2022
ANNUAL
REPORT
Moving the World Forward
Calian® keeps the world
moving forward.
TABLE
OF CONTENTS
We help the world communicate,
innovate, learn and lead safe and
healthy lives—today and
tomorrow.
“Coterra trusts Calian with our cybersecurity 24x7. This means
we can focus on our business—hydrogen exploration
operations. We depend on Calian because we cannot fail.”
—Chip Dyson, Vice President, Information Technology, Coterra Energy
“Our mission is to make early detection part of routine
healthcare.
Our partnership with Calian brings us a big step forward in
Canada to impact the way cancer is detected here and around
the world.”
—Dr. Kristina Rinker, Co-Founder and Chief Scientific Officer, Syantra Inc.
5-YEAR FINANCIAL HIGHLIGHTS
CALIAN AT A GLANCE
CHAIR’S MESSAGE
CEO’S MESSAGE
IT AND CYBER SOLUTIONS
HEALTH
ADVANCED TECHNOLOGIES
LEARNING
KEY PERFORMANCE INDICATORS
ESG
LOOKING FORWARD
SHARE INFORMATION
MANAGEMENT’S DISCUSSION AND ANALYSIS
AUDITED ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
2
3
6
8
12
16
20
24
28
30
32
33
34
70
ADDITIONAL INFORMATION
116
2
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Calian Annual Report 2022Calian Annual Report 2022 5-YEAR FINANCIAL HIGHLIGHTS
For the years ended September 30
(in millions of dollars, except per share amounts and percentages)
CALIAN AT A GLANCE
OPERATING RESULTS
Revenue
Gross profit
Adjusted EBITDA1
Net profit
Adjusted net profit1
PER SHARE DATA
Adjusted EBITDA per share—basic1
Adjusted EBITDA per share—diluted1
Net profit per share—basic
Net profit per share—diluted
Adjusted EPS—basic1
Adjusted EPS—diluted1
Dividends per share
FINANCIAL RATIOS
Gross profit margin
Adjusted EBITDA margin1
Current ratio
FINANCIAL POSITION
Cash and cash equivalents
Current assets
Total assets
Current liabilities
Shareholders’ equity
CASH FLOW
2022
2021
2020
2019
2018
$
$
$
$
$
582.2
169.2
65.9
13.6
44.0
5.81
5.79
1.19
1.19
3.88
3.87
1.12
518.4
126.7
51.9
11.2
37.2
4.89
4.85
1.08
1.07
3.51
3.50
1.12
432.3
89.2
36.8
20.4
23.5
4.08
4.02
2.25
2.23
2.60
2.59
1.12
343.0
74.7
27.1
20.0
19.0
3.46
3.45
2.55
2.54
2.43
2.41
1.12
305.1
64.1
25.3
16.3
17.5
3.28
3.26
2.11
2.10
0.61
0.60
1.12
29.1%
11.3%
1.4
24.4%
10.0%
2.2
20.6%
8.5%
2.2
21.8%
7.9%
1.8
21.0%
8.3%
2.3
42.6
296.5
547.2
211.7
305.2
78.6
262.2
458.0
121.2
292.4
24.2
202.6
331.1
92.7
200.4
17.1
129.0
195.0
69.8
115.1
21.8
114.7
152.1
49.9
100.1
Cash flows generated from operating
activities
Cash flows generated from financing
activities
Cash flows used in investing activities
43.1
46.5
(2.8)
13.5
11.4
(6.2)
(72.9)
64.4
(56.6)
45.0
(35.2)
7.4
(25.6)
(6.5)
(11.6)
1) This is a non-GAAP measure mainly derived from the consolidated financial statements, but do not have a standardized
meaning prescribed by IFRS. Please refer to the Reconciliation of non-GAAP measures to most comparable IFRS measures
section of the Management’s Discussion and Analysis.
Profile
Revenue segmentation
SEGEMENTED BY SEGMENT1
ITCS 30%
Advanced Technologies 26%
Calian (TSX: CGY) is a diverse products
and services company providing
innovative healthcare, communications,
learning and cybersecurity solutions.
The company is headquartered in
Ottawa, Ontario with locations across
Canada and in the U.S., Germany,
Norway and U.K. The company is
uniquely positioned to solve the
significant and complex problems its
customers face so that these
companies are better able to succeed
and deliver on their objectives. The
company’s shares are listed on the
Toronto Stock Exchange.
Values
Customer-First Commitment,
Teamwork, Integrity and Innovation
$1.3B
Backlog
$582M
Revenues
$699M
18%
New contract signings
5 year Revenue CAGR
SEGMENTED BY OFFERING
SEGMENTED BY GEOGRAPHY
27%
5 year EBITDA CAGR
SEGMENTED BY CUSTOMER
4,500
Workforce
CGY
TSX
1) percentages may not add up due to rounding
Health 29%
Learning 16%
Product 27%
Service 73%
International 29%
Canada 71%
Commercial 53%
Government 47%
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3
Calian Annual Report 2022Calian Annual Report 2022
CALIAN AT A GLANCE
Key milestones of the past 40 years
Establishing profitable foundation
Transformation to a growing technology company
1990
Acquisition of
SED Systems Inc.
1995
First strategic
DND training contract win
2005
Ray Basler
becomes CEO
(Advanced Technologies)
(Learning)
2020
Bought deal public offering
of $69M at $44.00/share
2020
2022
Acquisition of Tallysman
Wireless, Inc. (Advanced
Acquisition of SimFront
Simulation Systems Corp.
Technologies)
(Learning)
2016
2020
2022
Name changed to
Acquisition of Allphase
Acquisition of Computex
Calian Group Ltd.
Clinical Research
Technology Solutions
stock ticker now CGY
Services, Inc. and Allo
Health Services, Inc.
(Health)
(ITCS)
1982
1993
Calian Technology Ltd.
Initial public offering,
established
TSX: CTY
1993
Acquisitioin of Skywave
(Advanced Technologies)
2004
Strategic health
contract win for DND
(HSSC) (Health)
2015
Kevin Ford becomes
President and CEO
2019
Calian re-aligns
business to four
segments to drive next
phase of growth
2021
Revenues exceed the
half-billion-dollar mark
2021
Bought deal public
offering of $80M at
$60.50/share
2021
Acquisition of Dapasoft
and iSecurity (ITCS)
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Calian Annual Report 2022Calian Annual Report 2022 CHAIR’S MESSAGE
It has been 40 years since a small
segments rose to compensate,
provider and cybersecurity company,
segments. This diversification resulted
Calian CARES™
“Calian marked its 40-year milestone with a
second consecutive year of a half-billion
dollars in revenue—a testament to resilience
and consistent, profitable growth.”
professional services firm came to life
contributing to consistent performance.
was a strategic acquisition to expand
in our commercial business
in 1982. An initial public offering in 1993
Calian closed FY22 with record
geographically and diversify offerings.
debuted Calian on the Toronto Stock
revenues and gross margins and
Calian launched its expansion into the
Exchange. On September 27, 2022,
Calian marked its 40-year milestone
with a second consecutive year of a
half-billion dollars in revenue—a
testament to resilience and consistent,
profitable growth.
Calian faced both calm and storm over
four decades. The last few years
presented both headwinds and
tailwinds. In fiscal year 2022 (FY22),
Calian persevered through another year
of global pandemic, supply chain
issues, inflation and tight labour
markets. The conflict in Ukraine further
squeezed the supply chain and
exacerbated inflationary pressures.
COVID-19 variants continued to affect
nations, our customers and our
operations.
The four operating segments, or
“four-piston engine,” that make up
Calian—IT and Cyber Solutions (ITCS),
Health, Advanced Technologies and
Learning—provided the stability,
resilience and adaptability necessary to
power through the challenges of FY22.
Revenue and Gross Margin
(in millions of $, except margin)
Revenue
Gross Margin
305
21.0%
343
21.8%
432
20.6%
582
29.1%
518
24.4%
2018
2019
2020
2021
2022
remained on course to propel Calian to
U.S. market, gained 1,100 customers,
become a one-billion-dollar company.
gained a robust sales distribution
An Innovative Global
Technology Company
Acquisitions continued to be key to
growth in FY22. Calian acquired
SimFront Simulation Systems
engine, bolstered access to
cybersecurity talent, and reinforced its
transformation from a professional
services firm to a global technology
company.
As a technology company, Calian
Corporation and Computex Technology
introduced innovative solutions—Calian
Solutions, bringing the total number of
Nexi™ for healthcare, Calian managed
acquisitions over the past four years to
detection and response (MDR) for
13. Through acquisitive growth, Calian
cybersecurity, and Calian synthetic and
offered additional and complementary
distributed training solutions for
skillsets and technologies to customers
learning. The burgeoning number of
Diversity was a key driver of this
in Canada, the U.S. and Europe.
success. When one segment
experienced headwinds, other
Computex, a U.S.-based IT solution
solutions meant Calian could now fulfill
its strategy to answer the needs of
global customers’ multiple complex
challenges with solutions that crossed
outweighing our government business
for the first time in our history. It also
allowed us to continue to grow our
revenues outside Canada. Revenue
from outside Canada increased 48% as
a result of expansion into the U.S. IT
and cybersecurity sector and the
European defence sector.
53%
47%
Commercial
Government
71%
Canada
29%
International
An Evolving Company
This year saw changes at the board
level. Long-serving board member and
former Chair, Ken Loeb, retired from the
board of directors and Valerie Sorbie
Our mission—to help the world
communicate, innovate, learn and lead
safe and healthy lives, today and
tomorrow—is the basis for our ESG
strategy. Our ESG framework, Calian
CARES™ (Collaboration to Advance
Resilience Excellence and
Sustainability), aligns with eight of the
internationally recognized United
Nations Sustainable Development
Goals that correspond to our mission.
Read the Calian ESG Report to learn
more about how Calian embeds ESG
successfully transformed into a
provider of diverse technology
solutions that solve complex problems
and help the world move forward.
I continue to be optimistic about the
future of Calian. I am confident the
company’s formidable track record of
profitable growth, strong balance sheet
and backlog, rigorous capital
employment methodology and
capable, experienced leadership
team—led by a highly effective and
energetic CEO committed to progress
and innovation—will continue to carry
priorities into its business practices and
Calian to new heights.
where Calian made an impact in the
communities it serves. This inaugural
report from Calian lays the foundation
for the future.
40 Years of Calian—and
Many More
Thank you to our shareholders for your
ongoing support of Calian.
joined. We thank Ken for his
As Calian celebrates its 40-year
contributions and years of service.
anniversary, it is an opportunity to
Valerie’s extensive experience in
reflect on the journey this company
government, strategy, operations and
travelled. From a small consulting
human resources strengthens the
start-up in Canada to a company with a
capabilities of the Calian board. With
talented and dedicated workforce of
these latest changes, the board is now
4,500 people around the globe, of which
comprised of seven directors, of which
3,100 are employees and approximately
six are independent and three are
1,400 are contractors—Calian
women.
George Weber
Chair
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Calian Annual Report 2022Calian Annual Report 2022 CEO’S MESSAGE
Two years into our current three-year
Innovation
strategic plan—Imagine 2023—two key
points come to mind. First, we had a
phenomenal record year once again.
Revenues increased to $582 million and
gross margin attained its highest level
ever at 29%, representing the 21st year
of consecutive profit. These results
were accomplished despite the
lingering pandemic, supply chain
issues, global conflict and inflation. The
second is why we had a phenomenal
year. The amazing team at Calian
focused their attention on the
company’s four pillars of growth—
innovation, customer diversification,
continuous improvement and customer
retention. Achieving our goals this year
is a testament to strong leadership,
committed employees and loyal
customers.
Four Pillars of Growth
Continuous
Improvement
Customer
Retention
OurPeople
Innovation
Customer
Diversification
8
This year, with the newly created CTO
office, Calian formalized a strategic
innovation playbook that thoroughly
details how we generate innovation
across the depth and breadth of a
business as diverse and multi-faceted
as Calian. Further, the playbook
provides an innovation management
framework aligned with the principles
of ISO56001, yet uniquely tailored to
Calian. This playbook harmonizes and
aligns all innovation-related initiatives
across Calian under a common
framework, enhancing our strong
culture of innovation while creating
designing, developing, manufacturing
and delivering ground-based solutions
to support space applications for
communications, earth observation,
precision global navigational satellite
solutions and space exploration. We
expanded our offerings with synthetic
training environments, virtual reality
and immersive training technologies.
We continued to innovate through
advanced software engineering
programs, and we evolved our
cybersecurity platforms to meet today’s
complex cyber challenges.
Customer Diversification
efficiencies and building scale by more
We had an exceptional year on the
tightly interconnecting the different
customer diversification front. Our
parts of our business.
On this front, we launched Nexi™, an
automated patient support program
that enhances the patient’s experience
throughout their treatment journey. We
re-launched Corolar Virtual Care™, a
platform that enables healthcare
providers to deliver high-quality virtual
care to their patients. We expanded
capabilities in the space market—
revenue streams from the government
sector and commercial sector were
more balanced. We increased revenue
from the U.S. and Europe. We expanded
capacity to serve learning, training and
defence markets in Europe and beyond
as we moved towards our goal of being
a global company.
Continuous Improvement
Four-Piston Engine
We continued to achieve our
You have likely heard me reference our
improvement goals in FY22. We went
“four-piston engine,” which is the four
live with a new SAP enterprise resource
operating segments that make up
planning (ERP) system, with the Ottawa
Calian: ITCS, Health, Advanced
and Saskatoon offices now running on
Technologies and Learning. When a
the same platform for the first time in
piston encounters headwinds, the other
the company’s history. We continued to
pistons work harder to keep Calian as a
invest in our cybersecurity platform and
whole on track to our growth
adopted company-wide
objectives.
communications tools, such as
Microsoft Teams. Our U.S.
cybersecurity team achieved ISO 27001
certification, while our Canadian
cybersecurity team achieved SOC II
Type 1. And, as part of our ESG
strategy, we completed our first
emissions inventory, which will help us
establish plans to improve the
company’s carbon footprint.
Customer Retention
Customer retention continued to be a
strong pillar for Calian. We remain
proud and humbled by our long-
standing customers’ confidence in us.
For example, Calian signed an
agreement for a third high-performance
antenna for NASA’s very long baseline
interferometry (VLBI) Global Observing
System (VGOS) and also signed a
three-year contract for the Royal
Canadian Air Force, a long-time
customer, to deliver e-learning.
Four-Piston Engine:
Calian Operating Segments
Health
Learning
IT and Cyber Solutions
Advanced Technologies
This year, Calian demonstrated the
strength and value of the four-piston
business model that provides four
separate, yet complementary, operating
segments. The diversity of this model
allowed us to capitalize on market
trends as they occurred in FY22. During
the pandemic, for example, the
healthcare segment benefited from the
immediate need for clinics, vaccine
delivery and virtual care. During the
Ukraine conflict, our training and
defence capabilities were immediately
deployed because the people, the skills
and the capabilities were already in
place.
This four-piston engine creates a
unique opportunity for shareholders.
Not many companies provide investors
with access to four distinct markets
that can balance out market
opportunities and challenges the way
this model does.
Moving the World Forward:
Focus on Defence
In times of political and social unrest,
our core purpose of helping the world
communicate, innovate, learn and lead
safe and healthy lives is paramount.
After 30 years as a trusted partner to
the Canadian military, we have a unique
understanding of the challenges our
military customers face. That
understanding helped us effectively
transition this year from a Canadian
defence company to a global defence
company. Our strategic focus on
defence contributes to a safer world by
keeping militaries ready to respond to
threats.
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Calian Annual Report 2022Calian Annual Report 2022 Defence is one industry that utilizes the
Alongside our support for military
that intellectual capital and developed
gamut of Calian services, from
customers, Calian also supports
intellectual property that provides real,
healthcare and training to cyber and
Canadian military members and
measurable value because we have a
manufacturing. This is a great example
veterans as a key component of our
deep understanding of how the
of a single customer that may have
ESG initiative. By hiring veterans, we
healthcare ecosystem works. With a
multiple challenges that can all be
leverage their intellectual capital in
view to helping the world lead safe and
addressed through cross-segment
supporting the military and allow them
healthy lives, we will continue to invest
solutions.
to give back to the community. We also
in our healthcare products and
Leveraging the latest technology in
synthetic training environments—
gained from this year’s acquisition of
SimFront and vehicle electronics
(vetronics)—we are well positioned to
support the women and men of the
militaries around the world. In
partnership with defence vehicle prime
contractors, we develop key vetronics
components for armoured vehicle
safety, control and monitoring. Our
composites group is developing
provide access to healthcare to military
capabilities.
families by matching them with family
doctors through our Military Family
Doctor Network (MFDN) initiative.
Supporting the health of military
members, veterans and their families
aligns again with our core purpose of
helping the world lead safe and healthy
lives.
Moving the World Forward:
Focus on Digital Health
Moving the World Forward:
Focus on Space
We reorganized our Advanced
Technologies segment to focus on
three markets: space, terrestrial and
defence. Adding products and
capabilities through innovation and
acquisition, Calian increased its value in
the total value chain. As a Canadian
company, we will turn this into a global
upgraded components as an alternate
Another strategic focus for us this year
market advantage. As such, Calian
to heavier steel structures to make
transportable or mobile equipment
was digital health. The launch of Nexi
became a founding member of the new
and new opportunities to leverage
space industry group, Space Canada,
more agile. Global navigation satellite
Corolar Virtual Care were pivotal in this
which will raise awareness and
system (GNSS) geomatics technologies
initiative. In a turbulent healthcare
commercialize Canada’s growing space
have the potential to assist prime
contractors with precise timing and
market, Calian differentiates itself by
ecosystem. We expect space to
approaching healthcare through a
continue to be a growth segment for
location solutions for drones, electronic
practitioner’s lens. We understand the
Calian for the long term.
vehicles and other defence
applications.
system and how it works from a
process viewpoint, as well as how
practitioners are engaged with
supporting patients. And we’ve taken
“We had a phenomenal record year once again.
Revenues increased to $582 million and gross
margin attained its highest level ever at 29%,
representing the 21st consecutive year of profit.”
An Evolving Company
This year saw changes at the
ways to capitalize on those
opportunities.
leadership level. Sacha Gera, President
ITCS, joined Calian at the start of FY22
I thank our incredibly talented and
dedicated team for creating record
and led the Computex acquisition. Jerry
results for the company, capping five
Johnson, CIO, retired and handed the
reins to Michael Muldner, at the end of
FY22. In addition, Gordon McDonald,
President Health, announced his plan to
years of double-digit growth and getting
us ever-closer to the billion-dollar mark.
I thank our customers for placing their
continued trust in us to solve their most
retire in FY23.
Looking Ahead
This year, Calian executed a branding
strategy to position itself as a single
company to customers, partners and
employees, allowing the company as a
whole to better address the multiple
challenges a single customer faces. As
a diverse products and services
company providing innovative
healthcare, communications, learning
and cybersecurity solutions, Calian
solves not one, but many complex
challenges for any customer. Looking
ahead, this cross-selling approach, our
four pillars of growth and our diverse
four-piston engine will help us continue
to enjoy positive and growing cash
flows and a pristine balance sheet. We
will continue to look in new areas
across the globe for opportunities and
critical challenges. With our ESG
strategic framework now in place, we
look forward to working with our
stakeholders to validate our plans and
refine our priorities. And I thank our
board of directors for their ongoing
support during very turbulent times.
