 was paid in cash on settlement
of net equity, $2,500 was paid in common shares, and $12,000 is payable contingently, of which $3,000 is included
in the initial accounting of the purchase price. Alio/Allphase provides clinical trial services, specialty medication
support and community care and other services and is reported as a part of the Health operating segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
Alio/Allphase an additional $3,616, $4,192 and $4,192 if Alio/Allphase attains specified levels of EBITDA for the
years ending January 30, 2021, 2022, 2023, respectively. The Company revises its estimate of total contingent
consideration owed based on actual results and forecasts for future periods. As at September 30, the company has
paid $3,616 based on achievement of the first year EBITDA under the agreement, and has accrued $6,941 to be
paid in future periods.
A portion of the first and second year earn out payable amounts is subject to the retention of the principal shareholders
for a period of two years from the date of acquisition. This amount is deemed to represent deferred compensation
payable to such shareholders and therefore is excluded from the total consideration of the purchase price, and will
be expensed in the Company’s consolidated statement of net profit as deemed compensation related to acquisitions
on a straight-line basis over the retention period. The Company recorded deemed compensation expense of $3,850
in the twelve-month period ended September 30, 2021.
The Company recognized $395 in the year ended September 30, 2021, related to changes in fair value of contingent
earn out.
EMSEC Solutions Inc. (“EMSEC”)
On July 14, 2020, the Company acquired all of the outstanding shares of EMSEC for a purchase price of up to
$4,809. Of this amount, $3,009 was paid in cash on the date of closing, and $1,800 is payable contingently. EMSEC’s
customized services include vulnerability assessments, monitoring, training, risk mitigation and countermeasure
sweeps. The firm’s emission analyzer software product, provides automated and manual signal analysis supporting
production testing, equipment certification, as well as troubleshooting, investigation and research. EMSEC is
reported as part of the ITCS operating segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of EMSEC
an additional $900 and $900 if EMSEC attains specific levels of EBITDA for the years ending December 31, 2021 and
December 31, 2022, respectively. In the current year it was determined by management that EMSEC is unlikely to
achieve the level of EBITDA to achieve the targets set out for the first or second year relating to the earn outs. This
has resulted in an adjustment to the changes of fair value related to contingent earn out in the amount of $1,551 in
the year ended September 30, 2021.
98
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Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. 25. Acquisitions (continued)
25. Acquisitions (continued)
This was offset by changes in fair value throughout the period of $191 recognized in relation to accrete the initial
estimate from present value to fair value and recorded as changes in fair value of contingent earn out.
This was offset by changes in fair value throughout the period of $191 recognized in relation to accrete the initial
estimate from present value to fair value and recorded as changes in fair value of contingent earn out.
Comprehensive Training Solutions International (“CTS”)
Comprehensive Training Solutions International (“CTS”)
On July 8, 2020, the Company acquired all of the outstanding shares of CTS for a purchase price of up to 13,800
NOK ($1,983 CAD). Of this amount, 7,900 NOK ($1,135 CAD) was paid in cash on the date of closing and 5,900
NOK ($848 CAD) is payable contingently. CTS designs, develops and delivers complex training exercises for the
Joint Warfare Centre, a multi-national and multi-service organization of NATO, and the wider NATO audience across
Europe. CTS is reported as part of the Learning operating segment.
On July 8, 2020, the Company acquired all of the outstanding shares of CTS for a purchase price of up to 13,800
NOK ($1,983 CAD). Of this amount, 7,900 NOK ($1,135 CAD) was paid in cash on the date of closing and 5,900
NOK ($848 CAD) is payable contingently. CTS designs, develops and delivers complex training exercises for the
Joint Warfare Centre, a multi-national and multi-service organization of NATO, and the wider NATO audience across
Europe. CTS is reported as part of the Learning operating segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of CTS
an additional $417 and $431 if CTS attains specific levels of EBITDA for the years ending September 30, 2021 and
September 30, 2022, respectively. The Company recognized $104 in the year ended September 30, 2021, related to
changes in fair value of contingent earn out.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of CTS
an additional $417 and $431 if CTS attains specific levels of EBITDA for the years ending September 30, 2021 and
September 30, 2022, respectively. The Company recognized $104 in the year ended September 30, 2021, related to
changes in fair value of contingent earn out.
