Growth in Action
ADVANCING THE JOURNEY
2024 ANNUAL REPORT
Overview.........................................................................................3
2024 Highlights .............................................................................4
Letter from the Chair....................................................................6
Letter from the President and CEO......................................... 7
Environmental, Social and Governance. ................... 8
Management’s Discussion and Analysis.........................13
Consolidated Financial Statements.................................62
Board of Directors and ISC Leadership..............................106
Corporate Information.............................................................107
TABLE OF CONTENTS
3
2024 ISC® Annual Report
Headquartered in Canada, ISC (TSX:ISC) is a leading provider
of registry and information management services for public
data and records. Throughout our history, we have delivered
value to our clients by providing solutions to manage, secure
and administer information through our Registry Operations,
Services and Technology Solutions segments.
About Us
Our Business
Services
Delivers products and services
that utilize public records
and data to provide value to
customers in the financial and
legal sectors
Registry Operations
Delivers registry and
information services on behalf
of governments and private
sector organizations
Technology Solutions
Provides the development,
delivery and support of
registry (and related)
technology solutions
Overview
2024 ISC® Annual Report
4
Financial Results
$247.4 million
in record revenue
generated
$90.3 million
in record adjusted
EBITDA generated
$56.4 million
in adjusted free cash
flow generated
$16.7 million
in dividends paid
out to shareholders
in 2024
Launched
goal to double the size
of the Company on a
revenue and adjusted
EBITDA basis by 20281
Expanded
service offerings
both federally and
internationally, across
all three business
segments
2024 Financial Results
2024
Results
2023
Results
Revenue
$247.4 M
$214.5 M
Net income
$20.2 M
$25.0 M
Adjusted EBITDA2
$90.3 M
$72.9 M
Adjusted free cash flow2
$56.4 M
$50.8 M
Earnings per share (basic)
$1.11
$1.41
2024
Highlights
Overview
5
2024 ISC® Annual Report
1 The goal to double the size of the Company is based on the actual financial results reported as at December 31, 2023.
2 Adjusted EBITDA and adjusted free cash flow are not recognized as measures under IFRS Accounting Standards and do not have a standardized meaning prescribed and may not be
comparable to similar measures reported by other companies. Refer to Section 8.8 “Non-IFRS financial measures” in the MD&A for a discussion on why we use these measures, the calculation
of them and their most directly comparable financial measure calculated in accordance with IFRS Accounting Standards. Refer to Section 2 “Consolidated Financial Analysis” and Section 6.1
“Cash flow” in the MD&A for a reconciliation of these measures to the most directly comparable financial measure calculated in accordance with IFRS Accounting Standards.
2024
2022
2023
189.9
214.5
247.4
2023
2024
72.9
90.3
68.5
4.4
11.9
+24%
78.4
Consolidated EBITDA and
adjusted EBITDA2 for the year ended
December 31,
(CAD millions)
Consolidated Revenue
for the year ended
December 31,
(CAD millions)
47%
48%
5%
2023
2024
45%
51%
4%
Registry Operations
Services
Technology
Adjustments
EBITDA
Revenue Distribution by Segment for the year ended Dec. 31
Overview
2024 ISC® Annual Report
6
Our achievements this year are a testament to our robust business model and the unwavering
dedication of our team.
As such I would like to start by extending my thanks to our President and CEO, Shawn Peters and
his team for another year of strong financial and operational performance. Their leadership and
execution have been crucial to our success, and we are confident in their ability to continue driving
our growth and delivering on our goal to double the size of ISC by 2028.
Additionally, I want to recognize all our employees across Canada and in Ireland. Their hard work
and dedication are the foundation of our success. We would not be where we are today, nor will we
achieve our future goals without their commitment.
On the Board governance side, and as I’ve often said, we are committed to ensuring that those
around the Board table can contribute in the best way possible. Following our typical cadence, we
rotated some of our Board Committee memberships with Jim Roche joining the Audit Committee
and Roger Brandvold joining the Compensation Committee.
As Chair of the Board, I am extremely fortunate to sit at a table surrounded by such high calibre
professionals and my thanks to them for their support and sage advice. We are committed to guiding
the Company through this current period of growth with a long-term lens, confident in our ability to
navigate any short-term uncertainties. We know that ISC is well-prepared to seize the opportunities
that lie ahead.
Finally, I want to express my gratitude to our shareholders, many of whom share our long-term vision.
Your steadfast support is invaluable, and your Board also remains focused on delivering long-term
value. We appreciate your trust and confidence in us and in ISC.
Thank you for your continued support.
Joel Teal
Chair, Board of Directors
Letter from the Chair
“I am delighted to
report that 2024
has been another
year of stellar
performance for
ISC, setting the
stage for the next
era of growth.”
Overview
7
2024 ISC® Annual Report
We began 2024 with the exciting announcement of our goal to double the size of the Company on
a revenue and adjusted EBITDA basis by 2028, based on the actual results for 2023. This ambitious
goal marks the beginning of our next stage of growth, and we are off to a strong start, as shown by
our 2024 results.
In 2025, we are excited to embrace the future by following our proven playbook, which has
consistently driven our organic growth. When we announced our goal to double the size of the
Company (again) by 2028, we understood that this growth would not be linear. However, we remain
focused on our long-term objectives. We are confident that, just as in the past, we will continue to
build on our historical success and achieve remarkable results. Our focus on organic growth, combined
with targeted and strategic M&A, will help us achieve our 2028 growth goal.
As we look to the future, our investments in people and technology will ensure that we remain, as
our Chair noted, “well-prepared to seize the opportunities that lie ahead.” This includes our registry
transformation project, part of our Extension Agreement announced in 2023, which will deliver new
registry infrastructure and an enhanced user experience for registry customers in Saskatchewan.
From there, our Technology Solutions segment will have a world-class registry technology to sell
and deploy to prospective clients. Our Services segment is also vigilant in ensuring our proprietary
platforms, Registry Complete and Recovery Complete, remain competitive while being ably supported
by our customer service team. The opportunity for organic growth in the Services segment remains
and we intend to capitalise on that in 2025 and beyond.
In addition to our financial and operational success, we also achieved several significant milestones in
2024 including:
– Achieving certification to the ISO/IEC 27001:2022 standard across the enterprise, replacing the prior
certification for the ISO/IEC 27001:2013 standard
– Securing an extension to our contract with the Government of Ontario to operate the Province’s
online Property Tax System
– Securing a contract with the Principality of Liechtenstein to deliver a Digital Commercial
Registry System
– Launching the Bank Act Security Registry on behalf of the Bank of Canada – our first Federal registry
mandate; and
– Winning numerous awards, including:
• Being recognized as a Saskatchewan Top Employer for the 16th consecutive year
• Earning the Globe and Mail’s 2024 Women Lead Here Benchmark for Executive Gender Diversity
for the 5th consecutive year
None of these achievements would have been possible without the unwavering commitment of our
people. I would like to echo our Chair’s comments about our team because we would not be able to
achieve what we do without them. Their hard work and dedication are the foundation of our success.
Achieving those results also takes the right leadership team. In 2024, we made a couple of changes at our
senior leadership level. First, Jeff Fallowfield assumed the role of President of ESC, and later in the year,
Todd Antill joined the Company as Vice President of our Registry Operations business. I look forward to
their ongoing contributions around the leadership table.
In closing, as we reflect on the first year of our ambitious five-year journey to double our revenue and
adjusted EBITDA by 2028, we can proudly say that we have laid a strong foundation for success. With
our sights set on the future, we are energized and ready to deliver another successful year in 2025.
Thank you for your continued trust, confidence and support.
Yours sincerely,
Shawn B. Peters, CPA, CA, ICD.D
President and CEO
Letter from the President and CEO
“As the Chair noted,
2024 has been
another great
year for ISC, with
record revenue
and adjusted
EBITDA results.
Strong operating
performance across
the business are a
testament to the
strength of our
business and the
commitment of
our team to our
continued growth.”
2024 ISC® Annual Report
8
This summary presents
information on
environmental, social
and governance (“ESG”)
practices that impact our
organization and society.
ISC’s ESG initiatives align
with our values, benefit
our stakeholders and
contribute to meaningful
global and local progress.
Environmental,
Social and
Governance
2024 ISC® Annual Report
8
By embracing a responsibility to protect and
sustain the environment, the Company aims
to remain mindful about how our day-to-day
business and industry are making an impact
on our environment and how ISC can monitor
and manage this impact. Environmental
related initiatives at ISC include:
Procurement
We prioritize suppliers focused on reducing environmental
impact, requiring them to detail methods for minimizing their
ecological footprint.
Recycling
Our offices participate in recycling programs for paper, toner,
cell phones and computers. Unused devices are donated or
recycled through partnerships like SaskTel’s Phones for a Fresh
Start and the Computers for Schools Plus (CFS+) program,
which extends the life cycle of electronic equipment.
Partnerships
With a partnership spanning over a decade, ISC has supported
the Nature Conservancy of Canada in advancing conservation
projects. In 2024, we contributed to the conservation of over
300,000 hectares of grasslands in the Prairies, preserving
habitats for over 250 at risk species.
Environmental
Environmental, Social and Governance
A people-first approach at ISC fosters a culture of inclusivity and care. We strive
to empower employees professionally and personally while making meaningful
contributions to our communities. Efforts in 2024 are structured around two
strategic pillars: Community Wellbeing and Growth.
Community Wellbeing
Focused on creating meaningful and positive impacts for the people and communities we serve, ISC addresses
critical societal issues and fosters global collaboration among employees. Through these efforts, we aim to
enhance overall quality of life and build stronger, more inclusive communities.
• Direct Contributions: ISC contributed nearly $600,000 to 60 organizations in Canada, Ireland and targeted
global initiatives. In addition, our employees raised more than $20,000 through grassroots initiatives.
• Targeted Philanthropy: The Company allocated over $50,000 to celebrate and support diverse
communities during key observances, including the International Day for Women and Girls in Science, Mental
Health Awareness Week, Pride Month, National Day for Truth and Reconciliation, and more. This funding
enabled initiatives like scholarships for young women pursuing STEM education, mental health resources in
underserved areas and support for LGBTQ2S+ community events.
• Employee Engagement: Employees actively volunteered at various community initiatives, including youth
programming, organizing community events and supporting local shelters.
• New Campaigns: To unite colleagues across all regional
offices for meaningful causes, ISC introduced two annual
campaigns, fostering increased employee engagement
and strengthening the shared sense of purpose across
our workforce:
– The Spring into Action initiative aims to address food
insecurity and homelessness in our local communities.
– The Holiday Spirit of Giving initiative brings
employees together to support families in need by
hosting donation drives and funding holiday hampers
across multiple regions.
Social
Through our commitment to uphold equity in the workplace, ISC was honoured
in The Globe and Mail’s Report on Business Women Lead Here list for the fifth
consecutive year as well as being recognized as one of Saskatchewan’s Top
Employers for the 16th consecutive year.