Our success this year is the result of a
lot of hard work and dedication, and I
couldn’t be prouder of our people, who
work every day to make Calian a great
company that continues to move the
world forward.
Kevin Ford
CEO
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Calian Annual Report 2022Calian Annual Report 2022
IT AND CYBER SOLUTIONS
HIGHLIGHTS
CONSULTING SERVICES
Growth
One of four pillars of growth for Calian
is customer diversification. Acquiring
Computex bolstered the company’s
capabilities and offerings with a direct
sales force, engineering and
cybersecurity experts coined
“Brainware”, enterprise-grade hardened
network operations centre (NOC) and
security operations centre (SOC), more
than 1,100 U.S. customers, including
EnerVest, Omni Logistics and Coterra,
and best-in-breed technology partners.
The Computex acquisition in March
2022 contributed C$71 million of
revenue during seven months of fiscal
year 2022, while expanding into the U.S.
everything-as-a-services (Xaas) market
with a full suite of managed services.
In support of our customer retention
pillar, Immigration, Refugees and
Citizenship Canada (IRCC) renewed a
contract with ITCS to support
modernization and transformation of
its eServices. And Coterra renewed a
contract to provide cybersecurity
technology and professional services to
build a data centre.
What We Do.
IT SOLUTION PROVIDER
24X7 MANAGED IT
& CYBER SERVICES
The ITCS segment entered FY22 with a strong backlog and a recent acquisition—
Dapasoft and its wholly owned subsidiary, iSecurity. This strong start to the year
was further strengthened by the acquisition of award-winning Computex, which had
a 35-year history in the U.S.
Profile of ITCS
Offers IT services to support customers
in their digital transformation from
advisory through to implementation,
delivery, management, monitoring and
securing of complex IT solutions.
2022 Results
$173M
Revenues
35%
Gross margin
17%
EBITDA margin
Our strategy to become a leading provider in information technology and
cybersecurity, meet customers’ needs across Canada and the U.S., and increase
recurring revenue streams took shape this year. Further, our efforts to expand our
ecosystem and partnerships bolstered our offerings and capability.
$30M
EBITDA
$97M
Backlog
12
When the CIO of Coterra
Energy came to Calian,
he understood that
cyberattacks don’t always
happen during business
hours.
They happen on weekends and holidays. Coterra wanted a
trusted partner that would be there when they were not. The
Calian SOC-as-a-Service offering provides Coterra with artificial
intelligence and human-integrated threat hunting, awareness
training and, most importantly, remediation when a cyber attack
happens. As Coterra acquired companies, Calian was at the
forefront of integrating the companies and building their IT
infrastructure. Coterra trusts Calian with their cybersecurity 24x7.
This means they can focus on their business—hydrogen
exploration operations. Coterra depends on Calian because they
cannot fail.
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Calian Annual Report 2022Calian Annual Report 2022 Calian partnered with Canadian
quantum cybersecurity innovator
Quantropi® Inc. to sound the alarm
about the looming cryptographic threat
known as “Y2Q” and spotlight the
company’s end-to-end quantum
cybersecurity solutions.
Groundbreaking research demonstrates
the company’s commitment to cyber
innovation and positions Calian
effectively for early-stage deployments
in defence and critical infrastructure
applications.
Also on the groundbreaking research
front, ITCS funded researchers at
Dalhousie University CyberLabs to
study data exhaust. The research will
ultimately lead to applications that help
organizations continually enhance their
security postures. Through this
initiative, Calian hopes to create an
efficient and effective system and
process to test internet of things (IoT)
devices for risks and vulnerabilities
before deploying them.
Confidence. Engineered.
As a trusted IT partner, it is important
for Calian to demonstrate competence,
experience and deep knowledge of
cybersecurity best practices. This year,
the ITCS U.S. division achieved ISO
27001 certification, an international
standard ensuring organizations follow
best practices for securing assets such
as financial information, intellectual
property, employee details or
information entrusted by third parties.
In addition, the Canadian division
achieved SOC II, Type 1. These
certifications position Calian for further
growth and expansion in the Canadian,
U.S. and global markets.
Moving the World Forward
Cybersecurity is critical to organizations
around the world. Calian not only helps
customers solve current-day
cybersecurity challenges, we invest in
research to stay ahead of the curve.
As cybercrime—especially against large
healthcare and government entities—
increases globally, there is a growing
need for effective and timely incident
response to cyber attacks. This year,
Calian led a facilitated incident
response to a ransomware attack for a
healthcare customer in Canada. The
purpose of this type of exercise is to
help protect a customer from a real-life
ransomware attack scenario.
Looking ahead to what could be a
cybersecurity challenge in the future,
What is Data Exhaust?
Internet of things (IoT) devices have the potential to learn about their
users and their surrounding environments by combining sensor
information from cameras, microphones and internet connectivity.
Byproducts from online actions, known as data exhaust, can be a
security threat. As the defence sector looks to use IoT data points in
various applications, it is critical to manage this risk.
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Calian Annual Report 2022Calian Annual Report 2022 HEALTH
HIGHLIGHTS
PHARMACEUTICAL SOLUTIONS
Customer Retention
What We Do.
HEALTH SOLUTIONS
AND SERVICES
DIGITAL HEALTH TECHNOLOGIES
Profile of Health
Manages a network of more than 2,400
healthcare professionals delivering
primary care and occupational health
services to public and private sector
clients across Canada as well as
provides management and strategy
services to pharmaceutical companies
conducting clinical trials and patient
support programs.
2022 Results
$167M
Revenues
25%
Gross margin
$28M
EBITDA
17%
EBITDA margin
$707M
Backlog
16
As the pandemic stretched into a third
beyond clinic walls, enable data
fiscal year, the Health segment
interoperability across disparate
continued to support Canada’s
systems, shorten wait times, and
COVID-19 response with screening,
improve collaboration for more than
testing and vaccination programs. And
3,000 frontline workers, hundreds of
the company’s approach to drive future
community partners and more than five
growth through the Health segment
million Canadians.
took shape: technology, retention and
focus on the pharmaceutical market.
Innovation
Working with our ITCS segment, a
highlight this year was the introduction
of Nexi™, which was the first product
released under our new cloud initiative.
Nexi included Microsoft Azure
Communications Services integration
for virtual care delivery.
The company re-launched Corolar
Virtual Care™ to unlock the potential of
digital transformation to deliver care
As a Microsoft Gold Partner, Calian
continued to be a trusted technology
partner across the healthcare
ecosystem. Delivering digital health
solutions in a software-as-a-service
(SaaS) business model enabled rapid
deployment and reduced total cost of
ownership (TCO) for healthcare
providers by enabling a pay-per-
consumption commercial model. This
frictionless business model enabled
hospitals, clinics, labs, pharmacies,
regional health systems, provincial
agencies and the private sector to
purchase our digital solutions through
the Azure Marketplace.
With customer retention as one of the
four pillars for growth, Calian saw
increased demand from existing
customers for clinician services, clinical
research for major pharmaceutical
customers, and services to remote
locations in Northern Canada. At the
same time, the shortage of healthcare
professionals in Canada fuelled
continuing demand for COVID-19
support from the large network of
Calian health practitioners.
The company’s largest health customer,
the Department of National Defence,
continued to benefit from the provision
of Calian nurses, doctors, dentists,
psychological support and other
healthcare professionals throughout
FY22. Calian also provided
psychological services to police,
correctional institutions and border
services agencies in the Canadian
market.
Aline-Chrétien Health Hub*
A unique and innovative model that shares a wide range of specialized and
community healthcare services to provide everyone from newborns to
seniors with high-quality care close to home, focused on their needs and in
The Fraser Health Authority expanded
both official languages. A solution was needed to improve coordination of
its existing Corolar subscription to
include three additional clinics and
services as partner patient systems existed in separate silos, creating a
barrier to collaboration. Calian Corolar platform was leveraged to provide a
added the secure online chat module to
collaborative environment that powered hospital and community care
support administrative and therapeutic
providers to create a seamless experience for patients.
communications.
Other new contracts with existing
customers—Statistics Canada for the
Canadian Health Measures Survey and
10 medical services contracts with
correctional institutions across
Canada—also supported the customer
retention element of our growth
“ I think that the fact that you can combine multiple services for the same
client in one place, I think that’s just beyond value.” – Dr. Frank Knoefel,
Physician, Bruyère Memory Program | Aline-Chrétien Health Hub
video case study
strategy.
* Previously known as Orléans Health Hub
17
Calian Annual Report 2022Calian Annual Report 2022 Pharmaceutical
This year, Syantra Inc. chose Calian to
provide a digital platform (Nexi) and
nursing network for the mobile test
administration of Syantra’s innovative
blood test that can detect breast
cancer. As pharmaceutical companies
develop innovative and life-changing
solutions, Calian is well positioned to
help them develop and bring those
medications to market.
The Vaccine and Infectious Disease
Organization (VIDO), part of University
of Saskatchewan, engaged Calian to
manage COVID-19 vaccine clinical
trials: Phase I/II Booster and Phase II
trial in Uganda.
Moving the World Forward
ITCS and Health partnered with
L-SPARK, Canada’s largest SaaS
accelerator, to launch a joint program,
the Calian L-SPARK MedTech
Accelerator. So far, Calian and L-SPARK
have successfully launched the first
cohort to help Canadian digital health
start-ups grow their businesses and
bring innovative, high-value solutions to
healthcare organizations across the
country. Three companies in the
program—Coalese Health, Lime Health
and Virtual Hallway—signed
commercial teaming agreements to
leverage the Corolar Virtual Care
platform.
The Vaccine and Infectious
Disease Organization
(VIDO) engaged Calian to
manage COVID-19 vaccine
clinical trials.
18
19
Calian Annual Report 2022Calian Annual Report 2022 ADVANCED TECHNOLOGIES
HIGHLIGHTS
What We Do.
Space
Defence
Terrestrial
COMMUNICATION AND SPACE
EXPLORATION GROUND
SYSTEMS
SATELLITE
COMMUNICATION
PRODUCTS
SOFTWARE DEFINED
SOLUTIONS
AEROSPACE AND DEFENCE
ELECTRONICS
ENGINEERING AND
TECHNICAL SERVICES
WIRED AND TERRESTRIAL
WIRELESS PRODUCTS
GNSS ANTENNAS
AND RECEIVERS
ASSET
MANAGEMENT
AGRICULTURE
TECHNOLOGY
NUCLEAR AND
ENVIRONMENT
COMPOSITES DESIGNS
AND PRODUCTS
Profile of Advanced
Technologies
Offers internally developed products,
engineering services and solutions for
the space, defence and terrestrial
sectors. Capabilities are wide-ranging,
covering software development,
product development, custom
manufacturing, full lifecycle support,
studies, requirements analysis, project
management, multi-discipline
engineered system solutions and
training.
2022 Results
$150M
Revenues
29%
Gross margin
14%
$21M
EBITDA
$160M
Backlog
The Advanced Technologies (AT)
segment continued to increase backlog
through signing new work with existing
customers. Repeat business continues
to be the mainstay of the AT segment.
In addition, an increasing number of our
sub-segments had excellent
opportunities to acquire new customers
EBITDA margin
as a step function to growth. This
included the composites business’s
entry into defence and other
commercial applications to increase
their utilization (defence). Our GNSS
antenna business saw excellent growth
through customer acquisition in the
electronic vehicle and drone markets
(terrestrial). The Calian DecimatorTM
communications spectrum analysis
solution continued to be adopted by
new and existing customers as the
“standard” for satellite communications
Diversity and Resilience
monitoring. A strategy adopted by the
AT businesses was cross-collaboration
with other operating segments to
provide additional value to customers,
for example, composites and GNSS
With AT now organized into space,
defence and terrestrial businesses, we
saw diversity and resilience in all three
of these areas.
antennas for defence applications, and
Within the space business, our
custom technology development and
software defined solutions team
applications. We provide a line of GNSS
antennas that null interfering (jamming)
signals low to the horizon that are likely
from an adversarial source and favour
signals directly above, likely to be the
true GNSS signal. In addition, GNSS
solutions employ untethered dead
reckoning to assist applications to
composite designs for the agriculture
diversified customers, applications and
continue to navigate despite the loss of
technology market. Cross-segment
geographical locations. The new drive
signal. These capabilities are useful for
collaboration will continue to unlock
in the satellite communications market
a great number of market verticals,
new value for Calian.
is for orchestration of the space,
including electronic vehicles, defence
As we delivered the final parts of our
largest ever ground system to a North
American carrier, we saw a slow-down
in the timing between RFP and project
award for new ground system projects
due to a more difficult financing
environment for large capital projects.
Our investments in the last five years to
diversify our advanced technology
business into new adjacent sectors
was evident this year and will be key in
the coming years. Our growth into
custom software development, global
positioning antennas and
telecommunication products all bring
with them higher margin profiles and
lower unit prices.
Gross margins increased in FY22 from
25% to 29%, and EBITDA margins
increased by 1%.
gateway and user equipment to gain
and mining.
peak efficiency using advanced
software-defined satellite payloads. Our
subject expertise in this area, gathered
over decades of work with various
satellite payloads and gateway
configurations, allowed us to make an
early entrance into this market. As
such, we won development contracts
with global players, as well as regional
satellite operators as they invest in
growing their capabilities. These
customers saw our track record of
performance and our accumulated
knowledge as key assets they could
trust to deliver the solutions they need.
Our software defined solutions
business continues to grow at an
unprecedented rate, limited only by our
ability to acquire and train new talent.
At first glance, composites capabilities
might not seem well aligned with AT’s
technology focus, however, it is clear
that composites are now involved in as
many market verticals as our
electronics capability. When combined
with our electronics capabilities, their
ability to increase value grows.
Composites are a lightweight, but
extremely strong alternative to steel
and, as a result, can help many sectors
decrease their carbon footprint through
decreased transportation costs,
extended battery lifetime and fewer
manufacturing byproducts. This year
saw the price of composites materials
rise substantially due to the war in
Ukraine, making it more difficult to
compete against steel on a price point.
The state-of-the art navigation and
However, this was likely a short-term
timing antenna solutions continuously
challenge and the other benefits to
being evolved and improved by Calian
using composites outweigh the use of
not only provided excellent margins to
steel in many cases. In FY22, we
AT, but also provided a foundation for
increased our composites
resilient architectures for customer
manufacturing area by 30,000 square
20
21
Calian Annual Report 2022Calian Annual Report 2022 feet in order to meet the growing
demand for this capability. This creates
a complementary diversity to our core
engineering business.
Calian demonstrated its own
operational resilience as supply chain
shortages threatened revenues and
profitability throughout the year. In a
continuous struggle of parts availability,
our procurement groups relentlessly
pursued alternative sources while our
engineering groups worked to find
alternative components to meet our
production demands. While we faced
challenges, we tackled them creatively
and were largely successful. We
managed to produce a significant
amount of product to shore up
revenues and profits. In addition,
logistics continued to be a struggle.
Finding new delivery routes and
constantly searching for cost-effective
logistics hit new levels of effort during
this year.
In addition to the introduction of a new
low-cost grain monitoring solution,
Bin-Sense® Solo, customer field trials
opened a new market for Bin-Sense
autonomous vehicles and a reduction
demonstrate the use of Q and V radio
The strategies executed in FY22 by the
in the amount of herbicides used. Our
frequency bands in satellite
AT operating segment make it well
agriculture technologies help to secure
communication solutions. The race
positioned to gain traction in the space,
our world’s food supply by keeping it
continues with Calian developing a 4m
defence and terrestrial markets.
safe in storage. Our technologies like
low earth orbit (LEO) class antenna to
Fuel Lock® protect the assets of
demonstrate Q/V band
producers, ultimately helping to reduce
communications over a LEO satellite
Farming is a high-risk business.
production costs.
Calian is proud to provide a part of
NASA’s Space Geodesy Project’s
infrastructure. Including the award this
year of another 12m high-performance
antenna, Calian has provided a total of
three antennas to support their Geodesy
Project through the use of very long
baseline interferometry (VLBI). VLBI is
unique in its ability to define an inertial
reference frame and to measure the
Earth’s orientation in this frame. Changes
in the Earth’s orientation in inertial space
have two causes: the gravitational forces
communications network. Calian
played a part in a historic moment in
2022: the first time the European Space
Agency (ESA) successfully captured
Calian is a champion
for the advancement of
women in STEM.
views of the planet Mercury. As part of
As one of the technology
the ESA/JAXA BepiColombo mission,
pioneers at Calian, the Advanced
our 35m antennas transmitted
commands to the spacecraft as it
tracked a probe through space and
received images back to the ground
Technologies segment offers a
breadth and depth of STEM
roles not easily found in other
organizations. Helen Percival,
station. The black and white images,
systems engineering lead,
taken 1,000km from Mercury’s surface,
provides her in-depth knowledge
will help ESA better understand the
of satellite communication
“mysterious” planet.
When Blake Bergen of 3B Acres in Drake, SK, bought Bin-Sense, a Calian
Agriculture product, to monitor the grain bins at his family farm, he
suspected that it would be a wise purchase. “We knew if we had a train-
wreck, we’d buy a system so it wouldn’t happen again, so why not buy the
of the sun and moon and the
In addition, Calian became a founding
redistribution of total angular momentum
member of Space Canada, a new space
among the solid Earth, ocean and
industry group created to raise
atmosphere. VLBI makes a direct
awareness for Canada’s growing space
system before the train-wreck and then it pays for itself?” says Bergen. The
measurement of the Earth’s orientation in
sector. Through this industry association
Bergens purchased Bin-Sense Live to monitor their 30 grain bins.
It wasn’t long before the purchase paid off. While the family was on
products in the monitoring of harvested
vacation in Florida, Bergen got a notification on his phone that one of his
almonds.
Moving the World Forward
The use of lightweight composite
materials, development of image
processing modules for artificial
intelligence (AI) applications and high
precision GNSS antennas are helping to
create a cleaner, safer planet, paving
the way for electronic vehicles and
22
canola bins was heating up. “We decided to watch it for two or three days
and could see a constant climb of one to 1.5 degrees every day. We phoned
home and asked some friends to take a semi-load out of the bin. They took
it to the elevator, and we saved that bin of canola.”
Even though heat rose in the smallest of bins, the save justified the cost of
monitoring the entire yard. “I look at grain monitoring as a solid return on
investment,” says Bergen, estimating that Bin-Sense Live paid for itself
twofold in that one instance.
space from which geoscientists then
Calian intends to foster Canadian
study such phenomena as atmospheric
industry collaboration, and government
angular momentum, ocean tides and
support for Canada’s space industry as
currents, and the elastic response of the
well as help motivate Canada’s youth
solid Earth.
towards careers in STEM.