The first year earn out has concluded with an overachievement on the initial target as set out in the share purchase
agreement, which has resulted in overachievement bonus of $61 which was recorded in deemed compensation.
The first year earn out has concluded with an overachievement on the initial target as set out in the share purchase
agreement, which has resulted in overachievement bonus of $61 which was recorded in deemed compensation.
Tallysman Wireless Inc. (“Tallysman”)
Tallysman Wireless Inc. (“Tallysman”)
On September 3, 2020, the Company acquired all of the outstanding shares of Tallysman for a purchase price of up
to $25,354. Of this amount, $16,654 was paid in cash on the date of closing, and $8,700 is payable contingently.
Tallysman designs, manufactures and sells a very wide range of Global Navigation Satellite System, Iridium and
Globalstar antennas and related products into a market with a broad range of vertical applications that include
precision reference systems, survey, timing, precision agriculture, unmanned and autonomous vehicles, marine and
many more. The company also produces cloud based wireless tracking systems over two-way radio systems and
4G category M cellular systems, for applications ranging from school buses to municipal public works. Tallysman is
reported as part of the Advanced Technologies operating segment.
On September 3, 2020, the Company acquired all of the outstanding shares of Tallysman for a purchase price of up
to $25,354. Of this amount, $16,654 was paid in cash on the date of closing, and $8,700 is payable contingently.
Tallysman designs, manufactures and sells a very wide range of Global Navigation Satellite System, Iridium and
Globalstar antennas and related products into a market with a broad range of vertical applications that include
precision reference systems, survey, timing, precision agriculture, unmanned and autonomous vehicles, marine and
many more. The company also produces cloud based wireless tracking systems over two-way radio systems and
4G category M cellular systems, for applications ranging from school buses to municipal public works. Tallysman is
reported as part of the Advanced Technologies operating segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
Tallysman an additional $3,950 and $4,750 if Tallysman attains specific levels of EBITDA for the years ending
December 31, 2021 and December 31, 2022, respectively. The Company recognized $759 in the twelve-month
period ended September 30, 2021, related to changes in fair value of contingent earn out.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
Tallysman an additional $3,950 and $4,750 if Tallysman attains specific levels of EBITDA for the years ending
December 31, 2021 and December 31, 2022, respectively. The Company recognized $759 in the twelve-month
period ended September 30, 2021, related to changes in fair value of contingent earn out.
Cadence Consultancy Limited (“Cadence”)
Cadence Consultancy Limited (“Cadence”)
On October 30, 2020, the Company acquired the outstanding shares of Cadence for total cash consideration of
up to 2,000 Pound Sterling ($3,518 CAD) of which, £1,100 ($1,966 CAD) was paid on closing, and £900 ($1,552
CAD) is payable contingently. Cadence is a UK based training firm with operations across the North Atlantic Treaty
Organization (NATO) with a particular focus on the Joint Forces Training Centre (JFTC). Cadence was acquired to
expand the Company’s work with NATO which was initially won with the acquisition of CTS in July of fiscal 2020.
Cadence is reported as part of the Learning operating segment.
On October 30, 2020, the Company acquired the outstanding shares of Cadence for total cash consideration of
up to 2,000 Pound Sterling ($3,518 CAD) of which, £1,100 ($1,966 CAD) was paid on closing, and £900 ($1,552
CAD) is payable contingently. Cadence is a UK based training firm with operations across the North Atlantic Treaty
Organization (NATO) with a particular focus on the Joint Forces Training Centre (JFTC). Cadence was acquired to
expand the Company’s work with NATO which was initially won with the acquisition of CTS in July of fiscal 2020.
Cadence is reported as part of the Learning operating segment.
99
99
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 25. Acquisitions (continued)
25. Acquisitions (continued)
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of Cadence
an additional $776 and $776 if Cadence attains specific levels of EBITDA for the years ending October 31, 2021 and
October 31, 2022, respectively. Therefore, the amount of $1,181 represents the estimated present and risk adjusted
value of the Company’s obligation at the acquisition date. The Company recognized $236 in the twelve-month period
ended September 30, 2021, related to changes in fair value of contingent earn out.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of Cadence
an additional $776 and $776 if Cadence attains specific levels of EBITDA for the years ending October 31, 2021 and
October 31, 2022, respectively. Therefore, the amount of $1,181 represents the estimated present and risk adjusted
value of the Company’s obligation at the acquisition date. The Company recognized $236 in the twelve-month period
ended September 30, 2021, related to changes in fair value of contingent earn out.
