2021
Annual
Report
PAN-CANADIAN INFRASTRUCTURE
SUPPORT SERVICES
Yellowknife, NT
Baker Lake, NU
LEGEND
Offices
Manufacturing
Facilities
Kamloops, BC
Vancouver, BC
Grande Prairie, AB
Edmonton, AB
Calgary, AB
Winnipeg, MB
Amos, QC
Oromocto, NB
Thunder Bay, ON
Halifax, NS
Ottawa, ON
Montreal, QC
Mississauga, ON
Cambridge, ON
Grimsby, ON
Revenue Growth in $000s
Adjusted EBITDA* in $000s
$733,380
$733,380
$71,087
$71,087
$80,755
$80,755
$477,815
$477,815
$261,059
$261,059
$16,540
$16,540
2019 2020 2021
2019 2020 2021
2019 2020 2021
2019 2020 2021
*Includes Canada Emergency Wage Subsidies in 2020 and 2021 (see the
Reconciliation of non-GAAP Measures in the Management Discussion and Analysis)
TABLE OF CONTENTS
04 LETTER FROM THE BOARD CHAIR
05 LETTER FROM THE CEO
07 MANAGEMENT’S DISCUSSION
AND ANALYSIS
19 MANAGEMENT’S REPORT
TO SHAREHOLDERS
21
INDEPENDENT AUDITOR’S REPORT
TO SHAREHOLDERS
27
32
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
IBC
CORPORATE INFORMATION
LETTER FROM THE
CHAIR OF THE BOARD
To our shareholders:
Thank you for the continued trust you have
placed in your Board of Directors and the
management team. It has been a busy year!
Your company made significant progress in
executing its short-term vision and strategy
to become a Canadian services champion
with over $1 billion in revenue and over
$100 million in EBITDA.
The performance of our employees was
exemplary given the continued business
restrictions related to COVID-19. Diverse
teams from across the country acted with
agility, care, and a customer-first focus. I
want to thank them for their dedication,
hard work, and support every day in making
Dexterra a better company.
Dexterra Group Annual Report 2021 | 4
Our financial performance and progress
in 2021 were also strong. We added new
customers, new modular capacity, reduced
our debt level, entered into a new credit
facility that gives us financial flexibility for
future growth, increased our dividend to
shareholders, and closed two important
acquisitions shortly after year end. These
combined developments translated into
higher shareholder value and give us a
strong foundation for future growth.
We are optimistic about the opportunities
that lie ahead of us. Thank you for your
continued support over the past year.
We also hope you will join us and look
forward to answering your questions at our
shareholders’ meeting on May 11, 2022.
Bill McFarland
Chair of the Board
LETTER FROM
THE CEO
To our Dexterra Group stakeholders:
2021 was an important year in the evolution
of Dexterra Group. While restrictions began
to ease throughout the year, the COVID-19
pandemic continued to pose challenges
for Canadian businesses. The resilience of
our business was evident in completing
a successful year, thanks to the quality of
our people, systems, and tools. We also
remained committed to growth and
investments in people and systems.
I would like to thank the more than
7,500 Dexterra Group employees across
Canada, who have done an outstanding
job supporting our customers this year.
The quality of our people, our business
model, and the excellent service our teams
deliver to our clients have been important
differentiators for us and will help us meet
our growth aspirations in the future. Our
decentralized model, with nimble and
accountable business units and fewer
layers of management, push decision
making closer to our clients so we can
react with agility.
Our people also reached new heights
when Dexterra Group was named
Canada’s Safest Employer in the Services
Sector by Canadian Occupational Safety
and Lee-Anne Lyon-Bartley, Executive
Vice-President, Health, Safety,
Environment & Quality, was named
one of the 100 Accomplished Black
Canadian Women by 100ABCWomen
in their annual publication.
We started the new year strong by
successfully closing two M&A deals in
January 2022, which add new skills, expand
our footprint in the facilities management
sector, and will add over $130 million in
Dexterra Group Annual Report 2021 | 5
revenue. Our business also celebrated
some major milestones in 2021. We shared
our first Sustainability Report, which
highlights how we are strengthening
our organization through environmental,
social, and governance initiatives. We
expanded our services business in the
Workforce Accommodations, Forestry, and
Energy Services business unit with new
wins, emphasizing our capabilities in food
services, housekeeping and caretaking. In
2021, we also converted 55 per cent EBITDA
to FCF, with the target of increasing that
conversion over time.
THE VALUES WE LIVE BY
I want to thank our customers, clients,
partners, and shareholders, who have
supported us over the past year and the
Board of Directors for its insights and
support. It has been a privilege to be CEO
and work with our various stakeholders
and successfully navigate through these
challenging times.
John Mac Cuish
Chief Executive Officer
Accountability
We don’t just walk by. We own our
successes and setbacks. If we see
something wrong, we act to resolve it. If
we see something right, we celebrate it.
Diversity
Everyone has a voice. Sharing is how we
learn. It’s how we make progress and move
forward as a team.
Trust
Our actions speak louder than our
words. Trust is earned through clarity,
compassion and competence. It is
our commitment to our clients, our
colleagues and our communities.
Partnership
Service is what we sell. By asking
for, listening to and acting on client
feedback, we create long-term,
successful partnerships.
Dexterra Group Annual Report 2021 | 6
MANAGEMENT’S DISCUSSION
AND ANALYSIS
December 31, 2021
This MD&A has been prepared as at March 9, 2022.
Dexterra Group Annual Report 2021 | 7
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
The following Management’s Discussion and Analysis (“MD&A”) prepared as at March 9, 2022 for Dexterra Group Inc.
(“Dexterra Group” or the “Corporation”), provides information concerning Dexterra Group’s financial condition and results of
operations. This MD&A should be read in conjunction with the Corporation’s audited Consolidated Financial Statements (“2021
Financial Statements”) for the years ended December 31, 2021 and 2020. For additional information, readers should also refer
to Dexterra Group's Annual Information Form (“AIF”) available on SEDAR at sedar.com and Dexterra Group’s website at
dexterra.com. Some of the information in this MD&A contains forward-looking statements that involve risks and uncertainties.
See “Forward-Looking Information” for a discussion of the uncertainties, risks and assumptions associated with these
statements. Actual results may differ materially from those indicated or from the underlying forward-looking information as a
result of various factors including those described elsewhere in this MD&A and AIF.
The accompanying 2021 Financial Statements of Dexterra Group as at and for the year ended December 31, 2021 and
December 31, 2020 are the responsibility of Dexterra Group’s management and have been prepared in accordance with
International Financial Reporting Standards (“IFRS” or “GAAP”) and all amounts presented are in thousands of Canadian dollars
unless otherwise indicated.
Financial Summary
(000's except per share amounts)
Total Revenue
Adjusted EBITDA(1)
Adjusted EBITDA excluding CEWS as a % of revenue(1)
Net earnings
Earnings per share
Basic(2)
Diluted(2)
Total assets
Total loans and borrowings
Free Cash Flow(1)
Three months ended December 31,
Years ended December 31,
2021
201,588
18,054
$
$
9 %
4,176
$
0.06
0.06
531,548
65,320
20,791
$
$
$
$
$
2020
164,418
17,477
$
$
8 %
27
$
0.00
0.00
513,523
85,369
29,069
$
$
$
$
$
$
$
$
$
$
$
$
$
2021
733,380
80,755
$
$
10 %
2020(3)
477,815
71,087
8 %
24,628
$
64,479
0.37
0.37
531,548
65,320
45,393
$
$
$
$
$
1.25
1.24
513,523
85,369
64,016
(1)
(2)
(3)
Please refer to the “Non-GAAP measures” section for the definition of Adjusted EBITDA, Adjusted EBITDA excluding CEWS as a % of revenue and Free Cash Flow and to the “Reconciliation
of non-GAAP measures” section for the related calculations.
All 2020 share and per share data presented has been retroactively adjusted to reflect the five-for-one share consolidation completed on July 16, 2020.
2020 comparative information includes the results of Horizon North Logistics Inc. from May 29, 2020 onwards which was the effective date of the Acquisition (as defined below under the
heading “Core Business”).
Non-GAAP measures
Certain measures and ratios in this MD&A do not have any standardized meaning as prescribed by GAAP and, therefore, are
considered non-GAAP measures. Non-GAAP measures include “Adjusted EBITDA”, calculated as earnings before interest, taxes,
depreciation, amortization, equity investment depreciation, share based compensation, bargain purchase (gain) reduction,
gain/loss on disposal of property, plant and equipment and non-recurring items; “Adjusted EBITDA excluding Canada
Emergency Wage Subsidy (“CEWS”) as a percentage of revenue”, calculated as Adjusted EBITDA excluding CEWS divided by
revenue; “Free Cash Flow”, calculated as net cash flows from (used in) operating activities, less sustaining capital expenditures,
purchase of intangible assets, lease payments and finance costs plus proceeds on the sale of property, plant and equipment;
and “Backlog” which is the total value of work that has not yet been completed that: (a) has a high certainty of being performed
based on the existence of an executed contract or work order specifying job scope, value and timing; or (b) has been awarded
to Dexterra Group, as evidenced by an executed letter of award or agreement, describing the general job scope, value and
timing of such work, and where the finalization of a formal contract in respect of such work is reasonably assured and expects
to be recognized in the next 12 months. These measures and ratios provide investors with supplemental measures of Dexterra
Group's operating performance and highlight trends in its core businesses that may not otherwise be apparent when relying
solely on GAAP financial measures. Dexterra Group also believes that securities analysts, investors and other interested parties
frequently use non-GAAP measures in the evaluation of issuers. Dexterra Group’s management also uses non-GAAP measures
in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets, and to
determine components of management compensation.
These measures are regularly reviewed by the Chief Operating Decision Makers and provide investors with an alternative
method for assessing the Corporation’s operating results in a manner that is focused on the performance of the Corporation’s
ongoing operations and to provide a consistent basis for comparison between periods. These measures should not be
construed as alternatives to net earnings and total comprehensive income or operating cash flows as determined in accordance
with GAAP as indicators of the Corporation’s performance. The method of calculating these measures may differ from other
entities and accordingly, may not be comparable to measures used by other entities. For a reconciliation of these non-GAAP
measures to their nearest measure under GAAP please refer to “Reconciliation of non-GAAP measures”.
Dexterra Group Annual Report 2021 | 8
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
Management's Discussion and Analysis
Core Business
Dexterra Group is a publicly listed corporation (TSX: DXT.TO) delivering quality solutions to create, manage and operate
infrastructure, offering both experience and regional expertise across Canada under its three operating business units:
Integrated Facilities Management (“IFM”), Workforce Accommodations, Forestry and Energy Services (“WAFES”), and Modular
Solutions.
Our Integrated Facilities Management business delivers operations and maintenance solutions for built assets and
infrastructure in the public and private sectors, including government, commercial, defence, education, healthcare and aviation.
Our WAFES business provides a full range of workforce accommodations solutions, forestry services and access solutions to
clients in the mining, forestry, construction and other natural resource sectors. Our Modular Solutions business integrates
modern design concepts with off-site manufacturing processes to produce high-quality building solutions for rapid affordable
housing, specialty kiosks, commercial, residential and industrial clients. As a result of our diverse product and service offerings,
Dexterra Group is uniquely positioned to meet the needs of our customers in numerous sectors across Canada.
On May 29, 2020, Dexterra Group (previously Horizon North Logistics Inc.) completed a transaction (the “Acquisition”) with
10647802 Canada Limited, operating as Dexterra Integrated Facilities Management (“Dexterra”), a subsidiary of Fairfax
Financial Holdings Limited (“Fairfax Financial”). Pursuant to the Acquisition, the Corporation acquired all of the outstanding
common shares of Dexterra and in exchange issued 31,785,993 common shares of Dexterra Group to Dexterra’s sole
shareholder, 9477179 Canada Inc., a wholly-owned subsidiary of Fairfax Financial. Accordingly, Fairfax Financial indirectly owns
a 49% interest in the combined Corporation, while existing shareholders of the Corporation maintained a 51% interest. Prior to
the Acquisition, Fairfax Financial had no ownership interest in Dexterra Group. For accounting purposes, the business
combination constituted a reverse acquisition that involved a change of control of Dexterra Group as Dexterra was the
accounting acquirer and Fairfax Financial controls the Corporation. The Corporation also changed its name in 2020 to Dexterra
Group Inc. 2020 comparative information included herein is solely Dexterra up until the Acquisition closing date of May 29,
2020. Horizon North Logistics Inc. financial results are included subsequent to the Acquisition closing date and a bargain
purchase gain of $29.9 million was recorded on Acquisition.
On July 16, 2020, the Corporation completed a five-for-one share consolidation of all of its issued and outstanding common
shares. All share and per share data presented, including share options outstanding, has been retroactively adjusted to reflect
the share consolidation, unless otherwise noted.
Consolidated Results for 2021
Consolidated revenue totaled $733.4 million for 2021 compared to $477.8 million in the prior year, an increase of $255.5
million, primarily due to full year operations in 2021 of the acquired Horizon North Logistics Inc. business and improved market
conditions and growth as COVID-19 restrictions were reduced. The Corporation reported consolidated net earnings of $24.6
million for 2021 which was lower than 2020 due to the non-taxable $29.9 million non-cash bargain purchase gain ("BPG")
related to the Acquisition in 2020 and lower CEWS in 2021 of $23.8 million when compared to 2020 offset by better business
conditions and growth described above.
Fourth Quarter Results and Overview
Highlights
•
•
•
•
•
The Corporation generated consolidated revenue of $201.6 million for Q4 2021, which increased $37.2 million, or 23%,
when compared to Q4 2020. The increase in revenue is mainly attributed to growth in the WAFES business segment due to
improved market conditions and new business won in 2021;
The Corporation’s Adjusted EBITDA for Q4 2021 was $18.1 million, which increased by $0.6 million compared to Q4 2020
and reflected no CEWS in Q4 2021 (2020 - $4.2 million). Adjusted EBITDA in Q4 2021 also excluded a $1.7 million net loss
recorded in corporate to settle a dispute related to a contract in place at the time of the reverse takeover;
Consolidated net earnings increased by $4.1 million in Q4 2021 as compared with Q4 2020. Q4 2020 included a bargain
purchase reduction of $4.2 million in expense;
The IFM business had Q4 2021 revenue of $39.3 million, which increased 2% from Q4 2020 with a gradual reopening of
airports and retail facilities. Adjusted EBITDA of $2.5 million in Q4 2021 was similar to Q4 2020, which had $1.0 million of
CEWS;
The WAFES business had Q4 2021 revenue of $111.9 million, an increase of $33.7 million compared to Q4 2020. Adjusted
EBITDA for the same period was $18.5 million, an increase of $4.0 million from Q4 2020. CEWS of $2.8 million was
recorded in Q4 2020.
Dexterra Group Annual Report 2021 | 9
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
•
The Modular Solutions business had Q4 2021 revenue of $46.5 million and Adjusted EBITDA of $2.9 million, a decrease of
$1.7 million and $1.4 million, respectively, as compared to Q4 2020. The decreases are due to ongoing delays in the rapid
affordable housing projects in Ontario and supply chain and site access issues in the West including the impact of the
floods in British Columbia;
•
The Corporation closed on two IFM acquisitions in January 2022:
◦
◦
Dana Hospitality LP (“Dana”) effective January 1, 2022 (the “Dana Acquisition”). The purchase price was $31.5
million. This acquisition expands existing culinary services into education, healthcare, and leisure activities and
has approximately $100 million in annual contracts post-pandemic; and
TRICOM Facility Services Group (“Tricom”) on January 31, 2022, for $19 million (the “Tricom Acquisition”). Tricom
delivers contract janitorial and associated building maintenance services and supplies custodial equipment and
consumables to clients in major centres across Canada and has a small U.S presence. Tricom has a book of
business that is expected to exceed $35 million post-pandemic and increases Dexterra Group’s presence in
hotels, rail and leisure.
•
•
Debt was $65.3 million at December 31, 2021, down from $85.4 million at December 31, 2020. Debt levels will increase by
$50.5 million in Q1 2022 with the acquisitions of Dana Hospitality and Tricom and leverage approximates 1.5x Adjusted
EBITDA post acquisitions;
Dexterra Group paid a dividend of $0.0875 per share on January 17, 2022 to shareholders of record on December 31, 2021,
and declared a dividend for the first quarter of 2022 of $0.0875 per share. The dividend is payable to shareholders of
record at the close of business on March 31, 2022 and will be paid on April 15, 2022.