Calian is a global leader in designing,
Our nuclear business is helping the
developing, manufacturing and
world adopt the use of small nuclear
delivering ground-based solutions to
reactors in a clean and safe way. Calian
support space applications for
helps our customers select the
communications, earth observation
appropriate nuclear technologies and
and space exploration. Our
develop the processes to safely
development of Q/V band solutions
manage the nuclear waste.
resulted in Calian leading the race to
payload capacity management
to define innovative solutions to
meet our customer needs. “It
has been a really comfortable
place to be heard and I’ve been
given plenty of opportunities—
the same opportunities as all my
other peers,” says Percival.
Jordyn Rohel designs, tests and
integrates radio frequency
systems with satellite ground
stations. “I have not been
treated differently, or given
different work, as a result of
being a woman. I am proud to
say that Calian and our
customers are very inclusive in
this way,” says Rohel.
23
Calian Annual Report 2022Calian Annual Report 2022 LEARNING
HIGHLIGHTS
MILITARY TRANING AND SYNTHETIC
TRAINING SIMULATION ENVIRONMENTS
What We Do.
EMERGENCY MANAGEMENT
DIGITAL LEARNING SOLUTIONS
Profile of Learning
2022 Results
Provider of specialized training
solutions for the Canadian Armed
Forces and other primarily government
clients in the domestic market.
Internationally, the company is growing
its footprint in Europe servicing NATO
and NATO member countries with a
variety of learning services. Calian also
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
Canadian domestic markets.
$92M
Revenues
25%
Gross margin
$17M
EBITDA
18%
EBITDA margin
$328M
Backlog
The Learning segment concluded a
strong year with healthy revenue
growth, both organic and acquisitive.
Organic growth resulted from new and
existing customers, through current
long-term vehicles and a focus on
winning new customers. Growth in
Europe continued with NATO and other
defence-based agencies, where Calian
continued to win work based on its
brand recognition in the area. This was
significant for the Learning segment,
which did not have a footprint in Europe
three years ago, and sets the stage for
continued expansion in Europe and
beyond.
Technology
Calian acquired Canadian-based
SimFront. Calian and SimFront had a
15-year collaborative relationship within
the Department of National Defence.
During this 15-year period, the SimFront
Virtual Command and Control Interface
(VCCI) Tool Suite 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™ enabled Calian to provide
end-to-end military training and
simulation capabilities and pursue new
opportunities with customers seeking
integration and immersive training
support.
Cutting-edge technologies with artificial
intelligence elevated the company’s
capabilities and provided opportunities
to deliver a wide range of complete
solutions. The immersive technologies
acquired through SimFront boosted
Calian capabilities to explore real-world
learning and training scenarios in safe
and controlled environments for both
commercial and military training
applications.
Diversification
Calian continued to diversify within
military and public sector agencies in
Canada and Europe.
The Royal Canadian Air Force (RCAF)
chose Calian for eLearning services.
And, shortly after acquiring SimFront,
Calian won a contract with the Royal
Canadian Navy (RCN) to create a
high-fidelity 3D virtual fleet for four RCN
ships.
The Village of Telkwa, British
Columbia, wanted to support its
community and protect the
mental and physical health of
residents if faced with a major
disruptive event that could
result in community
evacuations.
Telkwa is exposed to several potential hazards, including wildland-urban
interface fires and flooding. Calian worked closely with the community to
develop a guiding document that would support effective and appropriate
decision-making in Telkwa’s emergency operations centre (EOC), which
would be responsible for making evacuation-related decisions. The
emergency plan conformed to provincial evacuation procedures and
included detailed flowcharts to help Telkwa officials make decisions during
E.U./U.K. ministries of defence selected
an emergency event and/or evacuation. The comprehensive plan delivers
Calian to develop scenario and exercise
order and efficiency in response to a disaster, allowing the leaders and
scripts for upskilling troops as part of
people of Telkwa to feel confident in their choices during an emergency
one of their core 2022-2023 defence
situation.
exercise programs. Ministries of
24
25
Calian Annual Report 2022Calian Annual Report 2022 defence, new defence customers, made
Assistance Force (ISAF), NATO Mission
including reservist units, regardless of
their decisions based on the Calian
Iraq and NATO Mission Georgia
location. Our company’s synthetic
solid track record of managing complex
deployments.
training requirements while ensuring
reduced time to competency.
On behalf of the Department of
National Defence, Canadian Defence
Within its emergency management
Academy (CDA)/Military Personnel
solutions offerings, Calian continues to
Generation Group (MPGG) renewed a
book key wins to perform needs
contract with Calian to support four
assessments for public safety training.
activity streams: administration,
training environment is a collective
training experience focused on mission-
critical decision-making in the face of
live and simulated data. When deployed
via Azure, any element of the synthetic
training environment—such as cloud
computing, virtual and augmented
reality, wargaming, data analytics,
after-action reviews, collective training
and individual engagement—are
accessible to geographically distributed
military personnel. Individual, collective
and command training supported by
the cloud enhances readiness and
decision-making for real-life situations.
training, instruction and e-learning
development. The administrative
processes involved in turning civilians
into military members are complex and
numerous. Canadian Forces Leadership
and Recruit School (CFLRS) must be
able to rely on a professional team of
highly competent administrative and
training support personnel to run
With tailwinds in the Learning segment,
smoothly. For more than 12 years, CDA
Calian anticipates continued organic
and MPGG have trusted Calian to
growth from new and existing
augment training support during their
customers in Canada and Europe.
current CAF personnel shortages:
onboarding new recruits efficiently,
staging realistic exercises, delivering
high-calibre training and adapting to
offer e-learning.
Moving the World Forward
Retention and Expansion
Joint Warfare Centre NATO 360 chose
Calian for collaborative production
environment development and delivery
support. Calian continued to play a
leading role in NATO exercise support
as a mission partner for the Joint
Warfare Centre (JWC). JWC, located in
Stavanger, Norway, is a hub for
collective training at both the
operational and strategic levels of
warfare and supports NATO readiness.
This contract represented an expansion
of the military training and exercise
support Calian provided to NATO. Our
solutions prepared NATO high
readiness forces at strategic,
operational and tactical levels. Over the
past 13 years, Calian supported the
As a Microsoft Gold Partner, Calian is
design and delivery of more than 70
trusted across the military ecosystem.
NATO exercises, with exercise planning,
Calian plans to deliver next-generation
computer-assisted technologies,
synthetic training in the Microsoft Azure
role-playing, mentoring and advising.
cloud environment. Significantly for
Calian played key roles in delivering
military customers, this will enable
pre-deployment exercise and training
cost-effective and time-efficient
events for NATO International Security
high-quality training for disparate units,
26
27
Calian Annual Report 2022Calian Annual Report 2022 KEY PERFORMANCE INDICATORS
KEY PERFORMANCE INDICATORS
Continued
Revenues
(in millions of $)
582
+18%
518
432
343
305
EBITDA1
& EDITDA Margin1
(in millions of $,
except margin)
66
EBITDA
EBITDA %
11.3%
52
10.0%
Net Profit
& Adjusted Net Profit1
(in millions of $)
Net Profit
Adjusted Net Profit
44
37
37
8.5%
27
25
8.3% 7.9%
24
19
18
Backlog and New
Contract Signings
(in millions of $)
Backlog
New Contract Signings
1,185 1,307
1,270 1,292
1,137
Operating Free Cash
Flow1 & Operating Free
Cash Flow Conversion
(in millions of $, except %)
OFCF
OFCF Conversion
47
28
76%
35
66%
72%
699
442
492
447
270
17
63%
13
50%
Investments
in Acquisitions
(in millions of $)
66
49
29
21
5
2018 2019 2020 2021 2022
2018 2019 2020 2021 2022
2018
2019
2020
2021
2022
2018
2019
2020
2021
2022
2018 2019 2020 2021 2022
2018 2019 2020 2021 2022
Revenues increased 12% to $582
EBITDA increased 27% from $52
Driven by higher EBITDA, adjusted net
In fiscal 2022, Calian signed
We generated $47 million of operating
During fiscal 2022, Calian pursued its
million in fiscal 2022 when compared
million in fiscal 2021 to $66 million in
profit increased 18% to $44 million, or
$699 million in new contracts to
free cash flow in fiscal 2022 compared
growth through acquisitions with the
to fiscal 2021. Revenue growth was
fiscal 2022, significantly outpacing top
$3.87 per diluted share, in fiscal 2022,
increase realizable backlog to $1.3
to $35 million last year. This represents
addition of SimFront to bolster its
driven by our entry into the U.S.
line growth. This growth was mainly
from $37 million, or $3.50 per diluted
billion which spans over 10 years in
an operating free cash flow conversion
learning capabilities and Computex to
IT market and the expansion of our
driven by higher margins from a better
share, in fiscal 2021.
length. Of this amount, $412 million is
rate from adjusted EBITDA of 72%.
expand its IT practice into the U.S.
learning technology portfolio.
business mix of market verticals and
the introduction of innovative products
with higher margins. As a result, the
EBITDA margin improved from 10.0%
in fiscal 2021 to 11.3% in fiscal 2022,
a historic record.
1 This is a non-GAAP measure. Please refer to the MD&A.
expected to be recognized in fiscal
2023, $208 million in fiscal 2024 and
the balance beyond fiscal 2024.
These acquisitions support the
company’s growth objective to
become a one-billion-dollar
global company.
28
Calian Annual Report 2022
29
Calian Annual Report 2022Calian Annual Report 2022 ESG
In 2021, Calian embarked on an
initiative to formalize our
environmental,
social and governance (ESG)
strategy. While Calian has always
had a strong commitment to
social responsibility, we
recognized the need to look
beyond corporate giving and
community engagement to
develop a more fulsome strategy
related to our socioeconomic and
environmental commitments as
well as to prepare for future
regulation and disclosure
requirements..
Defining our ESG Journey
Our inaugural ESG report
describes our journey, as we work
towards embedding ESG best
practices in our business. In 2022,
we focused on internal discovery
and conducted our initial scope 1,
2 and 3 emissions inventory. We
developed an ESG strategic
framework to help establish key
priorities, set targets and drive
value for our stakeholders.
Download
ESG report
30
Key milestones
(Calian fiscal year Oct 1 to Sept 30th)
1
Starting point
Calian mission
Where can Calian have an impact
in the world?
We help the world communicate,
innovate, learn and lead safe and
healthy lives—today and
tomorrow.
Developing our ESG Vision
Calian CARESTM–Collaboration to
Advance Resilience Excellence and
Sustainability, builds on our mission,
values, historical commitment to social
responsibility and key competencies. It
provides a framework and focus for our
activities and corporate communications
related to ESG.
2
Setting priorities
What is important to our
stakeholders?
Environmental: Responsible
consumption
Social: Innovative, impactful
collaboration to support a more
resilient world for all our stake-
holders by leveraging Calian
solutions and expertise
Governance: Ethical, transparent
tracking, reporting and eventual
disclosure based on industry best
practices
• Collaboration: Working hard and
working together for a common
purpose or benefit
• Advance: Moving the world forward in
a purposeful, innovative way
• Resilience: The ability to adapt in the
face of adversity by solving complex
problems that stand in the way of
better health, communications,
learning and security
• Excellence: A quality, which is
unusually good, surpassing ordinary
standards
• Sustainability: Meeting Calian needs
without compromising the ability of
future generations to meet their needs
by protecting social, economic and
natural resources
3
We are
here.
Sharing the
Calian ESG story
What does the world need to know?
4
ESG is more than a phrase—it is
embedding sustainability in
everything we do.
• Board-approved ESG strategic
framework
• ESG vision: Calian CARES
• Alignment to UN Sustainable
Development Goals (SDGs)
Defining
key metrics
How will we measure our
success?
• Set baselines
• Define key metrics
• Establish long-term goals
5
Track progress
Where are we having
an impact?
• Develop plans to achieve goals
• Improved emissions
• IFRS/ISSB standards to guide future
disclosure
• Embed ESG in business and
strategic planning processes
• Innovative solutions
• Support to advance key social
themes and target communities
• Ongoing reporting to meet
constituent needs
• Emissions inventory initiated
• Social themes: DEI, Indigenous,
innovation (advancing STEM),
community resilience
• Internal communications launched
• ESG launched on calian.com
• Year end 2022: inaugural ESG Report
Determining
our ESG Approach
As Calian continues to grow, we
recognize a strategic approach to ESG
GOAL 3
GOAL 9
Good health & well-being
Industry, innovation & infrastructure
Ensure healthy lives and promote
Build resilient infrastructure, promote
well-being for all at all ages
inclusive and sustainable
industrialization and foster innovation
is paramount to our success, and to
GOAL 4
meeting stakeholder expectations. Over
Quality education
GOAL 11
the past 18 months, we performed
Ensure inclusive and equitable
Sustainable cities & communities
internal discovery, to understand our
quality education and promote lifelong
Make cities and human settlements
ESG strengths, challenges and
business opportunities in this space.
learning opportunities for all
inclusive, safe, resilient and sustainable
In looking at best practices, the United
Gender equality
Responsible consumption &
Nations Sustainable Development
Achieve gender equality and empower
production
Goals (SDGs) provide a blueprint to
all women and girls
Ensure sustainable consumption and
GOAL 5
GOAL 12
achieving a more sustainable future for
all. Calian has aligned our ESG efforts
GOAL 8
production patterns
to the following SDGs:
Decent work & economic growth
GOAL 13
Promote sustained, inclusive and
Climate action
sustainable economic growth, full and
Take urgent action to combat climate
productive employment and decent
change and its impacts
work for all
31
Calian Annual Report 2022Calian Annual Report 2022 LOOKING FORWARD
SHARE INFORMATION
For the years ended September 30
As Calian celebrates its 40th year in business, it is important to reflect on the journey and the challenges we overcame along the
way. While no one could have predicted the onset of a global health crisis in 2020, companies that were able to adapt and
leverage their strengths to respond to the needs created by the crisis tended to fare better.
Calian demonstrated exceptional resilience throughout the pandemic, stepping up to provide solutions to some of the world’s
most difficult challenges, especially in healthcare, training and emergency management. This is not a one-time thing; resilience
is embedded in our DNA and speaks to 40 years of success. Resilience will underpin our growth as we move forward.
Calian sustained our growth momentum in FY22 while remaining profitable. We accomplished this by making strategic
2018
2019
2020
2021
2022
Trading data on common shares
52-week high ($)
52-week low ($)
Closing ($)
Total volume
34.95
28.25
30.00
36.00
25.76
35.12
68.50
31.29
67.25
71.91
53.27
61.00
72.11
51.99
55.93
1,471,200
1,442,900
3,225,200
4,574,900
4,929,800
investments in acquisitions and expanding into new markets and geographies. Stability through diversity and growth through
Average daily volume
5,885
5,749
12,798
18,227
19,641
innovation remained key drivers of this success.
At Calian, we help the world communicate, innovate, learn and lead safe and healthy lives—today and tomorrow. We are proud
of the impact we have on society and our customers while fulfilling this mission. Our ESG framework and vision—Calian
CARES—demonstrates our commitment to moving the world forward in a responsible, sustainable way. We will continue to
embed ESG practices in the coming years to support all Calian stakeholders and balance the triple bottom line of people, planet
and profit.
The Calian leadership team is committed to continuing the momentum of the past years. This includes advancing the pursuit
of our four pillars of growth in a sustainable way. We are confident and excited about the future of Calian and the impact our
solutions and engagements deliver for our fellow global citizens and stakeholders as we continue our mission to move the
world forward.
Corporate Leadership Team
Other statistics
Dividends on common shares
(in millions $)
Dividends per share ($)
Dividend yield (%)
Shares outstanding (000’s)
Weighted average shares
outstanding—basic (000’s)
Weighted average shares
outstanding—diluted (000’s)
Market capitalization (in millions $)
Closing Share Price Volume
8.7
1.12
8.8
1.12
9.9
1.12
3.7%
3.2%
1.7%
11.8
1.12
1.8%
12.8
1.12
2.0%
7,765
7,929
9,760
11,286
11,607
7,723
7,843
9,045
10,600
11,344
7,767
233
7,863
278
9,104
656
10,640
688
11,383
649
Kevin Ford,
CEO
Patrick Houston,
CFO and Corporate
Secretary
Sue Ivay,
CHRO
Michael Muldner,
Michele Bedford,
CIO
CCO
Seann Hamer,
CTO
Sacha Gera,
President, IT and
Cyber Solutions
Gordon McDonald,
President, Health
Patrick Thera,
President,
Advanced
Technologies
Don Whitty,
President,
Learning
32
33
Calian Annual Report 2022Calian Annual Report 2022
MANAGEMENT’S DISCUSSION
AND ANALYSIS
FOR THE THREE AND TWELVE MONTHS ENDED SEPTEMBER 30, 2022
The following Management’s Discussion and Analysis (MD&A) is dated November 24, 2022 and should be read in conjunction with
the audited annual consolidated financial statements. Calian aligns its accounting policies in accordance with IFRS. As in the
audited annual 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.
IFRS and non-GAAP Measures
This MD&A contains both IFRS and non-GAAP measures. Non-GAAP measures are defined and reconciled to the most comparable
IFRS measure.
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 include 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:
• Customer demand for the Company’s services.
• The Company’s ability to maintain and enhance customer relationships.
• Market conditions.
• Levels of government spending.
• The Company’s ability to bring to market products and services.
• The Company’s ability to execute on its acquisition program including successful integration of previously acquired businesses.
• The Company’s ability to deliver to customers throughout the COVID-19 pandemic, and any government regulations limiting
business activities.
• The Company’s ability to deliver to customers throughout the Russia/Ukraine conflict, and any government 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,
2022, 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.
34
34
Calian Annual Report 2022
35
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 Coronavirus
Four-Piston Engine. One Company.
Today, Calian is a diverse products and services company providing innovative healthcare, communications, learning and
cybersecurity solutions. The Company is headquartered in Ottawa, Ontario, and also has locations in the U.S., Germany, Norway, and
the U.K. The Company is uniquely positioned to solve the significant and complex problems its customers face so that these
companies are better able to succeed and deliver on their objectives.
Mission: Calian helps the world communicate, innovate, learn and lead safe and healthy lives—today and tomorrow.
Values: The principles of customer-first commitment, teamwork, integrity and innovation guide the decisions made by Calian.
Culture: Every Calian employee brings their “A” game for every client, works hard and works together using collaboration to powerful
advantage. Calian attracts and challenges great people and great partners.
Four Pillars of Growth
While the four operating segments are diverse, each is anchored by the Company’s common four-pillar framework for growth.
• Customer Retention: Through continued delivery excellence, each segment maintains relationships with their valued customer
bases, thus earning more revenue through expanded scopes of existing contracts.
• Customer Diversification: Through continued diversification, each segment increases its percentage of revenue derived from
winning non-government contracts, from commercial activity in global markets, and from increasing product offerings—both
acquisitive and organic.
• Innovation: Through continued investment in acquisitive and organic growth, each segment increases its differentiation thus
improving gross margins.
• Continuous Improvement: Through continued leverage of innovation, the Company streamlines processes and scales its back-
office support capability.