As at September 30, 2021, the accounting for the acquisition of Cadence is considered final.
As at September 30, 2021, the accounting for the acquisition of Cadence is considered final.
Net Assets
Acquired
Purchase Price
Fair Value of Net
Accounting
Assets Acquired
Net Assets
Acquired
Purchase Price
Accounting
Fair Value of Net
Assets Acquired
Cash and cash equivalents
Accounts receivable
Work in process
Prepaid expenses
Equipment
Acquired Intangibles
Goodwill
Accounts payable and accrued liabilities
Deferred tax liabilities
Net purchase price
Discount on contingent consideration
Total purchase price
InterTronic Solutions Inc. (“InterTronic”)
$
$
$
$
$
$
338
180
45
1
564
1
-
-
565
234
-
234
-
-
-
-
-
-
1,119
1,921
3,040
-
224
224
$
$
$
$
$
$
$
$
$
$
$
$
338
180
45
1
564
1
1,119
1,921
3,605
234
224
458
3,147
371
3,518
Cash and cash equivalents
Accounts receivable
Work in process
Prepaid expenses
Equipment
Acquired Intangibles
Goodwill
Accounts payable and accrued liabilities
Deferred tax liabilities
Net purchase price
Discount on contingent consideration
Total purchase price
InterTronic Solutions Inc. (“InterTronic”)
$
$
$
$
$
$
338
180
45
1
564
1
-
-
565
234
-
234
-
-
-
-
-
-
1,119
1,921
3,040
-
224
224
$
$
$
$
$
$
$
$
$
$
$
$
338
180
45
1
564
1
1,119
1,921
3,605
234
224
458
3,147
371
3,518
On January 4, 2021, the Company acquired all of the outstanding shares of InterTronic for a purchase price of up
to $24,540. Of this amount, $13,000 was paid in cash on the date of closing, and $11,540 is payable contingently
of which, $4,847 was included in the purchase price. InterTronic designs and installs high-performance antenna
systems and broadens the current Calian range of capabilities with antenna ground systems. InterTronic results will
be consolidated and reported with the Calian Advanced Technologies segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
InterTronic an additional $4,620 and $4,620 if InterTronic attains specific levels of EBITDA for the years ending
December 31, 2021 and December 31, 2022, respectively. An additional contingent consideration amount of $2,300
is achievable if InterTronic meets a certain level of contracts signed for the year ending December 31, 2021. The
Company recognized $324 in the twelve-month period ended September 30, 2021, related to changes in fair value
of contingent earn out and recorded a change in estimate of $1,080 relating to the level of contracts signed for the
year ending December 31, 2021. As at September 30, 2021, the accounting for the acquisition of InterTronic is
considered final.
On January 4, 2021, the Company acquired all of the outstanding shares of InterTronic for a purchase price of up
to $24,540. Of this amount, $13,000 was paid in cash on the date of closing, and $11,540 is payable contingently
of which, $4,847 was included in the purchase price. InterTronic designs and installs high-performance antenna
systems and broadens the current Calian range of capabilities with antenna ground systems. InterTronic results will
be consolidated and reported with the Calian Advanced Technologies segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
InterTronic an additional $4,620 and $4,620 if InterTronic attains specific levels of EBITDA for the years ending
December 31, 2021 and December 31, 2022, respectively. An additional contingent consideration amount of $2,300
is achievable if InterTronic meets a certain level of contracts signed for the year ending December 31, 2021. The
Company recognized $324 in the twelve-month period ended September 30, 2021, related to changes in fair value
of contingent earn out and recorded a change in estimate of $1,080 relating to the level of contracts signed for the
year ending December 31, 2021. As at September 30, 2021, the accounting for the acquisition of InterTronic is
considered final.