Operational Analysis
(000's)
Revenue:
Integrated Facilities Management
WAFES
Modular Solutions
Corporate and Inter-segment eliminations
Total Revenue
Adjusted EBITDA:
Integrated Facilities Management
WAFES
Modular Solutions
Corporate and Inter-segment eliminations
Total Adjusted EBITDA(1)
Adjusted EBITDA excluding CEWS as a % of Revenue(1)
Integrated Facilities Management
WAFES
Modular Solutions
Three months ended December 31,
Years ended December 31,
2021
2020
2021
2020(2)
$
$
$
$
39,250
$
38,522
$
155,131
$
111,924
46,473
3,941
78,225
48,212
(541)
393,797
181,701
2,751
147,229
234,681
98,767
(2,862)
201,588
$
164,418
$
733,380
$
477,815
2,509
$
2,609
$
13,283
$
18,462
2,923
(5,840)
14,391
4,360
(3,883)
72,309
13,322
(18,159)
18,054
$
17,477
$
80,755
$
6 %
16 %
6 %
4 %
15 %
8 %
7 %
17 %
7 %
21,345
57,245
10,636
(18,139)
71,087
5 %
15 %
7 %
(1)
(2)
Please refer to the “Non-GAAP measures” section for the definition of Adjusted EBITDA and Adjusted EBITDA excluding CEWS as a % of revenue and to the “Reconciliation of non-GAAP
measures” section for the related calculations.
2020 comparative information includes the results of Horizon North Logistics Inc. from May 29, 2020 onwards which was the effective date of the Acquisition.
Integrated Facilities Management
For Q4 2021, IFM revenues were $39.3 million and increased by $0.7 million, or 2%, from the $38.5 million in Q4 2020. The
increase is mainly attributable to the reduction of certain COVID-19 health measures and net new business. Management
expects an upward trend in revenue to continue as provincial COVID-19 restrictions are lifted, especially in the aviation and
retail sectors. Revenue from airports is still significantly below pre-pandemic levels, at approximately 60% in Q4 2021, despite
the higher passenger travel activity levels compared to Q4 2020. We expect the return to pre-pandemic travel levels to be
gradual over 2022 and into 2023. We are winning new contracts across all segments of the business and are experiencing a very
competitive landscape for new work and on contract renewals. The increase in scale of operations with the Dana and Tricom
acquisitions will also support revenue growth and result in cross-selling opportunities with the expanded client base as we
move into a post-pandemic environment.
Dexterra Group Annual Report 2021 | 10
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
Adjusted EBITDA excluding CEWS as a percentage of revenue was 6% for Q4 2021, which is an improvement from 4% recorded
in Q4 2020. The margins for the segment have continued to improve from Q4 2020 as COVID-19 restrictions are lifted. IFM
margins continued to be impacted in Q4 2021 by overtime costs caused by staffing issues, supply chain inflation and reduced
project work due to the Omicron variant.
IFM revenues for the year ended December 31, 2021 were $155.1 million and increased by $7.9 million or 5% from the
$147.2 million in 2020. The growth in the segment was attributable to increased customer volumes. Certain key industry sectors
such as aviation and retail, continued to have reduced volumes compared to pre-pandemic periods. Management is
experiencing increased bidding activity and, in addition, the Dana and Tricom Acquisitions have broadened our service offerings
and are expected to support growth in the future.
For the year ended December 31, 2021, Adjusted EBITDA excluding CEWS as a percentage of revenue for this segment was 7%
which is improved from 5% for the year ended December 31, 2020. The improvement is mainly due to better project
management and management delivering on operational improvements as compared with 2020 as the Corporation dealt with
shutdowns due to COVID-19.
Direct Costs
Direct costs are comprised of labour, materials, supplies and transportation, which vary directly in proportion with revenues,
and have a relatively fixed component that includes rent and utilities. Direct Costs for Q4 2021 were $35.8 million compared to
$34.8 million in Q4 2020, an increase of $0.9 million, or 3%, which is consistent with the 2% increase in revenue in the segment
compared with Q4 2020.
For the year ended December 31, 2021, direct costs were $136.3 million, compared to $121.8 million in 2020. This increase of
$14.5 million is primarily due to the $12.0 million of additional CEWS received in 2020 compared to 2021 with the remaining
increase related to better cost control.
WAFES
WAFES is comprised of two revenue streams: Workforce accommodations (“WA”) & Forestry and Energy Services. A significant
portion of our WAFES business is support services which is not capital intensive and has similar characteristics to our integrated
facilities management business. The remainder of the WAFES business relates to asset-based services.
WAFES support services includes assisting clients with food and facilities services on-site at their remote locations. The Forestry
services business is also part of WAFES support services. For 2021, support services comprised 45% of WAFES revenue. The
proportion of revenue attributable to support services is expected to grow in the future.
WA asset-based services represents remote WA activities in which the accommodation structures are owned and installed by
Dexterra Group as part of an equipment supply contract or bundled with food and facilities services as in the case of turn-key
camp contracts or the Corporation’s open lodge operations. This asset-based service category also includes Energy Services,
where the Corporation owns the matting and relocatable structures, which are sold or rented to clients. For 2021, asset-based
services comprised 55% of WAFES revenue.
Revenue from the WAFES segment for Q4 2021 was $111.9 million, an increase of $33.7 million compared to Q4 2020. WAFES
revenue performance was strong in Q4 2021 due to new sales, stronger camp occupancy and improved mat and relocatable
structures utilization due to increased activity in the resource and energy sectors.
Adjusted EBITDA excluding CEWS as a percentage of revenue for Q4 2021 was 16%, which is higher than the Q4 2020
comparative of 15%, due to higher margin sales and higher activity levels. The Corporation also successfully negotiated
improved commercial terms in Q4 2021 for services previously provided to a large client. This resulted in additional one time
revenue in Q4 2021 of $1.8 million.
Revenue from the WAFES segment for the year ended December 31, 2021 was $393.8 million, an increase of $159.1 million
compared to 2020. The increase in segment revenues was primarily driven by a full year of results for the Horizon North
Logistics Inc. business in 2021, which added $96.2 million to revenue reported in 2021, with the remaining $63.0 million being
attributable to growth. The growth represents the recovery from low activity levels in 2020 due to the COVID-19 pandemic and
new contracts won in 2021.
Adjusted EBITDA excluding CEWS as a percentage of revenue was 17% for the year ended December 31, 2021 compared to 15%
for the prior year. This increase resulted from strong margins as we scale the business and focus on the services business
component. In addition, there were fewer carrying costs relating to underutilized staff and equipment compared to 2020.
Revenues from Energy Services were $11.2 million and $35.9 million for the three months and year ended December 31, 2021,
respectively. Revenues for Q4 2021 were up $4.7 million from $6.5 million in Q4 2020 due to a large sale of mats of $5.3 million.
Both the relocatable structures and matting business experienced higher utilization rates in the second half of 2021 given the
stronger energy services environment.
Dexterra Group Annual Report 2021 | 11
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
Direct Costs
Direct costs are comprised of labour, materials, supplies and transportation, which vary directly with revenues, and have a
relatively fixed component, that includes rent and utilities. Direct costs in the WAFES business unit for Q4 2021 were $93.2
million or 83% of revenue, compared to 84% of revenue for Q4 2020 after excluding for the additional CEWS received in Q4
2020 of $2.8 million. The decrease in the percentage of direct costs when compared to the prior year is due to the positive
impact of improved utilization in 2021.
Direct costs after excluding the CEWS for the year ended December 31, 2021 were $325.7 million or 83% of revenue, which is
consistent with 81% of revenue for 2020.
Management continues to be focused on managing costs as we navigate through the spread of the Omicron variant and the
impacts to this business unit which include increasing food costs, labour shortages and hiring challenges, as well as strained
supply chains. These impacts are expected to be of diminishing magnitude as we move towards a post-pandemic environment.
Modular Solutions
Modular Solutions segment revenues for Q4 2021 were $46.5 million, a decrease of $1.7 million, or 4% as compared to Q4
2020. The segment faced temporary site and administrative delays in the rapid affordable housing projects in Ontario and site
access delays on projects in British Columbia caused by flooding. Management is working closely with municipalities to predict
the timing of projects and is diversifying the customer base to utilize plant capacity and optimize overhead absorption. Revenue
increased by $1.4 million from Q3 2021. Adjusted EBITDA for Q4 2021 was $2.9 million, which was lower than Q4 2020.
Adjusted EBITDA excluding CEWS as a percentage of revenue was 7% for the quarter which is consistent with Q4 2020 .
Revenue from the Modular segment for the year ended December 31, 2021 was $181.7 million, an increase of $82.9 million,
which is mainly attributable to a full year of operations in 2021. Adjusted EBITDA for the year ended December 31, 2021 was
$13.3 million, which is $2.7 million higher than 2020 which also included $2.7 million more CEWS support. Adjusted EBITDA
excluding CEWS as a percentage of revenue was 7.2% for the year ended December 31, 2021, which was consistent with 2020.
A key metric for the Modular Solutions segment is the Backlog1 of projects and timing of backlog execution. The focus for this
business unit is to secure and increase backlog, which was $78.6 million for rapid affordable housing at the end of 2021,
excluding approximately $32 million of contracts being finalized with existing customers and backlog of $19.4 million for
Industrial and U.S. manufacturing supply projects. Additionally, Modular Solutions has recurring business beyond the projects
noted above for approximately $40 million per annum, consisting of education modules, retail stores and kiosks. A key goal over
time is also to diversify our modular product market verticals.
Direct Costs
Direct costs are comprised of labour, raw materials and transportation, which vary directly with revenues, and a relatively fixed
component that includes rent, utilities and the design and technical services required in the bidding process and post award
manufacturing and installation of the product.
Direct costs for Q4 2021 were 91%, as compared to the 91% of revenue in Q3 2021, and 89% in Q4 2020. Direct costs for the
year ended December 31, 2021 were 90% of revenue, as compared to 86% in 2020. The direct costs as a percentage of revenue
have remained fairly consistent throughout the periods.
Other Items
Selling, General & Administrative Expense
Selling, general & administrative (“SG&A”) expenses are comprised of head and corporate office costs including the executive
officers and directors of the Corporation, and shared services, including human resources, finance & accounting, quality
information technology and the associated costs of supporting a public company.
SG&A expenses for Q4 2021 were $9.5 million, an increase of $3.3 million when compared to Q4 2020. The corporate costs
were abnormally lower in Q4 2020 due to a $1.2 million legal cost recovery. Q4 2021 also includes $0.5 million related to
resolving an employment contract dispute and transaction costs of $0.2 million. SG&A expenses were 5% of total revenue in Q4
2021, which is consistent compared to both Q3 2021 and Q4 2020.
SG&A expenses for the year ended December 31, 2021 were $34.9 million, an increase of $12.7 million compared to the same
period in 2020, mainly due to a full year of operations for both predecessor companies. As a percentage of revenue, SG&A
expenses were 5% for the year ended December 31, 2021, which is consistent with 2020.
1 Refer to the definition of Backlog under the “Non-GAAP measures” section.
Dexterra Group Annual Report 2021 | 12
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
Depreciation and Amortization
Three months ended December 31,
Years ended December 31,
(000's)
2021
2020
2021
2020
Depreciation of property, plant and equipment and right-of-use assets
Amortization of intangibles
Total depreciation and amortization
$
$
7,856 $
10,232 $
34,450 $
22,139
1,058
905
3,611
8,914 $
11,137 $
38,061 $
2,925
25,064
For Q4 2021, depreciation and amortization was $8.9 million, a decrease of $2.2 million compared to Q4 2020, which aligns
with the decrease in the carrying value of property, plant and equipment and right-of-use assets in Q4 2021 comparing to Q4
2020 as more assets became fully depreciated. The Corporation also opportunistically sells excess equipment in the WAFES
business.
For the year ended December 31, 2021, depreciation and amortization was $38.1 million, an increase of $13.0 million compared
to 2020, mainly due to the timing of the 2020 Acquisition.
Finance costs
Finance costs include interest on loans and borrowings, interest on lease liabilities and accretion of debt financing costs and
provisions.
The effective interest rate on loans and borrowings for the year ended December 31, 2021 was 3.4% (December 31, 2020 -
4.3%). The interest rate is impacted by the debt level and tiered interest rate structure of the credit facility. The rate ranges
from bank prime rate plus 0.50% to 1.75% per annum based on an EBITDA coverage ratio.
Goodwill
Goodwill of $98.6 million is made up of $96.0 million recognized on the acquisition of certain assets and associated liabilities
comprising the services business carried on by Dexterra Group. Goodwill is not amortized. A portion of the goodwill is
deductible for tax purposes. The Corporation concluded there was no impairment of its goodwill at December 31, 2021.
Gain/Loss on disposal
For Q4 2021, the gain on disposal was $0.3 million compared to a loss on disposal of $0.2 million in Q4 2020. For the year ended
December 31, 2021, the gain on disposal was $0.4 million, whereas there was a loss on disposal of $0.04 million in 2020. The
gains and losses on disposals are typically generated from the sale of excess WAFES equipment.
Non-controlling interest
Dexterra Group owns 49% of Tangmaarvik Inland Camp Services Inc. (“Tangmaarvik”) and controls its operations. As a result,
the results of Tangmaarvik are consolidated with the results of Dexterra Group and a non-controlling interest is recognized. For
the three months and year ended December 31, 2021, earnings of $0.1 million and $0.3 million were attributed to the non-
controlling interest, respectively, compared to earnings of $0.1 million and $0.4 million in the same periods of the prior year.
Joint Ventures
Dexterra Group owns 49% of Gitxaala Horizon North Services LP (“Gitxaala”) and Big Spring Lodging Limited Partnership (“BSL
LP”). Earnings from the joint ventures for the three months and year ended December 31, 2021 were $0.8 million and $2.5
million, respectively (2020 - $0.4 million and $0.7 million, respectively). These joint ventures provide services to certain camps
and utilize Dexterra’s staff and infrastructure to provide the services. For Gitxaala, volumes have increased from the prior year
as more relocatable structures were rented to clients for the full year. BSL LP began operations in the second half of 2021.
Income taxes
For the year ended December 31, 2021, the Corporation's effective income tax rate was 26.1%, compared to 16% in 2020. The
lower tax rate for the 2020 year was due to the Acquisition and related non-taxable bargain purchase gain. For the three
months ended December 31, 2021, the Corporation’s effective income tax rate was 26.0% (2020 - 97.4%). The tax rate in Q4
2020 was abnormal due to the $4.2 million reduction in the bargain purchase on the Acquisition which was non-taxable. The
Dexterra Group Annual Report 2021 | 13
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
effective tax rate for the three months and year ended December 31, 2021 is consistent with the combined federal and
provincial income tax rate.
The Corporation has non-capital losses for Canadian tax purposes of $79.9 million (December 31, 2020 - $75.7 million) available
to reduce future taxable income in Canada.
The Corporation paid $10.7 million (2020 - $3.3 million) in income taxes for the year ended December 31, 2021. $3.3 million of
this amount related to amounts owing for the year ended December 31, 2020 and $7.4 million was paid for 2021 tax
installments of which $2.2 million will be refunded based on the tax reorganization completed late in the year.
COVID-19 Pandemic
The situation resulting from COVID-19 and subsequent variants of the virus is uncertain and continues to evolve. The safety of
employees and customers continues to be a key priority. At this time, it is difficult to predict the impact the pandemic will
continue to have on the Corporation. The effective response to the changing situation with the COVID-19 pandemic continues
to be a major focus in the business. Recent disruptions to the supply chain have been experienced and are being managed. In
addition, hiring and retaining talent continues to be a challenge in the pandemic environment. We are actively managing our
human capital resources across all business segments. The degree of COVID-19 related impacts in 2022 are expected to vary by
geography, driven in part by regional vaccination rates, spread of new variants, provincial government restrictions and health
system capacities.
COVID-19 has adversely affected the Corporation’s financial results across all operating segments, with varying effects. IFM and
WAFES have been the most significantly impacted. IFM by reduced services in the retail and aviation sectors and WAFES has
experienced lower camp and catering activities including the British Columbia government mandated shutdowns in 2021 and
the temporary closure for all of 2021 of our Crossroads Lodge. Management has continued to invest in resources for the future
as it believes the COVID-19 pandemic will have a lessening impact on its business in 2022.
Outlook
Operations Outlook
Overall
The Corporation is poised for continued growth in 2022 as the economy is expected to move into a post-pandemic
environment. Management remains focused on executing on its organic and M&A expansion strategy by using a capital light
service model along with its strong balance sheet to drive sustainable growth. The acquisition strategy remains active, focusing
on expanding geographically and certain service offerings.
IFM
In the IFM business, the organic growth prospects and annual growth rates for the overall market are significant. Dexterra
Group has also been significantly impacted in both the aviation and retail sectors and expects the improvement in these sectors
to have a positive impact on its results as the population receives vaccinations and federal restrictions on travel lessen.
Management forecasts that this improvement will be gradual through 2022 and into 2023. The focus of this business is on
winning new bids and maintaining profit margins while providing excellent service to existing clients. In addition, the
acquisitions of Dana and Tricom gives us a new base of clients in hospitality and other verticals and new skills where expansion
possibilities exist. These acquisitions should also produce more cross-selling opportunities.
WAFES
The WAFES business is expected to continue to be strong in 2022, commensurate with expanded natural resources activity
nationwide. The Corporation is well positioned to take advantage in a highly competitive marketplace, including with the
expected reopening of its Crossroads Lodge in Kitimat, British Columbia. This facility has 736 beds and is expected to reopen in
the summer of 2022.