The outbreak of the coronavirus, or COVID-19, was declared a pandemic by the World Health Organization on March 11, 2020. The
virus spread across the globe and impacted worldwide economic activity. The public health pandemic may continue to pose the risk
that the Company and its employees, contractors, suppliers and other partners may be prevented from conducting business
activities. This can especially be the case where government authorities mandate shutdowns. Certain countries may continue to 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 a variant and the actions to contain its impact. The
Company and its employees transitioned to working remotely where possible and customer delivery was not materially impacted.
The Company remains reliant on this alternative work arrangement to minimize the impact of outbreak on its financial results and
will continue to monitor the appropriate time to adjust our work and delivery model. The Company is also exposed to effects from
supply chain disruptions as a result of COVID-19. Inability to obtain components in a timely manner can impact the timing of our
delivery to our customers.
Russia/Ukraine Conflict
On February 24, 2022, Russia attacked Ukraine. Impact on worldwide economic activity may occur. It is possible that the Company
may experience, among other things, supply chain disruptions, shipping delays, labour shortages, and inflationary pricing pressures
adversely affecting the business as a result of the conflict. These risks may be further exacerbated by the COVID-19 market impacts
discussed above. The extent to which the conflict impacts the Company’s results will depend on future developments that are
uncertain and cannot be predicted. A donation made to support Ukrainians demonstrates our social responsibility principles. In Q2,
Calian donated $63,000 to the Canadian Red Cross Ukrainian Humanitarian Crisis Appeal.
Seasonality
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 quarters 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. 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.
Executive Overview
Calian is a diversified and growing company that operates in Canada, the U.S. and Europe. Its growth strategy is achieved
organically and through disciplined capital deployment on M&A. Calian has acquired 13 companies in the past four years.
Four-Piston Engine
The Company’s four-segment operating model—referred to as its four-piston engine of diversity—is pivotal to its transformational
success. The four operating segments include:
• Advanced Technologies (AT)
• Health
• IT and Cyber Solutions (ITCS)
• Learning
This model provides diversity and stability. The model enables Calian to capitalize on unique opportunities during upturns in some
markets while weathering downturns in others.
36
37
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 Q4 Consolidated Dashboard
The four segments operate as a single company. Key performance indicators (KPIs) for the Company are highlighted in this
dashboard.
Q4
Q4
TRAILING
TWELVE MONTHS
Q4 BALANCE
SHEET/OTHER
DIVERSITY
PRIORITES
Selected Quarterly Financial Data
(Canadian dollars in millions, except per share data)
Q4/22
Q3/22
Q2/22
Q1/22
Q4/21
Q3/21
Q2/21
Q1/21
Revenues
Advanced Technologies
$
30.5 $
39.2 $
39.6 $
41.1 $
42.6 $
43.8 $
42.8 $
37.3
$161M
Revenue
31%
Gross margin
12%
EBITDA Margin
$161M
New contract signings
$582M
Revenues
(+12% Growth)
$169M
Gross profit
(+24% Growth)
$699M
New contract signings
(+56% Growth)
$1.3B
Backlog
$115M
Net liquidity
(Cash less debt plus
unused debt capacity)
-11%/-6%
Q4/TTM
Organic growth
36%/19%
Q4/TTM
Acquisition growth
SEGMENTED BY
GEOGRAPHY
International 29%
Canada 71%
SEGMENTED BY
CUSTOMER
Commercial 53%
Government 47%
Q4 and Annual Highlights
This quarter continues the pattern of all-time high results with revenues of $161 million, which represents a 26% increase year-over-
year, and a new record high for the Company in a single quarter. For the 2022 fiscal year, the Company had revenues of $582 million,
a 12% increase from the previous year and a new record high. This represents the Company’s fifth consecutive year of double-digit
revenue growth.
Gross margin performance this quarter was also at an
all-time high, surpassing 31% for the first time in
Company history. Gross margin on a year-to-date
basis was 29%, which is an increase of five points
from our consolidated margin for fiscal 2021. Our
multi-pronged effort to diversify into new markets and
investments and to introduce new products and
differentiated services has allowed us to grow our
gross margins.
Our ability to convert revenue and adjusted EBITDA
performance into operationg free cash flow continued
to be strong. Operating free cash flow in the fourth
quarter of 2022 was $14.1 million, which resulted in
operating free cash flow of $47.2 million for the 2022
fiscal year. This represents an increase of 36% from
the prior year, and a 46% increase from two years ago.
Gross Profit & Margin (in millions of $, except margin)
Gross Profit
Gross Margin
89
20.6%
2020
169
29.1%
127
24.4%
2021
2022
Operating Free Cash Flow (OFCF)
47
(in millions of $)
32
35
2020
2021
2022
38
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
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
39.4
21.8
68.8
39.7
22.3
48.8
45.4
24.8
32.3
42.4
22.8
23.2
44.1
17.6
23.2
50.8
18.1
23.4
52.9
20.9
21.9
47.1
18.0
13.8
$
160.5 $
150.0 $
142.1 $
129.5 $
127.5 $
136.1 $
138.5 $
116.2
110.4
104.5
102.2
50.1
13.1
17.0
1.0
45.5
9.6
18.0
1.8
39.9
5.3
16.6
1.2
95.8
33.7
4.5
13.8
1.4
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
19.0
16.1
16.8
14.0
12.4
14.9
14.1
10.4
2.4
1.0
3.5
3.3
2.3
6.5
0.1
-
6.4
5.4
2.3
1.0
3.4
-
0.7
8.7
0.1
0.1
8.5
1.8
1.4
0.9
10.1
0.2
1.6
2.6
0.1
0.1
2.4
1.1
1.2
0.8
3.6
0.7
1.0
6.7
0.1
0.1
6.5
2.2
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
1.0
0.7
2.1
1.9
0.4
4.3
0.1
-
4.2
1.7
2.5
Net profit
$
1.0 $
6.7 $
1.3 $
4.3 $
0.9 $
2.1 $
5.5 $
Weighted average shares
outstanding - Basic
Weighted average shares
outstanding - Diluted
Net profit per share
Basic
Diluted
Adjusted EBITDA per share
Basic
Diluted
$
$
$
$
11.4M
11.3M
11.3M
11.3M
11.3M
11.2M
10.1M
9.8M
11.5M
11.4M
11.4M
11.4M
11.3M
11.3M
10.2M
9.9M
0.10 $
0.60 $
0.11 $
0.38 $
0.10 $
0.18 $
0.55 $
0.10 $
0.60 $
0.11 $
0.38 $
0.10 $
0.18 $
0.54 $
1.67 $
1.48 $
1.24 $
1.24 $
1.10 $
1.33 $
1.40 $
1.66 $
1.47 $
1.23 $
1.23 $
1.09 $
1.32 $
1.39 $
0.25
0.25
1.06
1.05
39
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 Fourth Quarter Financial Summary
Consolidated Statements of Cash Flows
This fourth quarter unaudited interim condensed consolidated financial summary should be read in conjunction with the annual
For the years ended September 30, 2022 and 2021 (Canadian dollars in thousands):
financial statements along with accompanying notes thereto.
Consolidated Statements of Net Profit
For the years ended September 30, 2022 and 2021 (Canadian dollars in thousands, except per share data):
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
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
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
40
$
$
$
$
30,517
39,470
21,799
68,764
160,550
110,400
50,150
13,064
17,004
1,015
19,067
2,308
950
3,484
3,314
2,289
6,722
143
7
6,572
5,650
(273)
5,377
1,195
0.10
0.10
$
$
$
$
$
42,728
44,167
17,561
23,183
127,639
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
$
150,398
167,141
91,668
172,965
582,172
412,946
169,226
32,514
65,408
5,372
65,932
6,974
3,629
20,555
4,314
5,555
24,905
451
295
24,159
14,307
(3,752)
10,555
1,093
$
13,604
$
166,591
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
CASH FLOWS GENERATED FROM OPERATING
ACTIVITIES
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
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
Business acquisitions
Capitalized research and development
Equipment and application software
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
$
1,195
$
1,093
$
13,604
$
11,155
7
2,289
143
5,377
125
571
6,742
3,314
19,763
(41,755)
13,785
(10,443)
681
20,962
403
3,396
(150)
(3,258)
(12)
571
(3,249)
-
(929)
(3,607)
(2,928)
(2)
(2,240)
(5,170)
63
3,556
107
1,431
45
428
5,267
906
12,896
(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)
295
5,555
451
10,555
518
1,927
31,158
4,314
68,377
(28,822)
15,444
(20,137)
(4,340)
(15,142)
11,333
56,997
(747)
(13,109)
43,141
2,705
(12,765)
7,500
(3,655)
(6,215)
(65,566)
(177)
(7,148)
(72,891)
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)
0.10
0.10
$
$
1.19
1.19
$
$
1.08
1.07
NET CASH (OUTFLOW) INFLOW
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
$
(8,789)
$
(22,561)
$
(35,965)
$
54,376
51,435
56,050
78,611
42,646
$
78,611
$
42,646
$
24,235
78,611
41
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022
The diluted weighted average number of shares has been calculated as follows:
Segmented information is as follows for three months ended September 30, 2022 (Canadian dollars in thousands):
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
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
11,399,172
11,271,536
11,343,615
10,599,693
72,928
75,333
39,725
40,735
11,472,100
11,346,869
11,383,340
10,640,428
The following table presents the revenue of the Company for the year ended September 30, 2022 and 2021 (Canadian dollars in
thousands):
Product revenue
Advanced Technologies
Health
Learning
ITCS
Total product revenue
Service revenue
Advanced Technologies
Health
Learning
ITCS
Total service revenue
Total revenue
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
$
$
$
$
$
16,021
$
29,731
$
93,038
$
5
1,581
37,311
147
-
3,391
5
3,670
62,542
54,718
$
33,269
$
159,255
$
14,496
$
12,997
$
57,360
$
39,465
20,218
31,653
105,832
160,550
$
$
44,020
17,561
19,792
94,370
127,639
$
$
167,136
87,998
110,423
422,917
582,172
$
$
113,878
4,658
-
13,088
131,624
52,713
190,278
74,622
69,167
386,780
518,404
Revenue
Cost of revenues
Gross profit
Gross profit %
Selling and marketing
General and administration
Research and development
Profit before under noted
items
Profit before under noted
items %
Depreciation of equipment,
application software and R&D
Depreciation of right of use
asset
Amortization of acquired
intangibles
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
Advanced
Technologies
Health
Learning
ITCS
Shared
Services
Total
$
30,517 $
39,470
$
21,799
$
68,764 $
- $
160,550
20,341
10,176
29,440
10,030
16,932
4,867
43,687
25,077
33 %
25 %
22 %
36 %
2,764
2,162
734
749
2,823
101
457
1,421
-
8,293
4,211
180
-
-
N/A
801
6,387
-
110,400
50,150
31 %
13,064
17,004
1,015
$
4,516 $
6,357
$
2,989
$
12,393 $
(7,188) $
19,067
15 %
16 %
14 %
18 %
N/A
12 %
2,308
950
3,484
3,314
2,289
6,722
143
7
6,572
5,650
(273)
5,377
1,195
$
42
43
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022
Segmented information is as follows for three months ended September 30, 2021 (Canadian dollars in thousands):
Calian Consolidated Results
Revenue
Cost of revenues
Gross profit
Gross profit %
Selling and marketing
General and administration
Research and development
Profit before under noted
items
Profit before under noted
items %
Depreciation of equipment,
application software and R&D
Depreciation of right of use
asset
Amortization of acquired
intangibles
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
Advanced
Technologies
Health
Learning
ITCS
Shared
Services
Total
$
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 %
1,975
2,519
1,243
790
2,919
115
181
1,043
-
653
1,368
649
-
-
N/A
852
6,374
-
94,535
33,104
26 %
4,451
14,223
2,007
$
5,542 $
7,273
$
2,624
$
4,210 $
(7,226) $
12,423
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
$
The Company continued its double-digit growth in the current year with consolidated revenues increasing by 12% when compared
to the same period of the prior year. This comes even with strong headwinds faced in both Advanced Technologies and Health. This
overall growth can be attributed to the increases in revenue that the Company achieved in both its ITCS and Learning segments,
with growth of 110% and 23%, respectively. Not only is the Company growing its revenue base by delivering on its customer
retention and customer diversification pillars, but through innovation and continuous improvement, the Company has been able to
grow its gross margin to record amounts at 29% for the year ended September 30, 2022, up from 24% for the same period of the
prior year.
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Revenues
Gross profit
Selling and marketing
General and administration
Research and development
$
160,550
$
127,639
$
582,172
$
50,150
13,064
17,004
1,015
33,104
4,451
14,223
2,007
169,226
32,514
65,408
5,372
Profit before under noted items
$
19,067
$
12,423
$
65,932
$
518,404
126,737
16,334
53,454
5,020
51,929
Revenues
Consolidated revenues grew 26% in the three-month period, and 12% in the 12-month period ended September 30, 2022, when
compared to the same periods in the previous year. This increase in revenue can be largely attributed to the additional revenues
from acquired entities. Acquisitive growth was 36% for the three-month period and 19% for the 12-month period ended September
30, 2022, when compared to the same periods in the prior year. Calian measures growth through acquisition on a trailing 12-month
basis; once the acquisition has been included in our results for 12 months, their contribution is included in the organic growth
metric.
IT and Cyber Solutions saw an unprecedented 197% growth for the three-month, and a 110% growth for the year ended September
30, 2022, when compared to the same periods of the previous year. This growth was the result of its acquisition of Computex in
March of 2022 along with continued strong performance of its overall cyber practice.
Learning showed strong revenue growth of 24% for the three-month, and 23% for the year ended September 30, 2022, when
compared to the same periods of the previous year. This growth came from the acquisition of Simfront which brought new
technologies to our segment to supplement the strong base of specialized learning services we deliver in North America and
Europe.
Advanced Technologies experienced a revenue decline of 29% for the three-month period ended September 30, 2022, and a 10%
decline for the year ended September 30, 2022, when compared to the same periods of the previous year. Supply chain issues have
resulted in parts delays which have restricted our ability to deliver our products. In addition, delays in the award of new ground
system projects had an impact on revenue.
Health revenue decreased by 11% for the three-month period, and decreased by 14% for the year ended September 30, 2022, when
compared to the same periods of the previous year, which is primarily related to business the Company won to support various
Canadian government agencies’ responses to COVID-19, or increased demand on existing contracts with customers that were
directly related to COVID-19. Those new engagements have reduced significantly as the response to the pandemic has evolved, and
our existing vehicles have reduced to more normal run rates.
44
45
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 Below is a discussion of the performance of the four operating segments for the fourth quarter, including:
Advanced
Technologies
Health
Learning
IT & Cyber
Revenue
Gross margin
Organic/acquisitive
New contract signings
Backlog
$
$
$
$
30,517 ↓29% $
39,470 ↓11%
10,176
-31% / Nil
$60,102
159,7625
$
$
$
10,030
-11% / Nil
35,240
707,084
$
$
$
$
21,799 +24%
4,867
8% / 16%
9,755
328,330
$
$
$
$
68,764
+197%
25,077
12% / 185%
55,682
96,515
*Comparisons in the above table are made to the three month-period ended September 30, 2021
Gross Margin %
31.0%
29.0%
27.0%
25.0%
23.0%
21.0%
19.0%
17.0%
15.0%
29.1%
24.4%
21.8%
20.6%
19.6%
FY2018
FY2019
FY2020
FY2021
FY2022
Gross Profit
As detailed below in each segment, performance and gross margin by segment varies from 22% to 36% and the business mix, in
turn, affects the consolidated gross margin. Consolidated gross margin percentage for the Company’s fourth quarter was 31%, and
29% for the 12 months ended September 30, 2022, which represents yet another record quarter and year for the Company. This is
due to several factors, including higher margins derived from products and services which were acquired through the Company’s
M&A agenda, organic revenues with a focus on market verticals where margins are higher, along with sustained focus on innovation
to introduce products which derive higher margins. Gross margin percentage has increased by nearly 10% in the last 5 fiscal years.
This has been achieved through several initiatives. These include expansion into new markets and new geographies, expansion into
more commecial customers, investment in our own products and strategic M&A investments.
Operating Expenses
Selling and marketing costs increased $8,613 for the three-month period, and $16,180 for the 12-month period ended September 30,
2022, when 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 with incentives on selling activities, in addition to continued spend on business
development activities as government-imposed restrictions in response to COVID-19 were eased for conferences and travel.
General and administration costs increased by 20% for the three-month, and 22% for the 12-month periods ended September 30,
2022, when compared to the same periods of the previous year. The increase is the result of further investments within the four
operating segments to enable strong project delivery, additional costs incurred through recent acquisitions, and enhancing
capabilities in human resources and information technology. Information technology investments are critical for the company’s
sustained growth agenda.
Research and development costs decreased by $992 in the three-month, and increased by $352 in the 12-month periods ended
September 30, 2022, when compared to the same periods in the prior year. The reduction in research and development in the
three-month period ended September 30, 2022 is primarily due to timing of development projects ending, and new project starts
being delayed.
46
47
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 ADVANCED TECHNOLOGIES
The Advanced Technologies segment operates in three distinct market verticals. It uses its deep experience and skills in software
and development, radio frequency (RF) engineering, and hardware development to help customers across these market verticals.
What We Do.
Space
Defence
Terrestrial
COMMUNICATION AND SPACE
EXPLORATION GROUND
SYSTEMS
SATELLITE
COMMUNICATION
PRODUCTS
SOFTWARE DEFINED
SOLUTIONS
AEROSPACE AND DEFENCE
ELECTRONICS
ENGINEERING AND
TECHNICAL SERVICES
WIRED AND TERRESTRIAL
WIRELESS PRODUCTS
GNSS ANTENNAS
AND RECEIVERS
ASSET
MANAGEMENT
AGRICULTURE
TECHNOLOGY
NUCLEAR AND
ENVIRONMENT
COMPOSITES DESIGNS
AND PRODUCTS
For Whom.
INMARSAT
SiriusXM
Canada Center for Mapping and Earth Observation (CCMEO)
NASA Goddard Space Flight Center
ORBCOMM Inc.
MDA
Canadian Space Agency
European Space Agency
Q4 Snapshot.
-29%
-19%
$160M
$31M Revenue*
$4.5M EBITDA*
Backlog
$60M
New Contract
Signings
4
Aquisitions
Since 2018
* Compared to Q4 FY21
48
Space
Defence
Terrestrial
Calian has been a global leader in the
provision of sophisticated ground-
based solutions to the satellite industry
for over 50 years. The Company’s
solutions include sophisticated ground
systems, services and products
supporting space exploration, satellite
communications, broadcast solutions,
earth observation and defence.
Calian designs and manufactures
aerospace and defence electronics
including vetronics, subsystem
assemblies, circuitry and cable
harnesses built to meet military
qualifications and to perform in the
harshest of environments.
The Company’s terrestrial segment
provides solutions oriented to a variety
of markets including cable networks
and wireless, precision GNSS and
timing antennas and receivers, asset
management solutions, producer to
consumer agriculture technology,
along with environment and nuclear
consulting.