100
100
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. 25. Acquisitions (continued)
25. Acquisitions (continued)
Cash
Accounts receivable and tax receivable
Inventory
Prepaid expenses
Equipment
Acquired Intangibles
Goodwill
Accounts payable and accrued liabilities
Unearned contract revenue
Deferred tax liability
Net purchase price
Discount on contingent consideration
Total purchase price
Dapasoft Inc. (“Dapasoft”)
Net Assets
Acquired
Purchase Price
Fair Value of Net
Accounting
Assets Acquired
Net Assets
Acquired
Purchase Price
Accounting
Fair Value of Net
Assets Acquired
$
$
$
$
$
$
5,666
1,506
76
38
7,286
109
-
-
7,395
1,530
366
-
1,896
-
-
-
-
-
-
-
-
9,540
4,473
14,013
2,528
2,528
$
$
$
$
$
$
$
$
$
$
$
5,666
1,506
76
38
7,286
109
9,540
4,473
21,408
1,530
366
2,528
4,424
16,984
863
Cash
Accounts receivable and tax receivable
Inventory
Prepaid expenses
Equipment
Acquired Intangibles
Goodwill
Accounts payable and accrued liabilities
Unearned contract revenue
Deferred tax liability
Net purchase price
Discount on contingent consideration
$
$
$
$
$
$
5,666
1,506
76
38
7,286
109
-
-
7,395
1,530
366
-
1,896
-
-
-
-
-
-
9,540
4,473
14,013
-
-
2,528
2,528
$
$
$
$
$
$
$
$
$
$
$
5,666
1,506
76
38
7,286
109
9,540
4,473
21,408
1,530
366
2,528
4,424
16,984
863
$
17,847
Total purchase price
$
17,847
On February 22, 2021, the Company acquired all of the outstanding shares of Dapasoft for a purchase price of up
to $78,709. Of this amount, $39,209 was paid in cash on the date of closing, $2,500 was placed in escrow, $5,000
was paid through the issuance of common shares, $2,000 of common shares are to be issued upon expiry of escrow
on February 22, 2022 and $30,000 is payable contingently of which $11,605 was included in the purchase price.
Dapasoft is a provider of innovative systems integration, cloud lifecycle management and cybersecurity solutions,
which enable clients to securely implement digital transformation initiatives. Dapasoft is reported as part of the ITCS
operating segment.
Dapasoft Inc. (“Dapasoft”)
On February 22, 2021, the Company acquired all of the outstanding shares of Dapasoft for a purchase price of up
to $78,709. Of this amount, $39,209 was paid in cash on the date of closing, $2,500 was placed in escrow, $5,000
was paid through the issuance of common shares, $2,000 of common shares are to be issued upon expiry of escrow
on February 22, 2022 and $30,000 is payable contingently of which $11,605 was included in the purchase price.
Dapasoft is a provider of innovative systems integration, cloud lifecycle management and cybersecurity solutions,
which enable clients to securely implement digital transformation initiatives. Dapasoft is reported as part of the ITCS
operating segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
Dapasoft an additional $17,500 and $12,500 if Dapasoft attains specific levels of EBITDA for the years ending
February 28, 2022 and February 28, 2023, respectively. Results in the first seven months after acquiring Dapasoft
have been stronger than anticipated at time of purchase, which has resulted in a change of estimate for payment
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of
Dapasoft an additional $17,500 and $12,500 if Dapasoft attains specific levels of EBITDA for the years ending
February 28, 2022 and February 28, 2023, respectively. Results in the first seven months after acquiring Dapasoft
have been stronger than anticipated at time of purchase, which has resulted in a change of estimate for payment
101
101
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 25. Acquisitions (continued)
25. Acquisitions (continued)
of contingent earnout in relation to the first and second years’ contingent earn outs. The change in estimate for the
first and second year earn outs has resulted in a change in fair value of the contingent earn out in the amount of
$9,282. The Company additionally recognized $606 in the twelve-month period ended September 30, 2021, related
to changes in fair value of contingent earn out relating to present value adjustments. A portion of the earn out is
payable through issuance of common shares of the Company. The share price for Calian has increased since the
acquisition date, and this has led to a fair value adjustment in relation to the contingent earn out shares in the amount
of $572 which is recognized in changes in fair value of contingent earn out.
of contingent earnout in relation to the first and second years’ contingent earn outs. The change in estimate for the
first and second year earn outs has resulted in a change in fair value of the contingent earn out in the amount of
$9,282. The Company additionally recognized $606 in the twelve-month period ended September 30, 2021, related
to changes in fair value of contingent earn out relating to present value adjustments. A portion of the earn out is
payable through issuance of common shares of the Company. The share price for Calian has increased since the
acquisition date, and this has led to a fair value adjustment in relation to the contingent earn out shares in the amount
of $572 which is recognized in changes in fair value of contingent earn out.