Modular
The demand for affordable housing in urban centers is strong. The CMHC’s Rapid Housing Initiative is an example of
government programs seeking to address the immediate need and, as a result, driving demand for modular housing solutions.
Favorable conditions for the development of multi-unit housing (both public and private) are expected to continue for the
foreseeable future. However, labour shortages, project delays and increasing prices of materials due to supply chain issues are
creating short-term challenges. The Corporation plans to scale and further diversify this business.
Dexterra Group Annual Report 2021 | 14
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
Subsequent Events
On January 1, 2022, Dexterra Group acquired 100% of privately owned Canadian hospitality company Dana from Fulcrum
Capital Partners for $31.5 million. This acquisition expands the Corporation’s existing culinary services into education,
entertainment, healthcare, and leisure activities and has approximately $100 million in annual contracts. Dana’s business is
expected to be impacted by the pandemic in 2022 so the full book of business will not be realized until at least 2023. This
acquisition broadens our service offerings, strengthens existing customer relations, and improves our ability to grow our
hospitality market share in new verticals.
On January 31, 2022, Dexterra Group acquired 100% of the business of privately owned TRICOM Facility Services Group. Tricom
delivers contract janitorial and associated building maintenance services and supplies custodial equipment and consumables to
clients in major centres across Canada. This acquisition brings the Corporation several key contracts and client relationships,
including a small footprint in the United States. The purchase price was $19 million, and has performance-based incentives tied
to results over the next two years, with an additional maximum payout of $5 million. Tricom’s book of business is expected to
exceed $35 million post-pandemic and increases Dexterra’s presence in the hotel, rail and leisure sectors.
Both of these acquisitions are being financed using the Company’s current credit lines which had $124.5 million of unused
capacity at December 31, 2021.
Liquidity and Capital Resources
For the three months ended December 31, 2021, cash generated from operating activities was $24.6 million, compared to $34.0
million generated in the same period of 2020. The Q4 2021 results included a working capital investment required to support
business growth. In addition, cash flows from operating activities in Q4 2020 were positively impacted by $1.2 million in legal
costs refunded and CEWS of $4.2 million. For the year ended December 31, 2021, there was $64.5 million cash generated from
operating activities, compared to $72.8 million generated in 2020. This was driven by a full year of operations for both
predecessor companies and growth in the business which was more than offset by $33.5 million lower CEWS in 2021.
The Corporation's financial position and liquidity are strong. The Corporation generated Free Cash Flow of $45.4 million for the
year ended December 31, 2021 and converted 56% of Adjusted EBITDA to Free Cash Flow. Debt was lower as at December 31,
2021 by $20 million as compared to December 31, 2020. Debt levels will increase with the Dana and Tricom acquisitions and the
dividend payments in January 2022 and are expected to approximate 1.5x adjusted EBITDA based on the current book of
business. Our strong free cash flow generation provides the ability to reduce debt, subject to future growth initiatives.
Capital Spending
For the year ended December 31, 2021, gross capital spending for property, plant and equipment was $5.9 million compared to
$3.5 million in the same period of 2020. Capital spending in 2021 was mainly focused on the NRB Cambridge plant expansion,
totaling $3.9 million, compared to the purchase of small equipment in 2020.
Quarterly Summary of Results
(000's except per share amounts)
Revenue
Adjusted EBITDA(1)
Net earnings attributable to shareholders
Net earnings per share, basic and diluted(2)
(000's except per share amounts)
Revenue
Adjusted EBITDA(1)
Net earnings (loss) attributable to shareholders
Net earnings per share, basic(2)
Net earnings per share, diluted(2)
Three months ended
2021
December
2021
September
2021
June
201,588 $
202,760 $
173,627 $
18,054
4,093
22,372
7,780
22,502
8,206
0.06 $
0.12 $
0.13 $
Three months ended
2020
December
2020
September
2020
June
164,418 $
176,918 $
76,106 $
17,477
(103)
— $
— $
27,085
16,131
0.25 $
0.24 $
23,241
47,139
1.08 $
1.08 $
$
$
$
$
$
2021
March
155,404
17,825
4,275
0.07
2020
March
60,373
3,284
864
0.03
0.03
(1)
(2)
Please refer to the “Non-GAAP measures” section for the definition of Adjusted EBITDA and to the “Reconciliation of non-GAAP measures” sections for the related calculations.
All share and per share data presented prior to Q3 2020 has been retroactively adjusted to reflect the five-for-one share consolidation completed on July 16, 2020.
Dexterra Group Annual Report 2021 | 15
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
Reconciliation of non-GAAP measures
The following provides a reconciliation of non-GAAP measures to the nearest measure under GAAP for items presented
throughout the MD&A.
Adjusted EBITDA
(000's)
Net earnings
Add:
Share based compensation
Depreciation & amortization
Equity investment depreciation
Finance costs
Bargain purchase (gain) reduction
Loss (gain) on disposal of property, plant and equipment
Income tax expense
Non-recurring items(2)
Adjusted EBITDA(1)
Three months ended December 31,
Years ended December 31,
$
2021
4,176 $
2020
2021
27 $
24,628 $
516
8,914
110
1,221
—
(308)
1,469
1,956
$
18,054 $
148
11,137
141
1,538
4,247
156
1,319
(1,236)
17,477 $
2,099
38,061
627
5,101
—
(425)
8,708
1,956
80,755 $
2020(3)
64,479
354
25,064
296
4,632
(29,881)
36
12,210
(6,103)
71,087
(1) Please refer to the “Non-GAAP measures” section for the definition of Adjusted EBITDA and Adjusted EBITDA excluding CEWS as a % of revenue.
(2) Non-recurring items for the three months and year ended December 31, 2021 includes $0.2 million of transaction costs related to the Dana Acquisition and a loss of $1.7 million related to a
legal dispute on a contract that was negotiated prior to the Acquisition. For the three months and year ended December 31, 2020, items include amounts awarded through legal proceedings
including legal costs of $1.2 million and $7.8 million, respectively. The year ended December 31, 2020 excludes non-recurring acquisition costs of $1.7 million associated with the acquisition
of Horizon North Logistics Inc.
(3) 2020 comparative information includes the results of Horizon North Logistics Inc. from May 29, 2020 onwards which was the effective date of the Acquisition.
Free Cash Flow
(000's)
Net cash flows from operating activities
Sustaining capital expenditures(2)
Proceeds on sale of property, plant and equipment
Purchase of intangible assets
Finance costs paid
Lease payments
Free Cash Flow(1)
Three months ended December 31,
Years ended December 31,
2021
2020
$
24,603 $
34,018 $
(351)
419
(353)
(1,128)
(2,399)
(881)
493
(854)
(1,379)
(2,328)
$
20,791 $
29,069 $
2021
64,486 $
(1,981)
749
(1,931)
(5,327)
(10,603)
45,393 $
2020
72,806
(1,938)
4,892
(1,524)
(4,989)
(5,231)
64,016
(1) Please refer to the “Non-GAAP measures” section for the definition of Free Cash Flow.
(2) Total capital expenditures for the three months and years ended December 31, 2021 were $0.6 million and $5.9 million respectively, which includes $0.3 million and $3.8 million in growth
capital mainly related to the NRB Cambridge plant (2020 - $0.9 million and $1.5 million, respectively). The capital contributions for equity investments are also considered to be growth
capital and are therefore excluded from the Free Cash Flow calculation.
Adjusted EBITDA excluding CEWS
(000's)
Total Adjusted EBITDA
CEWS by Segment:
Integrated Facilities management
WAFES
Modular Solutions
Corporate
Three months ended December 31,
Years ended December 31,
2021
2020
2021
$
18,054 $
17,477 $
80,755 $
—
—
—
—
(1,004)
(2,761)
(378)
(63)
(1,713)
(6,607)
(577)
(203)
2020
71,087
(13,742)
(14,685)
(3,273)
(1,245)
38,142
Adjusted EBITDA excluding CEWS
$
18,054 $
13,271 $
71,655 $
Accounting Policies
Dexterra Group’s IFRS accounting policies are provided in Note 3 to the 2021 Financial Statements for the years ended
December 31, 2021 and 2020.
Outstanding Shares
Dexterra Group had 65,151,083 voting common shares issued and outstanding as at March 9, 2022, of which 49% or 31,785,993
are owned by subsidiaries of Fairfax Financial.
Dexterra Group Annual Report 2021 | 16
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
Off-Balance Sheet Financing
Dexterra Group has no off-balance sheet financing.
Management’s Report on Disclosure Controls and Procedures and Internal Controls over
Financial Reporting
Disclosure Controls and Procedures
The Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) have designed, or caused to be designed under their
supervision, disclosure controls and procedures (“DC&P”) as defined in National Instrument 52-109 - Certification of Disclosure
in Issuers' Annual and Interim Filings (“NI 52-109”) of the Canadian Securities Administrators, to provide reasonable assurance
that: (i) material information relating to the Corporation is made known to the CEO and the CFO by others, particularly during
the period in which the interim filings are being prepared; and (ii) information required to be disclosed by the Corporation in its
annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed,
summarized and reported within the time periods specified in securities legislation.
There were no changes in Dexterra Group’s DC&P that occurred during the year ended December 31, 2021 that have materially
affected, or are reasonably likely to materially affect, Dexterra Group’s DC&P.
Internal Controls over Financial Reporting
The CEO and the CFO have designed, or caused to be designed under their supervision, internal controls over financial reporting
(“ICFR”) as defined in NI 52-109 of the Canadian Securities Administrators, in order to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.
There were no changes to the Corporation’s ICFR during the year ended December 31, 2021 that have materially affected, or
are reasonably likely to materially affect, the Corporation’s ICFR.
Limitations on the Effectiveness of Disclosure Controls and Procedures and Internal Control over Financial
Reporting
Because of their inherent limitations, DC&P and ICFR may not prevent or detect misstatements, errors or fraud. Control
systems, no matter how well conceived or implemented, can provide only reasonable, not absolute, assurance that the
objectives of the control systems are met.
Risks and Uncertainties
The financial risks, critical accounting estimates and judgements, and risk factors related to Dexterra Group and its business,
which should be carefully considered, are disclosed in the Annual Information Form under “Risk Factors” and in the
Corporation's Consolidated Financial Statements for the year ended December 31, 2021 under Note 21, dated March 9, 2021,
and this MD&A should be read in conjunction with them. Such risks may not be the only risks facing Dexterra Group. Additional
risks not currently known may also impair Dexterra Group’s business operations and results of operation.
Critical Accounting Estimates and Judgements
This MD&A of Dexterra Group’s financial condition and results of operations is based on its consolidated financial statements,
which are prepared in accordance with IFRS. The preparation of the consolidated financial statements requires management to
make estimates and judgements about the future. Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The MD&A should
be read in conjunction with the 2021 Financial Statements.
Financial Instruments and Risk Management
In the normal course of business, the Corporation is exposed to a number of financial risks that can affect its operating
performance. These risks are: COVID-19, credit risk, liquidity risk and interest rate risk. The Corporation’s overall risk
management program and prudent business practices seek to minimize any potential adverse effects on the Corporation’s
financial performance. The MD&A should be read in conjunction with the 2021 Financial Statements.
Forward-Looking Information
Certain statements contained in this MD&A may constitute forward-looking information under applicable securities law.
Forward-looking information may relate to Dexterra Group’s future outlook and anticipated events, business, operations,
financial performance, financial condition or results and, in some cases, can be identified by terminology such as “continue”;
“forecast”; “may”; “will”; “project”; “could”; “should”; “expect”; “plan”; “anticipate”; “believe”; “outlook”; “target”; “intend”;
“estimate”; “predict”; “might”; “potential”; “continue”; “foresee”; “ensure” or other similar expressions concerning matters
that are not historical facts. In particular, statements regarding Dexterra Group’s future operating results and economic
Dexterra Group Annual Report 2021 | 17
Management’s Discussion and Analysis
Three months and years ended December 31, 2021 and 2020
performance, including COVID-19 related impacts and the impacts of the Dana and Tricom acquisitions; its leverage, NRB
Modular Solutions backlog, and its objectives and strategies are forward-looking statements. These statements are based on
certain factors and assumptions, including expected growth, results of operations, performance and business prospects and
opportunities regarding Dexterra Group, which Dexterra Group believes are reasonable as of the current date. While
management considers these assumptions to be reasonable based on information currently available to Dexterra Group, they
may prove to be incorrect. Forward-looking information is also subject to certain known and unknown risks, uncertainties and
other factors that could cause Dexterra Group’s actual results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by such forward- looking information, including, but not
limited to: the ability to retain clients, renew existing contracts and obtain new business; an outbreak of contagious disease that
could disrupt its business; the highly competitive nature of the industries in which Dexterra Group operates; reliance on
suppliers and subcontractors; cost inflation; volatility of industry conditions could impact demand for its services; a reduction in
the availability of credit could reduce demand for Dexterra Group’s products and services; Dexterra Group’s significant
shareholder may substantially influence its direction and operations and its interests may not align with other shareholders; its
significant shareholder’s 49% ownership interest may impact the liquidity of the common shares; cash flow may not be
sufficient to fund its ongoing activities at all times; loss of key personnel; the failure to receive or renew permits or security
clearances; significant legal proceedings or regulatory proceedings/changes; environmental damage and liability is an operating
risk in the industries in which Dexterra Group operates; climate changes could increase Dexterra Group’s operating costs and
reduce demand for its services; liabilities for failure to comply with public procurement laws and regulations; any deterioration
in safety performance could result in a decline in the demand for its products and services; failure to realize anticipated benefits
of acquisitions and dispositions; inability to develop and maintain relationships with Indigenous communities; the seasonality of
Dexterra Group’s business; inability to restore or replace critical capacity in a timely manner; reputational, competitive and
financial risk related to cyber-attacks and breaches; failure to effectively identify and manage disruptive technology; economic
downturns can reduce demand for Dexterra Group’s services; its insurance program may not fully cover losses. Additional risks
and uncertainties are described in Note 21 of the Corporation's Consolidated Financial Statements for the years ended
December 31, 2021 and 2020 contained in its most recent Annual Report filed with securities regulatory authorities in Canada
and available on SEDAR at sedar.com. The reader should not place undue importance on forward-looking information and
should not rely upon this information as of any other date. Dexterra Group is under no obligation and does not undertake to
update or alter this information at any time, except as may be required by applicable securities law.
Dexterra Group Annual Report 2021 | 18
MANAGEMENT’S REPORT
TO SHAREHOLDERS
Dexterra Group Annual Report 2021 | 19
MANAGEMENT’S REPORT TO SHAREHOLDERS
The accompanying consolidated financial statements of Dexterra Group Inc. (“Dexterra
Group” or the “Corporation”) have been approved by the Board of Directors (the
“Board”) of Dexterra Group and have been prepared by management in accordance
with International Financial Reporting Standards. Financial statements will, by
necessity, include certain amounts based on estimates and judgments. The financial
information contained throughout this report has been reviewed to ensure consistency
with these consolidated financial statements.
Management has overall responsibility for internal controls and maintains accounting
systems designed to provide reasonable assurance that transactions are properly
authorized, assets safeguarded and that the financial records form a reliable base
for the preparation of accurate and timely financial information. The Chief Executive
Officer and Chief Financial Officer have evaluated the effectiveness of disclosure
controls and procedures and internal controls over financial reporting and have
concluded that they are effective.
The Board oversees the management of the business and affairs of Dexterra Group;
including ensuring management fulfills its responsibilities for financial reporting and is
ultimately responsible for reviewing and approving the financial statements. The Board
carries out this responsibility principally through its Audit Committee, which consists of
four independent directors. An independent firm of chartered accountants, appointed
as external auditor by the shareholders, has audited the consolidated financial
statements and its report is included herein. The Audit Committee has reviewed the
consolidated financial statements with management and the external auditor.
John Mac Cuish
President and Chief Executive Officer
Drew Knight
Chief Financial Officer
Dexterra Group Annual Report 2021 | 20
INDEPENDENT AUDITOR’S REPORT
TO SHAREHOLDERS
Dexterra Group Annual Report 2021 | 21
Independent auditor’s report
To the Shareholders of Dexterra Group Inc.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of Dexterra Group Inc. and its subsidiaries (together, the Corporation) as at
December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in
accordance with International Financial Reporting Standards (IFRS).
What we have audited
The Corporation’s consolidated financial statements comprise:
●
●
●
●
●
the consolidated statements of financial position as at December 31, 2021 and 2020;
the consolidated statements of comprehensive income for the years then ended;
the consolidated statements of changes in equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
the notes to the consolidated financial statements, which include significant accounting policies and
other explanatory information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Corporation in accordance with the ethical requirements that are relevant to
our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical
responsibilities in accordance with these requirements.