Q4 and Full Fiscal Year Highlights
• Signed $185 million in new contracts in FY22, including $160 million with existing customers.
• Renewed contract with SaskPower for technical and engineering services to support planning for small modular reactors (SMRs)
for an additional year.
• Won new business, including over $5 million worth of armoured vehicle cable and harness manufacturing business; additional
antenna systems work from NASA, a long-standing customer; as well as a contract to develop a multi-camera high speed image
processing module for drone applications worth $2 million.
• Became a founding member of the new space industry group “Space Canada.” The national group will raise awareness for
Canada’s growing space sector.
• Played a role in a historic moment–the first time the European Space Agency (ESA) was able to successfully capture views of the
planet Mercury. As part of the ESA/JAXA BepiColombo mission, our 35m antennas transmitted commands to the spacecraft as it
tracked a probe through space and received images back to the ground station. These black-and-white images, taken 1,000 km
from Mercury’s surface, will help ESA better understand the “mysterious” planet.
• Launched several products including Bin-Sense® Solo, providing an affordable entry-level remote monitoring solution for small- to
medium-sized grain bins; a new antenna receiver solution in partnership with u-blox which enables solution providers to obtain
unprecedent precise location accuracy on a robust and affordable platform; as well as Decimator D4 product which was a huge
success leading to record Decimator sales in 2022.
• Expanded composite capabilities to other aperture-size antenna reflectors and building large composite material structures for the
military.
49
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 Financial Performance
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Revenues
Gross profit
Selling and marketing
General and administration
Research and development
$
30,517
$
42,728
$
150,398
$
10,176
2,764
2,162
734
11,279
1,975
2,519
1,243
43,335
9,224
9,211
4,243
Profit before under noted items
$
4,516
$
5,542
$
20,657
$
166,591
41,576
7,496
9,683
3,542
20,855
Advanced Technologies’ revenues decreased by 29% for the three-month period and decreased by 10% in the 12-month period
ended September 30, 2022, when compared to the same periods of the previous year. The revenue decrease in the three-month
period is attributable primarily to a large-scale project in the prior year scaling down this year and not being replaced as rapidly in our
Space division, along with a decrease in volume of manufactured product sales revenues due to parts shortages. This is partially
offset by the continued growth in our GNSS product business where we have been successful in managing through supply chain
challenges.
Gross margin percentage increased from 26% to 33% for the three-month period, and from 25% to 29% for the 12-month period
ended September 30, 2022, when compared to the same periods of the prior year. This change is primarily due to the revenue mix
being impacted and a greater proportion of revenue attributable from higher-margin product sales.
Sales and marketing expenses increased by $789 for the three-month period and decreased by $1,728 for the 12-month period
ended September 30, 2022, when compared to the same periods in the prior year. The overall increase is due to a higher volume of
tradeshows and on-site customer travel as travel restrictions have eased.
General and administration expenses decreased by 14% in the three-month period and 5% in the 12-month period ended September
30, 2022, which is a direct result of cost management within the segment to maintain profitability along with strategically utilizing
staff on either research projects, or ones that are ongoing for customer deployment.
Research and development expenses have decreased by 41% in the three-month period ended, and have increased by 20% in the
year ended September 30, 2022, when compared to the same periods of the prior year. The decrease in the three-month period is a
result of more vacation usage by unutilized engineering staff, while the increase in the year-to-date period is a result of targeted
investment on new technologies for the segment.
HEALTH
PHARMACEUTICAL SOLUTIONS
What We Do.
HEALTH SOLUTIONS
AND SERVICES
DIGITAL HEALTH TECHNOLOGIES
For Whom.
Vaccine and Infectious Disease Organization
Canada Border Services Agency
(VIDO), part of the University of Saskatchewan
Canadian armed forces
Q4 Snapshot.
-11%
-13%
$707M
$39M Revenue*
$6.4M EBITDA*
Backlog
$35M
New Contract
Signings
3
Aquisitions
Since 2018
* Compared to Q4 FY21
50
51
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 Calian delivers healthcare and digital health solutions engineered to improve access to high-quality care. The company’s innovations
increase efficiencies, protect critical systems and enable new pathways to better healthcare on a global scale.
Financial Performance
Digital Health Technologies
Health Solutions & Services
Pharmaceutical
• Health Enterprise Resource Planning
• Clinical Services
• Contract Research Outsourcing
(ERP) Platform
• Solutions Cross-Sold from ITCS
• Virtual Care
• Care Coordination
• Health Data Integration and
Interoperability
• Health Cloud and Application
Services
• Nursing Services
• Patient Support Programs
• Psychological Services
• Functional Service Provider
• Patient Support Programs
• Clinical Services
• Medical Property Management
Q4 and Full Fiscal Year Highlights
• Debuted Calian Nexi™ digital health platform in the US Homecare market in September at the 2022 Home Care Association of
America Conference.
• Launched the Syantra DX Patient Support Program & Real-World Evidence Study to increase breast cancer awareness and
promote early detection in Canada. The three-year contract, valued at $5M, leverages Syantra DX | Breast Cancer screening test to
collect real-world outcomes, Calian Nexi for patient support automation, the Calian nursing network for mobile testing and clinical
research services.
• Signed $154 million in new contracts in FY22, including $91 million with existing customers.
• Launched the first cohort of the Calian L-SPARK MedTech Accelerator to help Canadian digital health startups grow their
businesses and bring innovative, high-value solutions to healthcare organization across the country.
• Extended our relationship with the Department of National Defence & Veteran’s Affairs Canada through the Health Care Provider
Requirements contract which speaks to our customer retention and high value of service.
• Became a strategic partner for Microsoft Life365. This is a complementary partnership to our Corolar Virtual Care™ and data
interoperability platform that makes digital transformation easier by eliminating the need to overhaul IT infrastructures. The
strength of this partnership will provide healthcare institutions with the ability to enhance solutions and services to clinicians and
patients, thus improving the overall virtual care experience.
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Revenues
Gross profit
Selling and marketing
General and administration
Research and development
$
39,470
$
44,167
$
167,141
$
10,030
749
2,823
101
11,097
790
2,919
115
41,551
2,479
10,341
397
Profit before under noted items
$
6,357
$
7,273
$
28,334
$
194,936
47,843
2,636
9,848
573
34,786
Revenues decreased 11% for the three-month period and 14% for the 12-month period ended September 30, 2022, when compared
to the same periods of the previous year. In fiscal 2021, the Company saw significant demand for both new and existing contracts
relating to COVID-19 response. Demand on existing contracts has since ramped down to more normalized levels, and revenue from
new programs related specifically to COVID-19-related support services is attributable to appromiately 6% of the decline in overall
revenues. In addition to the decline in COVID-19 business, the Company has seen a temporary slowdown in demand in patient
support programs as new contracts are being onboarded and resources are being shifted to the new programs.
Gross margin percentage remained at 25% for the three- and 12-month periods ended September 30, 2022, when compared to the
same periods of the prior year.
General and administration expenses increased by $493 for the 12-month period ended September 30, 2022, when compared to the
same period of the prior year, due to increases in fixed costs that were brought on to support new contracts won in the past 12
months.
52
53
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022
LEARNING
What We Do.
For Whom.
Military, all levels of government, and commercial clients leverage the Company’s expertise in military training and simulation
solutions, learning and emergency management.
Military Training & Synthetic
Training Simulation Environments
Digital Learning Solutions
Emergency Management
• Exercise Design, Development, and
• Learning Management Services
• Risk Assessments
Delivery
• Military Occupational Trades and
Leadership Training
• High-Readiness Training
• Competency Development
• Curriculum Development
• Business Continuity Planning
• Digital Delivery
• Crisis Communications Planning
• Immersive Training Technologies
(AR/VR/MR/XR)
• Training and Exercise Design,
Development, and Delivery
• After-Action Reviews
MILITARY TRANING AND SYNTHETIC
TRAINING SIMULATION ENVIRONMENTS
EMERGENCY MANAGEMENT
• Acquired Canadian-based SimFront, valued at up to $15 million. SimFront brings world-class technology tools to help scale training
Q4 and Full Fiscal Year Highlights
DIGITAL LEARNING SOLUTIONS
EU/UK Ministries of Defence
Department of National Defense for Canadian Defense Army (CDA)
Hydro Ottawa
Department of National Defence
Military Personnel Generation Group (MPGG)
NATO
Canadian Armed Forces (CAF)
St. Joseph’s hospital
Royal Canadian Airforce (RCAF)
Q4 Snapshot.
+24%
+14%
$328M
$22M Revenue*
$3.0M EBITDA*
Backlog
$10M
New Contract
Signings
2
Aquisitions
Since 2018
* Compared to Q4 FY21
54
initiatives for customers around the globe.
• Signed $154 million in new contracts in FY22, including $99 million with existing customers.
• Expanded our relationship with key customers, including four new projects with NATO and NATO member countries, the Royal
Canadian Navy and Sault College and University of Guelph.
• Signed several new contracts including a one-year contract with option years worth a full potential value of $15 million with the
Joint Warfare Centre NATO 360 for collaborative production environment development and delivery support, a three-year contract
worth $12 million with the Royal Canadian Air Force (“RCAF”) for eLearning Services, a $3-million contract for virtual fleet
development and digital asset management with the Royal Canadian Navy and $5.5 million in sales with a Canadian defence
prime contractor for parts, components and assemblies.
• Renewed a contract, worth an initial value of $8.8 million, with the Military Personnel Generation Group (“MPG”) to support four
activity streams: administration, training, instruction and e-learning development.
• Continued European expansion. Calian was selected by the French Ministry of Defence Land Forces to develop scenario and
exercise scripts for upskilling 60,000 troops as part of one of their core 2022-2023 defence exercise programs, Exercise HEMEX
ORION 2023.
55
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 Financial Performance
Revenues
Gross profit
Selling and marketing
General and administration
Research and development
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
$
21,799
$
17,561
$
91,668
$
4,867
457
1,421
-
3,848
181
1,043
-
23,271
1,404
4,984
-
74,622
17,337
866
4,036
-
Profit before under noted items
$
2,989
$
2,624
$
16,883
$
12,435
Revenue increased by 24% for the three-month period and 23% for the 12-month period ended September 30, 2022, when compared
to the same periods of the prior year. Acquisitive growth was 16% for both the three- and 12-month period ended September 30,
2022, when compared to the same periods of the previous year. Organic growth of 8% for the three-month period, and 7% for the
12-month period is a factor of expanded work with long-standing customers along with continued expansion into Europe as the
Company continues to capitalize on brand recognition in the area gained through acquisitions in the last 24 months.
Gross margin percentage remained at 22% for the three-month period and increased from 23% to 25% for the 12-month period
ended September 30, 2022, when compared to the same periods of the previous year. This is primarily due to our acquisitive
revenue.
General and administration expenses increased by $948 for the 12-month period ended September 30, 2022, when compared to the
same period of the prior year, resulting from costs attributable to acquisitions completed within the past 12 months, the
consolidation of costs related to acquired entities, along with the costs of the segment’s continued European expansion.
IT AND CYBER SOLUTIONS
CONSULTING SERVICES
What We Do.
IT SOLUTION PROVIDER
24X7 MANAGED IT
& CYBER SERVICES
For Whom.
Department of National Defence
Coterra
General Dynamics Mission Systems
Omni logistics
Q4 Snapshot.
+197%
$69M Revenue*
+194%
$97M
$12.4M EBITDA*
Backlog
$56M
New Contract
Signings
4
Aquisitions
Since 2018
* Compared to Q4 FY21
56
57
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 Revenues increased by 197% for the three-month period and 110% for the 12-month period ended September 30, 2022, compared
to the same periods of the previous year. The growth in this quarter is primarily attributed to the strong performance achieved due
to our expansion into the U.S. marketplace. Acquisitive growth was 185% for the three-month and 102% for the 12-month period
ended September 30, 2022, when compared to the same periods of the previous year. Organic growth was driven from the
continued expansion of our Canadian-based cybersecurity offerings. Revenue performance in the quarter was aided by an
improvement in the supply chain. We were able to receive key products from our partners to reduce our backlog in the IT Solutions
Provider division.
Gross margin increased from 30% to 36% in the three-month period and 24% to 35% in the 12-month period ended September 30,
2022, when compared to the same periods of the previous year. This has been a result of our growth in managed services and IT
solutions provider business.
Selling and marketing costs have increased by $7,640 in the three-month period and $12,570 in the 12-month period ended
September 30, 2022, when compared to the same periods of the previous year. This increase can be directly related to additional
costs of consolidating newly acquired entities where their selling and marketing costs tied to individual margin contribution.
General and administrative expenses increased by $2,843 in the three-month period and $9,147 for the 12-month period ended
September 30, 2022, when compared to the same periods of the previous year. This increase relates to additional expenses from
the consolidation of recent acquisitions, along with additional investments in headcount to support sustained growth organically.
Research and development expenses have decreased by $469 in the three-month period ended September 30, 2022, when
compared to the same period of the previous year. This decrease is related to utilization of key engineers on customer projects
instead of research programs within the Company.
Profitability for the segment has increased by 194% in the three-month period and 196% in the 12-month period ended September
30, 2022, when compared to the same period of the previous year. This is a direct result of the increases in sales volume and
increases in gross margin percentage offset by the costs of consolidating newly acquired entities. Profit before under noted items
for the segment increased from 12% to 17% for the 12-month period ended September 30, 2022. The investments in acquisitions
and our internally generated delivery platforms are demonstrating the results of the Company’s investment strategy.
Calian creates enterprise value through a wide range of products and solutions that solve complex problems for the Company’s
customers.
Consulting Services
IT Solution Provider
24x7 Managed IT & Cyber Services
• Cloud Strategy/Migration
• Enterprise Architecture
• MDR (Managed Detection and
• Application Integration & Migration
• Data Centre Builds & Migration
• Custom Application & Web Portal
• Firewalls & Network Security
Development
• OnDemand IT/Cyber Consulting
• RF Emissions
• Wireless & SD-WAN
• Integration Services
Response)
• Security Operations
Centre-as-a-Service
• Network Operations
Centre-as-a-Service
• Infrastructure Monitoring
& Management
• User and Business Application
Management & Support
• Cyber Incident Response
• Penetration Testing vCISO
Q4 and Full Fiscal Year Highlights
• Acquired Computex for C$43 million, enabling entry into the U.S. market with a strong base of recurring, complementary
cybersecurity solutions, and a strong sales distribution engine. Since completing the acquisition in March of 2022, it has added
C$71 million in acquisitive revenue for the IT segment.
• Signed $206 million in new contracts in FY22, including $70 million with existing customers.
• Awarded several contracts including a $20-million four-year cybersecurity on-demand staffing contract with the Canadian
Government’s Department of National Defence and a C$7.9-million contract supporting the modernization and transformation of
Immigration, Refugees, and Citizenship Canada’s (IRCC) eServices.
• Launched two XaaS recurring revenue platforms: Corolar Virtual Care on the Microsoft Azure Marketplace and Juno 360 Cyber platform.
• Achieved several certifications with Microsoft including Solution Partner designation with certifications in Data & AI, Digital & App
Innovation, and Modern Work as well as ISO 27001 certification in the U.S. and SOC II Type 1 in Canada. Microsoft Canada awarded
Calian the Health Impact Award in Canada while our U.S. IT & Cyber Solutions division was awarded the CRN top 500 MSPs.
• Completed Cisco Canada partner agreement. The partner agreement expands our Gold Triple Master partnership capabilities
beyond the U.S. and allows Calian Canadian operations to sell into existing and new customers investing in data centre refresh and
networking infrastructure equipment.
• Selected as CrowdStrike’s Canadian partner of the year. The award is a testament to our successful customer and partner
relationships.
Financial Performance
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Revenues
Gross profit
Selling and marketing
General and administration
Research and development
$
68,764
$
23,183
$
172,965
$
25,077
8,293
4,211
180
6,880
653
1,368
649
61,069
15,598
15,218
732
Profit before under noted items
$
12,393
$
4,210
$
29,521
$
82,255
19,981
3,027
6,071
905
9,978
58
59
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 SUMMARY
With a record quarter of performance across several key indicators, resulting in the eighth consecutive record year, the Company
continues to execute its strategy of profitable growth.
Customers: During FY22 we continued to focus on delivery excellence and have won contracts worth $420M with existing
customers.
Diversification: We continued to diversify our revenues—growth in the U.S. and Europe was 46%—while doing so in a profitable
manner. Commercial revenues have reached parity with our government revenues as our investment in sales and marketing have
yielded returns.
Innovation: We introduced technology into our Learning and Health segments and continue to evolve our offerings across all we do
to be relevant for our customers today and into the future.
Continuous Improvement: We continue to strive for excellence and efficiency across our activities. We launched a new ERP during
the year, as well as invested to support a flexible hybrid workforce for the coming years.
.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 non-recurring. 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.
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
Net profit
$
1,195
$
1,093
$
13,604
$
11,155
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
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
Income tax
Adjusted EBITDA
60
2,308
950
3,484
143
2,289
7
3,314
5,377
1,112
781
3,374
107
3,556
63
906
1,431
6,974
3,629
20,555
451
5,555
295
4,314
10,555
$
19,067
$
12,423
$
65,932
$
4,285
3,054
11,731
450
10,336
360
4,006
6,552
51,929
Adjusted Net Profit and Adjusted EPS
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Net profit
$
1,195
$
1,093
$
13,604
$
11,155
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
2,289
3,314
3,484
3,556
906
3,374
5,555
4,314
20,555
$
10,282
$
8,929
$
44,028
$
10,336
4,006
11,731
37,228
11,399,172
11,271,536
11,343,615
10,599,693
0.90
0.90
0.79
0.79
3.88
3.87
3.51
3.50
Free Cash Flow and Operating Free Cash Flow
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
(12)
$
27,666
$
43,141
$
46,542
Cash flows generated from operating activities
Capitalized research and development
Equipment and application software
Free cash flow
Free cash flow
Adjustments:
Change in non-cash working capital
Operating free cash flow
$
$
$
$
(2)
(2,240)
(2,254)
(2,254)
$
$
(93)
(2,430)
25,143
25,143
$
$
(177)
(7,148)
35,816
35,816
$
$
16,367
(16,366)
11,380
14,113
$
8,777
$
47,196
$
(430)
(7,419)
38,693
38,693
(4,022)
34,671
3.27
Operating free cash flow per share
1.24
0.78
4.16
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. Operating free cash flow
measures the company’s cash profitability after required capital spending when excluding working capital changes. 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 IFRS. 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 IFRS. 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 IFRS financial
measures. The Company has reconciled adjusted profit to the most comparable IFRS financial measure as shown above.