As at September 30, 2021, the accounting for the acquisition of Dapasoft is considered final.
As at September 30, 2021, the accounting for the acquisition of Dapasoft is considered final.
Net Assets
Acquired
Purchase Price
Fair Value of Net
Accounting
Assets Acquired
Net Assets
Acquired
Purchase Price
Accounting
Fair Value of Net
Assets Acquired
Accounts receivable and tax receivable
Cash
WIP
Prepaid expenses
Equipment
Acquired Intangibles
Goodwill
Accounts payable and accrued liabilities
Unearned contract revenue
Deferred tax liability
Net purchase price
Discount on contingent consideration
Total purchase price
Consideration paid in cash
Less- cash balance acquired
$
$
$
$
$
$
5,530
5,342
2,065
393
13,330
1,297
-
-
-
14,627
5,864
2,740
8,604
-
-
-
-
-
-
-
19,400
38,419
57,819
5,141
5,141
$
$
$
$
$
$
$
$
$
$
$
5,530
5,342
2,065
393
13,330
1,297
19,400
38,419
72,446
5,864
2,740
5,141
13,745
58,701
1,613
Cash
Accounts receivable and tax receivable
WIP
Prepaid expenses
Equipment
Acquired Intangibles
Goodwill
Accounts payable and accrued liabilities
Unearned contract revenue
Deferred tax liability
Net purchase price
Discount on contingent consideration
$
$
$
$
$
$
5,530
5,342
2,065
393
13,330
1,297
-
-
14,627
5,864
2,740
-
8,604
-
-
-
-
-
19,400
38,419
57,819
-
-
5,141
5,141
$
$
$
$
$
$
$
$
$
$
$
5,530
5,342
2,065
393
13,330
1,297
19,400
38,419
72,446
5,864
2,740
5,141
13,745
58,701
1,613
Cash consideration paid for acquisition activity during the year ended September 30, 2021:
Cash consideration paid for acquisition activity during the year ended September 30, 2021:
$
60,314
Total purchase price
$
60,314
Cadence
InterTronic
Dapasoft
$
$
1,966
(338)
1,628
13,000
(5,666)
7,334
41,709
(5,530)
36,179
Consideration paid in cash
Less- cash balance acquired
Cadence
InterTronic
Dapasoft
$
$
1,966
(338)
1,628
13,000
(5,666)
7,334
41,709
(5,530)
36,179
None of the goodwill arising on the acquisitions is expected to be deductible for tax purposes.
None of the goodwill arising on the acquisitions is expected to be deductible for tax purposes.
102
102
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. 26. Contingent Earn-Out
The following shows the contingent consideration activity for the year ended September 30, 2021:
26. Contingent Earn-Out
The following shows the contingent consideration activity for the year ended September 30, 2021:
Comprehensive Training Solutions
Company Acquired
Alio/Allphase
EMSEC Solutions
Tallysman Wireless
Cadence
InterTronic
Dapasoft
Total
Beginning
balance
5,814
645
1,360
7,345
-
-
-
-
-
-
-
1,181
3,984
7,363
Acquisition
Payments
Value
Adjustments
Ending balance
Change in Fair
(3,616)
395
104
191
759
236
324
606
4,348
(1,551)
-
-
-
(1,080)
9,854
6,941
749
-
8,104
1,417
3,228
17,823
$ 15,164
$ 12,528
$ (3,616)
$ 2,615
$ 11,571
$
38,262
Company Acquired
Alio/Allphase
Comprehensive Training Solutions
EMSEC Solutions
Tallysman Wireless
Cadence
InterTronic
Dapasoft
Total
Beginning
balance
Acquisition
Payments
Change in Fair
Value
Adjustments
Ending balance
5,814
645
1,360
7,345
-
-
-
-
-
-
-
1,181
3,984
7,363
(3,616)
-
-
-
-
-
-
395
104
191
759
236
324
606
4,348
-
(1,551)
-
-
(1,080)
9,854
6,941
749
-
8,104
1,417
3,228
17,823
$ 15,164
$ 12,528
$ (3,616)
$ 2,615
$ 11,571
$
38,262
A portion of the contingent earn-out amount for Dapasoft is included in contributed surplus. This relates to contingent
earn-out amounts to be issued in shares of the company if certain levels of EBITDA is achieved. The number of
shares to be issued are fixed, and if Dapasoft does not achieve the target, no shares will be issued in relation to this
earn-out. Due to this, $1,629 is included in contributed surplus instead of contingent earn-out payable.