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 December 31, 2021. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
PricewaterhouseCoopers LLP
PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2
T: +1 416 863 1133, F: +1 416 365 8215
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Dexterra Group Annual Report 2021 | 22
Key audit matter
How our audit addressed the key audit matter
Impairment assessment of goodwill
Our approach to addressing the matter involved the
Refer to note 2 − Statement of compliance,
note 3 − Significant accounting policies and
determination of fair values and note 8 − Intangible
assets and goodwill to the consolidated financial
statements.
The Corporation had goodwill of $98.6 million as at
December 31, 2021 which is allocated to cash
generating units (CGUs). Goodwill is subject to
impairment testing on an annual basis and at the
end of each reporting period during the year if an
indicator of impairment exists. Impairment exists
when the carrying value of a CGU exceeds its
recoverable amount.
Management applied significant judgment in
determining the recoverable amounts. The
recoverable amounts of the CGUs were based on a
fair value less cost of disposal method using
discounted cash flow models. Significant
assumptions used in the discounted cash flow
models included forecasted cash flows, revenue
growth rates and discount rates. Management
concluded that there was no impairment of goodwill
as at December 31, 2021.
We considered this a key audit matter due to the
significant judgment applied by management in
determining the recoverable amounts of the CGUs,
including the development of significant
assumptions. This, in turn, led to a high degree of
auditor judgment, subjectivity and effort in
performing procedures and evaluating audit
evidence relating to the significant assumptions
used by management. The audit effort involved the
use of professionals with specialized skill and
knowledge in the field of valuation.
following procedures, amongst others:
Evaluated how management determined the
recoverable amounts of the CGUs, which
included the following:
- Assessed the appropriateness of the
method used and tested the mathematical
accuracy of the discounted cash flow
models.
- Evaluated the reasonableness of significant
assumptions such as forecasted cash flows
and revenue growth rates applied by
management in the discounted cash flow
models by considering management’s
budget, strategy and business plan
approved by the Board of Directors, current
and past performance of the CGU’s and
industry data published by third parties.
- Professionals with specialized skill and
knowledge in the field of valuation assisted
in evaluating the appropriateness of
management’s fair value less costs of
disposal method and testing the
reasonableness of the discount rates.
- Tested the underlying data used in the
discounted cash flow models.
● Tested the disclosures made in the
consolidated financial statements, particularly
on the sensitivity of the significant assumptions
used.
Key audit matter
How our audit addressed the key audit matter
Impairment assessment of goodwill
Refer to note 2 − Statement of compliance,
note 3 − Significant accounting policies and
determination of fair values and note 8 − Intangible
assets and goodwill to the consolidated financial
statements.
The Corporation had goodwill of $98.6 million as at
December 31, 2021 which is allocated to cash
generating units (CGUs). Goodwill is subject to
impairment testing on an annual basis and at the
end of each reporting period during the year if an
indicator of impairment exists. Impairment exists
when the carrying value of a CGU exceeds its
recoverable amount.
Management applied significant judgment in
determining the recoverable amounts. The
recoverable amounts of the CGUs were based on a
fair value less cost of disposal method using
discounted cash flow models. Significant
assumptions used in the discounted cash flow
models included forecasted cash flows, revenue
growth rates and discount rates. Management
concluded that there was no impairment of goodwill
as at December 31, 2021.
We considered this a key audit matter due to the
significant judgment applied by management in
determining the recoverable amounts of the CGUs,
including the development of significant
assumptions. This, in turn, led to a high degree of
auditor judgment, subjectivity and effort in
performing procedures and evaluating audit
evidence relating to the significant assumptions
used by management. The audit effort involved the
use of professionals with specialized skill and
knowledge in the field of valuation.
Our approach to addressing the matter involved the
following procedures, amongst others:
Evaluated how management determined the
recoverable amounts of the CGUs, which
included the following:
- Assessed the appropriateness of the
method used and tested the mathematical
accuracy of the discounted cash flow
models.
- Evaluated the reasonableness of significant
assumptions such as forecasted cash flows
and revenue growth rates applied by
management in the discounted cash flow
models by considering management’s
budget, strategy and business plan
approved by the Board of Directors, current
and past performance of the CGU’s and
industry data published by third parties.
- Professionals with specialized skill and
knowledge in the field of valuation assisted
in evaluating the appropriateness of
management’s fair value less costs of
disposal method and testing the
reasonableness of the discount rates.
- Tested the underlying data used in the
discounted cash flow models.
● Tested the disclosures made in the
consolidated financial statements, particularly
on the sensitivity of the significant assumptions
used.
Dexterra Group Annual Report 2021 | 23
Other information
Management is responsible for the other information. The other information comprises the information,
other than the consolidated financial statements and our auditor’s report thereon, included in the annual
report.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated 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 consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Corporation’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 Corporation or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Corporation’s financial reporting
process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 generally accepted auditing standards
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 consolidated financial statements.
Dexterra Group Annual Report 2021 | 24
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated 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 Corporation’s internal control.
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 Corporation’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 consolidated 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 Corporation to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated 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 Corporation to express an opinion on the consolidated 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.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated 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 Corporation’s internal control.
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 Corporation’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 consolidated 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 Corporation to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated 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 Corporation to express an opinion on the consolidated 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.
Dexterra Group Annual Report 2021 | 25
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 Michael Hawtin.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Ontario
March 9, 2022
Dexterra Group Annual Report 2021 | 26
CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2021 and December 31, 2020
Dexterra Group Annual Report 2021 | 27
Consolidated statement of financial position
(000’s)
Assets
Current assets
Trade and other receivables
Inventories
Prepaid expenses and other
Income tax receivable
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Goodwill
Deferred income taxes
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Deferred revenue
Income tax payable
Asset retirement obligations
Lease liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Contingent consideration
Asset retirement obligations
Loans and borrowings
Deferred income taxes
Non-current liabilities
Total liabilities
Shareholders’ Equity
Share capital
Contributed surplus
Retained earnings
Non-controlling interest
Total shareholders’ equity
Note
December 31,
2021
December 31,
2020
4,21
$
184,776
$
5
6
7
8
8
9
13
11
7
7
11
10
12
16,998
4,948
2,213
208,935
161,981
22,057
21,777
98,640
—
18,158
322,613
$
$
531,548
$
122,637
$
1,946
—
5,277
7,346
137,206
17,722
1,142
5,283
65,320
527
89,994
227,200
233,541
1,199
69,639
(31)
304,348
149,532
12,445
5,981
—
167,958
184,047
22,052
23,457
98,640
2,587
14,782
345,565
513,523
81,815
3,310
2,895
5,102
7,160
100,282
18,921
1,448
6,527
85,369
—
112,265
212,547
232,348
354
66,451
1,823
300,976
513,523
Total liabilities and shareholders’ equity
$
531,548
$
The accompanying notes are an integral part of the consolidated financial statements.
Subsequent events (Note 25)
Mary Garden
Director, Audit Committee Chair
John MacCuish
Director, Chief Executive Officer
Dexterra Group Annual Report 2021 | 28
Consolidated statement of comprehensive income
(000's except per share amounts)
Revenue
Revenue from operations
Other revenue
Total revenue
Operating expenses
Direct costs
Selling, general and administrative expenses
Depreciation
Amortization of intangible assets
Share based compensation
Loss (gain) on disposal of property, plant and equipment
Operating income
Finance costs
Earnings from equity investments
Bargain purchase gain
Earnings before income taxes
Income tax
Income tax expense
Net earnings and comprehensive income
Net Earnings Attributable to:
Shareholders
Non-controlling interest
Earnings per common share:
Net earnings per share, basic
Net earnings per share, diluted
Weighted average common shares outstanding:
Basic
Diluted
The accompanying notes are an integral part of the consolidated financial statements.
Years ended December 31,
Note
2021
2020
$
733,380
$
471,246
—
733,380
6,569
477,815
622,837
34,853
34,450
3,611
2,099
(425)
35,955
5,101
(2,482)
—
33,336
379,502
22,107
22,139
2,925
354
36
50,752
4,632
(688)
(29,881)
76,689
8,708
24,628
$
12,210
64,479
24,355
273
$
$
64,031
448
0.37
0.37
$
$
1.25
1.24
65,075
65,420
51,311
51,447
$
$
$
$
$
13
14
15
6,7
8
12
24
16
18
18
18
18
Dexterra Group Annual Report 2021 | 29
Consolidated statement of changes in equity
(000’s)
Share capital
- Number of
Shares(1)
Note
Share capital
Contributed
surplus
Retained
earnings
Non-
controlling
interest
Total
Balance as at Balance as at December 31, 2019
31,786 $
131,543 $
— $
12,150 $
1,430 $
145,123
Effect of reverse acquisition of Horizon North Logistics Inc.
24
33,083
100,904
Share issuance costs
Dividends
Share based compensation
Net income
Balance as at December 31, 2020
Dividends
Exercise of stock options
Share based compensation
Net income
19
12
19
12
12
—
—
—
—
(99)
—
—
—
—
—
—
354
—
—
—
—
—
100,904
(99)
(9,730)
(55)
(9,785)
—
64,031
—
448
354
64,479
64,869 $
232,348 $
354 $
66,451 $
1,823 $
300,976
— $
— $
— $
(21,167) $
(2,127) $
(23,294)
282
—
—
1,193
(334)
—
—
1,179
—
—
—
24,355
—
—
273
859
1,179
24,628
Balance as at December 31, 2021
65,151 $
233,541 $
1,199 $
69,639 $
(31) $
304,348
(1) Comparative information has been retroactively adjusted to reflect the five-to-one share consolidation which was completed on July 16, 2020.
The accompanying notes are an integral part of the consolidated financial statements.
Dexterra Group Annual Report 2021 | 30
Consolidated statement of cash flows
(000’s)
Cash provided by (used in):
Operating activities:
Net earnings
Adjustments for:
Depreciation
Amortization of intangible assets
Share based compensation
Loss (gain) on disposal of property, plant and equipment
Bargain purchase gain
Book value of used fleet transferred to inventory
Purchase of rental fleet
Earnings from equity investments
Non-cash revaluation of contingent consideration
Asset retirement obligation settled
Finance costs
Income tax expense
Changes in non-cash working capital
Income taxes paid
Net cash flows from operating activities
Investing activities:
Purchase of property, plant and equipment
Purchase of intangible assets
Capital contribution for equity investments
Proceeds on sale of property, plant and equipment
Net cash flows used in investing activities
Financing activities:
Issuance of common shares
Payments for lease liabilities
Repayments of loans and borrowings
Finance costs paid
Dividends paid to non-controlling interest
Dividends paid to shareholders
Net cash flows used in financing activities
Change in cash position
Cash, beginning of period
Cash, end of period
Years ended December 31,
Note
2021
2020
$
24,628
$
64,479
6,7
8
12
24
6
6
11
16
17
16
6
8
12
10
19
34,450
3,611
2,099
(425)
—
6,373
(4,356)
(2,482)
(306)
(2,041)
5,101
8,708
(172)
(10,702)
64,486
(5,860)
(1,931)
(949)
749
(7,991)
859
(10,603)
(19,942)
(5,327)
(1,151)
(20,331)
(56,495)
—
—
$
—
$
22,139
2,925
354
36
(29,881)
2,067
(2,283)
(688)
—
(1,360)
4,632
12,210
1,467
(3,291)
72,806
(3,462)
(1,524)
(2,264)
4,892
(2,358)
—
(5,231)
(57,885)
(4,989)
(55)
(4,865)
(73,025)
(2,577)
2,577
—
The accompanying notes are an integral part of the consolidated financial statements.
Dexterra Group Annual Report 2021 | 31
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
1. Reporting entity
Dexterra Group Inc. (“Dexterra Group” or the “Corporation”) is a corporation registered and domiciled in Canada and its
common shares are listed on the Toronto Stock Exchange (“TSX”) under the symbol DXT. Dexterra Group is a diversified support
services organization delivering quality solutions for the creation, management, and operation of infrastructure across Canada.
Our Integrated Facilities Management (“IFM”) business delivers operation and maintenance solutions for built assets and
infrastructure in the public and private sectors, including aviation, defence and security, retail, healthcare, education and
government. Our Workforce Accommodations, Forestry and Energy Services (“WAFES”) business provides a full range of
workforce accommodations solutions, forestry services and access solutions to clients in the energy, mining, forestry and
construction sectors among others. Our Modular Solutions business integrates modern design concepts with off-site
manufacturing processes to produce high-quality building solutions for rapid affordable housing, commercial, residential and
industrial clients.
On May 29, 2020, Dexterra Group (previously Horizon North Logistics Inc. (“Horizon North”)) completed a transaction (the
“Acquisition”) with 10647802 Canada Limited, operating as Dexterra Integrated Facilities Management (“Dexterra”), a
subsidiary of Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) (“Fairfax Financial”). Pursuant to the Acquisition, the
Corporation acquired all of the outstanding common shares of Dexterra and in exchange issued 31,785,993 common shares of
Dexterra Group to Dexterra’s sole shareholder, 9477179 Canada Inc., a wholly-owned subsidiary of Fairfax Financial.
Accordingly, Fairfax Financial indirectly owns a 49% interest in the combined Corporation, while existing shareholders of the
Corporation maintained a 51% interest. Prior to the Acquisition, Fairfax Financial had no ownership interest in Dexterra Group.
For accounting purposes, the Acquisition constituted a reverse acquisition that involved a change of control of Dexterra Group
and a business combination of Horizon North and Dexterra, to form a new corporation that now carries on operations as
Dexterra Group Inc. Based on the guidance in IFRS 3, Business Combinations (“IFRS 3”), it was determined that Horizon North
was the accounting acquiree and Dexterra was the accounting acquirer, as Fairfax Financial, the sole shareholder of Dexterra,
now controls the Corporation. As a result, the operations for Horizon North are included in the results from May 29, 2020
onwards and its assets and liabilities are valued at their fair value on the date of acquisition in accordance with IFRS 3 and a
bargain purchase gain of $29.9 million was recorded on Acquisition (Note 24).
On July 16, 2020, the Corporation completed a five-for-one share consolidation of all of its issued and outstanding common
shares (the “Consolidation”). All share and per share data presented in the Corporation’s consolidated financial statements,
including share options outstanding, has been retroactively adjusted to reflect the Consolidation, unless otherwise noted.
2. Statement of compliance
Basis of Preparation
a.
Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRS”).
The consolidated financial statements were authorized for issue by the Board of Directors on March 9, 2022.
b. Basis of measurement
The consolidated financial statements have been prepared using the historical cost basis.
Dexterra Group Annual Report 2021 | 32
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
c. Functional and presentation currency
These consolidated financial statements are presented in Canadian dollars ("CAD"), which is the Corporation and
subsidiaries’ functional currency with the exception of a United States (“US”) operational entity which has a US dollar
("USD") functional currency.
d. Use of estimates and judgments
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. The judgments, estimates and associated assumptions are based on historical experience and other factors that
are considered to be relevant. Actual outcomes may differ from these estimates. The judgments, estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision
affects both current and future periods. The following are the list of judgments, estimates and assumptions in the
consolidated financial statements:
Estimates & Judgments
•
•
•
•
•
•
Purchase price equations - The acquired assets and assumed liabilities are generally recognized at fair value on the date
the Corporation obtains control of a business. The measurement of each business combination is based on the information
available on the acquisition date. Management applied significant judgment in estimating the fair value of property, plant
and equipment. For a significant portion of the property, plant and equipment, management used a cost approach
adjusted for economic obsolescence to value these assets. Significant assumptions were developed with respect to the
cost approach including the replacement costs, inflation indices, physical depreciation and obsolescence considerations in
the valuation of property, plant and equipment. Adjustments for economic obsolescence were based on discounted cash
flow models which included the following assumptions: forecasted cash flows, growth rates and discount rates attributable
to these assets. The estimate of fair value of the acquired intangible assets and other assets and the liabilities are largely
based on projected cash flows, discount rates, and market conditions at the date of acquisition.
Impairment - Impairment exists when the carrying value of an asset or cash generating unit (“CGU”) exceeds its
recoverable amount, which is the higher of its fair value less costs of disposal (“FVLCOD”) and its value in use (“VIU”). The
FVLCOD calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets
or observable market prices less incremental costs for disposing of the asset. If no such transactions can be identified, an
appropriate valuation model is used. The Corporation’s calculation of recoverable amount is based on a discounted cash
flow model. Management applied significant judgment in determining the recoverable amounts. The most significant
assumptions in estimating the recoverable amount of each CGU include forecasted cash flows, revenue growth rates and
discount rates. Forecasted cash flows include assumptions around EBITDA (Earnings before interest, taxes, depreciation,
amortization, depreciation from equity investment, share based compensation, bargain purchase gain and gain/loss on
disposal of property, plant and equipment).
Revenue Recognition Estimate - The Corporation recognizes revenue over a period of time as work is completed for its
construction contracts and estimates progress of these contracts by comparing costs incurred to the total expected costs
of the project. To determine the estimated costs to complete construction contracts, assumptions and estimates are
required to evaluate matters related to schedule, material and labour costs, labour productivity, changes in contract scope
and subcontractor costs. Due to the nature of construction activities, estimates can change significantly over the life of the
contracts.