9
2024 ISC® Annual Report
2024 ISC® Annual Report
10
Environmental, Social and Governance
Growth
Investing in education, entrepreneurship and local economies, ISC empowers individuals and drives societal
advancement. By equipping individuals with the resources and support needed to succeed, we are contributing
to building resilient and prosperous communities. Key initiatives include:
• Educational Sponsorships: ISC supports the University of Regina’s JDC West Business Competition team and
First Nations University of Canada’s Indigenous Youth Entrepreneurship Camp, providing aspiring leaders with
resources to succeed.
• Local Economic Support: Our procurement strategies prioritize sustainably sourced and locally operated
businesses, including Creative Fire, Bamboo Shoots, Western Litho Printers Ltd., and other small businesses in
Canada and Ireland, contributing to community advancement.
• Entrepreneurial Advocacy: Through our Corporate Registries, as well as through investments in local
workshops and organizations such as the Saskatchewan Chamber of Commerce, ISC is fostering opportunities
for small business owners.
• Workforce Development: In collaborating with educational institutions and nonprofit organizations, we help
bridge the gap between academia and industry. This includes volunteering with and providing funding to
organizations like the Neil Squire Society, which empowers individuals with disabilities by enhancing their
technical and professional capabilities.
ISC Impact was developed in 2024 as a strategic approach to strengthening ISC’s role
in community investment and employee engagement. By prioritizing prosperity and
equality, this initiative supports the growth of employees, local businesses and the
communities in which we operate.
Launched in January 2025, ISC Impact brings employees together across our global
operations, aligning philanthropic efforts and employee-led initiatives to create
lasting, positive change.
ISC looks forward to sharing the program’s first-year achievements and impact in our
next report.
IMPACT
11
2024 ISC® Annual Report
Environmental, Social and Governance
Our Board of Directors (the “Board”) plays an important role in providing
governance oversight and provides direction for our strategy and business affairs.
The Board guides ISC to operate as a sustainable business, to optimize financial
returns while effectively managing risk, and to conduct our business in a way that
is transparent, independent, and ethical.
Board Composition and Renewal
The Governance and Nominating Committee (the “GNC”)
reviews Director competencies annually against a skills
matrix to validate that they continue to meet ISC’s needs.
Bi-annually, each Director completes a self-assessment of
their competencies following a prescribed rating scale and
meets with the Board Chair to review their self-assessment.
The GNC reviews the results for consistency and to
confirm that the Directors possess skills in these areas.
Board Diversity
A Board with a mix of diverse skills, backgrounds,
experience, gender and age is important for sound
decision-making and good governance. The Board has a
formal Diversity Policy, which includes a set of measurable
objectives for achieving diversity on the Board. Of ISC’s
current Directors, three are women (30% of the total
number of Directors).
Business Ethics
Our Code of Conduct (the “Code”) guides how we uphold
our value of integrity. The Code applies to all employees,
executives and members of ISC’s Board, and subsidiary
Boards. It sets out our principles and guidelines for ethical
behaviour at ISC and with our shareholders, communities
and all stakeholder groups.
Conduct and Ethics Training
Every year, all new and current employees at ISC and its
subsidiaries complete Code of Conduct online training and
submit a declaration statement. The training covers key
issues such as conflicts of interest, fraud prevention,
privacy matters, acceptable gifts and invitations from
vendors, respectful workplace matters, and avenues
available to raise concerns about ethics matters.
Governance
GOVERNANCE INFORMATION
Ethics
Code of Conduct for Directors,
executives and employees
Yes
Board Composition and Independence
Size of Board
10
Independent Directors
10
Separate Chair and CEO
Yes
Independent Chair (required)
Yes
Comprehensive Board
Assessment Process
Yes
Directors that are financially
literate
100%
Board meetings held in 2024
8
Average meeting attendance
100%
Board Renewal and Diversity
Annual election of Directors
Yes
Average age of Directors
63
Female Board members
30% (3)
Board Diversity Policy
Yes
2024 ISC® Annual Report
12
Whistleblower Hotline
Through a third-party service provider, we offer an anonymous whistleblower hotline that is open to all employees,
contractors and suppliers from across our operations. Information about the hotline is broadly communicated to
employees to let them know they can communicate any concerns to us in this way. Results of whistleblower complaints
are reported to the Company’s Governance and Nominating and Audit Committees and the Board as applicable.
Cyber Security
As a trusted partner of choice to governments, industries and communities around the world, data and information
security is at the forefront of everything we do. In 2024, ISC achieved certification to the ISO/IEC 27001:2022 standard
across the enterprise, replacing the previous certification held for the ISO/IEC 27001:2013 standard.
ISO/IEC 27001 defines requirements that an information security management system (“ISMS”) must meet in order to
obtain certification. The ISO/IEC 27001 standard provides companies of any size and from all sectors of activity with
guidance for establishing, implementing, maintaining and continually improving an ISMS. Conformity with ISO/IEC 27001
means that an organization or business has put in place a system to manage risks related to the security of data owned
or handled by the company, and that this system respects all the best practices and principles enshrined in this
international standard.
This achievement reinforces the Company’s commitment to maintaining the highest levels of information security and
giving customers and clients added confidence in its products and services.
At the end of 2024, ISC successfully completed SOC 2® Type II examination across its ISC locations in Saskatchewan.
SOC 2® Type II examination focuses on Trust Services Criteria or addresses controls relevant to security, availability and
processing integrity of the systems the service organization uses to process users’ data and the confidentiality and
privacy of the information these systems process.
This milestone underscores our commitment to maintaining the highest standards of security, reliability and operational
excellence. It reflects our dedication to safeguarding the trust our clients place in us every day.
Environmental, Social and Governance
1
Overview.............................................................................................. 16
2
Consolidated Financial Analysis.....................................................21
3
Business Segment Analysis............................................................28
4
Summary of Consolidated Quarterly Results.......................... 48
5
Business Strategy............................................................................. 49
6
Financial and Capital Management............................................ 50
7
Business Risks....................................................................................55
8
Accounting Policies, Financial Measures
and Controls.......................................................................................56
For the Fourth Quarter
and Year Ended
December 31, 2024
Management’s
Discussion and
Analysis
13
2024 ISC® Annual Report
Management’s Discussion and Analysis
2024 ISC® Annual Report
14
Introduction
This Management’s Discussion and Analysis (“MD&A”) for Information Services Corporation (“ISC”) discusses our financial and operating
performance, business indicators and outlook from management’s viewpoint.
This document should be read in its entirety and is intended to complement and supplement ISC’s audited consolidated financial
statements for the years ended December 31, 2024, and 2023 (“Financial Statements”). Additional information, including our Annual
Information Form for the year ended December 31, 2023, is available on the Company’s website at www.isc.ca and in the Company’s
profile on SEDAR+ at www.sedarplus.ca.
This MD&A contains information from the Financial Statements for the years ended December 31, 2024, 2023 and 2022, prepared in
accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (“IASB”). The financial information
that appears throughout our MD&A is consistent with the Financial Statements.
This MD&A also includes certain measures that have not been prepared in accordance with IFRS Accounting Standards, such as adjusted
net income, adjusted earnings per share, basic, adjusted earnings per share, diluted, EBITDA, EBITDA margin, adjusted EBITDA, adjusted
EBITDA margin, free cash flow and adjusted free cash flow. These non-IFRS measures do not have a standardized meaning under IFRS
Accounting Standards and, therefore, may not be comparable to similar measures presented by other issuers. In addition to conventional
measures prepared in accordance with IFRS Accounting Standards, management believes that these non-IFRS measures provide useful
information to investors to assist them in understanding components and trends in our financial results. These measures should not be
considered in isolation or viewed as a substitute for the related financial information prepared in accordance with IFRS Accounting
Standards. Refer to Section 8.8 “Non-IFRS financial measures” for a discussion on why we use these measures, the calculation of them and
their most directly comparable financial measure calculated in accordance with IFRS Accounting Standards. Refer to Section 2
“Consolidated Financial Analysis” and Section 6.1 “Cash flow” for a reconciliation of these measures to the most directly comparable financial
measure calculated in accordance with IFRS Accounting Standards.
Unless otherwise noted, or unless the context indicates otherwise, “ISC”, the “Company”, “we”, “us” and “our” refer to Information Services
Corporation and its subsidiaries. Any statements in this MD&A made by, or on behalf of, management are made in such persons’ capacities
as officers of ISC and not in their personal capacities. In this MD&A, this quarter, the quarter or fourth quarter refer to the three months
ended December 31, 2024, and year-to-date or year-over-year refer to the year ended December 31, 2024, unless the content indicates
otherwise. All results commentary is compared to the equivalent period in 2023 or as at December 31, 2023, as applicable, unless otherwise
indicated.
The Financial Statements are presented in Canadian dollars (“CAD”). In this MD&A, all references to “$” or “dollars” are to CAD and amounts
are stated in CAD unless otherwise indicated.
This MD&A contains forward-looking information and should be read in conjunction with the “Caution Regarding Forward-Looking
Information” that follows. This MD&A is current as of March 17, 2025.
A reference made in this MD&A to other documents or to information or documents available on a website does not constitute the
incorporation by reference into this MD&A of such other documents or such other information or documents available on such website,
unless otherwise stated.
Responsibility For Disclosure
The ISC Board of Directors (“Board”) carries out its responsibility for review of this disclosure primarily through the Audit Committee (“Audit
Committee”) of the Board, which is comprised exclusively of independent directors.
The Audit Committee reviews the fiscal year end MD&A and recommends it to the Board for approval. Interim MD&As are reviewed and
approved by the Audit Committee.
Caution Regarding Forward-Looking Information
Certain statements in this MD&A and certain information incorporated by reference herein contain forward-looking information within the
meaning of applicable Canadian securities laws. The purpose of the forward-looking information is to provide a description of
management’s expectations regarding future events or developments and may not be appropriate for other purposes.
Management’s Discussion and Analysis
15
2024 ISC® Annual Report
Forward-looking information that may be found in this MD&A includes, without limitation, that contained in the “Outlook” section hereof
and management’s expectations, intentions and beliefs concerning the industries in which we operate, business strategy and strategic
direction, growth opportunities, integration, contingent consideration, development and completion of projects, the competitive landscape,
seasonality, our future financial position and results of operations, capital and operating expectations, projected costs, the impact of certain
payments to the Government of Saskatchewan, access to financing, debt levels, free cash flow, expectations for meeting future cash
requirements, the economy and the real estate market, reporting currency and currency fluctuations, dividend expectations, market trends,
and other plans and objectives of or involving ISC. The words may, will, would, should, could, expect, plan, intend, anticipate, believe, estimate,
predict, strive, strategy, continue, likely and potential or the negative or other variations of these words or other comparable words or
phrases, are intended to identify forward-looking information.
Forward-looking information is based on estimates and assumptions made by us in light of ISC’s experience and perception of historical
trends, current conditions and expected future developments, as well as other factors that ISC believes are appropriate and reasonable in
the circumstances. There can be no assurance that such estimates and assumptions will prove to be correct. Certain assumptions with
respect to our ability to implement our business strategy and compete for business (other than our exclusive service offerings) and market
our technology assets and capabilities, as well as business, economic, market and other conditions, availability of financing, currency
exchange rates, consumer confidence, interest rates, level of unemployment, inflation, liabilities, income taxes, and our ability to attract and
retain skilled staff are material factors in preparing forward-looking information.
Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events
to differ materially from those expressed or implied by such forward-looking information. Factors that could cause our actual results or
events to differ materially from those expressed or implied by such forward-looking information include, without limitation, operational,
economic, market, financial, competitive, regulatory, technological and other risks (including those arising from public health concerns)
detailed from time to time in the filings made by the Company, including those detailed in our Annual Information Form for the year ended
December 31, 2024, and the Financial Statements, copies of which are available on our website at www.isc.ca and in the Company’s profile
on SEDAR+ at www.sedarplus.ca. You should consider these factors carefully. We caution that the foregoing list is not exhaustive. Other
events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by,
this forward-looking information. See Section 7.2 “Business risks and risk management”.
Furthermore, unless otherwise stated, the forward-looking information contained in this MD&A is made as of the date of this MD&A. We
have no intention and undertake no obligation to update or revise any forward-looking information, whether as a result of new information,
future events or otherwise, except as required by law. The forward-looking information contained in this MD&A is expressly qualified by this
cautionary statement. You should not place undue reliance on forward-looking information contained herein.
Management’s Discussion and Analysis
2024 ISC® Annual Report
16
1 Overview
Following the achievement of a significant milestone for the Company in 2023 in the form of the Saskatchewan Registries Extension (as defined
in Section 3.1 “Saskatchewan Registries” also referred to as the “Extension”), ISC commenced 2024 with the launch of its next stage of growth
with the announcement of the goal to double the size of the Company on a revenue and adjusted EBITDA basis by 2028 (based on the actual
results for 2023). With the first full year of the execution of this goal behind us, ISC is pleased to report that the fourth quarter, and by extension
the full year, produced excellent financial results in line with the Company’s expectations in the form of record consolidated revenue and
adjusted EBITDA.
At the segment level, Registry Operations saw a strong performance from the Saskatchewan Registries division, where increased volumes
across the division, record high-value property registration revenue within the Land Titles Registry and new revenue related to the Bank Act
Security Registry (the “BASR”) during the second half of the year were the predominant factors leading to record revenue. For more information
about BASR, please refer to Section 3.1 “Registry Operations – Other Registries”.
In Services, there was quarter over prior year quarter and year-over-year growth in the Recovery and Regulatory Solutions divisions. Growth in
the Regulatory Solutions division is primarily due to the growth in know-your-customer (“KYC”) and due diligence activities from existing
customers as Anti-Money Laundering policies continue to be enhanced for the lending industry. Growth in the Recovery Solutions division was
due to an increase in individual Asset Recovery assignments and sales. Some of this growth was partially offset by a decline in the Corporate
Solutions division with the opening of the Ontario Business Registry as well as following the sudden and unexpected ban by the Government of
Ontario on Notice of Security Interests (“NOSIs”) at the start of June 2024.
The Technology Solutions segment saw an improvement in revenue with adjusted EBITDA being consistent with the prior year. Progress
continues to be made on existing and new Third Party solution definition and implementation contracts combined with related party projects,
including registry enhancements for the Saskatchewan Registries division in the Registry Operations segment and the development of
technology supporting BASR in the first half of the year. Continued investment in people, including contractors, to deliver on solution definition
and implementation contracts has been a key driver of revenue growth.
Expenses were up by $30.0 million for the year compared to 2023, largely due to regular business activity such as increases in wages and salaries,
information technology services and the cost of goods sold because of increased revenue in the Regulatory Solutions division in Services.
Our results for the fourth quarter and year ended December 31, 2024 are a reflection of the strength of the Company’s business overall. With
the first year of our five-year goal to double revenue and adjusted EBITDA by 2028 behind us, the foundation for success has been firmly
established with further detail on our expectations for 2025 contained in Section 1.3. For more information about our strategy and our five-year
goal, please refer to Section 5 “Business Strategy”.
1.1 Consolidated highlights
SELECT CONSOLIDATED FINANCIAL INFORMATION
Net cash flow provided
by operating activities
$71.2M
+25% vs 2023
Revenue
$247.4M
+15% vs 2023
Adjusted net income1
$42.9M
+25% vs 2023
Earnings per share,
diluted
$1.11
(20%) vs 2023
Adjusted EBITDA1
$90.3M
+24% vs 2023
Adjusted free cash flow1
$56.4M
+11% vs 2023
Net income
$20.2M
(19%) vs 2023
1 Adjusted net income, adjusted earnings per share, basic, adjusted earnings per share, diluted, adjusted EBITDA, adjusted EBITDA margin and adjusted free cash flow are
not recognized as measures under IFRS Accounting Standards, do not have a standardized meaning prescribed and may not be comparable to similar measures reported
by other companies. Refer to Section 8.8 “Non-IFRS financial measures” for a discussion on why we use these measures, the calculation of them and their most directly
comparable financial measure calculated in accordance with IFRS Accounting Standards. Refer to Section 2 “Consolidated Financial Analysis” and Section 6.1 “Cash flow” for a
reconciliation of these measures to the most directly comparable financial measure calculated in accordance with IFRS Accounting Standards.
Management’s Discussion and Analysis
17
2024 ISC® Annual Report
SELECT FINANCIAL INFORMATION
The select financial information set out for the years ended December 31, 2024, 2023 and 2022 is derived from the Financial Statements
and has been prepared on a consistent basis. In the opinion of the Company’s management, such financial data reflects all adjustments
necessary for a fair presentation of the results for those periods.
Year Ended December 31,
(thousands of CAD)
2024
2023
2022
Revenue
$ 247,366
$ 214,520
$ 189,895
Net income
20,241
25,045
30,769
Net cash flow provided by operating activities
71,177
56,771
43,536
Adjusted net income1
$ 42,931
$
34,213
$
33,348
Adjusted EBITDA1
90,326
72,866
64,390
Adjusted EBITDA margin (% of revenue)1
36.5%
34.0%
33.9%
Adjusted free cash flow1
$ 56,420
$
50,770
$
44,390
Dividend declared per share
$
0.92
$
0.92
$
0.92
Earnings per share, basic
1.11
1.41
1.75
Earnings per share, diluted
1.11
1.39
1.71
Adjusted earnings per share, basic1
2.36
1.92
1.89
Adjusted earnings per share, diluted1
2.35
1.90
1.86
As at December 31,
2024
2023
2022
Total assets
$ 520,022
$ 536,323
$ 283,454
Total non-current liabilities
$ 267,754
$ 304,048
$
88,240
1 Adjusted net income, adjusted earnings per share, basic, adjusted earnings per share, diluted, adjusted EBITDA, adjusted EBITDA margin and adjusted free cash flow are
not recognized as measures under IFRS Accounting Standards, do not have a standardized meaning prescribed and may not be comparable to similar measures reported
by other companies. Refer to Section 8.8 “Non-IFRS financial measures” for a discussion on why we use these measures, the calculation of them and their most directly
comparable financial measure calculated in accordance with IFRS Accounting Standards. Refer to Section 2 “Consolidated Financial Analysis” and Section 6.1 “Cash flow” for a
reconciliation of these measures to the most directly comparable financial measure calculated in accordance with IFRS Accounting Standards.
ISC has generated strong consolidated results over the past three years through a combination of organic growth throughout that period,
the execution of M&A in 2022 and the successful extension of the Saskatchewan Registries Master Service Agreement in 2023. Some of
the key financial highlights for 2024 were:
• Revenue grew by 15 per cent from $214.5 million in 2023 to a record $247.4 million in 2024 as a result of the following:
– Registry Operations revenue grew by 21 per cent due to increased volumes across the Saskatchewan Registries division, combined with
a full year of fee adjustments compared to five months in the prior year and record high-value property registrations in the Land Titles
Registry.
– Services revenue grew by 8 per cent year-over-year due to increases in KYC and due diligence transactions in the Regulatory Solutions
division as well as increased assignments and sales in the Recovery Solutions division.
– Technology Solutions revenue grew by 30 per cent year-over-year due to the advancement of project work on existing and new
solution definition and implementation contracts.
• Adjusted EBITDA grew by 24 per cent from $72.9 million in 2023 to a record $90.3 million in 2024 as a result of strong operating results
from the Registry Operations and Services segments.
• Net income for the year was $20.2 million, down from $25.0 million in the prior year due to increased share-based compensation
expense and investment in information technology services and people primarily related to project work in Technology Solutions as well
as increased interest and amortization associated with the Extension.
• Adjusted free cash flow increased to a record $56.4 million in 2024, up 11 per cent over the 2023 results, demonstrating the Company’s
consistent generation of strong free cash flow.
Management’s Discussion and Analysis
2024 ISC® Annual Report
18
FOURTH QUARTER CONSOLIDATED HIGHLIGHTS
• Revenue was $62.2 million for the quarter, an increase of 8 per cent compared to the fourth quarter of 2023. This increase was driven
by increased volumes across the Saskatchewan Registries division of Registry Operations, record high-value property registrations in the
Saskatchewan Land Titles Registry and new revenue related to BASR. Further contributing to this increase was the Services segment
with growth in KYC and due diligence transactions in the Regulatory Solutions division and increased assignments and sales in the
Recovery Solutions division.
• Net income was $5.3 million or $0.29 per basic share and diluted share for the quarter, compared to $5.7 million or $0.32 per basic share
and diluted share in the fourth quarter of 2023.
• Net cash flow provided by operating activities was $22.3 million for the quarter, consistent with $22.2 million in the fourth quarter
of 2023.
• Adjusted net income was $9.3 million or $0.51 per basic share and $0.50 per diluted share compared to $9.8 million or $0.55 per basic
share and $0.54 per diluted share in the fourth quarter of 2023.
• Adjusted EBITDA was $21.0 million for the quarter, consistent with $21.3 million in the fourth quarter of 2023. Adjusted EBITDA
margin was 33.8 per cent compared to 37.1 per cent in the fourth quarter of 2023. The decrease in the margin was driven by increased
investment in information technology services primarily related to project delivery work in Technology Solutions.
• Adjusted free cash flow for the quarter was $13.2 million, compared to $14.0 million in the fourth quarter of 2023.
2024
2023
2022
Consolidated Revenue
for the year ended December 31,
(CAD millions)
189.9
214.5
247.4
2024
2023
2022
Consolidated Net Income
for the year ended December 31,
(CAD millions)
30.8
25.0
20.2
2024
2023
2022
Consolidated Adjusted EBITDA
for the year ended December 31,
(CAD millions)
64.4
72.9
90.3
2024
2023
2022
Consolidated Adjusted Free Cash Flow
for the year ended December 31,
(CAD millions)
44.4
50.8
56.4
Management’s Discussion and Analysis
19
2024 ISC® Annual Report
• Voluntary prepayments of $14.0 million were made towards the Company’s Credit Facility during the quarter. This is part of the
Company’s plan to deleverage towards a long-term net leverage target of 2.0x – 2.5x. See Section 6.3 “Debt” for more information on
ISC’s Credit Facility.