A portion of the contingent earn-out amount for Dapasoft is included in contributed surplus. This relates to contingent
earn-out amounts to be issued in shares of the company if certain levels of EBITDA is achieved. The number of
shares to be issued are fixed, and if Dapasoft does not achieve the target, no shares will be issued in relation to this
earn-out. Due to this, $1,629 is included in contributed surplus instead of contingent earn-out payable.
As at September 30, 2021, the total gross value of all contingent consideration outstanding is $62,816.
As at September 30, 2021, the total gross value of all contingent consideration outstanding is $62,816.
The following shows the contingent consideration activity for the year ended September 30, 2020:
The following shows the contingent consideration activity for the year ended September 30, 2020:
Beginning
balance
Acquisition
Payments
Value
Adjustments Ending balance
Change in Fair
$
800
$
(1,025)
$
-
$
225
$
2,885
2,634
-
-
-
-
-
-
-
2,555
618
1,297
7,282
403
354
207
27
63
63
(3,288)
(2,988)
3,052
-
-
-
-
-
-
5,814
645
1,360
7,345
$ 6,319
$ 11,752
$
(1,025)
$ 1,117
$ (2,999)
$ 15,164
Comprehensive Training Solutions
Company Acquired
Secure Tech
IntraGrain Technologies
SatService
Alio/Allphase
EMSEC Solutions
Tallysman Wireless
Total
27. Pension Plan
related to this pension plan.
The Company sponsors a defined contribution pension plan for certain of its employees. Required contributions
have been fully funded to September 30, 2021. For fiscal 2021 (2020), an amount of $1,468 ($1,228) was expensed
Company Acquired
Secure Tech
IntraGrain Technologies
SatService
Alio/Allphase
Comprehensive Training Solutions
EMSEC Solutions
Tallysman Wireless
Total
Beginning
balance
Acquisition
Payments
Change in Fair
Value
Adjustments Ending balance
$
800
$
2,885
2,634
-
-
-
-
-
-
-
2,555
618
1,297
7,282
(1,025)
$
-
$
225
$
-
-
-
-
-
-
403
354
207
27
63
63
(3,288)
(2,988)
3,052
-
-
-
-
-
-
5,814
645
1,360
7,345
$ 6,319
$ 11,752
$
(1,025)
$ 1,117
$ (2,999)
$ 15,164
27. Pension Plan
The Company sponsors a defined contribution pension plan for certain of its employees. Required contributions
have been fully funded to September 30, 2021. For fiscal 2021 (2020), an amount of $1,468 ($1,228) was expensed
related to this pension plan.
-
-
-
-
-
-
-
-
-
-
-
-
103
103
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual ReportCalian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)Calian Group Ltd.2021 Annual Report 28. Related Party Transactions
During the year ended September 30, 2021 (2020), the Company had sales of $1,729 ($1,160) to GrainX in which
Calian holds a non-controlling equity investment. At September 30, 2021 (2020), the Company had an accounts
receivable balance with GrainX of $66 ($130) which is included in accounts receivable. The terms and conditions
of the related party sales are within the Company’s normal course of operations and are measured at the exchange
amounts agreed to by both parties.
The compensation for directors and other members of key management during the year was as follows. The
compensation of directors and key executives is determined by the compensation committee having regards to the
performance of individuals and market trends. The key executives are the Chief Executive Officer, the Chief Financial
Officer, Chief Information Officer, Chief Human Resource Officer, Chief Commercial Officer, Chief Technology Officer
and President, Advanced Technologies.
28. Related Party Transactions
During the year ended September 30, 2021 (2020), the Company had sales of $1,729 ($1,160) to GrainX in which
Calian holds a non-controlling equity investment. At September 30, 2021 (2020), the Company had an accounts
receivable balance with GrainX of $66 ($130) which is included in accounts receivable. The terms and conditions
of the related party sales are within the Company’s normal course of operations and are measured at the exchange
amounts agreed to by both parties.