Construction Receivable Estimate - The price of construction contracts may change over the duration of the construction
period. Change orders may be issued by customers to modify the original contract scope of work or conditions resulting in
possible disputes or claims regarding additional amounts owing may arise. Construction work related to a change order or
claim may proceed, and costs may be incurred, in advance of final determination of the value of the change order. As many
change orders and claims may not be settled until the end of the construction project, management estimates what
changes orders to include in the determination of revenue recognized and changes in these estimates could result in
significant increases or decreases in revenue and income during any particular accounting period.
Collectability of receivables - The Corporation estimates the collectability of accounts receivable, including unbilled
accounts receivable related to current period service revenue. An analysis of historical bad debts, client creditworthiness,
the age of accounts receivable and current economic trends and conditions are used to evaluate the adequacy of the
provision for expected credit losses and the collectability of receivables. Significant estimates and judgment must be made
and used in connection with establishing the provision in any accounting period which may result in differences from
actual results.
Asset Retirement Obligation (“ARO”) - The Corporation recognizes an asset retirement obligation to account for future
demobilization and reclamation of owned camps. Use of an ARO requires estimates of the asset retirement costs, timing of
payments, present value discount rate and inflation rate to determine the amount recognized in accordance with the
accounting policy set out in Note 3(i).
Dexterra Group Annual Report 2021 | 33
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
•
Share-based compensation transactions - The fair value of the employee share options is measured using the Black-Scholes
option pricing model. Measurement inputs include the share price on measurement date, the exercise price of the
instrument, the expected volatility (based on weighted average historic volatility adjusted for changes expected due to
publicly available information), the weighted average expected life of the instruments (based on historical experience and
general option holder behavior), the forfeiture rate, the expected dividends, and the risk-free interest rate (based on
government bonds). Service and non-market performance conditions are not taken into account in determining fair value.
3. Significant accounting policies and determination of fair values
(a) Basis of consolidation
i.
Subsidiaries
Subsidiaries are entities controlled by the Corporation. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases. The
accounting policies of subsidiaries are aligned with the policies adopted by the Corporation.
ii.
Joint ventures
The Corporation’s joint ventures are those entities over whose activities the Corporation has joint control, established
through ownership, voting rights, or by contractual agreement. Joint ventures are accounted for using the equity
method (equity accounted investees) and are initially recognized at cost.
iii. Special purpose entities
The Corporation has established a number of special purpose entities (“SPE”) for operating purposes. An SPE is
consolidated when, based on an evaluation of the substance of its relationship with the Corporation and the SPE's
risks and rewards, the Corporation concludes that it controls the SPE. Control exists when the Corporation is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity.
iv.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with
equity accounted investees are eliminated against the investment to the extent of the Corporation’s interest in the
investee.
v.
Non-controlling interest
The Corporation owns 49% of Tangmaarvik Inland Camp Services Inc. and is exposed to variable returns from its
involvement with the entity such that control exists. As a result, the results of Tangmaarvik Inland Camp Services Inc.
are consolidated with the results of the Corporation and a non-controlling interest is recorded.
(b) Business combinations
Business combinations are accounted for using the acquisition method. Determining whether an acquisition meets the
definition of a business combination or represents an asset purchase requires judgment on a case by case basis. If the
acquisition meets the definition of a business combination, the assets acquired and assumed liabilities are classified or
designated based on the contractual terms, economic conditions, the Corporation’s operating and accounting policies, and
other factors that exist on the acquisition date. The acquired identifiable net assets are measured at their fair value at the
date of acquisition. Any excess of the purchase price over the fair value of the net assets acquired is recognized as
goodwill. Furthermore, any excess of the fair value of the net assets acquired over the purchase price is recognized as a
bargain purchase gain.
Acquisition costs, other than those associated with the issue of debt or equity securities, that the Corporation incurs in
connection with a business combination are expensed as incurred.
(c) Financial instruments
IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, fair value through
other comprehensive income (“FVOCI”) and fair value through the consolidated statement of comprehensive income
(“FVTPL”). The classification of financial assets under IFRS 9 is generally based on the business model in which a financial
asset is managed and its contractual cash flow characteristics. Derivatives embedded in contracts where the host is a
financial asset in the scope of the standard are not separated. Instead, the hybrid financial instrument as a whole is
assessed for classification.
The “expected credit loss” model applies to financial assets measured at amortized cost, and contract assets and debt
instruments at FVOCI.
i.
Non-derivative financial assets
Dexterra Group Annual Report 2021 | 34
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
The initial classification of a financial asset depends upon the Corporation’s business model for managing its financial
assets and the contractual terms of the cash flows. There are three measurement categories into which the
Corporation classified its financial assets:
Amortized Cost: Includes assets that are 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 represent solely
payments of principal and interest;
FVOCI: Includes assets that are held within a business model whose objective is achieved by both collecting
contractual cash flows and selling the financial assets, where its contractual terms give rise on specified dates to
cash flows that represent solely payments of principal and interest; or
FVTPL: Includes assets that do not meet the criteria for amortized cost or FVOCI and are measured at fair value
through the consolidated statement of comprehensive income. This includes all derivative financial assets.
The Corporation initially recognizes trade and other receivables on the date that they originate. All other financial
assets are recognized initially on the trade date at which the Corporation becomes a party to the contractual
provisions of the instrument.
The Corporation’s financial assets, trade and other receivables, are initially recognized at fair value plus any directly
attributable transaction costs. Subsequently, they are measured at amortized cost using the effective interest
method, less any impairment losses.
The Corporation derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or
it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets
that is created or retained is recognized as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial
position when, and only when, there is a legal right to offset the amounts and the Corporation intends either to settle
on a net basis or to realize the asset and settle the liability simultaneously.
ii. Non-derivative financial liabilities
The Corporation’s financial liabilities are categorized as measured at amortized cost. The Corporation initially
recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial
liabilities are recognized initially on the trade date at which it becomes a party to the contractual provisions of the
instrument.
The Corporation derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.
Bank overdrafts that are repayable on demand and form an integral part of the Corporation’s cash management are
included as a component of loans and borrowings for the purpose of the statement of cash flows.
Liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition these financial liabilities are measured at amortized cost using the effective interest method.
iii.
Share capital
Common shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and
share options are recognized as a deduction from equity, net of any tax effects.
(d) Property, plant and equipment
i.
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset, including non-recoverable
indirect taxes, acquisition costs including the cost of materials and direct labour, any other costs directly attributable
to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items
and restoring the site on which they are located, and borrowing costs on qualifying assets.
Costs related to assets under construction are capitalized when incurred. Assets under construction are not
depreciated until they are completed and available for use in the manner intended by management. When this
occurs, the asset is transferred to the appropriate class of property, plant and equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.
Dexterra Group Annual Report 2021 | 35
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment, and are recognized net within operating
expenses in the consolidated statement of comprehensive income.
Proceeds from the sale of rental equipment that is routinely sold before the end of its useful life are included in
revenue and net cash flows from operating activities. The investments in the acquisition or manufacturing of rental
equipment is also included in net cash flows from operating activities if the assets are expected to be predominantly
sold before the end of their useful life, otherwise the investments are included in net cash flows from investing
activities.
ii.
Subsequent costs
The cost of replacing a major component of an item of property, plant and equipment is recognized in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will flow to the
Corporation, and its cost can be measured reliably. The carrying amount of the replaced major component is
derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in the
consolidated statement of comprehensive income as incurred.
iii. Depreciation
Depreciation is calculated using the depreciable amount, which is the cost of an asset, less its residual value.
Depreciation is recognized in the consolidated statement of comprehensive income on a straight-line basis over the
estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the
expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are
depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the
Corporation will obtain ownership by the end of the lease term.
The estimated useful lives for the current and comparative periods are as follows:
Assets
Buildings
Furniture & fixtures
Leasehold improvements
Computer hardware & software
Automotive
Mats
Camp facilities (residual value of 20%)
Camp & catering supplies
Equipment
Method
Straight-line
Straight-line
Straight-line
Straight-line
Straight-line
Straight-line pool
Straight-line
Straight-line pool
Useful life
25 years
5 years
Term of lease
5 years
4-8 years
6 years
15 years
3 years
Straight-line
5-10 years
Depreciation methods, useful lives, and residual values are reviewed at each financial year end and adjusted if
required. Land and assets under construction are not depreciated.
(e) Intangible assets
i.
Goodwill
Goodwill arises on the acquisition of subsidiaries, associates and joint ventures. Goodwill is measured at cost less
accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included
in the carrying amount of the investment. Goodwill is not amortized but is tested at least annually for impairment and
at the end of each reporting period during the year if an indicator of impairment exists.
Dexterra Group Annual Report 2021 | 36
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
ii.
Assets acquired
Intangible assets are acquired as a result of a business combination or through the purchase of other contractual or
legal rights which are transferable or separable. Intangibles acquired as part of a business combinations are measured
at fair value on initial recognition. Intangible assets purchased are measured at cost. Amortization is charged on a
straight line basis to the consolidated statement of comprehensive income over their expected useful lives, as follows:
Assets
Customer relationships
Trade Names
Software and other
Method
Straight-line
Straight-line
Straight-line
Useful life
Up to 15 years
7 years
3 years
Amortization methods, useful lives, and residual values are reviewed at each financial year-end and adjusted if
required.
(f) Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on a weighted
average cost principle and includes expenditures incurred in acquiring the inventories, production or conversion costs, and
other costs in bringing them to their existing location and condition. In the case of manufactured inventories and work-in-
progress, cost includes an appropriate share of production overheads based on normal operating capacity.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.
(g) Impairment
i.
Financial assets
An impairment loss in respect of a financial asset measured at amortized cost is calculated using the “expected credit
loss” model and recognizes expected credit losses as a loss allowance. The Corporation recognizes an amount equal to
the lifetime expected credit losses based on the Corporation’s historical experience and including forward-looking
information. The carrying amount of these assets in the consolidated statement of financial position is net of any loss
allowance. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment
loss is reversed through net earnings.
ii. Non-financial assets
The carrying amounts of the Corporation’s non-financial assets, other than inventories and deferred tax assets are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful
lives or assets that are not yet available for use, the recoverable amount is estimated each year at the same time.
The recoverable amount of an asset is the greater of its value in use (“VIU”) and its fair value less costs of disposal
(“FVLCOD”). In assessing the recoverable amount, 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 the purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or groups of assets (the "CGU"). The Corporation has identified four
CGUs: Workforce Accommodations and Forestry, Energy Services, Integrated Facilities Management, and Modular
Solutions. For the purposes of goodwill impairment testing, goodwill acquired in a business combination is allocated
to the CGU or group of CGUs that are expected to benefit from the synergies of the business combination. This
allocation is subject to an operating segment ceiling test and reflects the lowest level at which that goodwill is
monitored for internal reporting purposes.
The Corporation’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate
asset may be impaired, then the recoverable amount is determined for the group of CGUs to which the corporate
asset belongs.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable
amount. Impairment losses are recognized in the consolidated statement of comprehensive income. Impairment
losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the
units and then to reduce the carrying amounts of the other assets in the unit (group of units), on a pro rata basis. An
impairment loss in respect of goodwill is not reversed.
Dexterra Group Annual Report 2021 | 37
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
(h) Employee benefits
i.
Defined contribution plan
The Corporation’s defined contribution plan is a post-employment benefit plan under which the Corporation pays
fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in the
statement of comprehensive income when they are due.
ii.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided. A liability is recognized for the amount expected to be paid under the short-term cash bonus plans
if the Corporation has a present legal or constructive obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated reliably.
iii.
Share based compensation transactions
Equity-settled transactions
The grant date fair value of share-based compensation awards granted to directors, officers and employees is
recognized as an expense, with a corresponding increase in equity, over the period that the employees
unconditionally become entitled to the awards (vesting period). The amount recognized as an expense is adjusted to
reflect the number of awards for which the related service and non-market vesting conditions are expected to be met,
such that the amount ultimately recognized as an expense is based on the number of awards that do meet the related
service and non-market performance conditions at the vesting date.
Cash-settled transactions
The Corporation has a Restricted Share Unit (“RSU”) and Performance Share Unit (“PSU”) plan for its eligible directors,
officers and employees. The fair value of the amount payable to officers and employees in respect of the RSUs and
PSUs, for which the participants are eligible to receive an equivalent cash value of the common shares at a future
date, adjusted by the performance criteria for the PSUs, is recognized as an expense with a corresponding increase in
liabilities over the period that the employees and officers provide the related service and become entitled to
payment. The liability is re-measured at each reporting date and at the settlement date. Any changes in the fair value
of the liability are recognized as share based compensation expense in the consolidated statement of comprehensive
income.
(i) Provisions
A provision is recognized if, as a result of a past event, the Corporation has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax risk-free rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is
recognized as finance cost. As at December 31, 2021 the Corporation has revalued its provision for Asset Retirement
Obligations and a contingent consideration related to the 2019 acquisition of Powerful Group of Companies (“PGC”).
(j) Revenue
The Corporation uses IFRS 15, Revenue from Contracts with Customers ("IFRS 15"). IFRS 15 provides a model for the
recognition and measurement of all revenue flowing from contracts with customers. The core principle is that revenue
recognition should align with the transfer of promised goods or services to customers in an amount that reflects the
consideration the entity expects to be entitled to in exchange for those goods or services.
The Corporation recognizes revenues over time as it fulfills its performance obligations to clients in line with contracted
terms. A performance obligation is a promise in a contract to transfer a distinct good or service to a client. A contract's
transaction price is allocated to each distinct performance obligation and recognized as revenues when, or as, the
performance obligation is satisfied. If a client contract has multiple performance obligations, the consideration in the
contract is allocated to the separate performance obligations based on stand-alone selling prices. Any modifications or
variations to contracts-in-progress are assessed to determine if they fall under the scope of the existing contract
performance obligation(s) or form part of a new performance obligation.
Revenues are derived mainly from the following types of client contracts and major products and services:
i.
Integrated Facilities Management
Integrated Facilities management provides solutions for ongoing maintenance and operations of high-quality
infrastructure. Ongoing facility management services are generally similar each month and are provided to customers
at a contracted price based on the amount of hours of service by the Corporation's employees and the amount of
supplies required. Revenue is recognized over time as the services are provided to the customer. If a contract has
Dexterra Group Annual Report 2021 | 38
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
distinct performance obligations, the transaction price is allocated to each performance obligation and recognized as
revenue as the performance obligation is satisfied.
ii.
Construction Contract Revenue
Construction contract revenue includes the initial amount agreed to in the contract plus any variations in contract
work, claims, and incentive payments, to the extent that it is highly probable that a significant revenue reversal will
not occur. The Corporation recognizes revenue over time for its construction contracts, and estimates progress of
these contracts by comparing costs incurred to the total expected costs of the project. Contract expenses are
recognized as incurred unless they create an asset related to future contract activity. An expected loss on a contract is
recognized immediately in the consolidated statement of comprehensive income.
iii. Workforce Accommodation
Workforce accommodation includes the management, supply and installation of modular and exploration facilities
and catering. In the workforce accommodation business, distinct performance obligations include the supply and
installation of the facilities, catering and maintenance of the facilities. Revenue is recognized when the supply and
installation of the facilities is complete and when catering services are provided to the customer. Catering services are
provided to customers at a contract price per unit served. If a contract has distinct performance obligations, the
transaction price is allocated to each performance obligation and recognized as revenue as the performance
obligation is satisfied.
iv.
Forestry Services
Forestry services includes reforestation solutions, forest thinning and firefighting services. Revenue is recognized over
time as the services are provided to the customer. Reforestation, forest thinning solutions and firefighting services are
provided to customers at a contracted price per unit. If a contract has distinct performance obligations, the
transaction price is allocated to each performance obligation and recognized as revenue as the performance
obligation is satisfied.
v.
Energy Services
The Corporation provides access mat rental, relocatable structure rental, and transportation services to customers.
Revenue from rendering of these services are recognized over time. Rental days are used to measure the rental fleet
revenue. Revenue is recognized at the applicable day rate for each asset rented, based on rates specified in each
contract, and as the services are performed.
vi.
Sale of used fleet
The Corporation routinely sells items of property, plant and equipment that it has held for rental and such assets are
transferred to inventories at their carrying amount when they cease to be held for rent. The proceeds from the sale of
such assets are recognized as revenue at a point in time when control of the assets transfers.
vii. Sale of other goods
Revenue from the sale of other goods is measured at the fair value of the consideration received or receivable. The
Corporation recognizes revenue when it transfers control of the product or service to a customer, which is generally
when title passes from the Corporation to its customer, collectability is reasonably assured, the associated costs can
be estimated reliably, and there is no continuing management involvement with the goods. The Corporation
recognizes revenue from the sale of other goods at a point in time.
(k) Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset,
the Corporation assesses whether:
•
•
•
The contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should
be physically distinct or represent substantially all of the capacity of a physically distinct asset.