• On November 28, 2024, Enterprise Registry Solutions Limited, a wholly owned subsidiary of ISC announced an agreement with the
Principality of Liechtenstein to deliver a digital commercial registry system. The total value of the contract is approximately $10.0 million
and is for a period of five years. For more information, please see our news release dated November 28, 2024.
YEAR-TO-DATE CONSOLIDATED HIGHLIGHTS
• Revenue was $247.4 million for the year ended December 31, 2024, an increase of 15 per cent compared to $214.5 million in 2023.
Growth was driven by strong performance from the Saskatchewan Registries division of Registry Operations, combined with a full
year of fee adjustments made in July 2023 related to the Extension, compared to only five months in the prior year, and record high-
value property registrations in the Land Titles Registry. Services also contributed to the growth with increases in KYC and due diligence
transactions in the Regulatory Solutions division and increased assignments and sales in the Recovery Solutions division. Within
Technology Solutions, the advancement of project work on existing and new solution definition and implementation contracts further
added to the growth in revenue.
• Net income was $20.2 million or $1.11 per basic share and diluted share for the year ended December 31, 2024, compared to $25.0
million or $1.41 per basic share and $1.39 per diluted share in 2023. Strong results from Registry Operations and Services were offset by
increased interest and amortization associated with the Extension, investment in information technology services and people primarily
related to project work in Technology Solutions, and share-based compensation expense.
• Net cash flow provided by operating activities was $71.2 million for the year ended December 31, 2024, an increase of $14.4 million
compared to 2023, driven by strong operating results and changes in non-cash working capital.
• Adjusted net income was $42.9 million or $2.36 per basic share and $2.35 per diluted share for the year ended December 31, 2024,
compared to $34.2 million or $1.92 per basic share and $1.90 per diluted share for the year ended December 31, 2023. The growth reflects
strong results from Registry Operations and Services that were partially offset by increased interest expense due to higher average
long-term debt outstanding compared to the prior year following the drawdown of the Credit Facility to fund the Upfront Payment in July
2023. For more information about the Upfront Payment, please refer to Section 3.1 “Registry Operations – Saskatchewan Registries”.
• Adjusted EBITDA was a record $90.3 million for the year ended December 31, 2024, compared to $72.9 million last year. Adjusted
EBITDA margin for the year was 36.5 per cent compared to 34.0 per cent in 2023. The increase in adjusted EBITDA and adjusted
EBITDA margin was primarily driven by higher volumes, record high-value property registrations in the Saskatchewan Land Titles Registry
and fee adjustments, all within the Saskatchewan Registries division of Registry Operations.
• Adjusted free cash flow for the year ended December 31, 2024, was $56.4 million, an increase of $5.6 million compared to $50.8 million
in 2023. This growth was driven by the same reasons noted for adjusted EBITDA.
• Voluntary prepayments on our Credit Facility during the year, as part of the Company’s plan to deleverage towards a long-term net
leverage target of 2.0x – 2.5x, totalled $44.0 million. Additionally, in July the first of five annual cash payments of $30.0 million was made
to the Government of Saskatchewan pursuant to the Extension Agreement (as defined in Section 3.1 “Saskatchewan Registries”), using
funds drawn from the Credit Facility.
• On March 8, 2024, Regulis S.A. (“Regulis”), a wholly owned subsidiary of ISC, launched the International Registry of Interests in Rolling
Stock consistent with its contract under the Luxembourg Rail Protocol of the Cape Town Convention, which provides the exclusive right
and obligation to develop, deliver and operate the International Registry of Interests in Rolling Stock for a period of 10 years from the date
of go live. Pursuant to the Regulis Share Purchase Agreement executed in 2022, additional purchase consideration of $0.9 million was
paid during the first quarter.
• On May 13, 2024, ISC announced that through its wholly owned subsidiary, Reamined Systems Inc. (“Reamined”), the Company and His
Majesty the King in right of Ontario as represented by the Minister of Finance (the “Ministry”) entered into an amended and restated
License and Information Technology Services Agreement (the “A&R OPTA Agreement”) to continue the management and operation of
the Online Property Tax Analysis (“OPTA”) system for the Government of Ontario until March 31, 2028, with two additional options for
one-year renewals.
• On July 2, 2024, the Company launched the online, self-service Customer Portal for BASR.
1.2 Subsequent events
• On March 17, 2025, the Board declared a quarterly cash dividend of $0.23 per Class A Share, payable on or before April 15, 2025, to
shareholders of record as of March 31, 2025.
Management’s Discussion and Analysis
2024 ISC® Annual Report
20
1.3 Outlook
The following section includes forward-looking information, including statements related to our strategy, future results, including revenue
and adjusted EBITDA, segment performance, expenses, operating costs and capital expenditures, the industries in which we operate,
economic activity, growth opportunities, investments and business development opportunities. Refer to “Caution Regarding Forward-
Looking Information”.
2025 marks the second year of ISC’s growth plan to again double the size of the Company by 2028, on a similar metrics basis and based on
2023 results. Our guidance for 2025 reflects continued organic growth in line with historical trends. While not included in our guidance, our
disciplined M&A strategy is intended to support our 2028 growth targets as we continue to pursue new opportunities.
In Registry Operations, a declining interest rate environment is likely to support ongoing activity in the Saskatchewan real estate market. As
a result, there is expected to be typical annual growth in overall volumes in the Saskatchewan Land Registry of 2 to 3 per cent. At the same
time, there is also forecasted to be an increase in the fair market value of regular real estate transfers, along with inventory challenges in the
lower-value homes category. The stability of the Ontario Property Tax Assessment division, along with a full year of BASR and annual
Saskatchewan Registries CPI fee adjustments, will support the segment’s steady financial performance.
In Services, we expect continued growth in the Regulatory Solutions division due to the ongoing trend of increased due diligence by
financial institutions. In addition, we expect to build on the strong gains made in the Recovery Solutions division in 2024. Growth in these
two divisions is expected to offset any headwinds from the further opening of the Ontario Business Registry, as well as the unexpected ban
on NOSIs in Ontario at the start of June 2024.
In Technology Solutions, we are again forecasting double-digit growth in 2025, supported by a pipeline of Third Party and Related Party
contracts, that is currently being delivered, including our projects in Cyprus, Guernsey, Michigan and the recently announced contract with
Liechtenstein, among others.
As in prior years, the key drivers of expenses in 2025 are expected to be wages and salaries and cost of goods sold, as well as the additional
operating costs associated with the enhancement of the Saskatchewan Registries and interest expense, which are excluded from adjusted
EBITDA.
As a result, in 2025 ISC expects revenue to be within a range of $257.0 million to $267.0 million and adjusted EBITDA to be in a range of
$89.0 million to $97.0 million. In keeping with our historical performance, the Company also expects to see robust free cash flow in 2025,
which will support the deleveraging of our balance sheet to realize a long-term net leverage target of 2.0x – 2.5x.
Management’s Discussion and Analysis
21
2024 ISC® Annual Report
2 Consolidated Financial Analysis
Revenue for the quarter and year ended December 31, 2024 was up 8 and 15 per cent, respectively, compared to the same prior year periods
due to growth in the Registry Operations and Services segments. For the quarter, Registry Operations revenue grew due to increased volumes
across the Saskatchewan Registries division, record high-value property registrations in the Saskatchewan Land Titles Registry and new BASR
revenue. Services revenue increased due to continued KYC and due diligence transaction growth in the Regulatory Solutions division and
increased assignments and sales in the Recovery Solutions division. Revenue for the year grew due to the same reasons noted for the quarter,
combined with a full year of fee adjustments in the Saskatchewan Registries division of Registry Operations, compared to only five months in
the prior year.
Net income for the quarter and year ended December 31, 2024 was down 7 and 19 per cent, respectively, compared to the same periods of
2023. For the quarter, strong adjusted EBITDA from Registry Operations and Services in addition to lower share-based compensation expense
and net finance expense were offset by increased investment in information technology services and people primarily related to project
delivery work in Technology Solutions. Net income for the year was down due to increased interest, amortization, and investment in
information technology services and people primarily related to project work in Technology Solutions including costs related to the Extension
including continuation of registry enhancements (as further discussed under Section 3.1 “Saskatchewan Registries”), and share-based
compensation expense. This was offset by increased adjusted EBITDA contributions from Registry Operations and Services.
2.1 Consolidated statements of comprehensive income
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Revenue
Registry Operations
$
33,069
$
28,519
$ 125,588
$ 103,516
Services
26,742
25,368
110,196
101,712
Technology Solutions
2,371
3,604
11,570
9,268
Corporate and other
4
–
12
24
Total revenue
62,186
57,491
247,366
214,520
Expenses
Wages and salaries
15,799
15,098
70,609
59,999
Cost of goods sold
14,894
13,946
59,920
55,387
Depreciation and amortization
7,181
6,643
27,573
20,506
Information technology services
5,998
3,654
19,560
13,280
Occupancy costs
1,121
1,166
4,494
4,648
Professional and consulting services
2,544
1,522
7,688
5,981
Financial services
780
751
2,837
3,077
Other
1,021
903
3,814
3,669
Total expenses
49,338
43,683
196,495
166,547
Net income before items noted below
12,848
13,808
50,871
47,973
Finance income (expense)
Interest income
176
264
906
1,163
Interest expense
(5,053)
(6,482)
(22,852)
(14,346)
Net finance expense
(4,877)
(6,218)
(21,946)
(13,183)
Income before tax
7,971
7,590
28,925
34,790
Income tax expense
(2,675)
(1,876)
(8,684)
(9,745)
Net income
5,296
5,714
20,241
25,045
Other comprehensive income (loss)
Unrealized (loss) gain on translation of financial
statements of foreign operations
(158)
104
221
192
Other comprehensive (loss) income
(158)
104
221
192
Total comprehensive income
$
5,138
$
5,818
$ 21,462
$
25,237
Management’s Discussion and Analysis
2024 ISC® Annual Report
22
2.2 Consolidated revenue
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Registry Operations
$
33,069
$
28,519
$ 125,588
$ 103,516
Services
26,742
25,368
110,196
101,712
Technology Solutions
2,371
3,604
11,570
9,268
Corporate and other
4
–
12
24
Total revenue
$
62,186
$
57,491
$ 247,366
$ 214,520
Total revenue for the quarter increased by $4.7 million or 8 per cent as a result of:
• Increased revenue in Registry Operations of $4.6 million or 16 per cent compared to the fourth quarter of 2023 due to increased volumes
across the Saskatchewan Registries division, record high-value property registrations revenue within the Land Titles Registry and new
revenue related to BASR.
• Increased revenue of $1.4 million or 5 per cent in Services due to growth in the Regulatory Solutions and Recovery Solutions divisions.
Growth was driven by strength in KYC and due diligence activities in Regulatory Solutions and increases in individual asset recovery
assignments and increased vehicle sales in Recovery Solutions.