61
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 Consolidated Net Income and Other Selected Financial Information
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Profit before under noted items
$
19,067
$
12,423
$
65,932
$
51,929
Depreciation of equipment and application
software
Depreciation of right of use asset
Amortization of acquired intangible assets
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
2,308
950
3,484
3,314
2,289
1,112
781
3,374
906
3,556
6,974
3,629
20,555
4,314
5,555
4,285
3,054
11,731
4,006
10,336
$
$
6,722
$
2,694
$
24,905
$
18,517
143
7
5,377
107
63
1,431
451
295
10,555
1,195
$
1,093
$
13,604
$
0.11
547,162
0.28
0.10
465,400
0.28
1.20
547,162
1.12
450
360
6,552
11,155
1.05
465,400
1.12
Depreciation of equipment and application software increased by $1,196 in the three-month period and $2,689 in the 12-month
period ended September 30, 2022, when compared to the same periods in the year prior due to higher balances of assets across the
organization as a result of investment in information technology assets and depreciation from recent acquisitions.
Depreciation of right of use asset has increased by 22% for the three-month and by 19% for the 12-month periods ended September
30, 2022, which is a result of new leases signed in the last 12 months, along with leases brought on from recent acquisitions.
Amortization of acquired intangible assets has increased by $110 in the three-month period and $8,822 in the 12-month period
ending September 30, 2022 when compared to the same periods of the previous year due to acquisitions in the prior year of
Dapasoft and Cadence, along with intangibles acquired in the current year through SimFront and Computex. Additionally, in the
12-month period, ended September 30, 2022, InterTronic did not achieve the prescribed level of new contract signings for the
periods covered in the purchase agreement. This has resulted in a change of estimate regarding the amount of contingent
consideration to be paid. The Company had reduced the contingent consideration owed to NIL and recorded a gain in change of
estimate in the amount of $3,228. As a result of this adjustment in estimated total purchase price, the Company reviewed the
estimated cash flows to be derived from the assets acquired. As a result the Company has taken an impairment of $6,477 with
existing intangible assets, and reduced associated deferred tax liability by $1,716, resulting in a net loss in the period of $4,761.
Please see notes 24 and 25 to the financial statements for more information.
Changes in fair value related to contingent earn out has decreased by $1,267 in the three-month period and $4,781 in the nine-
month period ended September 30, 2022, when compared to the same periods of the previous year. This decrease is attributable to
greater changes in projected achievement that occurred in the prior year, where those earn out amounts were recognized closer to
their total value. In the current year, although there were changes to projected achievement levels, the amount to record was much
lower. The change in fair value of contingent payments and deemed compensation are explained further in note 25 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, 2022, was $5,377, which is higher than the $1,431 recorded in the same period of the previous fiscal year due to
higher earnings in the current period. The provision for income taxes for the 12-month period ended September 30, 2022, was
$10,555, which is greater than the $6,552 for the same period from the previous year which is primarily due to higher earnings. The
effective tax rate of the company is projected to be approximately 27% for the annual period. The difference in effective tax rate to
actual tax rate 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 earn out 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
The Company’s realizable backlog at September 30, 2022 was $1,292 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, 2022 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.
• $16M contract re-win with a long-standing customer in our Advanced Technologies Terrestrial division
• $15M contract with a single customer for a cybersecurity product
• $8M contract win for Learning services deploying our AR/VR technology
There were no material contracts that 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 2023, fiscal year 2024 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 $302 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.
Contract Backlog as of September 30, 2022
Contracted backlog
Option renewals
Management estimate of unrealizable portion
Estimated realizable backlog
$
$
$
774,755
818,918
1,593,673
(302,018)
1,291,655
62
63
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022
Estimated recognition of Estimated Realizable Backlog
Dividend
Advanced Technologies
Health
Learning
ITCS
Total
Statement of Cash Flows
October 1, 2022
to September 30,
2023
October 1, 2023
to September 30,
2024
Beyond
September 30,
2024
Total
$
$
91,118
$
40,235
$
28,373
$
159,726
150,540
96,592
73,903
65,676
87,128
15,420
490,867
144,611
7,192
707,083
328,331
96,515
412,153
$
208,459
$
671,043
$
1,291,655
Three months ended
Year ended
September 30,
2022
September 30,
2021
September 30,
2022
September 30,
2021
Cash flows from operating activities before
changes in working capital
$
16,355
$
11,300
$
54,521
$
Changes in working capital
(16,367)
16,366
(11,380)
Cash flows from (used in) operating
activities
Cash flows from (used in) financing activities
Cash flows from (used in) investing activities
(12)
(3,607)
(5,170)
27,666
(2,933)
(2,172)
43,141
(6,215)
(72,891)
Increase (decrease) in cash
$
(8,789)
$
22,561
$
(35,965)
$
42,520
4,022
46,542
64,440
(56,606)
54,376
Operating Activities
Cash outflows from operating activities for the three-month period ended September 30, 2022, were $12 compared to cash inflows
of $27,666 in the same period of the prior year. On a 12-month basis, cash inflows total $43,141 for the period ended September 30,
2022, when compared to inflows of $46,452 for the same period of the previous year.
Working capital (accounts receivable, work in process, inventory, prepaid expenses and other, accounts payable and accrued
liabilities, provisions and unearned contract revenue) has a negative affect on cash flows by an decrease of $16,367 in the three-
month period ended September 30, 2022, and stood at a net balance of $80,186.
Factors related to the overall change in working capital were an increase in accounts receivable which, due to significant billings
near September 30, 2022, increased by $41,755 for the three-month period ended September 30, 2022. This is, however, offset by
decreases in working capital for which the Company was able to achieve certain milestone billing on large-scale projects, along with
accounts payable management, which resulted in contributions to cash in the amount of $13,785 and $20,961 respectively.
Financing Activities
Lease Payments
The Company has made payments of $929 for the three-month period and $3,655 12-month period ended September 30, 2022,
when compared to the payments of $782 and $3,033 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, 2022. The Company paid dividends
totaling $3,249 for the three-month period ended September 30, 2022 or $0.28 per share, and $12,765 for the 12-month period
ended September 30, 2022 or $1.12 per share, compared to the same periods of the previous year when the Company paid $3,156
and $11,826, 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-month period ended September 30, 2022, the Company did not draw additional funds from its debt facility. Over the
12-month period ended September 30, 2022, the Company had drawn $7,500.
Shares
Exercises of stock options and issuances of shares under the employee share purchase plan has resulted in cash inflows of $571
for the three-month, and $2,705 for the 12-month periods ended September 30, 2022 when compared to an inflow of $1,005 and
$3,299, respectively, for the same activities in the same period of the prior year.
In 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 Markets, 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
Equipment Expenditures and Capitalized Research and Development
The Company invested $2,240 in the three-month period and $7,148 for the 12-month period ended September 30, 2022, when
compared to $2,430, and $7,419, 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.
Acquisitions
The Company had cash outflows in the amount of $2,928 in the three-month period ended September 30, 2022 relating to earn out
payments for CTS and Dapasoft. Additionally, the Company acquired the assets of Computex on March 14, 2022, and the
outstanding shares of SimFront on October 7, 2021, along with incurring earn out payments for CTS, Cadence and Tallysman which
resulted in total cash outflows of $65,566 in the 12-month period ended September 30, 2022. In the prior year the Company had
cash inflows of $351 in relation to business acquisitions. In addition the Company acquired InterTronic, Dapasoft and Cadence in
the 12-month period, resulting in total cash outflow of $48,757 for the 12-month period ended September 30, 2021.
Investments
No investment was made in the current or prior period.
Liquidity and Capital Resources
Cash
Calian cash and cash equivalent position was $42,646 at September 30, 2022, compared to $78,611 at September 30, 2021.
Capital Resources
At September 30, 2022, the Company had a debt facility of $80,000 with a Canadian chartered bank that bears interest at prime and
is secured by assets of the Company.
64
65
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022
Management believes that the company has sufficient cash resources to continue to finance its working capital requirements and
pay a quarterly dividend.
Judgments:
Financial instruments
Off-balance Sheet Arrangements
There were no off-balance sheet arrangements at September 30, 2022.
Related-party Transactions
During the 12 months ended September 30, 2022 (2021), the Company had sales of $1,011 ($1,729) to GrainX. At September 30,
2022 (2021), the Company had an accounts receivable balance with GrainX of $140 ($66) 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.
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.
The Company’s accounting policy with regard to financial instruments is described in Note 2 of the September 30, 2022 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 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 the 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
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, 2022 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, 2022, 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.
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, 2022, 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, 2022, 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.
66
67
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 Risk and Uncertainties
the contract life so the amount actually realized by the Company could be materially different from the original contract value.
We are exposed to risks and uncertainties in our business, including the risk factors set forth below:
• There is a risk that as the Company grows, credit risk increases with respect to accounts receivable.
• The Company’s business depends in part on a stable and growing economy. If the Canadian or global economy suffers a
downturn or enters into a recession as a result of COVID-19, the war in Ukraine, or otherwise, it could affect customers’ ability to
spend on the 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.
• Inflation and monetary policy adjustments by central banks may impact the Company’s cost structure and corresponding financial
results.
• The Company is subject to risks associated with the ongoing pandemic. Rising inflation, slow economic growth and/or a potential
recession may impact our customers’ ability to invest and spend on new or existing programs, which could reduce our
deliverables. The Company faces risks related to health epidemics and other outbreaks of communicable diseases, which could
significantly disrupt its operations and may materially and adversely affect its business and financial conditions.
• The Company conducts acquisitions and faces risks associated with those acquisitions and the integration of the acquired
businesses.
• The Company has experienced significant growth in recent years. Its growth has, and will likely continue to place a strain on
resources with increased demands on all corporate services and business units. It is possible that the Company may over-hire
with no guarantee of corresponding increase in revenue.
• 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. 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.
• 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 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 is subject to foreign exchange risk in that approximately 29% 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’s brand and reputation play an important role in its ability to maintain existing customers and generate new
business. The Company’s brand and reputation depend on the ability to continue successfully delivering products and solutions
without interruptions, errors or defects.
• Many of the Company’s solutions rely upon imbedded or external software to deliver goods and services. Any such defects could
lead to service interruptions and impact the Company’s ability to deliver its products and services.
• The Company operates managed cybersecurity services for customers. Managed services, which provide protection and defenses
against cyberattacks, are nevertheless not a guarantee that systems are entirely safe from cybercrime. In the event a managed
service customer’s system is compromised, a breach could negatively impact the Company’s reputation and expose the Company
to potential legal claims.
• Any fraudulent, malicious or accidental breach of our 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 collects, stores and uses certain sensitive data, intellectual property, proprietary business information and certain
personally identifiable information.
• The Company competes in industries that are subject to many intellectual property rights including patents. The risk of
infringement claims increases as the Company continues to innovate, offer new solutions and enter new markets.
• 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.
• The Company operates in the health services sector and faces the risks inherent in that sector.
• As climate change progresses, and its effects increase, the Company may be subject to increased operating risks.
• There is a risk in all fixed-price contracts that the Company will be unable to deliver the system within the time specified and at the
• The Company is exposed to environmental and health and safety regulations associated with its manufacturing activities.
expected cost.
• 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.
• 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 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 in 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.
• As many of the Company’s services are offered on location at military bases or other defence locations, the Company faces risks
inherent in operations at those sites. In the event one of the Company’s military customers were targeted by a hostile state or
group, the Company, as a key partner to those militaries, could be at an increased risk of state-sponsored strikes, including
cyber-attacks, damage to infrastructure, and supply chain interference, and therefore be at risk of sustaining financial losses and
reputational damage.
• Most fee-for-service contracts provide the applicable customer with the ability to adjust the timing and level of effort throughout
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.
Short-term outlook
Revenue
Adjusted EBITDA
Adjusted net profit
Guidance
Low
High
$
$
$
630,000
70,000
46,000
$
$
$
680,000
75,000
50,000
68
69
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCalian Annual Report 2022Calian Annual Report 2022 AUDITED ANNUAL CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED SEPTEMBER 30, 2022
INDEPENDENT AUDITOR’S REPORT
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, 2022 and 2021, 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, 2022 and 2021, 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
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, 2022. 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.
70
Audited Annual Consolidated
Financial Statements
71
Calian Annual Report 2022CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022 How the Key Audit Matter Was Addressed in the Audit
Other Information
Our audit procedures related to the costs to complete for fixed price uncompleted contracts included the following, among others:
Management is responsible for the other information. The other information comprises:
• Evaluated management’s ability to estimate costs by comparing actual costs to management’s historical estimates for contracts
• Management’s Discussion and Analysis
that have been completed.
• For a selection of fixed price uncompleted contracts we:
• Obtained and inspected the executed contract agreements;
• Conducted inquiries with management and project personnel to gain an understanding of the status of project activities,
including any changes to the initial plan
• Compared the estimates to management’s work plans, engineering specifications, supplier contracts or communications with
customers, as applicable;
• Tested the key components of the costs to complete estimates, including materials, labour, and subcontractor costs and
• 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.
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
estimated project contingencies for a sample of new contracts at initiation;
report that fact in this auditor’s report. We have nothing to report in this regard.
• Compared management’s estimated margins to those of similar contracts, when applicable;
• Compared costs incurred to date to the initial costs to complete estimate;
• 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 SimFront Simulation Systems Corporation (“SimFront”) and the assets and liabilities of
Computex Technology Solutions (“Computex”). The Company recognized the assets acquired and the liabilities assumed at fair
value, including intangible assets for customer relationships and technology. (“intangible assets”). The acquisition of SimFront
includes contingent consideration arrangements (“contingent earn-out”) which are based on the acquired entity attaining specified
levels of EBITDA for future years. 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 businesses, the timing of future cash flows, and the appropriate discount rates.
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, 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
Our audit procedures related to the forecasted future revenues and EBITDA margins and discount rates used to determine the fair
value of the contingent earn-out and intangible assets included the following, among others:
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.
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.
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.
• Evaluated the reasonableness of forecasted future revenues and EBITDA margins by comparing the forecasts to:
As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism
• Historical results of the acquired businesses;
• Actual results of the acquired businesses post acquisition to assess estimation accuracy;
• Underlying management analyses detailing growth plans;
• Industry and peer data, as applicable.
• With the assistance of fair value specialists, evaluated the reasonableness of the discount rates by testing the source information
underlying the determination of the discount rates and developing a range of independent estimates of the discount rates for each
acquired business and comparing those to the discount rates selected by management.
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, 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.
72
73
Calian Annual Report 2022Calian Annual Report 2022 • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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 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.
The engagement partner on the audit resulting in this independent auditor’s report is Amy deRidder.
/s/ Deloitte LLP
Ottawa, Ontario
November 24, 2022
CALIAN GROUP LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT SEPTEMBER 30, 2022 AND SEPTEMBER 30, 2021
(CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
NOTES
September 30,
2022
September 30,
2021
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
Debt facility
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.
5
6
9
7
8
24
10
10
10
11
12
13
14
17
15
26
16
9
24
11
11
26
18
18
$
$
$
42,646
171,453
39,865
18,643
23,780
123
296,510
2,186
16,623
10,395
16,678
670
57,087
1,054
145,959
250,652
547,162
7,500
126,096
25,676
1,249
46,210
812
4,115
211,658
14,920
2,874
12,524
30,318
241,976
$
$
$
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
213,277
3,479
92,198
(3,768)
305,186
547,162
11,607,391
$
194,960
5,224
91,359
817
292,360
457,969
11,285,828
$
74
Approved by the Board on November 24, 2022:
George Weber, Chairman
Ray Basler, Director
75
Calian Annual Report 2022Calian Annual Report 2022
CALIAN GROUP LTD.
CONSOLIDATED STATEMENTS OF NET PROFIT
FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021
(CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
CALIAN GROUP LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021
(CANADIAN DOLLARS IN THOUSANDS)
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
$1,485 (2021 $995)
Other comprehensive income (loss), net of tax
COMPREHENSIVE INCOME
Year ended September 30,
2022
2021
$
13,604
$
11,155
(711)
(243)
(3,874)
(4,585)
2,617
2,374
$
9,019
$
13,529
The accompanying notes are an integral part of the audited annual condensed consolidated financial statements.
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
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 recovery – deferred
Total income tax expense
NET PROFIT
Net profit per share:
Basic
Diluted
Year ended
September 30,
NOTES
2022
2021
$
150,398
$
166,591
167,141
91,668
172,965
582,172
412,946
169,226
32,514
65,408
5,372
65,932
6,974
3,629
20,555
4,314
5,555
24,905
451
295
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
20
10
11
13
25, 26
26
11
24,159
17,707
14,307
(3,752)
10,555
8,399
(1,847)
6,552
$
13,604
$
11,155
21
21
$
1.19
1.19
$
1.08
1.07
The accompanying notes are an integral part of the audited annual consolidated financial statements.
76
77
Calian Annual Report 2022Calian Annual Report 2022
CALIAN GROUP LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021
(CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Notes
Issued
capital
Contributed
surplus
Retained
earnings
Other
Comprehensive
Income
Total
CALIAN GROUP LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021
(CANADIAN DOLLARS IN THOUSANDS)
Balance October 1, 2021
$
194,960 $
5,224
$
91,359
$
817
$
292,360
CASH FLOWS GENERATED FROM OPERATING ACTIVITIES
Net profit and comprehensive
income
Dividend paid
($1.12 per share)
Shares issued under employee
share plans
Contingent earn-out
Shares issued under employee
stock purchase plan
Share-based compensation
expense
18
18
18
19
-
-
(1,045)
(2,627)
-
-
2,047
14,049
2,221
-
1,927
13,604
(4,585)
9,019
(12,765)
-
-
-
-
-
-
-
(12,765)
1,002
11,422
2,221
1,927
Balance September 30, 2022
$
213,277 $
3,479
$
92,198
$
(3,768) $
305,186
Notes
Issued
capital
Contributed
surplus
Retained
earnings
Other
Comprehensive
Income
Total
$
107,931 $
2,002
$
92,030
$
(1,557) $
200,406
-
-
-
-
11,155
(11,826)
18
3,064
(1,340)
Balance October 1, 2020
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
19
5,000
76,991
-
-
-
2,627
1,974
-
-
1,935
-
-
-
-
-
2,374
-
-
-
-
-
-
13,529
(11,826)
1,724
5,000
76,991
2,627
1,974
1,935
Balance September 30, 2021
$
194,960 $
5,224
$
91,359
$
817
$
292,360
The accompanying notes are an integral part of the audited annual consolidated financial statements.
Net profit
Items not affecting cash:
Interest expense
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, amortization and impairment
Deemed compensation
Change in non-cash working capital
Accounts receivable
Work in process
Prepaid expenses and other
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 debt facility
Payment of lease obligations
CASH FLOWS USED IN INVESTING ACTIVITIES
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
Year ended
September 30,
NOTES
2022
2021
$ 13,604
$ 11,155
26
11
19
19
10, 13
25, 26
295
5,555
451
10,555
518
1,927
31,158
4,314
68,377
360
10,336
450
6,552
399
1,935
19,070
4,006
54,263
(28,822)
(24,114)
15,444
(20,137)
(4,340)
15,142
11,333
56,997
30,934
(2,752)
(446)
(6,381)
6,781
58,285
(747)
(810)
(13,109)
(10,933)
43,141
46,542
18, 19
2,705
79,299
17
11
25
10
10
(12,765)
(11,826)
7,500
(3,655)
(6,215)
-
(3,033)
64,440
(65,566)
(48,757)
(177)
(7,148)
(430)
(7,419)
(72,891)
(56,606)
$ (35,965) $ 54,376
78,611
24,235
$ 42,646
$ 78,611
78
79
The accompanying notes are an integral part of the audited annual consolidated financial statements.