The Corporation has the right to obtain substantially all of the economic benefits from use of the asset
throughout the period of use; and
The Corporation has the right to direct the use of the asset. The Corporation has this right when it has the
decision-making rights that are most relevant to changing how and for what purpose the asset is used.
The Corporation recognizes a right-of-use asset and a lease liability at the lease commencement date. A right-of-use asset is
initially measured at cost, which comprises 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 assets or the site on which it is located, less any lease incentives received.
Dexterra Group Annual Report 2021 | 39
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the
earlier of the end of the useful life or the end of the lease term. The estimated useful lives of right-of-use assets are
determined on the same basis as those of property, plant and equipment.
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 interest rate implicit in the lease or, if that rate cannot be readily determined, the Corporation’s
incremental borrowing rate. Generally, the Corporation uses its incremental borrowing rate as the discount rate.
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 a rate, if there is a change in the Corporation’s estimate or the
amount expected to be payable under the residual value guarantee, or if the Corporation changes its assessment of
whether it will exercise a purchase, extension or termination period.
The Corporation presents right-of-use assets and finance lease liabilities in the consolidated statement of financial position.
The Corporation has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have an
expected lease term of 12 months or less and leases of low-value assets. The Corporation recognizes the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.
As a lessor
When the Corporation acts as a lessor, it determines at inception whether each lease is a finance lease or an operating
lease.
The Corporation makes an overall assessment of whether the lease transfers substantially all of the risks and rewards
incremental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an
operating lease. As part of this assessment, the Corporation considers certain indicators such as whether the lease is for the
major part of the economic life of the asset.
If the contract contains lease and non-lease components, the Corporation applies IFRS 15 to allocate the consideration in
the contract.
(l) Finance income and costs
Finance income comprises interest income on funds invested. Interest income is recognized as it accrues in the consolidated
statement of comprehensive income, using the effective interest method.
Finance costs comprise of interest expense on loans and borrowings, unwinding of the discount on provisions, and changes
in the fair value of financial assets at fair value through the consolidated statement of comprehensive income. Borrowing
costs that are not directly attributable to the acquisition, construction, or production of a qualifying asset are recognized in
the consolidated statement of comprehensive income using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
(m) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in the consolidated
statement of comprehensive income except to the extent that it relates to a business combination or items recognized
directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following
temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable earnings, and differences relating to investments in subsidiaries and jointly
controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred
tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is
measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws
that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same
tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized for unused tax losses, tax credits, and deductible temporary differences to the extent that
it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed
at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be
realized.
Dexterra Group Annual Report 2021 | 40
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
(n) Earnings per share
The Corporation presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS is calculated by
dividing the net earnings attributable to common shareholders of the Corporation by the weighted average number of
common shares outstanding during the period. Diluted EPS is calculated by the weighted average number of common
shares outstanding for the effects of all dilutive potential common shares, which is comprised of share options granted to
employees and directors.
(o) Segment reporting
A segment is a distinguishable component of the Corporation that is engaged either in providing related products or services
(business segment) which is subject to risks and returns that are different from those of other segments. The business
segments are determined based on the Corporation’s management and internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment, as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly investments and related revenue, loans and borrowings and
related expenses, corporate assets and head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and
intangible assets other than goodwill.
(p) Foreign currency translation
The consolidated financial statements are presented in CAD.
Foreign currency transactions entered into are translated into the functional currency of the operations at the exchange
rate on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are re-translated
into the functional currency using the exchange rate on the period end date. Foreign currency translation gains and losses
resulting from the settlement of transactions and the re-translation at period end are recognized in the consolidated
statement of comprehensive income within total profit. Non-monetary items that originated in a foreign currency are
translated at the exchange rate from the original transaction date.
The US entity has a USD functional currency therefore translated to be included in the consolidated financial statements in
CAD as follows: income and expenses are translated into CAD using the exchange rates on the dates of the transactions and
the assets and liabilities on the consolidated statement of financial position are translated into CAD at the period end
exchange rate. The effect of translation is recognized in other comprehensive income and included as translation of foreign
operations in accumulated other comprehensive income within equity.
Foreign currency gains and losses arising from monetary items receivable from or payable to a foreign operation, for which
settlement is neither planned nor likely to occur, form a part of the exchange differences in the net investment in the
foreign operations and are recognized initially in other comprehensive income. Upon disposal or partial disposal of an entity
with a functional currency other than CAD, any accumulated exchange differences will be reclassified to the consolidated
statement of comprehensive income within total profit.
(q) Government Assistance
IAS 20 “Accounting for government grants and disclosure of government assistance” (“IAS 20”) sets out the standard for
accounting of government grants and other forms of government assistance. Government assistance is not recognized until
there is reasonable assurance that the Corporation will comply with the associated conditions, and that the grant will be
received. Government grants shall be recognized in the consolidated statement of comprehensive income on a systematic
basis over the periods in which the entity recognizes the expenses for the related costs for which the assistance is intended
to compensate. For government assistance that becomes receivable as compensation for expenses or losses already
incurred, or for the purpose of giving immediate financial support to the Corporation with no future related costs, are
recognized in the consolidated statement of comprehensive income for the period in which it becomes receivable. The
Corporation recognized government assistance as a reduction in the related expense, through the consolidated statement
of comprehensive income.
(r) Adoption of new IFRS standards
In April 2021 the IFRS Interpretations Committee (“IFRIC”) published an agenda decision clarifying the accounting treatment
of configuration and customization costs incurred in implementing a cloud computing arrangement. In the agenda decision,
certain configuration and customization activities undertaken in implementing such arrangements may give rise to a
separate asset where the Corporation controls the intellectual property of the underlying software code (e.g. the
development of bridging modules to existing on-premise systems or bespoke additional software capability). In all other
instances, configuration and customization costs are to be expensed as incurred as an operating expense. Unlike new
accounting standards with a specific future application date with some lead time, IFRIC agenda decisions have no effective
date. Management has completed its process of analyzing and determining the appropriate accounting treatment of
previously capitalized customization and configuration costs in light of this new agenda decision and concluded that there is
no material impact on the financial statements.
Dexterra Group Annual Report 2021 | 41
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
(s) New standards and interpretations not yet adopted
The new standards, amendments to standards and interpretations not yet effective for the year ended December 31, 2021,
and not applied in preparing these consolidated financial statements are disclosed below. The Corporation intends to adopt
these standards, if applicable, when they become effective on January 1, 2022.
In May 2020, the IAS issued 'Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)' which amends the
standard regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is
onerous. Costs of fulfilling a contract can either be incremental costs of fulfilling that contract or an allocation of other costs
that relate directly to fulfilling a contract. The amendments are effective for annual periods beginning on or after January 1,
2022 and apply to contracts for which the entity has not yet fulfilled its obligations at the time of adoption. Comparatives
are not restated and the effect of applying the amendments is recognized as an adjustment to opening equity on the date of
application. These amendments are not expected to have a significant impact on the Corporation’s consolidated financial
statements.
4. Trade and other receivables
(000’s)
Trade receivables
Modular holdback receivables
Deferred trade receivables
Total trade receivables
Accrued trade receivables
Other receivables
Allowance for expected credit losses
Total
December 31, 2021 December 31, 2020(1)
$
$
115,265 $
10,297
12,428
137,990 $
43,504
4,460
(1,178)
76,821
5,071
6,114
88,006
53,397
9,853
(1,724)
$
184,776 $
149,532
(1) Certain prior year amounts have been amended to conform to the current period's presentation.
Modular holdback receivables and deferred trade receivables of $22.7 million (December 31, 2020 - $11.2 million) represent
amounts billed on contracts which are not due until the contract work is substantially complete and any lien period has expired.
All Modular holdback receivables and deferred trade receivables are expected to be collected within 12 months. Other
receivables include amounts due from Gitxaala Horizon North Services LP of $0.3 million (December 31, 2020 - $9.3 million) and
Big Spring Lodging Limited Partnership of $0.2 million (December 31, 2020 - nil). Credit risks are further described in Note 21.
5. Inventories
(000’s)
Raw materials
Modular work-in-progress
Finished goods and supplies
Inventories
December 31, 2021
December 31, 2020
$
$
7,463 $
3,444
6,091
4,082
1,114
7,249
16,998 $
12,445
Dexterra Group Annual Report 2021 | 42
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
6. Property, plant and equipment
Carrying Amounts
(000’s)
Cost
December 31, 2019
Acquisition
Acquisition - Assets under construction
Additions
Assets under construction
Asset Retirement Obligation
Transferred to inventory for sale
Disposals
December 31, 2020
Additions
Asset retirement obligations (Note 11)
Transferred from inventory
Transferred to inventory for sale
Transfer to Big Spring Lodging LP (Note 9)
Disposals
December 31, 2021
Accumulated Depreciation
December 31, 2019
Depreciation
Transferred to inventory for sale
Disposals
December 31, 2020
Depreciation
Transferred to inventory for sale
Transferred to Big Spring Lodging LP (Note 9)
Disposals
December 31, 2021
Net book value
December 31, 2021
December 31, 2020
$
$
$
Camp
equipment
& mats
Land & buildings
Automotive &
trucking
equipment
Manufacturing &
other equipment
$
5,097 $
1,526 $
522 $
4,368 $
142,688
26,405
18,838
2,962
19
3,757
12
1,865
(2,357)
(2,632)
148,449
1,411
914
4,356
(6,951)
(1,972)
(494)
—
(217)
—
—
—
—
695
—
—
—
550
223
102
—
—
(30)
(2,597)
(38)
27,684
1,991
17,458
1,069
—
—
—
—
—
—
—
—
8,167
1,389
—
—
—
—
(72)
(826)
(220)
Total
11,513
190,893
569
4,458
114
1,865
(2,357)
(5,297)
201,758
5,860
914
4,356
(6,951)
(1,972)
(1,612)
$
145,713 $
29,603 $
17,701 $
9,336 $
202,353
$
1,527 $
9,823
(290)
(1,509)
9,551
14,676
(578)
(124)
(376)
290 $
922
—
(7)
1,205
1,191
—
—
(37)
98 $
1,344 $
3,866
1,716
—
(54)
3,910
6,371
—
—
(291)
9,990 $
—
(15)
3,045
2,002 $
—
—
(173)
3,259
16,327
(290)
(1,585)
17,711
24,240
(578)
(124)
(877)
23,149 $
2,359 $
4,874 $
40,372
122,564 $
138,898 $
27,244 $
26,479 $
7,711 $
13,548 $
4,462 $
5,122 $
161,981
184,047
Dexterra Group Annual Report 2021 | 43
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
7. Leases
(i)
Right-of-use assets
(000’s)
Cost
Camp
equipment
& mats Land & buildings
Automotive &
trucking
equipment
Manufacturing &
other equipment
December 31, 2019
$
— $
919 $
1,174 $
184 $
Acquisition
Additions
Disposals
December 31, 2020
Additions(1)
Disposals
December 31, 2021
Accumulated Depreciation
December 31, 2019
Depreciation
Disposals
December 31, 2020
Depreciation
Disposals
December 31, 2021
Net book value
December 31, 2021
December 31, 2020
Total
2,277
21,878
4,922
(1,014)
28,063
15,170
(8,532)
2,445
3,524
(376)
5,593
2,215
19,316
788
(638)
20,385
11,489
75
391
—
1,640
1,391
(2,254)
(5,948)
(330)
42
219
—
445
75 $
—
$
$
$
$
$
5,554 $
25,926 $
2,701 $
520 $
34,701
— $
316 $
243 $
46 $
2,510
(377)
2,133
3,136
2,806
(29)
3,093
6,193
378
—
621
691
(2,526)
(850)
(201)
118
—
164
190
—
605
5,812
(406)
6,011
10,210
(3,577)
2,743 $
8,436 $
1,111 $
354 $
12,644
2,811 $
17,490 $
1,590 $
3,460 $
17,292 $
1,019 $
166 $
281 $
22,057
22,052
(1) Right-of-use asset additions for land & buildings include the new Cambridge facility ($7.5 million) and other land and building leases ($4 million).
(ii)
Lease liabilities
Maturity Analysis – contractual undiscounted cash flows
Year 1
Year 2
Year 3
Year 4
Year 5 and beyond
Total undiscounted lease payable as at December 31, 2021
Lease liabilities included in the statement of financial position at December 31, 2021
Current
Non-current
$
$
$
$
$
(000's)
8,542
5,602
3,889
3,337
7,890
29,260
25,068
7,346
17,722
For the year ended December 31, 2021, the Corporation has not sub-leased any right-of-use assets, there were no restrictions
or covenants imposed by leases of a material nature, and there were no sale and leaseback transactions.
The amount of lease interest expense recognized during the year ended December 31, 2021 is $1.4 million (2020 - $0.8 million).
Dexterra Group Annual Report 2021 | 44
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
8. Intangible assets and Goodwill
Intangible assets at the consolidated statement of financial position date are as follows:
(000’s)
Cost
December 31, 2019
Acquisition
Additions
December 31, 2020
Additions
December 31, 2021
Accumulated Amortization
December 31, 2019
Amortization
December 31, 2020
Amortization
December 31, 2021
Net book value
December 31, 2021
December 31, 2020
Trade Names
Customer
Relationships
Computer software
and other
— $
22,483 $
1,125 $
3,800
—
3,800
—
—
—
22,483
—
—
1,524
2,649
1,931
3,800 $
22,483 $
4,580 $
— $
2,163 $
387 $
380
380
651
1,854
4,017
1,743
691
1,078
1,217
1,031 $
5,760 $
2,295 $
2,769 $
3,420 $
16,723 $
18,466 $
2,285 $
1,571 $
$
$
$
$
$
$
Total
23,608
3,800
1,524
28,932
1,931
30,863
2,550
2,925
5,475
3,611
9,086
21,777
23,457
Goodwill at the consolidated statement of financial position date is as follows:
(000’s)
Integrated Facilities Management
Workforce Accommodations and Forestry
Balance, end of year
Impairment of Goodwill
December 31, 2021
December 31, 2020
$
$
64,055
$
34,585
98,640
$
64,055
34,585
98,640
The Corporation assesses indicators of impairment at the end of each reporting period and performs a detailed impairment test
at least annually. At December 31, 2021, an impairment test was performed for all CGUs with allocated goodwill, which
comprise Integrated Facilities Management and Workforce Accommodations and Forestry. No impairment was identified.
The recoverable amount of the CGUs was calculated based on FVLCOD discounted cash flow model. The cash flows are derived
from the Corporation’s budget, strategy and business plan approved by the Board of Directors. The calculation of the FVLCOD
discounted cash flow model was based on the following key assumptions:
•
•
The discount rate was estimated based on the Corporation's weighted average cost of capital, taking into account the
nature of the assets being valued and their specific risk profile. The after-tax discount rates used in determining the
recoverable amount for both CGUs was 12.5% (2020 - 12.7%).
The revenue growth rates for the first five years are based on management's internal budgets and projections. The
projections for Integrated Facilities Management take into account the impacts and subsequent recovery from the
pandemic on the aviation and retail sectors, which are forecasted to have a positive impact on the 2022 and 2023
forecasted cash flows. Annual revenue growth rates for the 2022 - 2026 years between 5% to 21% and 3% to 5% were
used for the Integrated Facilities Management and Workforce Accommodation and Forestry CGUs, respectively. The
long-term growth rate after 5 years for both CGUs used in determining the recoverable amount is 2.5% (2020 - 2.5%).
Sensitivities
The most sensitive inputs to the discounted cash flow model are the discount rate and the revenue growth rate in the first 5
years. All else being equal, a 5% absolute decrease in the revenue growth rates or a 1% absolute increase in the discount rate
would result in no impairment for Integrated Facilities Management. All else being equal, a 2.5% absolute decrease in the
revenue growth rates or a 1% absolute increase in the discount rate would result in no impairment for Workforce
Accommodations and Forestry.
Dexterra Group Annual Report 2021 | 45
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
9. Other assets
On September 2, 2021, the Corporation signed a limited partnership agreement with an existing Indigenous partner to form Big
Spring Lodging Limited Partnership (“BSL LP”). The Corporation owns 49% of the newly formed partnership. During the period,
the Corporation contributed assets to the BSL LP with a carrying value of $1.8 million as an in-kind contribution to BSL LP. The
Partnership is accounted for as a joint venture using the equity method.
Other assets at December 31, 2021 include equity accounted investments in Gitxaala Horizon North Services Limited
Partnership (“Gitxaala”) and BSL LP, both joint ventures that are 49% owned by the Corporation with a carrying value of $15.2
million (December 31, 2020 - $11.7 million) and $1.9 million (2020 - nil), respectively. In addition to the equity investments, the
other assets include long-term lease receivables of $1.1 million (December 31, 2020 - $3.1 million).