Total revenue for the year increased by $32.8 million or 15 per cent compared to the prior year due to:
• Increased revenue in Registry Operations of $22.1 million due to the same explanations as for the quarter supplemented by a full year of
fee adjustments in the Saskatchewan Land Registry, compared to only five months in the prior year.
• Strong growth in the Services segment of $8.5 million. Similar to the quarter, this was driven by continued KYC and due diligence
transaction growth in the Regulatory Solutions division where customers from financial institutions and auto finance continued to
enhance due diligence processes and increased regulatory oversight. In addition, there has been an increase in Recovery Solutions
division revenue due to the same reasons as explained for the quarter above.
• Increased Third Party revenue of $2.3 million in Technology Solutions due to progress during the year on both new and ongoing solution
definition and implementation contracts.
+8%
2023
2024
57.5
62.2
Consolidated revenue
for the three months ended December 31,
(CAD millions)
+15%
2023
2024
214.5
247.4
Consolidated revenue
for the year ended December 31,
(CAD millions)
Management’s Discussion and Analysis
23
2024 ISC® Annual Report
2.3 Consolidated expenses
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Wages and salaries
$
15,799
$
15,098
$ 70,609
$
59,999
Cost of goods sold
14,894
13,946
59,920
55,387
Depreciation and amortization
7,181
6,643
27,573
20,506
Information technology services
5,998
3,654
19,560
13,280
Occupancy costs
1,121
1,166
4,494
4,648
Professional and consulting services
2,544
1,522
7,688
5,981
Financial services
780
751
2,837
3,077
Other
1,021
903
3,814
3,669
Total expenses
$
49,338
$
43,683
$ 196,495
$ 166,547
Expenses were $49.3 million for the quarter, an increase of $5.7 million compared to the same quarter last year. The increase in the quarter
was due to:
• An increase in wages and salaries of $0.7 million when compared to the prior year quarter that primarily relates to increased investment
in people to support business growth, partially offset by a decrease in share-based compensation expense quarter-over-quarter due to a
decrease in the Company’s share price during the quarter compared to an increase in the same prior year quarter.
• An increase in cost of goods sold of $0.9 million due to increased Regulatory Solutions division revenue within the Services segment in
addition to BASR revenue within Registry Operations.
• An increase in information technology services of $2.3 million primarily related to project delivery work in Technology Solutions.
• An increase in professional and consulting services of $1.0 million driven by increased acquisition, integration and other costs related to
growth opportunities and registry enhancements.
For the year ended December 31, 2024, expenses were $196.5 million, an increase of $30.0 million compared to the prior year. The increase
was due to:
• An increase in wages and salaries of $10.6 million, which includes a $5.3 million increase in share-based compensation expense due to a
greater increase in the Company’s share price during the year compared to the prior year in addition to increased investment in people to
support business growth.
• An increase in depreciation and amortization of $7.1 million related to amortization of the intangible asset associated with the right to
manage and operate the Saskatchewan Registries, which was capitalized in July 2023.
• An increase in information technology services of $6.3 million primarily related to project delivery work in Technology Solutions.
• An increase in cost of goods sold of $4.5 million as a result of higher Services revenue within the Regulatory Solutions division as well as
revenue earned through BASR within Registry Operations.
• An increase in professional and consulting services of $1.7 million driven by increased investment to support registry enhancements.
2023
2024
43.7
49.3
18%
23%
30%
15%
32%
15%
32%
35%
Other
Costs of goods sold
Depreciation and amortization
Employee expenses
Consolidated expenses
for the three months ended December 31,
(CAD millions)
2023
2024
166.5
196.5
19%
20%
30%
14%
36%
12%
33%
36%
Other
Costs of goods sold
Depreciation and amortization
Employee expenses
Consolidated expenses
for the year ended December 31,
(CAD millions)
Management’s Discussion and Analysis
2024 ISC® Annual Report
24
2.4 Consolidated net income and adjusted net income
Three Months Ended December 31,
Pre-tax
Tax1
After-tax
(thousands of CAD)
2024
2023
2024
2023
2024
2023
Adjusted net income
$ 13,498
$ 13,253
$ (4,168)
$
(3,405)
$ 9,330
$
9,848
Add (subtract):
Share-based compensation (expense)
1,141
(307)
(308)
83
833
(224)
Acquisition, integration and other costs (2,112)
(559)
570
151
(1,542)
(408)
Effective interest component of
interest expense
(66)
(64)
18
17
(48)
(47)
Interest on vendor concession liability
(2,176)
(2,599)
588
702
(1,588)
(1,897)
Amortization of right to manage and
operate the Saskatchewan Registries
(2,314)
(2,134)
625
576
(1,689)
(1,558)
Net income
$ 7,971
$ 7,590
$ (2,675)
$
(1,876)
$ 5,296
$
5,714
1 Calculated at ISC’s statutory tax rate of 27.0 per cent.
Year Ended December 31,
Pre-tax
Tax1
After-tax
(thousands of CAD)
2024
2023
2024
2023
2024
2023
Adjusted net income
$ 60,008
$ 47,350
$ (17,077)
$ (13,137)
$ 42,931
$ 34,213
Add (subtract):
Share-based compensation expense
(5,589)
(283)
1,509
76
(4,080)
(207)
Acquisition, integration and other costs (6,293)
(4,104)
1,699
1,108
(4,594)
(2,996)
Effective interest component of
interest expense
(262)
(165)
71
45
(191)
(120)
Interest on vendor concession liability
(9,684)
(4,332)
2,615
1,170
(7,069)
(3,162)
Amortization of right to manage and
operate the Saskatchewan Registries (9,255)
(3,676)
2,499
993
(6,756)
(2,683)
Net income
$ 28,925
$ 34,790
$ (8,684)
$
(9,745)
$ 20,241
$ 25,045
1 Calculated at ISC’s statutory tax rate of 27.0 per cent.
(5)%
2023
2024
9.8
9.3
Net income and adjusted net income
for the three months ended December 31,
(CAD millions)
Adjustments
Net income
4.1
4.0
5.3
5.7
Note: Values in tables may not add due to rounding.
+25%
2023
2024
34.2
43.0
Net income and adjusted net income
for the year ended December 31,
(CAD millions)
Adjustments
Net income
9.2
22.7
20.2
25.0
Management’s Discussion and Analysis
25
2024 ISC® Annual Report
Three Months Ended December 31,
Year Ended December 31,
2024
2023
2024
2023
Earnings per share, basic
$
0.29
$
0.32
$
1.11
$
1.41
Earnings per share, diluted
0.29
0.32
1.11
1.39
Adjusted earnings per share, basic
0.51
0.55
2.36
1.92
Adjusted earnings per share, diluted
0.50
0.54
2.35
1.90
Weighted average # of shares
18,452,302
18,004,641
18,185,434
17,820,729
Weighted average # of diluted shares
18,570,169
18,130,264
18,290,955
18,023,777
Net income for the quarter was $5.3 million or $0.29 per basic share and diluted share, compared to $5.7 million or $0.32 per basic share
and diluted share in the fourth quarter of 2023. For the year ended December 31, 2024, net income was $20.2 million or $1.11 per basic share
and $1.11 per diluted share in 2024 compared to $25.0 million or $1.41 per basic share and $1.39 per diluted share last year.
For the year ended December 31, 2024, the decrease in net income of $4.8 million was due to:
• An increase in net finance expense of $8.8 million compared to the prior year due to higher average long-term debt outstanding
following the drawdown of the Credit Facility to fund the Upfront Payment in July 2023 combined with a full year of non-cash interest on
the vendor concession liability to the Government of Saskatchewan related to the Extension, compared to only five months in the prior
year period.
• Increased depreciation and amortization expense of $7.1 million due to a full year of amortization with respect to the extended right to
manage and operate the Saskatchewan Registries, which was capitalized in July 2023.
• An increase in information technology services expense of $6.3 million and an increase in wages and salaries, net of share-based
compensation expense, of $5.3 million primarily related to project delivery work in Technology Solutions.
• An increase in share-based compensation expense of $5.3 million compared to the same period in the prior year. This was driven by an
increase in the Company’s share price during the period compared to a decrease in the share price during same period in 2023.
Partially offsetting this was strong adjusted EBITDA contributions from the Registry Operations and Services segments. Registry Operations
adjusted EBITDA increased $21.1 million year-over-year due to increased volumes across the Saskatchewan Registries division, record
high-value property registration revenue within the Land Titles Registry and a full year of fee adjustments (implemented in July 2023) in the
Saskatchewan Land Registry, compared to only five months in the prior year. Services’ adjusted EBITDA increased $1.8 million year-over-
year due to increases in KYC and due diligence transactions in the Regulatory Solutions division and increased assignments and sales in the
Recovery Solutions division.
Adjusted net income for the quarter was $9.3 million or $0.51 per basic share and $0.50 per diluted share compared to $9.8 million or $0.55
per basic share and $0.54 per diluted share in the fourth quarter of 2023. For the year, adjusted net income was $42.9 million or $2.36 per
basic share and $2.35 per diluted share compared to $34.2 million or $1.92 per basic share and $1.90 per diluted share in 2023.
The decrease in adjusted net income for the three months ended December 31, 2024, is for similar reasons to that regarding net income,
with the exception of the decrease in share-based compensation expense as this item is excluded from adjusted net income. The growth in
adjusted net income for the year ended December 31, 2024 was due to strong results as highlighted for Registry Operations and Services
above, which were partially offset by increased interest expense due to higher average long-term debt outstanding compared to the prior
year following the drawdown of the Credit Facility to fund the Upfront Payment in July 2023.
Management’s Discussion and Analysis
2024 ISC® Annual Report
26
2.5 Consolidated EBITDA and adjusted EBITDA
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Adjusted EBITDA
$
21,000
$
21,317
$ 90,326
$
72,866
Add (subtract):
Share-based compensation recovery (expense)
1,141
(307)
(5,589)
(283)
Acquisition, integration and other costs
(2,112)
(559)
(6,293)
(4,104)
EBITDA1
$
20,029
$
20,451
$ 78,444
$
68,479
Add (subtract):
Depreciation and amortization
(7,181)
(6,643)
(27,573)
(20,506)
Net finance expense
(4,877)
(6,218)
(21,946)
(13,183)
Income tax expense
(2,675)
(1,876)
(8,684)
(9,745)
Net income
$
5,296
$
5,714
$ 20,241
$
25,045
EBITDA margin (% of revenue)1
32.2%
35.6%
31.7%
31.9%
Adjusted EBITDA margin (% of revenue)
33.8%
37.1%
36.5%
34.0%
1 EBITDA and EBITDA margin are not recognized as measures under IFRS Accounting Standards, do not have a standardized meaning prescribed and may not be comparable to
similar measures reported by other companies; refer to Section 8.8 “Non-IFRS financial measures” for a discussion on why we use these measures, the calculation of them and
their most directly comparable financial measure calculated in accordance with IFRS Accounting Standards.