Calian Annual Report 2022Calian Annual Report 2022
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, learning, defence, security, aerospace, engineering, AgTech, satellite communications (satcom), 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 Standards Board (“IASB”) and in
place for September 30, 2022. 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, 2022.
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, Dapasoft Inc. (“Dapasoft”) located in Toronto, Ontario, SimFront Simulation
Systems Corporation (“Simfront”) located in Ottawa, Ontario, and Calian Corp. located in Houston, Texas. 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.
Revenue recognition
The Company recognizes revenue from the following sources, although this list is not exhaustive:
Service revenue
• Advanced Technologies support services across a number of industries, and product development
• Healthcare services including clinic management, healthcare practitioner support, COVID-19 response services and psychological
assessments
• 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 services and cyber
security monitoring
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2. Summary of Significant Accounting Policies (continued)
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:
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 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.
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 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.
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CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
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
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:
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:
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.
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 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.
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.
Income taxes
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.
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CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
Current tax
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
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 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.
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:
• 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;
• adequate technical, financial and other resources to complete the development and to use or sell the asset are available; and
• 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.
Capitalized R&D is measured at cost and depreciated over the useful life of the assets which is determined to be ten years. Costs
include expenditures that are directly attributable to its construction.
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
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
Application software is measured at cost less accumulated depreciation and is amortized on a straight-line basis over its estimated
useful life not exceeding ten years. The amortization method and estimate of useful lives are reviewed annually.
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:
• 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.
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.
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.
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CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
Impairment of goodwill
Foreign currency translation
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 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, 2022 and 2021, management assessed the recoverable amount of goodwill and concluded that a goodwill
impairment charge was not required.
For the years ended September 30, 2022 and 2021, various assumptions were taken to arrive at estimated values per segment,
including discount rates in the range of 11% to 14% 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
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.
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.
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 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 Calian Corp. which is in USD,
SatService which is in Euro, CTS which is in Norwegian Krone, and Cadence which is in Pound Sterling.
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
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
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
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
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, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022 2. Summary of Significant Accounting Policies (continued)
2. Summary of Significant Accounting Policies (continued)
Financial liabilities
The Company determines the classification of its financial liabilities at initial recognition. The Company’s financial liabilities are as
follows:
Debt facility
Amortized cost
Accounts payable and accrued liabilities Amortized cost
Contingent earn-out
Provisions
Derivative liabilities
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:
Level 1 values are based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical
assets or liabilities.
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.
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.
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.
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.
3. Critical Accounting Judgments and Key Sources of Estimation Uncertainty
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
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.
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 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.
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.
Hedge accounting
Income taxes
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.
88
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.
89
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022 3. Critical Accounting Judgments and Key Sources of Estimation Uncertainty (continued)
4. Seasonality
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. 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
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.
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:
CAD
USD
GBP
EUR
CHF
NOK
Total cash and cash equivalents September 30, 2022
CAD
USD
GBP
EUR
CHF
NOK
Local
Currency
Foreign
Exchange
Presentation
Currency
$
$
16,719
12,933
388
5,619
-
723
57,281
10,463
237
4,256
295
6,220
1.00
1.37
1.51
1.34
1.40
0.13
1.00
1.27
1.71
1.48
1.37
0.15
$
$
$
16,719
17,718
586
7,529
-
94
42,646
57,281
13,288
406
6,299
404
933
Total cash and cash equivalents September 30, 2021
$
78,611
6. Accounts Receivable
The following table presents the trade and other receivables as at:
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.
Trade and accounts receivable
$
168,614
$
106,312
September 30, 2022
September 30, 2021
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.
Tax and Scientific Research and Development receivable
Other
Loss Allowance
2,235
864
171,713
(260)
2,753
2,118
111,183
(45)
$
171,453
$
111,138
Bad debt expense recognized in the year ended September 30, 2022 (2021) is $427 ($510).
90
91
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022
7. Inventory
10. Equipment
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, 2022
September 30, 2021
$
$
12,187
2,717
3,739
18,643
$
$
4,810
611
1,196
6,617
Inventory recognized as cost of revenues in the year ended September 30, 2022 (2021) is $19,838 ($14,453). No inventory
provisions have been recognized in periods ended September 30, 2022 (2021).
8. Prepaid Expenses
The following table presents prepaid expenses as at:
Prepaid maintenance
Other prepaid expenses
9. Contract Assets and Liabilities
The following table presents net contract assets as at:
Work in process
Unearned contract revenue
Net contract assets
September 30, 2022
September 30, 2021
$
$
18,924
4,856
23,780
$
$
5,703
4,188
9,891
Net Contract Assets
September 30, 2022
September 30, 2021
$
$
39,865
(46,210)
(6,345)
$
$
55,307
(23,321)
31,986
The following table presents changes in net contract assets for the period ended:
Opening balance, October 1
Net additions
Billings
Acquisitions (Note 25)
Ending balance
92
Changes in Net Contract Assets
September 30, 2022
September 30, 2021
$
31,986
84,000
(110,774)
(11,557)
$
70,697
114,446
(152,161)
(996)
$
(6,345)
$
31,986
A continuity of the equipment, application software and capitalized research and development for the year ended September 30,
2022 is as follows:
Cost
Depreciation
Carrying Value
Cost
Additions/
Disposals
Acquisitions
(Note 25)
Total
Depreciation
Accumulated
Depreciation
September
30, 2022
September
30, 2021
$
2,546 $
103 $
1,733 $
4,382 $
(472) $
(1,905) $
2,477 $
1,713
$ 27,544 $ 3,829 $
11,666 $ 43,039 $
(4,336) $
(28,893) $
14,146 $
10,698
$ 30,090 $ 3,932 $
13,399 $ 47,421 $
(4,808) $
(30,798) $
16,623 $
12,411
$ 11,425 $ 3,057 $
327 $
14,809 $
(957) $
(4,414) $
10,395 $
8,015
$
4,875 $
177 $
- $
5,052 $
(1,209) $
(2,866) $
2,186 $
3,217
Leasehold
improvements
Equipment
Total
equipment
Application
software
Capitalized
research and
development
11. Right-of-Use Assets and Lease Obligations
The following table presents the right-of-use assets for the Company:
Balance October 1
Additions
Disposals and foreign exchange adjustments
Depreciation
Acquisitions (Note 25)
Balance September 30
Years ended
September 30, 2022
September 30, 2021
$
15,383
$
17,595
2,467
(248)
(3,629)
2,705
842
-
(3,054)
-
$
16,678
$
15,383
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.
93
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022
11. Right-of-Use Assets and Lease Obligations (continued)
13. Acquired Intangible Assets
The following table presents lease obligations for the Company:
A continuity of the acquired intangible assets for the year ended September 30, 2022 is as follows:
Balance at October 1
Additions
Disposals and foreign exchange adjustments
Principal payments
Acquisitions
Balance at September 30
Current
Non-current
Total
Years ended
September 30, 2022
September 30, 2021
$
17,478
$
19,590
2,559
(86)
(3,655)
2,739
19,035
4,115
14,920
19,035
$
$
$
921
-
(3,033)
-
17,478
3,029
14,449
17,478
$
$
$
The following table presents the contractual undiscounted cash flows for lease obligations as at September 30, 2022:
September 30, 2022
Opening
Balance
Additions
(Note 25)
Amortization
Impairment
(Note 25)
Customer relationship - Primacy
$
1,909
$
-
$
-
$
Customer relationships
27,702
18,778
(7,889)
Discrete contracts with
customers & Non-competition
agreements
Technology and trademarks
717
24,191
231
3,037
(362)
(5,827)
Total
$
54,519
$ 22,046
$ (14,078)
-
-
-
(6,477)
(6,477)
Foreign
Exchange
Revaluation
Closing
Balance
$
-
$
1,909
1,098
39,689
-
(21)
586
14,903
1,077
$
57,087
In the year ended September 30, 2022 the Company recorded a foreign currency revaluation of intangible assets held in foreign
subsidiaries which utilize different functional currencies than the Company’s presentation currency. These foreign exchange
revaluations are reflected in comprehensive income.
Total Undiscounted Lease Obligations
A continuity of the acquired intangible assets for the year ended September 30, 2021 is as follows:
Less than one year
One to five years
More than five years
Total undiscounted lease obligations
$
$
4,537
11,277
4,775
20,589
Total cash outflow for leases in the year ended September 30, 2022 (2021) was $4,106 ($3,483), including principal payments
relating to lease obligations of $3,655 ($3,033), interest expense on lease obligations was $451 ($450). Expenses relating to
short-term leases recognized in general and administration expenses were $76 ($52) for the year ended September 30, 2022 (2021).
12. Investments
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 fiscal 2020.
September 30, 2021
Opening
Balance
Additions
Note (25)
Amortization
Closing
Balance
Customer relationship - Primacy
$
1,909
$
-
$
-
$
Customer relationships
17,661
15,619
(5,578)
Discrete contracts with customers & Non-competition
agreements
Technology and trademarks
Total
14. Goodwill
1,057
15,564
9,279
5,161
(2,080)
(4,073)
$
36,191
$
30,059
$
(11,731)
$
1,909
27,702
8,256
16,652
54,519
The following table presents the goodwill for the Company for the year ended September 30, 2022:
94
Opening balance
Additions:
Acquisition of SimFront (Note 25)
Acquisition of Computex (Note 25)
Adjustments:
Foreign Exchange
Ending balance
September 30, 2022
$
100,103
8,950
35,621
1,285
$
145,959
95
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022
14. Goodwill (continued)
17. Debt Agreement
In the year ended September 30, 2022 the Company recorded a foreign currency revaluation of goodwill held in foreign subsidiaries
which utilize different functional currencies than the Company’s presentation currency. These foreign exchange revaluations are
reflected in OCI.
The following table presents the goodwill for the Company for the year ended as at September 30, 2021:
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, 2022 (September 30, 2021), the Company
utilized $7,500 (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. At September 30, 2022 the balance was classified as a current liability as the Company
expects to settle the liability within twelve months after the reporting period.
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
15. Accounts Payable and Accrued Liabilities
The following table presents the accounts payable and accrued liabilities for the Company as at:
Trade accounts payable
Payroll accruals
Income tax payable
Other accruals
Total
16. Provisions
September 30,
2022
September 30,
2021
$
91,652
$
21,960
3,225
9,259
43,668
16,554
1,913
5,958
$
126,096
$
68,093
Changes in provisions for the year ended September 30, 2022 were as follows:
Balance at October 1, 2021
Additions
Utilization/Reversals
Balance at September 30, 2022
Product
Warranties
Severance
Other
Total
$
$
$
753
681
(537)
685
473
(910)
$
103
$
3
(2)
897
$
248
$
104
$
1,541
1,157
(1,449)
1,249
Changes in provisions for the year ended September 30, 2021 were as follows:
Balance at October 1, 2020
Additions
Utilization/Reversals
Balance at September 30, 2021
96
Product
Warranties
Severance
Other
Total
$
$
$
645
764
(656)
280
581
(176)
$
113
$
-
(10)
753
$
685
$
103
$
1,038
1,345
(842)
1,541
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, 2022.
Common share issued and outstanding:
September 30, 2022
September 30, 2021
Shares
Amount
Shares
Amount
Balance October 1
11,285,828
$
194,960
9,760,032
$
107,931
Shares issued under employee share plans
Shares issued under employee share purchase plan
Shares issued through acquisition
Shares issued under public offering
Issued capital
45,742
35,147
240,674
-
2,047
2,221
14,049
90,064
32,017
85,715
3,064
1,974
5,000
-
1,318,000
76,991
11,607,391
$
213,277
11,285,828
$
194,960
Subsequent to the date of the statement of financial position, on November 24, 2022, the date of issuance of these consolidated
financial statements, the Company declared a dividend of $0.28 per common share payable on December 22, 2022.
Contributed Surplus
Contributed surplus comprises the value of share-based compensation expense related to options granted that have not been
exercised or have expired unexercised.
19. Share-Based Compensation
Employee Share Purchase Plan
Under the Company’s 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, 2022, the Company can issue 414,672 shares.
During the year ended September 30, 2022 (2021) under the 2020 Employee Share Purchase Plan, the Company issued 35,147
(32,195) shares at an average price of $60.50 ($61.66). The Company received $1,742 ($1,575) in proceeds and recorded an
expense of $479 ($399).
97
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022
19. Share-Based Compensation (continued)
Stock Options
19. Share-Based Compensation (continued)
The following share-based payment arrangements are in existence:
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% (1,044,665) 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, 2022, the Company has 277,360 stock options and RSUs outstanding. As a result, the Company could grant up
to 767,578 additional stock options or RSU’s pursuant to the plan.
The weighted average fair value of options granted during the year ended September 30, 2022, was $10.70 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 following assumptions were used to determine the fair value of the options granted in the year ended September 30, 2022:
Weighted Average Options Granted
September 30,
2022
September 30,
2021
$
$
%
years
%
%
%
58.96
58.96
28.45
3.18
1.98
1.19
0
$
$
%
years
%
%
%
61.11
61.11
27.4
3.33
1.84
0.33
0
September 30, 2022
September 30, 2021
Number of
Options
Weighted Avg.
Exercise Price
Number of
Options
Weighted Avg.
Exercise Price
204,913
(24,759)
40,646
220,800
$
$
49.46
40.48
58.96
52.55
230,638
(54,900)
29,175
204,913
$
$
43.69
30.89
61.11
47.89
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
Granted
Outstanding September 30
98
Option series:
Number of
Options
Grant date
Expiry date
(1) Issued November 24, 2017
(2) Issued March 27, 2018
(3) Issued November 19, 2018
(4) Issued November 25, 2019
(5) Issued August 13, 2020
(6) Issued November 24, 2020
(7) Issued February 9, 2021
(8) Issued November 24, 2021
(9) Issued March 9, 2022
5,000
6,000
35,500
15,000
94,615
22,222
1,817
39,110
1,536
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
November 24, 2020
November 24, 2025
February 9, 2021
February 9, 2026
November 24, 2021
November 24, 2026
March 9, 2022
March 9, 2027
Exercise
price
Fair
value at
grant date
$
$
$
$
$
$
$
$
$
34.58
31.54
29.55
36.49
60.30
61.16
60.35
58.90
60.55
$
$
$
$
$
4.53
4.62
3.96
5.18
8.44
$ 10.24
$
9.92
$ 10.66
$ 10.33
For the options issued on November 24, 2021, vesting occurs through to November 24, 2023. For the options issued on March 9,
2022, vesting occurs quarterly through to March 9, 2023.
At September 30, 2022 (2021) the weighted average remaining contractual life of options outstanding is 2.49 (3.14) years of which
188,301 (164,604) options are exercisable at a weighted average price of $51.05 ($46.77). The Company has recorded $472 ($931)
of share-based compensation expense in the year ended September 30, 2022 (2021) related to the options that have been granted.
The Company has total unrecognized compensation expense of $97 (2021 - $133) that will be recorded in the next two fiscal years.
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. Under the above RSU
plan, the Company issued performance share units (“PSUs”) which will vest on the date or dates designated for that unit, conditional
on any vesting conditions being met. Vesting conditions for performance share units are tied to market metrics.
The following table summarizes information about the RSU’s as of September 30, 2022:
September 30, 2022
September 30, 2021
Number of
RSUs
Weighted Avg.
Grant Date
Fair Value
Number of
RSUs
Weighted Avg.
Grant Date
Fair Value
Balance at October 1
40,824
$
Exercised
Forfeited
Granted
Balance at September 30
(20,983)
(525)
37,201
56,517
$
46.65
42.35
51.54
48.10
49.09
56,039
$
(35,164)
(40)
19,989
40,824
$
32.67
31.52
59.35
59.25
46.62
99
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022
19. Share-Based Compensation (continued)
20. Revenue
Of the units issued in the current year under the RSU plan, nil has vested as of September 30, 2022. The Company has recorded
$1,457 ($978) of share-based compensation expense in the year ended September 30, 2022 (2021) related to the RSUs that have
been granted. The Company has total unrecognized compensation expense of $966 at September 30, 2022 (2021 - $644) that will
be recorded over the next two years.
The following unvested RSU-based payment arrangements are in existence:
RSU series:
(1) Issued November 25, 2019
(2) Issued November 24, 2020
(3) Issued February 9, 2021
(4) Issued May 12, 2021
(5) Issued August 10, 2021
(6) Issued November 24, 2021
(7) Issued Feb 9, 2022
(8) Issued May 10, 2022
(9) Issued Aug 10, 2022
(10) Issued September 14, 2022
Deferred Share Unit Plan
Number of
Units
7,108
11,929
163
450
34
23,456
9,522
79
2,176
627
973
RSU
RSU
RSU
RSU
RSU
RSU
PSU
RSU
RSU
RSU
RSU
Grant date
Vest through
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
November 24, 2021
November 15, 2024
November 24, 2021
October 1, 2022
February 9, 2022
November 15, 2024
May 10, 2022
November 15, 2024
August 10, 2022
November 15, 2024
September 14, 2022
November 15, 2024
Fair value
at grant date
$
$
$
$
$
$
$
$
$
$
$
36.49
59.35
59.74
56.32
63.25
58.90
16.62
57.18
67.34
66.60
56.10
The following table presents the revenue of the Company for the years-ended September 30, 2022 and 2021:
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,
2022
September 30,
2021
$
$
$
$
$
93,038
$
113,878
5
3,670
62,542
159,255
$
57,360
$
167,136
87,998
110,423
4,658
-
13,088
131,624
52,713
190,278
74,622
69,167
422,917
$
386,780
582,172
$
518,404
During the year ended September 30, 2022 (2021) the Company granted 3,370 (2,716) deferred share units (“DSU”). The Company
recorded share-based compensation of $175 ($148) related to the DSUs in the year ended September 30, 2022 (2021). 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.
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, 2022 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
There are 15,756 (22,516) DSUs outstanding at September 30, 2022 (2021). The fair value of the DSUs outstanding at September
30, 2022 (2021) was $50.61 ($55.83) per unit using the fair value of a Common Share at period end.
Revenues expected to be recognized in:
Less than 24 months
Thereafter
Total
September 30, 2022
$
$
529,648
26,525
556,173
100
101
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022
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
2022
2021
11,343,615
10,599,693
39,725
40,735
11,383,340
10,640,428
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, 2022 (2021), 40,646 (97,538) options
and 3,776 (NIL) RSU’s were excluded from the above computation.