10. Loans and borrowings
(000’s)
Committed credit facility
Unamortized financing costs
Total borrowings
December 31, 2021
December 31, 2020
$
$
66,469
$
(1,149)
65,320
$
86,411
(1,042)
85,369
Effective September 7, 2021, the Corporation reached an agreement with its lenders to amend its credit facility and extend the
maturity date to September 7, 2024. The amended credit facility has an available limit of $200 million plus an uncommitted
accordion of $125 million and is secured by a $400 million first fixed and floating charge debenture over all assets of the
Corporation and its wholly-owned subsidiaries. The interest rate for the credit facility is calculated on a grid pricing structure
based on the Corporation’s debt to EBITDA ratio. Amounts drawn on the credit facility incur interest at bank prime rate plus
0.50% to 1.75% or the Bankers’ Acceptance rate plus 1.50% to 2.75%. The committed credit facility has a standby fee ranging
from 0.30% to 0.55% per annum.
As at December 31, 2021, the Corporation was in compliance with all financial and non-financial covenants related to the credit
facility and available borrowing capacity was $124.5 million (2020 - $81.6 million), after adjusting for $9.1 million (2020 - $7
million) in letters of credit outstanding at December 31, 2021.
11. Asset retirement obligations
Provisions include constructive site restoration obligations for company owned camp projects to restore lands to previous
condition when camp facilities are dismantled and removed.
(000’s)
Balance, beginning of year
Acquisition (Note 24)
Additions
Asset retirement obligations settled
Change in estimate
Accretion of provisions
Balance, end of year
December 31, 2021
December 31, 2020
$
11,629 $
—
—
(2,041)
914
58
—
11,100
1,419
(1,360)
446
24
$
10,560 $
11,629
The estimated present value of rehabilitating the sites at the end of their useful lives has been estimated using existing
technology, adjusted for inflation and discounted using a risk-free rate. The future value amount of $10.7 million at
December 31, 2021 (December 31, 2020 - $11.8 million) was determined using a risk free interest rate of 1.23% and an inflation
rate of 1.27% using the Fisher equation. The timing of these payments is dependent on various factors, such as the estimated
lives of the equipment and industry activity in the region but is anticipated to occur up to 2028.
(000’s)
Current
Non-current
Balance, end of year
December 31, 2021
December 31, 2020
$
$
5,277 $
5,283
10,560 $
5,102
6,527
11,629
Dexterra Group Annual Report 2021 | 46
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
12. Share capital
As described under Note 1, on July 16, 2020, the Corporation completed a five-for-one share consolidation of all of its issued
and outstanding common shares. All current and prior period share and per share data presented below, including share
options outstanding, has been retroactively adjusted to reflect the Consolidation unless otherwise noted.
(a) Authorized and issued
The Corporation is authorized to issue an unlimited number of voting common shares without nominal or par value and an
unlimited number of preferred shares issuable in series, of which no preferred shares are outstanding. The number of common
shares and share capital are presented in the table below:
(In 000's, other than number of shares)
Balance, December 31, 2019
Acquisition (Note 24)
Share issue costs
Balance, December 31, 2020
Options exercised
Balance, December 31, 2021
Total number of
shares
Total share capital
31,785,993 $
33,083,424
—
64,869,417 $
281,666
65,151,083 $
131,543
100,904
(99)
232,348
1,193
233,541
On May 29, 2020, Dexterra Group acquired 100% of the issued and outstanding shares of Horizon North through issuing
31,785,993 shares to Fairfax Financial, as described in Note 1. As Dexterra was determined to be the acquirer, the number of
common shares outstanding as at December 31, 2019 has been adjusted retrospectively to reflect the capital of Dexterra using
the exchange ratio established in the acquisition agreement.
(b) Long-term incentive plans
(i) Share option plan
Balance, December 31, 2019
Granted
Forfeited
Balance, December 31, 2020
Granted
Exercised
Forfeited
Balance, December 31, 2021
Outstanding options
Weighted average
exercise price
— $
1,055,000
(65,000)
990,000 $
527,272
(281,666)
(35,466)
1,200,140 $
—
3.21
3.05
3.22
6.49
3.05
4.55
4.66
The exercise prices for options outstanding and exercisable at December 31, 2021 are as follows:
Exercise price per share
$3.05
$6.21 to $6.53
Total options outstanding
Exercisable options
Weighted average
exercise price per
share
Weighted average
remaining
contractual life in
years
3.05
6.48
4.66
3.4
4.0
3.7
Number
638,334 $
561,806
1,200,140 $
Weighted average
exercise price per
share
3.05
6.37
3.35
Number
165,008 $
16,666
181,674 $
Dexterra Group Annual Report 2021 | 47
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
The exercise prices for options outstanding and exercisable at December 31, 2020 are as follows:
Exercise price per share
$3.05
$6.21 to $6.53
Total options outstanding
Exercisable options
Weighted average
exercise price per
share
Weighted average
remaining
contractual life in
years
3.05
6.37
3.22
4.4
5.0
4.4
Number
940,000 $
50,000
990,000 $
Weighted average
exercise price per
share
Number
— $
—
— $
—
—
—
The Corporation calculated the fair value of the share options granted using the Black-Scholes pricing model to estimate the fair
value of the share options issued at the date of grant. The weighted average fair value of all options granted during the period
and the assumptions used in their determination are as follows:
Fair value per option
Forfeiture rate
Grant price
Expected life
Risk free interest rate
Dividend yield rate
Volatility
$
December 31, 2021
December 31, 2020
2.08
10.00 %
6.49
$
3.0 years
0.25 %
4.62 %
62.92 %
1.25
9.96 %
3.21
3.0 years
0.30 %
0.23 %
62.74 %
Expected volatility is estimated by considering historic average share price volatility. For the year ended December 31, 2021,
share based compensation for share options included in net earnings amounted to $1.2 million (2020 - $0.4 million).
Subsequent to year-end, the Corporation issued 487,625 share options under the plan.
(ii) Restricted Share Units (“RSU”) and Performance Share Units (“PSU”) incentive award plan
(a) RSUs
The Corporation has a RSU Plan whereby RSUs may be granted, subject to certain terms and conditions.
Under the terms of the RSU Plan, the awarded units vest in three equal portions on the first, second and third anniversary from
the grant date, and will be settled in cash in the amount equal to the fair market value of the Corporation's share price on that
date. The RSUs have been issued to directors of the Corporation.
The following table summarizes the RSU’s outstanding:
Units outstanding at December 31, 2020
Granted
Units outstanding at December 31, 2021
(b) PSUs
Number
—
28,970
28,970
The Corporation has a PSU Plan whereby PSUs may be granted, subject to certain terms and conditions.
Under the terms of the PSU Plan, the awarded units vest on the third anniversary of the grant date according to the vesting
criteria, and the vested units will be settled in cash in the amount equal to the fair market value of the Corporation's share price
on that date. The vesting criteria is fixed by the Board of Directors. Performance Criteria set by the Board at the time of the
grant of PSUs, may include i) total shareholder return, including dividends; ii) the participant’s satisfactory individual
performance; and (iii) any other terms and conditions the Board may in its discretion determine with respect to vesting. The
PSU payout is variable based on the share price on the vest date.
The following table summarizes the PSU’s outstanding:
Units outstanding at December 31, 2020
Granted
Forfeited
Units outstanding at December 31, 2021
Dexterra Group Annual Report 2021 | 48
Number
—
301,454
(9,692)
291,762
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
As at December 31, 2021, $0.9 million (2020 - nil) was included in accounts payable and accrued liabilities for outstanding RSUs
and PSUs. For the year ended December 31, 2021, share based compensation for RSUs and PSUs included in net earnings
amounted to $0.2 million (2020 - nil) and $0.7 million (2020 - nil) respectively. Subsequent to year-end, the Corporation issued
21,307 RSUs and 252,349 PSUs to its officers, key employees and directors. PSU payouts are variable and are expected to be
settled in cash upon vesting in January 2024 and 2025 if the return to shareholders performance criteria are met.
13. Revenue & other revenue
Contract balances
The following table provides information about receivables, contract assets and contract liabilities from contracts with
customers.
(000's)
Contract assets, which are included in trade and other accounts receivables
Contract liabilities, which are included in deferred revenue
December 31, 2021
December 31, 2020
$
$
44,389 $
1,946 $
30,901
3,310
The contract assets relate to the Corporation's rights for work completed but not billed at the reporting date, mainly related to
the modular business, and are included in trade and other receivables. The contract assets are transferred to receivables when
the rights become unconditional. This usually occurs when the Corporation completes a construction milestone under the
agreed upon contract. The balance is made up of $18.0 million (2020 - $19.7 million) in accrued trade receivables for Modular
Solutions and $22.7 million in Modular holdback and deferred trade receivables (2020 - $11.2 million) from customers, which
are generally due within three to six months of services being completed. The contract liabilities relate to payments received
from customers for which revenue is recognized over time.
The amount of $3.3 million recognized in contract liabilities at the beginning of the year has been recognized as revenue for the
year ended December 31, 2021.
As all contracts have an expected duration of one year or less, the Corporation has taken the practical expedient and not
disclosed the remaining performance obligations as at December 31, 2021.
Other revenue
For the year ended December 31, 2020, Other revenue of $6.6 million comprised amounts awarded to the Corporation through
legal proceedings with two former customers. The recovery of related expenses of $1.2 million was recorded against legal costs
in selling, general and administrative expenses.
14. Direct costs
(000's)
Cost of goods manufactured - materials and direct labour
Wages and benefits
Subcontracting
Product cost
Equipment and repairs
Transportation and travel
Partnership profit sharing
Workforce accommodations operating costs
Other operating expense
Years ended December 31,
2021
$
97,654 $
238,860
102,377
100,933
12,695
19,159
7,326
18,252
25,581
$
622,837 $
2020(1)
48,174
161,771
69,503
48,683
7,943
9,579
4,924
9,718
19,207
379,502
(1) Certain prior year amounts have been amended to confirm to the current period’s presentation.
The amount of inventories recognized as an expense during the year ended December 31, 2021 is $97.7 million (2020 - $48.2
million). Included in wages and benefits is the impact of the Canada Emergency Wage Subsidy (“CEWS”), which reduced wages
and benefits by $8.9 million (2020 - $31.7 million) for the year ended December 31, 2021.
Dexterra Group Annual Report 2021 | 49
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
15. Selling, general and administrative expenses
(000's)
Wages and benefits
Other selling and administrative expenses
Years ended December 31,
2021
21,078 $
13,775
34,853 $
$
$
2020(1)
15,207
6,900
22,107
(1) Certain prior year amounts have been amended to confirm to the current period’s presentation.
The impact of CEWS reduced wages and benefits by $0.2 million (2020 - $1.2 million) for the year ended December 31, 2021.
16. Income taxes
For the year ended December 31, 2021, the Corporation's effective income tax rate was 26.1%, compared to 16% in 2020. The
lower tax rate in 2020 was due to the Acquisition and related non-taxable bargain purchase gain. The effective tax rate for the
year ended December 31, 2021 is consistent with the combined federal and provincial income tax rate.
The deferred income taxes liability of $0.5 million (2020 - $2.6 million asset) comprises a deferred tax asset of $18.8 million
(2020 - $20.0 million) resulting primarily from non-capital losses in certain legal entities and a deferred tax liability of $19.3
million (2020 - $17.4 million) resulting primarily from taxable timing differences related to property, plant and equipment and
provisions. The Corporation has non-capital losses for Canadian tax purposes of $79.9 million (2020 - $75.7 million) available to
reduce future taxable income in Canada.
The Corporation paid $10.7 million (2020 - $3.3 million) in income taxes for the year ended December 31, 2021. $3.3 million of
this amount related to amounts owing for the year ended December 31, 2020 and $7.4 million was paid for 2021 tax
installments of which $2.2 million will be refunded based on the tax reorganization completed late in the year.
The current and deferred tax expense breakdown is as follows:
Income tax expense (000's):
Current
Deferred
Years ended December 31,
2021
5,594 $
3,114
2020
8,258
3,952
8,708 $
12,210
$
$
The provision for income taxes differs from that which would be expected by applying statutory rates. A reconciliation of the
differences is as follows:
(000's)
Earnings before income tax
Combined federal and provincial income tax rate
Expected income tax expense
Non-deductible items
Changes in tax rates
Non-taxable portion of capital (gain) loss
Non-deductible bargain purchase gain
Other items
Dexterra Group Annual Report 2021 | 50
Years ended December 31,
2021
2020
33,336
$
76,689
26 %
26 %
8,667
$
19,939
$
$
402
81
(1,063)
—
621
$
8,708
$
89
(31)
282
(7,919)
(150)
12,210
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
17. Cash flow information
The details of the changes in non-cash working capital are as follows:
(000's)
Trade and other receivables
Inventories
Prepaid expenses and other
Trade and other payables
Deferred revenue
18. Net earnings per share
A summary of the common shares used in calculating earnings per share is as follows:
Number of common shares, beginning of period
Weighted average number of common shares issued
Effect of reverse Acquisition of Horizon North, weighted average
Weighted average common shares outstanding - basic
Effect of share purchase options(1)
Weighted average common shares outstanding - diluted
Years ended December 31,
$
$
2021
(35,244) $
(4,553)
2,899
38,090
(1,364)
(172) $
2020
(2,181)
4,674
2,346
(659)
(2,713)
1,467
Years ended December 31,
2021
2020
64,869,417
31,785,993
205,091
—
65,074,508
345,298
—
19,524,619
51,310,612
135,972
65,419,806
51,446,584
(1) The Corporation utilizes the treasury stock method for calculating the dilutive effect of share purchase options when the average market price of the Corporation’s
common stock during the period exceeds the exercise price of the option.
19. Dividends
A dividend of $0.0875 per share was declared for the quarter ended December 31, 2021 and was accrued in trade and other
payables as at December 31, 2021. The dividend was payable to shareholders of record at the close of business on December
31, 2021 and was paid on January 17, 2022.
(000's except per share amounts)
2021
2020
March 31
June 30
September 30
December 31
Total dividends declared
Amount per share Total dividend amount
Amount per share Total dividend amount
$
$
0.075 $
4,880 $
0.075
0.0875
0.0875
4,884
5,702
5,701
— $
—
0.075
0.075
0.325 $
21,167 $
0.15 $
—
—
4,865
4,865
9,730
Dexterra Group Annual Report 2021 | 51
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
20. Reportable segment information
The Corporation operates through three operating segments: IFM, WAFES and Modular Solutions as described in Note 1.
Information regarding the results of all segments is included below. Inter-segment pricing is determined on an arm’s length
basis.
Year ended December 31, 2021 (000's)
Revenue(3)
Operating expenses
Direct costs(2)(3)
Selling, general and administrative expenses(2)
Depreciation and amortization
Share based compensation
Gain on disposal of property, plant and equipment
Operating income (loss)(2)
Finance costs
Earnings from equity investments
Earnings (loss) before income taxes
Total assets
IFM
WAFES
Modular
Solutions
Corporate
Inter-segment
Eliminations
Total
$
155,131 $
393,797 $
181,701 $
4,035 $
(1,284) $
733,380
(1,169)
622,837
136,336
319,081
162,848
5,512
3,329
146
(12)
9,820
52
—
5,517
27,200
110
(311)
42,200
431
(2,482)
5,531
5,294
97
(99)
8,030
1,011
—
5,741
18,293
2,238
1,746
(3)
(23,980)
(115)
3,607
—
—
—
34,853
38,061
2,099
(425)
35,955
5,101
(2,482)
$
$
9,768 $
44,251 $
7,019 $
(27,587) $
(115) $
33,336
107,350 $
323,115 $
93,029 $
8,635 $
(581) $
531,548
Year ended December 31, 2020 (000's)
IFM
WAFES
Modular
Solutions
Corporate
Inter-segment
Eliminations
Total
Revenue
Other revenue (Note 13)
Total revenue
$
147,229 $
228,112 $
98,767 $
— $
(2,862) $
471,246
—
6,569
—
147,229
234,681
98,767
—
—
—
6,569
(2,862)
477,815
Operating expenses
Direct costs(2)
Selling, general and administrative expenses(2)
Depreciation and amortization
Share based compensation
(Gain) loss on disposal of property, plant and equipment
Operating income (loss)(2)
Finance costs
Earnings from equity investment
Bargain purchase gain
Earnings (loss) before income taxes
Total assets(1)
121,791
175,085
4,093
3,343
—
(4)
3,335
18,129
—
(20)
18,006
38,152
—
—
—
253
(688)
—
85,285
2,847
2,485
—
60
8,090
663
—
—
(2,659)
379,502
—
11,832
1,107
354
—
(13,293)
(203)
3,716
—
(29,881)
—
—
—
22,107
25,064
354
36
50,752
4,632
(688)
(29,881)
$
$
18,006 $
38,587 $
7,427 $
12,872 $
(203) $
76,689
107,639 $
319,735 $
74,008 $
13,353 $
(1,212) $
513,523
—
—
—
—
—
—
—
—
(1)
(2)
(3)
Certain prior year amounts have been amended to conform to the current period's presentation. As a result, total assets for IFM, WAFES and Corporate as at December 31, 2020,
previously reported as $183,221, $246,465 and $11,041, were revised to $107,639, $319,735 and $13,353, respectively.