The compensation for directors and other members of key management during the year was as follows. The
compensation of directors and key executives is determined by the compensation committee having regards to the
performance of individuals and market trends. The key executives are the Chief Executive Officer, the Chief Financial
Officer, Chief Information Officer, Chief Human Resource Officer, Chief Commercial Officer, Chief Technology Officer
and President, Advanced Technologies.
2021
$
3,394
997
2020
2,570
1,349
$
4,391
$
3,919
Short-term benefits
Share-based payments
2021
$
3,394
997
2020
2,570
1,349
$
4,391
$
3,919
In the normal course of business, the Company is party to business and employee-related claims. The potential
outcomes related to existing matters faced by the Company are not determinable at this time. The Company intends
to defend these actions, and management believes that the resolution of these matters will not have a material
adverse effect on the Company’s financial condition.
30. Subsequent Events
Effective October 7, 2021, the Company acquired the outstanding shares of SimFront, for total cash consideration
of up to $15,000 of which, $9,000 was paid on closing, and $6,000 is payable contingently. SimFront will now
enable Calian to provide end-to-end military training and simulation capabilities and pursue new opportunities with
customers seeking integration and immersive training support. SimFront integration and augmented/virtual/mixed
reality solutions elevate Calian capabilities in this area. SimFront will be reported as part of the Learning operating
segment and fully consolidated as of October 7, 2021.
29. Contingencies
In the normal course of business, the Company is party to business and employee-related claims. The potential
outcomes related to existing matters faced by the Company are not determinable at this time. The Company intends
to defend these actions, and management believes that the resolution of these matters will not have a material
adverse effect on the Company’s financial condition.
30. Subsequent Events
Effective October 7, 2021, the Company acquired the outstanding shares of SimFront, for total cash consideration
of up to $15,000 of which, $9,000 was paid on closing, and $6,000 is payable contingently. SimFront will now
enable Calian to provide end-to-end military training and simulation capabilities and pursue new opportunities with
customers seeking integration and immersive training support. SimFront integration and augmented/virtual/mixed
reality solutions elevate Calian capabilities in this area. SimFront will be reported as part of the Learning operating
segment and fully consolidated as of October 7, 2021.
Short-term benefits
Share-based payments
29. Contingencies
104
104
Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd.Calian Group Ltd. Notes to the Consolidated Financial StatementsFor the years ended September 30, 2021 and 2020 (Canadian dollars in thousands, except per share amounts)2021 Annual ReportCalian Group Ltd. Table of Contents
1 Chair’s Letter
3 Message from the CEO
6
2021 Segment Highlights
15 How Our Segments Performed
16 People Driving Growth
20 Social Impact and ESG
23 Looking Forward
24 Management’s Discussion and Analysis
of Financial Condition and Results of
Operations
57
Independent Auditors’ Report
61 Consolidated Statements
of Financial Position
62 Consolidated Statements of Net Profit
63 Consolidated Statements
of Comprehensive Income
64 Consolidated Statements of Changes in Equity
65 Consolidated Statements of Cash Flows
66 Notes to the Consolidated
Financial Statements
Proudly
Canadian
Additional Information
Additional information about the Company such as the Company’s 2021 Annual Information Form and Management
Circular can be found on SEDAR at www.SEDAR.com
Common Share Information
The Company’s common shares are listed for trading on
the Toronto Stock Exchange under the symbol CGY.
Dividend Policy
The Company intends to continue to declare a quarterly
dividend in line with its overall financial performance and
cash flow generation. Decisions on dividend payments
are made on a quarterly basis by the Board of Directors.
There can be no assurance as to the amount of such
dividends in the future.
Dated: November 24, 2021
Corporate Information
Corporate Head Office
770 Palladium Drive
Ottawa, Ontario, Canada K2V 1C8
Phone: 613.599.8600
Fax: 613.592.3664
Web: www.calian.com
Board of Directors
George Weber
President, WebX Consulting Ltd.
Chair, Calian Group Ltd.
Chair of the Nominating Committee
Kenneth J. Loeb
Executive Chairman, Ambassador Realty Inc.
Chair of the Compensation Committee
Jo-Anne Poirier
President and CEO, VON Canada
Chair of the Governance Committee
Ray Basler, CPA, CA
Consultant
Chair of the Audit Committee
Young Park
Corporate Director
Ronald Richardson
Corporate Director
Kevin Ford
CEO, Calian Group Ltd.
2021 Annual Report
2021 Annual Report