Adjusted EBITDA for the fourth quarter was $21.0 million, consistent with $21.3 million in the fourth quarter of 2023. For 2024, adjusted EBITDA
was a record $90.3 million, an increase of $17.5 million compared to $72.9 million in 2023. This was due to:
• An increase in adjusted EBITDA in Registry Operations of $21.0 million when compared to the prior year. The increase was driven by
volume increases across the Saskatchewan Registries division and record high-value property registrations in addition to a full year of fee
adjustments in the Saskatchewan Registries pursuant to the Extension compared to five months in the previous year.
• An increase in adjusted EBITDA in Services of $1.8 million when compared to 2023. The increase was primarily a result of revenue growth
in Regulatory Solutions and Recovery Solutions.
Partially offsetting the above are:
• A decrease in adjusted EBITDA in Technology Solutions of $0.5 million due to continued investment in people, including contractors to
deliver on solution definition and implementation contracts.
• An increase in the inter-segment elimination of $5.3 million over the prior year primarily due to continued delivery of registry
enhancements to the Registry Operations segment by the Technology Solutions segment.
(1)%
2023
2024
21.3
21.0
Consolidated EBITDA and adjusted EBITDA1
for the three months ended December 31,
(CAD millions)
Adjustments
EBITDA
0.9
1.0
20.0
20.5
Note: Values in tables may not add due to rounding.
+24%
2023
2024
72.9
90.3
Consolidated EBITDA and adjusted EBITDA1
for the year ended December 31,
(CAD millions)
Adjustments
EBITDA
68.5
78.4
4.4
11.9
Management’s Discussion and Analysis
27
2024 ISC® Annual Report
The adjusted EBITDA margin for the quarter was 33.8 per cent compared to 37.1 per cent in the prior year. The decrease for the quarter was a
result of a $3.7 million decrease in adjusted EBITDA in the Technology Solutions segment due to continued investment in people, including
contractors, to deliver on solution definition and implementation contracts.
The adjusted EBITDA margin for the year was 36.5 per cent, compared to 34.0 per cent in 2023. The increase was due to volume increases
across the Saskatchewan Registries division, record high-value property registration revenue within the Land Titles Registry and a full year of fee
adjustments compared to only five months of fee increases in 2023.
2.6 Consolidated net finance expense
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Interest income
$
176
$
264
$
906
$
1,163
Interest expense on long-term debt
(2,702)
(3,696)
(12,421)
(9,449)
Interest on vendor concession liability
(2,176)
(2,599)
(9,684)
(4,332)
Interest on lease liabilities
(109)
(123)
(485)
(400)
Effective interest component of interest expense
(66)
(64)
(262)
(165)
Interest expense
$
(5,053)
$
(6,482)
$ (22,852)
$ (14,346)
Net finance expense
$
(4,877)
$
(6,218)
$ (21,946)
$ (13,183)
Note: Brackets in the above table denote expense.
Net finance expense was $4.9 million for the quarter, down $1.3 million from $6.2 million in the same quarter in the previous year. During the
quarter, the Company continued to make voluntary prepayments on its Credit Facility as part of its deleveraging plan, which combined with
prepayments during the first nine months of the year resulted in lower average long-term debt balances compared to the prior year quarter.
This, combined with a lower effective interest rate due to decreases in the interest rate by the Bank of Canada in 2024 compared to the
prior year and reduced interest on the vendor concession liability, contributed to the decrease.
For the year ended December 31, 2024, net finance expense was $21.9 million, up $8.8 million from 2023 due to higher average long-term
debt outstanding compared to the prior year following the drawdown of the Credit Facility to fund the Upfront Payment in July 2023.
Additionally, there has been a full year of non-cash interest on the vendor concession liability to the Government of Saskatchewan related to
the Extension, compared to only five months in the prior year period.
2.7 Tax provision
The Company is subject to federal and provincial income taxes at an estimated combined statutory rate of 27.0 per cent (2023 – 27.0 per
cent). Income tax expense varies from the amounts that would be computed by applying the combined statutory income tax rate to
earnings before taxes as outlined below:
(thousands of CAD)
2024
2023
Net income before tax
$ 28,925
$
34,790
Combined statutory income tax rate
27.0%
27.0%
Expected income tax expense
7,810
9,393
Increase (decrease) in income tax resulting from:
Non-deductible expenses
95
223
Income tax rate differential
502
19
Change in unrecognized deferred tax assets
278
100
Other
(1)
10
Income tax expense
$
8,684
$
9,745
In assessing the recovery of deferred income tax assets, management considers whether it is probable that the deferred income tax assets
will be realized. The recognition and measurement of the current and deferred income tax assets and liabilities involve dealing with
uncertainties in the application of complex tax regulations and the assessment of the recoverability of the deferred income tax assets. The
ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which
the temporary differences are deductible.
Management’s Discussion and Analysis
2024 ISC® Annual Report
28
3 Business Segment Analysis
Headquartered in Canada, ISC is a leading provider of registry and information management services for public data and records.
Throughout our history, we have delivered value to our customers by providing solutions to manage, secure and administer information.
ISC currently has three operating segments:
Registry Operations delivers
registry and information services
on behalf of governments and
private sector organizations.
Services delivers products and
services that utilize public records
and data to provide value to
customers in the financial and
legal sectors.
Technology Solutions provides
the development, delivery and
support of registry (and related)
technology solutions.
The balance of our corporate activities and shared services is reported as Corporate and other.
+15%
2023
2024
Revenue by segment1
for the year ended December 31,
Technology Solutions
Services
Registry Operations
47%
45%
48%
51%
4%
5%
+8%
2023
2024
Revenue by segment1
for the three months ended December 31,
Technology Solutions
Services
Registry Operations
44%
43%
50%
53%
1 Corporate and other and Inter-segment eliminations are excluded. Technology Solutions revenue included in the above graphs is Third Party revenue.
6%
4%
+24%
2023
2024
Adjusted EBITDA by segment1
for the year ended December 31,
Technology Solutions
Services
Registry Operations
26%
22%
73%
77%
1%
1%
(1)%
2023
2024
Adjusted EBITDA by segment1
for the three months ended December 31,
Technology solutions
Services
Registry operations
86%
19%
72%
20%
1 Corporate and other and Inter-segment eliminations are excluded.
(6)%
9%
Management’s Discussion and Analysis
29
2024 ISC® Annual Report
3.1 Registry Operations
Our Registry Operations segment delivers registry and information services on behalf of governments and private sector organizations. This
segment currently has two major clients: the Government of Saskatchewan and the Government of Ontario.
Our offerings are categorized into three divisions: Saskatchewan Registries, Ontario Property Tax Assessment Services and Other Registries.
On July 2, 2024, the Company commenced the management and operation of BASR. The results of operations of BASR are included in the
“Other Registries” division of Registry Operations.
For services in this segment, competitors include infrastructure funds and private equity firms as well as information services companies,
registry software providers and other such information-based companies that develop and provide software platforms to manage
registry and related information services. These types of companies may compete with ISC by acting as, or partnering with, businesses
that can provide other required processes, such as customer service and delivery, in conjunction with software platforms to provide
full-service solutions.
Saskatchewan Registries
ISC provides services on behalf of the Government of Saskatchewan under the amended and restated Master Service Agreement (the
“Amended and Restated MSA”) in effect until 2053 and is the exclusive full-service solution provider of the Saskatchewan Land Registry
(including the Saskatchewan Land Titles Registry (“Land Titles Registry”), the Saskatchewan Land Surveys Directory (“Land Surveys”) and
Saskatchewan Geomatics services (“Geomatics”), collectively the “Land Registry”), the Saskatchewan Personal Property Registry (“Personal
Property Registry”) and the Saskatchewan Corporate Registry (“Corporate Registry”) (collectively, the “Saskatchewan Registries”).
On July 5, 2023, the Company entered into an Extension Agreement (referred to herein as the “Extension Agreement”) to extend ISC’s
exclusive right to manage and operate the Saskatchewan Registries until 2053 (referred to herein as the “Extension”). Under the Extension
Agreement, ISC was granted the right to introduce and/or enhance fees on certain transactions. Applicable fee adjustments became
effective July 29, 2023.
The Amended and Restated MSA implemented certain incremental terms and conditions, the objectives of which are to enhance security
features and protocols for the Saskatchewan Registries; contemplate emerging and future technology enhancements for the Saskatchewan
Registries and the services provided pursuant to the Amended and Restated MSA; refresh and clarify governance practices and structure;
adjust the registry fees chargeable by the Company; and provide flexibility for change over the life of the extended term. Certain costs
associated with the Extension along with a portion of the transaction costs associated with the Extension have been capitalized as an
intangible asset related to the right to manage and operate the Saskatchewan Registries, while the remainder of the costs have been
expensed pursuant to IFRS Accounting Standards.
The consideration paid and to be paid by ISC to the Government of Saskatchewan with respect to the Extension consists of:
• an upfront payment (referred to herein as the “Upfront Payment”) of $150.0 million, paid in July 2023;
• five cash payments of $30.0 million per year, totalling $150.0 million, commencing in July 2024 with the final payment expected to be
made in 2028 (the “Subsequent Payments”); and
• annual contingent payments potentially payable after 2033 if cumulative annual volume growth for certain Saskatchewan Land Registry
transactions falls within a pre-determined range, calculated in any given year as follows:
– 25 per cent of any revenue associated with long-term volume growth between 0 per cent to 1 per cent;
– 50 per cent of any revenue associated with long-term volume growth between 1 per cent to 3 per cent;
– ISC to retain unlimited upside on any incremental volume growth in excess of 3 per cent.
In 2023, ISC commenced enhancement of the Saskatchewan Registries (also referred to as registry enhancements), leveraging ISC-owned
technology to offer a best-in-class technology, security and user experience. In accordance with IFRS Accounting Standards, these
expenditures will be capitalized as intangible assets or expensed.
Our Saskatchewan Registries division experiences moderate seasonality, primarily because Land Titles Registry revenue fluctuates in line
with real estate transaction activity in Saskatchewan. Typically, the second and third quarters of the fiscal year generate higher revenue, as
that is when real estate activity is traditionally highest.
Management’s Discussion and Analysis
2024 ISC® Annual Report
30
Saskatchewan Land Registry
The Land Titles Registry issues titles to land and registers transactions affecting titles, including changes of ownership and the registration of
interests in land, in Saskatchewan.
Revenue for the Land Titles Registry is earned through registration, search and maintenance fees. Registration fees are either flat or
value-based, calculated as a percentage of the value of the land and/or property being registered.
We typically charge a flat fee per transaction for search and maintenance transactions. However, in certain instances, we may charge a
negotiated fee for a customized search or maintenance transaction such as certain mineral certification or bulk data requests.
Because Land Titles Registry revenue comprises both residential and non-residential activity, mortgage rates and business lending rates
may affect revenue. Changes in land values, provincial population and mortgage qualifying requirements also affect the housing market,
which, in turn, influences changes of ownership and revenue.
Approximately 90 per cent of all Land Titles Registry registration transactions were submitted online in 2024.
Land Surveys registers land survey plans and creates a representation of Saskatchewan land parcels in the cadastral parcel mapping system.