Includes CEWS of $9.1 million and $32.9 million for the years ended December 31, 2021 and December 31, 2020, respectively: IFM - $1.7 million (December 31, 2020 - $13.7 million),
WAFES -$6.6 million (December 31, 2020 - $14.7 million), Modular Solutions -$0.6 million (December 31, 2020 - $3.3 million), Corporate - $0.2 million (December 31, 2020 - $1.2
million).
Corporate operational results for the year ended December 31, 2021 include revenue and direct expenses in the amount of $4 million and $5.7 million, respectively from a legal dispute
related to a contract in place at the time of the Acquisition.
21. Financial risk management
Overview
The Corporation is exposed to a number of different financial risks arising from the normal course of business operations as well
as through the Corporation’s financial instruments comprised of trade and other receivables, trade and other payables, and
loans and borrowings. These risk factors include credit risk, liquidity risk, and market risk, including interest rate risk.
The Corporation’s risk management practices include identifying, analyzing and monitoring the risks faced by the Corporation.
The annual consolidated financial statements for the year ended December 31, 2021 present information about the
Corporation’s exposure to each of the business and financial risks and the Corporation’s objectives, policies and processes for
measuring and managing risk.
COVID-19 Pandemic
The rapid spread of the COVID-19 virus, which was declared by the World Health Organization to be a pandemic on March 11,
2020, and actions taken globally in response to COVID-19, have significantly disrupted business activities throughout the world.
The Corporation's business relies, to a certain extent, on free movement of goods, services, and capital within Canada, which
has been significantly restricted as a result of the COVID-19 pandemic. Given the ongoing and dynamic nature of the
Dexterra Group Annual Report 2021 | 52
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
circumstances surrounding COVID-19, it is difficult to predict how significant the impact of COVID-19, including any responses to
it, will be on the economy and the Corporation’s business in particular, or for how long any disruptions are likely to continue.
The extent of such impact will depend on future developments, which are highly uncertain, rapidly evolving and difficult to
predict, including additional actions which may be taken to contain COVID-19, as well as the timing of the complete re-opening
of the economy in Canada. Such further developments could have a material adverse effect on the Corporation's business,
financial condition, results of operations and cash flows. The ultimate impact of COVID-19 on the Corporation's liquidity and
future cash flows may not be fully known for an extended period of time.
Credit risk
The following shows the aged balances of trade and other receivables:
(000's)
Trade receivables
Neither impaired nor past due
Outstanding 31-60 days
Outstanding 61-90 days
Outstanding more than 90 days
Total trade receivables
Accrued receivables
Other receivables
Provision for expected credit losses
Total trade and other receivables
December 31, 2021
December 31, 2020(1)
$
91,516 $
33,484
4,352
8,638
137,990
43,504
4,460
(1,178)
70,370
11,325
2,461
3,850
88,006
53,397
9,853
(1,724)
$
184,776 $
149,532
(1) Certain prior year amounts have been amended to conform to the current period’s presentation.
As at December 31, 2021, the Corporation provided for expected credit losses in the amount of $1.2 million. The provision for
expected credit losses is based on an expected credit losses matrix and fluctuates based on the aging of balances in receivables.
The Corporation continues to monitor the recoverability of trade receivables and the impact of current and expected future
credit losses. There was no significant impact to expected future credit losses due to COVID-19 at December 31, 2021.
The Corporation had one major customer from which it generated 10% of total revenue in 2021 (2020 - 9%).
Liquidity risk
The following shows the timing of cash outflows relating to trade and other payables, lease liabilities and loans and borrowings:
(000's)
Year 1
Year 2
Year 3
Year 4
Year 5 and beyond
Trade and
other payables(1)
Lease liabilities(2)
Loans and
borrowings(3)
Trade and
other payables(1)
Lease liabilities(2)
Loans and
borrowings(3)
December 31, 2021
December 31, 2020
$
122,637 $
8,542 $
395
—
—
747
5,602
3,889
3,337
7,890
— $
—
66,469
—
—
767
—
—
681
$
123,779 $
29,260 $
66,469 $
83,263 $
5,474
3,888
2,600
10,041
30,397 $
—
86,411
—
—
—
86,411
81,815 $
8,394 $
(1) Trade and other payables include trade and other payables and contingent consideration.
(2) Lease liabilities include total undiscounted lease payments.
(3) Loans and borrowings include Dexterra Group's senior secured revolving term credit facility. The timing and amount of interest payments will fluctuate depending on balances outstanding
and applicable interest rates. As at December 31, 2021, the Corporation has unused credit facilities of $124.5 million (2020 - $81.6 million).
Market risk
Market risk is the risk or uncertainty arising from possible market price movements and their impact on future performance of
the Corporation. The market price movements that could adversely affect the value of the Corporation’s financial assets,
liabilities and expected future cash flows include foreign currency exchange risk and interest rate risk. As the Corporation’s
exposure to foreign currency exchange risk and interest rate risk is limited, the Corporation does not currently hedge its
Dexterra Group Annual Report 2021 | 53
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
financial instruments.
i.
Foreign currency exchange risk
The Corporation has limited exposure to foreign currency exchange risk as sales and purchases are typically
denominated in CAD. The Corporation’s nominal exposure to foreign currency exchange risk arises from the purchase
of some raw materials, which are denominated in USD, and foreign operations or customer contracts with USD
functional currency.
ii.
Interest rate risk
The Corporation is exposed to interest rate risk as changes in interest rates may affect interest expense and future
cash flows. The primary exposure is related to the Corporation’s revolving credit facility which bears interest at a rate
of prime plus 0.50% to 1.75% or the Bankers’ Acceptance rate plus 1.50% to 2.75% per annum. If prime were to have
increased by 1.00%, it is estimated that the Corporation’s net earnings would have decreased by approximately $0.9
million for the year ended December 31, 2021 (2020 - $0.7 million). This assumes that the amount and mix of fixed
and floating rate debt in the period remains unchanged and that the change in interest rates is effective from the
beginning of the period.
22. Related parties
(000's)
Joint Ventures
Revenue
Recovery of administrative overhead
Included in accounts receivable
December 31, 2021
December 31, 2020
$
3,057 $
645
490
2,931
285
9,335
The Corporation earned revenue of $2.6 million (2020 - $2.9 million) for the year ended December 31, 2021 for the
manufacturing, installation and transportation of relocatable units provided to Gitxaala, a joint venture that is 49% owned by
the Corporation. The Corporation also charged $0.6 million (2020 - $0.3 million) in management fees and cost recoveries for
administrative overhead related to accounting and management services. As at December 31, 2021, Gitxaala owed $0.3 million
(2020 - $9.3 million) in payables to the Corporation which are considered to be part of normal course of operations and have no
fixed terms of repayment.
The Corporation earned revenue of $0.4 million (2020 - $nil) for the year ended December 31, 2021 for the manufacturing,
installation and transportation of relocatable units provided to Big Springs JV, a joint venture that is 49% owned by the
Corporation. As at December 31, 2021, BSL LP owed $0.2 million (2020 - $nil) in payables to the Corporation which are
considered to be part of normal course of operations.
As at December 31, 2021 Dexterra Group has performance and labour bonds outstanding with Northbridge General Insurance
Corporation (“Northbridge”), a company with the same controlling shareholder as Dexterra Group, totaling $44.0 million. No
fees for these bonds were incurred for the year ended December 31, 2021 (2020 - $0.4 million).
Dexterra Group has certain property insurance policies with Northbridge. This insurance coverage started on September 29,
2021 and the premiums paid are $0.3 million for coverage through the subsequent 12 month period and are at normal
commercial rates.
Key management personnel are those persons that have the authority and responsibility for planning, directing and controlling
the activities of the Corporation, directly or indirectly. Key management personnel of the Corporation include its named
executive officers and the board of directors.
Key management personnel compensation for the year ended December 31, 2021 and 2020 is comprised as follows:
(000's)
Short-term employee benefits
Post-employment benefits
Share based compensation
Years ended December 31,
2021
3,944 $
215
1,504
5,663 $
2020
3,086
82
274
3,442
$
$
Dexterra Group Annual Report 2021 | 54
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
23. Significant subsidiaries
The consolidated financial statements of the Corporation include the accounts of its wholly-owned corporations, partnerships,
and several special purpose entities. The following table includes the significant subsidiaries:
Subsidiary Name
Horizon North Camp & Catering Partnership
NRB Inc.
Horizon North Modular Solutions (“HNMS”)(1)
Horizon North Modular Manufacturing (“HNMM”)(1)
10647802 Canada Ltd. (“106”)(2)
Powerful Group of Companies (“PGC”)
Pioneer Site Service Ltd. (“Pioneer”)
Kitikmeot Camp Solutions Limited (“Kitikmeot”)
Acho Horizon North Camp Services Limited Partnership (“Acho”)
Secwepemc Camp & Catering Limited Partnership (“Secwepemc”)
Halfway River Horizon North Camp Services Limited Partnership (“HRHN”)
Two Lakes Horizon North Camp Services Limited Partnership (“TLHN”)
Tahltan Horizon North Services Inc. ("Tahltan")
Acden Horizon North Limited Partnership ("Acden")
Sekui Limited Partnership ("Sekui")
Eclipse Camp Solutions Incorporated ("Eclipse")
Deninu Kue Horizon North Camp & Catering Limited Partnership ("DKHN")
Skin Tyee Horizon North Camp Services Limited Partnership ("STHN")
Tangmaarvik Inland Camp Services Inc. ("Tangmaarvik")
Ownership Interest (%)
Country of
Incorporation
December 31, 2021 December 31, 2020
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
100
100
—
—
100
100
100
49
49
49
49
49
49
49
49
49
49
49
49
100
100
100
100
100
100
100
49
49
49
49
49
49
49
49
49
49
49
49
(1) HNMM and HNMS entities were amalgamated with NRB Inc. as at January 1, 2021.
(2) 106 was continued into 2395495 Alberta Ltd. on December 17, 2021 prior to being amalgamated with Dexterra Group Inc. on January 1, 2022.
(a) Special purpose entities
The Corporation has a 49% interest in the ownership and voting rights of Kitikmeot, Acho, Secwepemc, HRHN, TLHN, Tahltan,
Acden, Sekui, Eclipse, DKHN, STHN and Tangmaarvik and maintains two out of four board of director seats in these special
purpose entities (“SPE”) with the remaining voting rights and board of director seats being held by Indigenous partners. These
SPE’s are consolidated when, based on an evaluation of the substance of its relationship with the Corporation and the SPE’s
risks and rewards, the Corporation concludes that it controls the SPE. The SPE’s, other than Tangmaarvik, do not have net
earnings but rather have limited assets and the only non-flow through expenses are management fees paid to the partners.
Indigenous participation in the governance of these SPEs is required to secure projects in specific regions of Canada. The control
results in the Corporation receiving the majority of the benefits related to the SPE’s operations and net assets, being exposed to
the majority of risks incident to the SPE’s activities and retaining the majority of the residual or ownership risks related to the
SPE’s or their assets. The SPE's, other than Tangmaarvik, were acquired as part of the Acquisition.
24. Business combination
On May 29, 2020, Dexterra Group Inc. (previously Horizon North), acquired 100% of the issued and outstanding shares of
Dexterra through issuing 31,785,993 shares of the Corporation, as described in Note 1. Management performed an analysis
under IFRS 3 and determined that Dexterra was the accounting acquirer of Horizon North. As such, the Acquisition constituted a
Reverse Take Over for accounting purposes. Horizon North being the acquired enterprise for accounting purposes, had its
assets and liabilities included in these financial statements at their fair value on the date of the acquisition in accordance with
IFRS 3.
The acquisition was accounted for using the acquisition method whereby the assets and liabilities of the acquiree are recorded
at their fair values, with the deficit of the aggregate consideration relative to the fair value of the identifiable net assets
recorded as a bargain purchase gain. The Corporation assessed the fair values of the net assets acquired, at acquisition date,
based on management’s best estimate of the fair value, which takes into consideration the condition of the assets acquired,
industry conditions and the discounted future cash flows expected to be received from the assets as well as the amount
expected to settle the outstanding liabilities.
Dexterra Group Annual Report 2021 | 55
Notes to the consolidated financial statements
Years ended December 31, 2021 and 2020
Consideration:
Share consideration
Recognized fair value amounts of assets acquired and liabilities assumed:
Trade & other receivables (net)
Inventories
Prepaid expenses and other
Property, plant and equipment
Right-of-use assets
Intangible assets - trade names
Deferred income tax asset
Income taxes receivable
Other assets
Trade and other payables
Deferred revenue
Asset retirement obligations
Lease liabilities
Loans and borrowings
Total identifiable net assets
Bargain purchase gain on acquisition
$
$
$
$
(000's)
100,904
(000's)
110,843
12,668
7,897
191,462
21,878
3,800
8,250
357
10,479
(60,200)
(2,079)
(11,100)
(25,285)
(138,185)
130,785
(29,881)
The share consideration was determined based on the number of Dexterra Group common shares not acquired by Dexterra as
part of the Acquisition, which amounted to 33,083,424 common shares at $3.05 per common share. The amount per share was
based on Dexterra Group's closing price on the TSX on May 29, 2020, the date of the closing of the Acquisition. A bargain
purchase gain was recorded with this business combination as the share consideration is based upon a share price at closing
which was lower than the fair value of the identifiable net assets.
In the prior year, Dexterra incurred costs related to the acquisition of Dexterra Group of $1.8 million relating to share issuance,
legal, due diligence and external advisory fees. The cost related to the share issuance totaling $0.1 million were included in
share capital on the consolidated statement of financial position. The costs related to the due diligence and external advisory
fees totaling $1.7 million were included in selling, general & administrative expenses on the consolidated statement of
comprehensive income.
25. Subsequent events
On January 1, 2022, Dexterra Group acquired 100% of privately owned Canadian food services company Dana Hospitality LP
(“Dana Hospitality”) from Fulcrum Capital Partners (“Fulcrum”) for $31.5 million. The purchase price was financed through the
Corporation’s existing credit facility and is expected to be mainly allocated to goodwill and intangible assets. This acquisition
expands the Corporation’s existing culinary services into education, entertainment, healthcare, and leisure activities. Dana
Hospitality will be reported as part of the IFM segment.
On January 31, 2022, Dexterra Group acquired the assets of the privately owned TRICOM Facility Services group of companies
(“Tricom”) for a purchase price of $19 million. The purchase price was financed through the existing credit facility and has
performance-based incentives to a maximum of $5 million which are based upon the actual results over the next two years. The
purchase price is expected to be mainly allocated to goodwill and intangible assets. Tricom delivers contract janitorial and
associated building maintenance services and supplies custodial equipment and consumables to clients in major centres across
Canada, including a small footprint in the United States. Tricom will be reported as part of the IFM segment.
Dexterra Group Annual Report 2021 | 56
CORPORATE
INFORMATION
Board of Directors
Senior Leadership Team
R. William McFarland
Chair of the Board
Toronto, Ontario
(1)(2)
Mary Garden
Victoria, British Columbia
(1)(2)
David Johnston
Ottawa, Ontario
(2)(3)
Simon Landy
Toronto, Ontario
(1)(3)
John Mac Cuish
Burlington, Ontario
Kevin Nabholz
Calgary, Alberta
(2)(3)
Russell Newmark
Inuvik, Northwest Territories
(1)(3)
(1) Audit Committee Member
(2) Corporate Governance and Compensation Committee Member
(3) Enterprise Risk Management Committee Member
John Mac Cuish
Chief Executive Officer &
President Facilities Management
R. Drew Knight
Chief Financial Officer
Cindy G. McArthur
Chief Human Resources Officer
Mark Becker
Chief Operating Officer & President Workforce
Accommodations, Forestry and Energy Services
Dawn Nigro
President, NRB Modular Solutions
Christos Gazeas
Executive Vice President,
Legal and General Counsel
Lee-Anne Lyon-Bartley
Executive Vice President,
Health, Safety, Environment and Quality
JD MacCuish
Executive Vice President,
Strategy & Corporate Planning
Auditor
PricewaterhouseCoopers LLP
Toronto, Ontario
Transfer Agent
TSX Trust Company (Canada)
1 Toronto Street, Suite 1200
Toronto, Ontario M5C 2V6
Head Office
5915 Airport Road, Suite 425
Mississauga, Ontario L4V 1T1
Stock Exchange Listing
Toronto Stock Exchange
Symbol: DXT
Annual Meeting of Shareholders
Wednesday, May 11, 2022 at 11:30 a.m. EST
Sheraton Centre, Toronto, Canada
Live Webcast: https://web.lumiagm.com/272484736
Website
dexterra.com
We’ve been serving North American clients for over 75 years.
The companies that began independently, and now form
Dexterra Group, have an outstanding record of supporting
the infrastructure and built assets that play a vital role in our
society. We bring the right teams with the right skills together
– offering both experience and regional expertise so companies
can operate their day to day, confidently and successfully.
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