22. Income Tax
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:
Profit before income taxes
2022
2021
$
24,159
$
17,707
Tax provision at the combined basic Canadian federal and provincial income
tax rate of 26.9% (2021: 26.9%)
6,499
4,763
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
1,865
(1,230)
1,082
2,339
Tax expenses or adjustments relating to the prior year
$
10,555
$
3,258
(2,226)
1,048
(291)
6,552
22. Income Tax (continued)
Deferred Income Taxes
Reconciliation of deferred tax assets and liabilities are shown below:
Deferred tax assets
(liabilities)
Deferred tax liability at
September 30, 2021
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
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, 2022
Current Income Taxes
Equipment
and
application
software
Acquired
intangible
assets
Bought
deal costs
Cash flow
hedging
reserve
Other
Total
$
(1,976)
$
(9,704)
$
916
$
542
$
961
$
(9,261)
-
-
(7,893)
-
-
1,023
(670)
3,134
(462)
-
-
-
-
-
(7,893)
1,023
(155)
1,847
$
-
$
-
$
-
$
(995)
$
-
$
(995)
(2,646)
(360)
-
(14,463)
(1,450)
-
-
-
1,477
(453)
806
(15,279)
(1,810)
-
-
-
(942)
5,237
(423)
(120)
3,752
-
-
-
-
-
-
1,867
-
1,867
$
(3,948)
$
(10,676)
$
1,054
$
1,414
$
686
$
(11,470)
As at September 30, 2022 (2021), the Company had temporary differences of $11,171 ($3,174) 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.
102
103
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022
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 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 tax expense.
For the year ended September 30, 2022:
For the year ended
September 30, 2022
Advanced
Technologies
Health
Learning
ITCS
Shared
Services
Total
Revenue
Cost of revenues
Gross profit
Gross profit %
Selling and marketing
General and administration
Research and development
$
150,398
$ 167,141
$ 91,668
$
172,965
$
107,063
43,335
125,590
41,551
68,397
23,271
111,896
61,069
-
-
-
$
582,172
412,946
169,226
29%
25%
25%
35%
N/A%
29%
9,224
9,211
4,243
2,479
10,341
397
1,404
4,984
-
15,598
15,218
732
3,809
25,654
-
32,514
65,408
5,372
Profit before under noted items
$
20,657
$
28,334
$ 16,883
$ 29,521
$ (29,463)
$
65,932
Profit before under noted items %
14%
17%
18%
17%
N/A%
11%
Depreciation of equipment,
application software and R&D
Depreciation of right of use asset
Amortization of acquired
intangibles
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
104
6,974
3,629
20,555
4,314
5,555
24,905
451
295
24,159
14,307
(3,752)
10,555
$
13,604
23. Segmented Information (continued)
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 %
Selling and marketing
General and administration
Research and development
$
166,591
$ 194,936
$ 74,622
$ 82,255
$
125,015
41,576
147,093
47,843
57,285
17,337
62,274
19,981
-
-
-
$
518,404
391,667
126,737
25%
25%
23%
24%
N/A%
24%
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
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%
Depreciation of equipment,
application software and R&D
Depreciation of right of use asset
Amortization of acquired
intangibles
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
The Company operates in Canada but provides services to customers in various countries. Revenues from external customers for
the year ended September 30, 2022 are attributed as follows:
Canada
United States
Europe
Other
September 30,
2022
September 30,
2021
71 %
16 %
12 %
1 %
78 %
11 %
10 %
1
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, 2022 (2021) represented
47% (51%) of the Company’s total revenues. All four operating segments conduct business with this category of customer.
105
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022
24. Financial Instruments and Risk Management
24. Financial Instruments and Risk Management (continued)
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.
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
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 its foreign currency exposures within entities operating in currencies outside of
their functional currencies. The Company’s objective is to manage and control exposure and secure the Company’s profitability on
existing contracts and therefore, the Company’s policy is to hedge its foreign currency exposure where it is most practical to do so.
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 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 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 US
subsidiary is the US Dollar (“USD”), 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 US operations, German
operations, Norwegian operations, and U.K. operations are first expressed in the Companies’ USD, EUR, NOK and GBP functional
106
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, 2022, the Company had the following forward foreign exchange contracts:
Type
Notional
Currency
Maturity
Equivalent
Cdn. Dollars
Fair Value
September 30,
2022
SELL
SELL
SELL
Derivative assets
BUY
BUY
BUY
Derivative liabilities
$
11,188
714
160
$
80,624
4,809
213
USD
EURO
GBP
USD
EURO
GBP
October 2022
$
15,467
$
October 2022
October 2022
969
247
October 2022
$
111,462
October 2022
October 2022
6,527
329
$
$
$
86
26
11
123
(620)
(178)
(14)
(812)
A 10% strengthening of the Canadian dollar against the following currencies at September 30, 2022 would have decreased other
comprehensive income as related to the forward foreign exchange contracts or subsidiaries operating outside of the Company’s
presentation currency by the amounts shown below.
USD
EURO
GBP
NOK
Total
September 30, 2022
$
$
(7,994)
794
74
144
(6,983)
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 or subsidiaries operating outside of the Company’s presentation currency would have increased
Net Profit (a 10% weakening against the Canadian dollar would have had the opposite effect) by the amounts shown below.
USD
EURO
GBP
SEK
Total
September 30, 2022
$
$
3,458
114
4
16
3,592
107
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022
24. Financial Instruments and Risk Management (continued)
24. Financial Instruments and Risk Management (continued)
Credit Risk
Fair Value
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 diverse, however a significant portion of them are federal or provincial government agencies, or large
private entities. A significant portion of the Company’s accounts receivable is from long-time customers. At September 30, 2022
(September 30, 2021), 33% (46%) 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 counterparties to derivative financial instruments by dealing only with major
Canadian financial institutions. Management does not expect any counterparties 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:
Cash and cash equivalents
Accounts receivable
Derivative assets
Total
The aging of accounts receivable at the reporting date was:
Current
Past due (61-120 days)
Past due (> 120 days)
Total
Liquidity Risk
September 30,
2022
September 30,
2021
$
$
42,646
171,453
123
214,222
$
$
78,611
111,138
610
190,359
September 30,
2022
September 30,
2021
$
$
159,412
6,378
5,663
171,453
$
$
97,830
8,886
4,422
111,138
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. At September 30, 2022,
the company has a secured debt facility that matures on January 5, 2024 that allows the Company to draw up to $80,000 CAD. As at
September 30, 2022, the Company had $42,646 cash on hand and $7,500 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.
The fair value of accounts receivable, accounts payable and accrued liabilities approximate 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, 2022 and represents 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 observable:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for 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 or liability that are
not based on observable market data (unobservable inputs).
Cash and cash equivalents
Investment
Derivative financial assets
Debt facility
Contingent earn-out
Derivative financial liabilities
Total
Cash and cash equivalents
Investment
Derivative financial assets
Contingent earn-out
Derivative financial liabilities
Total
September 30, 2022
Level 1
Level 2
Level 3
$
42,646
$
-
-
-
-
-
$
-
-
123
(7,500)
-
(812)
-
670
-
-
(28,550)
-
$
$
42,646
$
(8,189)
$
(27,880)
September 30, 2021
Level 1
Level 2
Level 3
78,611
$
-
-
-
-
$
-
-
610
-
(158)
-
670
-
(38,262)
-
$
78,611
$
452
$
(37,592)
There were no transfers between Level 1, Level 2 and level 3 during the year ended September 30, 2022.
25. Acquisitions
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.
108
109
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022
25. Acquisitions (continued)
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. In the 2021 fiscal year, the Company paid $3,616 based on achievement of the first year EBITDA under the
agreement.
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 $1,000 ($3,850) for the year ended September 30, 2022 (2021).
The second year concluded in fiscal year 2022 with full achievement of earn out target resulting in payment of $4,192. The
Company has revised its estimate on achievement of the third year earn out based on current projected income to January 31,
2023, which has resulted in a gain relating to changes in fair value related to contingent earn out in the amount of $2,361.
The Company recognized an additional $472 of expense in the year ended September 30, 2022, 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 2021 fiscal 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. In fiscal year 2021, the Company recorded an
adjustment to the changes of fair value related to contingent earn out in the amount of $1,551. At September 30, 2022, the
Company had no contingent consideration outstanding in relation to EMSEC.
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 North Atlantic Treaty Organization (“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 $380 if CTS attains specific levels of EBITDA for the years ending December 31, 2021 and September 30, 2022,
respectively. In the year ended September 30, 2022 the Company settled the remainder of the contingent earn out. This resulted in
full achievement of the final earn out, and payment of $1,102 in the year ended September 30, 2022. CTS overachieved their second
year earn out target, which resulted in a bonus paid to the seller, which was recognized in deemed compensation in the amount of
$301. The Company recognized $52 in the year ended September 30, 2022, related to changes in fair value of contingent earn out.
25. Acquisitions (continued)
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.
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 August 31, 2021 and December 31,
2022, respectively. The first year concluded with full payment of $3,950 in the year ended September 30, 2022, plus overachievement
payment in the amount of $192 which was recognized in deemed compensation on the income statement.
The second year target was achieved in full, and anticipated to be overachieved by the end of the earn out period. This has resulted
in additional bonus to key individuals involved in the business in the amount of $763 recognized in deemed compensation in the
year ended September 30, 2022. The Company also recognized $494 in the year ended September 30, 2022, related to changes in
fair value of contingent earn out.
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 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.
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. In the year ended September 30, 2022 the Company paid $776 relating to the year one contingent earn out which
represented full achievement of targets. At September 30, 2022, the Company estimates that the second year target will not be
achieved, which has resulted in a gain recorded in changes in fair value related to contingent earn out in the amount of $660 for the
year ended September 30, 2022, net of accretion in interest amounts previously recognized in year. The deemed compensation of
$75 recognized in the year ended September 30, 2022 relates to transition of key management bonus payment amounts that were
included in the initial share purchase agreement..
InterTronic Solutions Inc. (“InterTronic”)
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 estimated by
management and 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 first year earn out amount was not achieved based on the EBITDA
achievement of InterTronic.
Subsequent to January 4, 2021, the Company recorded a $543 gain related to changing the estimated achievement of earn outs
which was recognized in changes in fair value related to contingent earn-out decreasing the initial estimated amount payable.
110
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CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022 25. Acquisitions (continued)
25. Acquisitions (continued)
In the year ended September 30, 2022, it was determined that InterTronic did not achieve the prescribed level of new contract signings
for the periods covered in the purchase agreement. This has resulted in a change of estimate regarding the amount of contingent
consideration to be paid. In the year ended September 30, 2022, the Company has reduced the contingent consideration owed to NIL
and recorded a gain in change of estimate of $3,228. As a result of this adjustment, the Company reviewed the estimated cash flows to
be derived from the assets acquired. As a result, the company has taken an impairment charge of $6,477 for existing intangible assets
and reduced associated deferred tax liability by $1,716, resulting in a net impact in the period due to this impairment of $4,761.
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. A portion of the earn out is payable through issuance of common shares of the Company. In the year ended September
30, 2022, the Company concluded on the year one earn out with full achievement. Settlement of the year one earn out resulted in
cash payment of $2,861, of which $2,000 was related to earn out payments, and the additional $861 was recognized in September
30, 2022 in changes in fair value related to contingent earn out, whereby the Company had agreed to a payment structure in the
initial agreement where if Dapasoft was able to maintain low levels of working capital for the first year after acquisition, that the
selling group would be entitled to additional achievement payments. Further, common shares in the amount of $14,048 were issued
in relation to the payment of the year one earn out. An additional amount of $1,511 is owing as at September 30, 2022 in relation to
the year one earn out and to be distributed in common shares.
In the current year, management had determined that a greater achievement was to be made for the second-year target based on
current estimates. This has resulted in a change of estimate for payment of contingent earnout in relation to the second year earn
out in the amount of $8,148. An additional amount of $2,175 was recognized as deemed compensation for the year ended
September 30, 2022 based on achievement of targets set out in the initial agreement for key management members over the two
year period. Further, as the first year earn out was payable in shares of the Company, at the end of the earn out period, the Company
assessed the fair market value of the amount due in shares of the Company, this has resulted in a decrease of contingent
consideration payable in the amount of $139.
The Company recognized $1,172 in the year ended September 30, 2022, related to changes in fair value of contingent earn out.
SimFront Simulation Systems Corporation (“SimFront”)
On October 7, 2021, the Company acquired the outstanding shares of SimFront, for total cash consideration of up to $15,625 of
which, $9,646 was paid on closing, and $6,000 is payable contingently. SimFront will 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 is
reported as part of the Learning operating segment.
Under the contingent consideration arrangement, the Company is required to pay the former shareholders of SimFront an additional
$2,760 and $3,240 if SimFront attains specific levels of EBITDA for the years ending September 30, 2022 and September 30, 2023,
respectively. The Company recognized $532 in the year ended September 30, 2022, related to changes in fair value of contingent earn
out.
During the fourth quarter of 2022, the Company continued its comprehensive evaluation of the fair value of net assets acquired
from SimFront and the purchase price allocation. As a result, goodwill initially presented in the December 31, 2021 financial
statements of $8,631 has been adjusted to $8,950. Additionally, intangible assets previously presented have been adjusted from
$5,535 to $5,470. As at September 30, 2022, the accounting for the acquisition of SimFront is final. None of the goodwill arising on
the acquisition is expected to be deductible for tax purposes.
Assets
Acquired
Purchase Price
Accounting
Total
Assets Acquired
Cash and cash equivalents
Accounts receivable
Prepaid expenses
Equipment and application software
Acquired intangible assets
Goodwill
Accounts payable and accrued liabilities
Deferred tax liabilities
Net purchase price
Discount on contingent consideration
Total purchase price
$
$
$
$
102
$
2,346
14
2,462
$
123
-
-
2,585
1,016
-
$
$
-
-
-
-
-
5,470
8,950
102
2,346
14
2,462
123
5,470
8,950
$
14,420
$
17,005
-
1,450
1,016
$
1,450
$
$
1,016
1,450
2,466
14,539
1,086
15,625
Computex Technology Solutions (“Computex”)
On March 14, 2022, the Company completed an asset acquisition of Computex, for total cash consideration of $33,631 USD
($42,970) which was paid on closing. Computex expands the Company’s current IT and cybersecurity portfolio, and adds the US as
a significant geographic region for the Company. Computex will enable the Company to continue to pursue its expansion in the
everything-as-a-service market. Computex will be reported as part of the ITCS segment.
During the fourth quarter of 2022, the Company contrinued its comprehensive evaluation of the fair value of net assets acquired
from Computex and the purchase price allocation. As a result, goodwill initially presented in the March 31, 2021 financial statements
of $45,617 has been adjusted to $35,621. Additionally, intangible assets previously presented have been adjusted from $11,207 to
$16,576. As at September 30, 2022, the accounting for the acquisition of Computex is final.
112
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CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022 25. Acquisitions (continued)
26. Contingent Earn-Out (continued)
Accounts receivable and tax receivable
Inventory
Prepaid expenses
Equipment and application software
Right of use asset
Acquired intangible assets
Goodwill
Accounts payable and accrued liabilities
Lease obligation
Unearned contract revenue
Total purchase price
Assets
Acquired
Purchase Price
Accounting
Total
Assets Acquired
$
$
$
$
$
$
29,147
$
3,881
4,836
37,864
5,086
2,705
-
-
45,655
40,586
2,739
11,557
$
$
$
$
54,882
$
-
-
-
-
-
-
16,576
35,621
52,197
-
-
-
-
$
$
$
$
$
$
$
29,147
7,686
1,031
37,864
5,086
-
16,576
35,621
97,852
40,586
-
11,557
54,882
42,970
Cash consideration paid for acquisition activity during the year ended September 30, 2022:
Consideration paid in cash
Less- cash balance acquired
26. Contingent Earn-Out
SimFront
Computex
Total
$
$
9,626
(102)
9,524
42,970
-
42,970
52,596
(102)
52,494
The following shows the contingent consideration activity for the year ended September 30, 2022:
Company Acquired
Beginning
balance
Acquisition
Payments
Change in
Fair Value
Adjustments
Ending
balance
Alio/Allphase
$
6,941
$
Comprehensive Training Solutions
Tallysman Wireless
Cadence
InterTronic
Dapasoft
SimFront
Total
749
8,104
1,417
3,228
17,823
-
4,914
-
-
-
-
-
-
$
(4,192)
$
(1,102)
(4,142)
(776)
-
(14,283)
-
472
52
493
94
215
1,173
532
$
(1,361)
$
1,860
301
956
(660)
(3,443)
11,045
-
-
5,411
75
-
15,758
5,446
$ 38,262
$
4,914
$ (24,495)
$
3,031
$
6,838
$
28,550
The following shows the contingent consideration activity for the year ended September 30, 2021:
Company Acquired
Beginning
balance
Acquisition
Payments
Change in
Fair Value
Adjustments
Ending
balance
Alio/Allphase
$
5,814
$
Comprehensive Training Solutions
EMSEC
Tallysman Wireless
Cadence
InterTronic
Dapasoft
Total
645
1,360
7,345
-
-
-
-
-
-
-
1,181
3,984
7,363
$
(3,616)
$
-
-
-
-
-
-
395
104
191
759
236
324
606
$
4,348
$
6,941
-
(1,551)
-
-
(1,080)
9,854
749
-
8,104
1,417
3,228
17,823
$ 15,164
$ 12,528
$
(3,616)
$
2,615
$
11,571
$
38,262
27. Related Party Transactions
During the year ended September 30, 2022 (2021), the Company had sales of $1,011 ($1,729) to GrainX. At September 30, 2022
(2021), the Company had an accounts receivable balance with GrainX of $140 ($66) 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. This amount incorporated the named executive officers of the Company.
Short-term benefits
Share-based payments
2022
2021
$
$
3,448
1,306
4,754
$
$
3,394
997
4,391
Of the $24,495 of payments made in the year ended September 30, 2022, $11,421 was settled in the form of shares, and $12,771
was paid in the form of cash. As at September 30, 2022, the total gross value of all contingent consideration outstanding is $35,152.
Included in the adjustments column in the table are amounts from deemed compensation, along with changes in estimated
payment amounts to make under contingent earn out estimates.
114
115
CALIAN GROUP LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)CALIAN GROUP LTD.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE YEARS ENDED SEPTEMBER 30, 2022 AND 2021 (CANADIAN DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)Calian Annual Report 2022Calian Annual Report 2022 ADDITIONAL INFORMATION
Additional information about the Company such as the Company’s Annual Information Form and Management Circular can be
found on SEDAR at www.SEDAR.com
Dated: November 24, 2022
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, ICD.D
Corporate Director, ICD.D
Ray Basler, CPA, CA
Consultant
Jo-Anne Poirier
President and CEO, VON Canada, ICD.D
Young Park
Corporate Director, ICD.D
Ronald Richardson
Corporate Director, P. ENG., ICD.D
Valerie Sorbie
Partner and Managing Director,
Gibraltar & Company
Kevin Ford
CEO, Calian Group Ltd.
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.
TRANSFER AGENT
TSX Trust Company
301-100 Adelaide Street West
Toronto, Ontario
M5H 4H1
800-387-0825 (toll-free within Canada
and the United States)
shareholderinquiries@tmx.com
www.tsxtrust.com
116
117
Calian Annual Report 2022Calian Annual Report 2022 2022
ANNUAL
REPORT
www.calian.com