Revenue related to all Land Survey services is earned as a flat fee per transaction.
Geomatics manages geographic data related to the cadastral parcel mapping system, which is integrated with the Land Titles Registry and
Land Surveys. Fees for Geomatics services are typically negotiated per transaction, based on the type and nature of services required.
Saskatchewan Personal Property Registry
The Personal Property Registry is a notice-based public registry in which security interests and certain other interests in personal property
(property other than land, buildings and other property affixed to land) may be registered.
Customers are charged flat fees per transaction and the automated web-based system enables real-time completion of search and
registration services as well as minimizes operational effort to deliver services.
General provincial economic drivers, including vehicle sales, interest rates and the strength of commercial activity across the province,
influence revenue in the Personal Property Registry.
Customers complete almost all searches in the registry online. High online usage is stable, with minimal numbers of end-use consumers
needing staff assistance to complete their transactions.
Saskatchewan Corporate Registry
The Corporate Registry is a province-wide system for the registration of business entities, including business corporations, non-profit
corporations, co-operatives, sole proprietorships, partnerships and business names.
Unlike other registries, the Corporate Registry earns most of its revenue from maintenance services, including annual returns and changes
to corporate articles, ownership or directorship.
Approximately 96 per cent of all registrations in the Corporate Registry were submitted online in 2024.
Ontario Property Tax Assessment Services
ISC also has an exclusive agreement with the Government of Ontario (the “OPTA Agreement”) by which Ontario Property Tax Assessment
Services provides online property tax analysis services to over 440 municipalities in Ontario, facilitating the management of property tax
rates and distribution.
On May 13, 2024, ISC announced that through its wholly owned subsidiary, Reamined, the Company and the Ministry entered into the A&R
OPTA Agreement to continue the management and operation of the OPTA system for the Government of Ontario, until March 31, 2028,
with two additional options for one-year renewals. The renewal agreed to in the A&R OPTA Agreement replaces the prior agreement
between Reamined and the Ministry, which would have expired on March 31, 2025.
Total revenue for each year of the agreement is determined at the time of renewal and is paid monthly by the Government of Ontario to
Ontario Property Tax Assessment Services. Should the government request any change orders during the term of the contract, the revenue
from any order is based on the scope of work agreed to by the parties and is in addition to regular revenue. Ontario Property Tax
Management’s Discussion and Analysis
31
2024 ISC® Annual Report
Assessment Services does not experience seasonality, as revenue is spread evenly throughout the year under the agreement with the
Government of Ontario.
The majority of business is conducted online.
Other Registries
The Other Registries division of the Registry Operations segment primarily consists of BASR. At the end of 2023, ISC secured an exclusive
agreement with the Bank of Canada to manage and operate BASR as well as provide the Company’s proprietary technology solution,
RegSys. On July 2, 2024, the Company completed the technology build of BASR and commenced its operation.
BASR enables security interests to be registered under section 427 of the Bank Act across Canada through an online, self-service customer
portal that offers a range of online submission and search capabilities for customers in English and French. BASR allows for seamless
experiences for users to track, manage and search their submissions in real time. In addition to providing online access, customers can make
their submissions through several other methods.
Revenue for BASR is earned through transaction fees for registration and search services. A flat fee is charged for these services at the time
the services are rendered. ISC collects and retains all fees charged for services under BASR and records this as revenue in exchange for
paying a quarterly fee to the Bank of Canada, which is calculated based on the percentage of revenue collected. This fee is accrued monthly
and is recorded in cost of goods sold.
REGISTRY OPERATIONS REVENUE
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Land Registry
$
21,831
$
18,501
$ 82,241
$
63,525
Personal Property Registry
3,168
2,885
12,831
11,879
Corporate Registry
3,334
3,163
13,192
11,979
Property Tax Assessment Services
3,950
3,970
15,712
15,545
Other
786
–
1,612
588
Registry Operations revenue
$
33,069
$
28,519
$ 125,588
$ 103,516
Revenue for Registry Operations for the fourth quarter of 2024 was $33.1 million, up $4.6 million or 16 per cent compared to the fourth
quarter of 2023. Increased volumes across the Saskatchewan Registries division, record high-value property registration revenue within the
Land Titles Registry and new revenue related to BASR during the quarter were the main reasons for the increase.
For the year, revenue was $125.6 million, a record compared to $103.5 million in 2023, an increase of $22.1 million or 21 per cent. The increase
was due to the same reasons noted above for the quarter, including record high-value property registrations, along with fee adjustments
implemented in 2023 realized for a full year compared to five months in the prior year.
+16%
2023
2024
33.1
Registry Operations revenue
for the three months ended December 31,
(CAD millions)
Other
Property Tax Services
Corporate Registry
Personal Property Registry
Land Registry
10%
66%
12%
28.5
14%
65%
11%
10%
10%
2%
+21%
2023
2024
125.6
Registry Operations revenue
for the year ended December 31,
(CAD millions)
65%
Other
Property Tax Services
Corporate Registry
Personal Property Registry
Land Registry
103.5
61%
11%
12%
15%
10%
11%
13%
1%
1%
Management’s Discussion and Analysis
2024 ISC® Annual Report
32
The top five customers for the Saskatchewan Registries made up 21 per cent of total division revenue in 2024. Of those customers, no
single customer accounted for more than 10 per cent of total Saskatchewan Registries revenue. The Ontario Property Tax Assessment
Services division earns its revenue from the Government of Ontario.
Saskatchewan Land Registry
For the fourth quarter of 2024, revenue for the Land Registry was $21.8 million, an increase of $3.3 million or 18 per cent compared to the
same period in 2023, primarily driven by strong results in the Saskatchewan residential real estate market and record high-value property
registrations. Year-to-date revenue was $82.2 million in 2024 compared to $63.5 million during the same period of 2023, an increase of
$18.7 million or 29 per cent due to the same reasons noted above for the quarter.
Most of the revenue generated from the Land Registry is from the Land Titles Registry and is derived from value-based (ad-valorem) fees.
Land Titles Registry revenue for the fourth quarter was $21.2 million, an increase of $3.3 million or 19 per cent compared to the fourth quarter
in 2023. The increase was driven by strong activity in regular residential real estate, combined with record high-value property registration
revenue. In addition, overall transaction volume compared to the fourth quarter of 2023 increased as shown in the graphs that follow.
According to the Saskatchewan Realtors Association, as reported by the Canadian Real Estate Association, year-over-year residential real
estate markets in the fourth quarter of 2024 saw the median sales price1 for single detached homes increase by 12 per cent. Overall
transaction volume2 in the fourth quarter of 2024 increased by 16 per cent compared to the same quarter in 2023. Annual sales are up
nearly 9 per cent3 compared to 2023. Compared to the 10-year trend, year-to-date sales are up 19 per cent despite the inventory challenges
being experienced.
Saskatchewan Land Registry revenue,
for the year ended December 31, 2023
95.8%
2.6%
1.6%
Land Titles Registry
Geomatics
Land Surveys Directory
Saskatchewan Land Registry revenue,
for the year ended December 31, 2024
96.9%
1.7%
1.4%
Land Titles Registry
Geomatics
Land Surveys Directory
2024
2023
2022
Personal Property Registry
Land Registry
Corporate Registry
Other
Property Tax Services
Registry Operations revenue
for the year ended December 31,
(CAD millions)
15.5
103.5
12.0
63.5
11.9
15.7
125.6
13.2
82.2
12.8
8.9
91.7
11.2
59.3
11.3
Note: Values may not add due to rounding.
1 Canadian Real Estate Association (“CREA”) www.crea.ca, https://stats.crea.ca/mls/sra-median-price, accessed 2025.01.13.
2 Canadian Real Estate Association (“CREA”) www.crea.ca, https://stats.crea.ca/mls/sra-residential-activity, accessed 2025.01.13.
3 Saskatchewan Realtors Association (“SRA”) December 2024 Market Watch Report released 2025.01.07.
Management’s Discussion and Analysis
33
2024 ISC® Annual Report
The following graphs show Land Registry revenue by type of transaction and overall transaction volume, respectively, for the last eight
quarters. Typically, the second and third quarters generate the most revenue for the Land Registry. Fee adjustments made in relation to the
Extension Agreement effective in July 2023 have impacted revenue comparability in the short-term as ISC realizes the first full year of these
fee adjustments.
Transaction volume in the Land Titles Registry rose by 1 per cent for the fourth quarter of 2024 when compared to the same period in 2023.
The volume of regular land transfers and mortgage registrations grew during the period, increasing by 2 per cent and 13 per cent,
respectively, when compared to the fourth quarter of 2023. Title search volume rose by 3 per cent when compared to the same period in
2023 and made up the largest portion of transaction volume, representing 71 per cent of the volume during the quarter. This growth was
offset by decreases in other transaction types during the quarter.
For the year ended December 31, 2024, Land Registry revenue was a record $82.2 million compared to $63.5 million in 2023, an increase
of $18.7 million or 29 per cent. The increase was driven by a robust Saskatchewan residential real estate sector, which contributed to
increased volumes, combined with a full year of fee adjustments compared to five months in the prior year and record high-value property
registration revenue.
Land Titles Registry revenue included in Land Registry revenue above was $79.7 million for 2024, up 31 per cent compared to $60.8 million
in 2023 for the same reasons as described above. Regular land transfers and mortgage registration volume ended the year higher, up 5 per
cent and 8 per cent, respectively. Title search volume also ended the year higher, up 3 per cent. As a result, overall transaction volume rose
by 7 per cent when compared to 2023. The introduction of a mortgage discharge fee in late July 2023 when fee adjustments related to the
Extension Agreement were made also contributed to the increase in overall volume. Excluding this new transaction type, volume would
have increased by 4 per cent during the year.
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Saskatchewan Land Registry revenue by type
(CAD millions)
Search
Registration
Note: The fee adjustments implemented in July 2023 positively impacted revenue for the third quarter of 2023 and onward. Therefore, quarterly results post
Q3 2023 are not directly comparable to results prior to Q3 2023 for the reasons described throughout this section. Values may not add due to rounding.
20.6
2.6
23.6
18.0
2.3
20.7
19.2
2.3
21.8
13.4
2.2
16.1
Maintenance/Services
0.4
0.4
0.4
0.3
2.1
2.1
12.4
1.9
14.7
15.2
2.2
17.8
15.9
2.2
18.5
10.0
1.9
12.5
0.6
0.4
0.4
0.4
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Saskatchewan Land Registry transaction volume
(Number of transactions)
190,625
224,404
205,502
194,279
188,266
191,494
192,042
192,135
Note: The fee adjustments implemented in July 2023 positively impacted volume for Q3 2023 and onward. Therefore, quarterly results Q3 2023 and onwards are
not directly comparable to results prior to Q3 2023. Values may not add due to rounding.
Management’s Discussion and Analysis
2024 ISC® Annual Report
34
The following graphs present Land Registry results over the past five years to highlight historical trends. As noted above, the fee
adjustments implemented in the third quarter of 2023 have positively impacted 2023 and 2024 revenue.
As a result of the increase to the ad-valorem fee (from 0.3 per cent to 0.4 per cent of the value of a land transfer) that was implemented on
July 29, 2023, the revenue related to high-value property registrations has increased. For comparative purposes, the graph below indicates
the impact of the additional revenue from the new ad-valorem rate. The first two quarters to the far left of the dotted vertical line in the
graph below were prepared on the basis that a high-value property registration was a transaction that generated revenue of $10,000 (i.e.,
from a land value of $3.3 million or more). The light blue bars to the right of the dotted line onward were prepared using all registrations with
a land value of $3.3 million or more at the previous ad-valorem rate of 0.3 per cent (for comparison), while the dark blue bar shows the
additional revenue generated at the new ad-valorem rate of 0.4 per cent.
High-value property registration revenue for the fourth quarter of 2024 was a quarterly record (since tracking began in 2004) of
$3.4 million, an increase of $2.0 million compared to $1.4 million in the fourth quarter of 2023. This rise is due to the increase in the volume
of these registrations, along with the value of the properties that were transferred, compared to the same period last year. Had the
ad-valorem rate remained at 0.3 per cent, high-value property registration revenue in the fourth quarter of 2024 would have been
$2.6 million, as illustrated in the graph above, which shows the last eight quarters of high-value property registration revenue.
High-value property registration revenue was an annual record (since tracking began in 2004) of $10.0 million in 2024, an increase of
$4.0 million compared to 2023. The second and fourth quarters of 2024 experienced higher revenue from these transactions. Annual
volumes of these transactions were consistent with 2023 whereas the average revenue per registration increased over the prior year. The
following graph presents the split of high-value property registrations over the past five years between commercial, agricultural and other.
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Saskatchewan Land Titles Registry – high-value property registration revenue
(CAD millions)
Note: Values may not add due to rounding.
1.0
0.3
1.4
2.6
0.9
3.4
MSA Extension Ad-Valorem Fee Increase
1.4
1.7
1.3
0.2
1.5
1.0
0.3
1.4
1.4
0.5
1.9
2.5
0.8
3.3
2024
2023
2022
2021
2020
Registration
Search
Note: The fee adjustments implemented in July of 2023 positively impacted revenue and volume for 2023 and onward. Therefore, 2023 and 2024 results are not directly
comparable to prior years’ results for the reasons described throughout this section. Values may not add due to rounding.
Maintenance
Saskatchewan Land Registry revenue by type
for the year ended December 31,
(CAD millions)
7.0
48.7
8.3
39.5
52.7
63.1
2.2
2.2
7.9
49.4
59.3
2.0
8.3
53.4
63.5
1.8
9.5
71.3
82.2
1.5
2024
2023
2022
2021
2020
Saskatchewan Land Registry transaction volume
for the year ended December 31,
(Number of transactions)
710,411
842,857
814,810
803,674
763,937
Management’s Discussion and Analysis
35
2024 ISC® Annual Report
The main customers of the Land Registry include law firms, financial institutions, governments, surveyors, developers and resource
companies as well as the general public. For 2024, the top 20 Land Registry customers comprised 43 per cent of revenue and the top 100
Land Registry customers represented 81 per cent of revenue.
Saskatchewan Personal Property Registry
For the fourth quarter of 2024, revenue for the Personal Property Registry was $3.2 million, up 10 per cent or $0.3 million compared to the
same period in 2023, due to increased volumes and annual CPI fee adjustments made during the second quarter. Registration, search and
maintenance revenue grew by 6 per cent, 20 per cent and 6 per cent, respectively, when compared to the same quarter in 2023.
The following graph shows the transaction volume for the Personal Property Registry by quarter.
Volume for the fourth quarter was up 8 per cent compared to the fourth quarter of 2023. Registration, search and maintenance volume grew
by 4 per cent, 9 per cent and 6 per cent, respectively, when compared to the same quarter last year. The volume in the Personal Property
Registry, especially registrations and searches, is often impacted by conditions in the new and used automobile markets. New light vehicle
sales in Canada for all of 2024 came in at an estimated 8 per cent ahead of 2023 according to DesRosiers Automotive Consultants1. A similarly
strong automotive sales market in Saskatchewan was noted by Statistics Canada in data released in February 2025 for the fourth quarter of
2024, as well as for the whole year2. With the increase in sales and inventory levels, there has been a decrease in prices for new and used
vehicles in Saskatchewan3 during the fourth quarter, which could be encouraging new sales and Personal Property Registry activity.
Full year revenue for the Personal Property Registry was $12.8 million in 2024, a rise of $1.0 million or 8 per cent compared to 2023.
Registration, search and maintenance revenue rose by 7 per cent, 13 per cent and 5 per cent, respectively. The increase in revenue was due to
higher volumes during the year as well as annual CPI fee adjustments made in the second quarter of 2024. Overall volume for 2024 grew by
6 per cent compared to 2023. Search volume, which represented 63 per cent of the volume for the registry this year, rose by 6 per cent.
Registration and maintenance volume both grew by 6 per cent as well compared to the prior year.
2024
2023
2022
2021
2020
Saskatchewan Land Titles Registry – high-value property registration revenue
(CAD millions)
Note: The fee adjustments implemented in July of 2023 positively impacted revenue for 2023. Therefore, 2023 results are not directly comparable to prior years’
results for the reasons described throughout this section. Values may not add due to rounding.
Commercial
Agricultural
Other
1.3
2.2
3.8
0.2
2.3
3.5
6.2
2.2
3.2
6.0
0.6
2.2
3.6
6.0
0.3
3.4
6.4
10.0
0.2
0.4
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Saskatchewan Personal Property Registry transaction volume
(Number of transactions)
111,766
131,377
122,825
120,371
110,143
124,763
113,966
111,970
1 DesRosiers Automotive Consultants Inc. Provincial Sales December 2024 Report published 2025.01.29.
2 Statistics Canada. Table 20-10-0001-01 – New motor vehicle sales, accessed 2025.02.14.
3 Autotrader.ca, Price Index, December 2024 Report published 2025.02.04.
Management’s Discussion and Analysis
2024 ISC® Annual Report
36
The following graphs present Personal Property Registry revenue and transaction volume to show trends over the past five years.
Customers of the Personal Property Registry are primarily in the financial sector but also include law firms. The top 20 Personal Property
Registry customers accounted for about 85 per cent of the revenue in 2024, while the top 100 represented 95 per cent of the revenue.
Saskatchewan Corporate Registry
Revenue for the Corporate Registry for the fourth quarter of 2024 was $3.3 million, an increase of 5 per cent, or $0.2 million, compared to
the same period in 2023. Search revenue grew by 8 per cent due primarily to higher volume. Maintenance revenue grew by 12 per cent due
to pricing adjustments made during the second quarter of 2024. Registration revenue decreased 10 per cent as a result of lower transaction
volume.
The following graph shows transaction volumes for the Corporate Registry by quarter.
Transaction volume for the fourth quarter of 2024 increased by 3 per cent when compared to the fourth quarter of 2023. Search
transactions, which are the largest component of volume and accounted for 65 per cent of overall volume during the quarter, grew by 7 per
cent. Registration and maintenance volume declined by 5 per cent and 1 per cent, respectively, compared to the same quarter last year.
For the full year, revenue for the Corporate Registry was $13.2 million, an increase of $1.2 million or 10 per cent, compared with 2023. During
2024, search revenue grew by 35 per cent primarily due to annual CPI fee adjustments, as well as higher volume. Maintenance revenue, the
largest of the three revenue streams, increased by 8 per cent during the year when compared to 2023 due to pricing adjustments made
during the second quarter of 2024. Registration revenue was consistent when compared to 2023.
The annual transaction volume for 2024 rose by 4 per cent compared to 2023. Search volume grew by 7 per cent. Registration and
maintenance volume grew at 2 per cent and 1 per cent, respectively, when compared to the prior year.
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Saskatchewan Corporate Registry transaction volume
(Number of transactions)
104,382
101,771
88,871
95,290
104,513
91,388
85,469
92,172
2024
2023
2022
2021
2020
Registration
Search
Note: Values may not add due to rounding.
Maintenance
Saskatchewan Personal Property Registry revenue by type
for the year ended December 31,
(CAD millions)
2.4
6.5
10.1
1.1
2.8
7.0
11.0
1.2
3.3
8.1
12.8
1.4
2.9
7.3
11.3
1.2
2.9
7.6
11.9
1.3
2024
2023
2022
2021
2020
Saskatchewan Personal Property Registry transaction volume
for the year ended December 31,
(Number of transactions)
427,318
447,856
486,339
454,521
460,842
Management’s Discussion and Analysis
37
2024 ISC® Annual Report
The following graphs present Corporate Registry revenue and transaction volume over the past five years illustrating further trends.
For the Corporate Registry, customers include law firms and companies in the financial sector, as well as the Government of Saskatchewan.
They also include corporations, non-profit corporations, co-operatives and sole proprietorships that are, were or will be registered in the
Corporate Registry. The top 20 Corporate Registry customers yielded 35 per cent of revenue in 2024 and the top 100 customers rendered
53 per cent of revenue for the year.
Ontario Property Tax Assessment Services
Revenue for the Ontario Property Tax Assessment Services division in the fourth quarter of 2024 was $4.0 million, consistent compared to
the same quarter last year. Total revenue for each year of the agreement with the Government of Ontario is determined at the time of
renewal and is paid monthly to the Ontario Property Tax Assessment Services division. Should the Government of Ontario request any
change orders during the term of the contract, the revenue from any change order is based on the scope of work agreed to by the parties
and is in addition to regular revenue.
Ontario Property Tax Assessment Services revenue for the year ended December 31, 2024, was $15.7 million, consistent with 2023 and
as expected.
Other Registries
Revenue in Other Registries is made up of revenue from the BASR for the year ended December 31, 2024. Revenue for the fourth quarter
was $0.8 million and was $1.6 million for the year ended December 31, 2024.
REGISTRY OPERATIONS EXPENSES, EBITDA AND ADJUSTED EBITDA
2024
2023
2022
2021
2020
Registration
Search
Note: Values may not add due to rounding.
Maintenance
Saskatchewan Corporate Registry revenue by type
for the year ended December 31,
(CAD millions)
2.6
6.6
10.5
1.3
3.0
6.8
11.2
1.5
3.0
7.7
13.2
2.5
2.8
6.9
11.2
1.5
3.0
7.1
12.0
1.9
2024
2023
2022
2021
2020
Saskatchewan Corporate Registry transaction volume
for the year ended December 31,
(Number of transactions)
338,494
359,153
390,314
364,313
373,542
+23%
2023
2024
21.3
17.3
Registry Operations adjusted EBITDA
for the three months ended December 31,
(CAD millions)
+36%
2023
2024
58.9
80.1
Registry Operations adjusted EBITDA
for the year ended December 31,
(CAD millions)
Management’s Discussion and Analysis
2024 ISC® Annual Report
38
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Revenue
$
33,069
$
28,519
$ 125,588
$ 103,516
Total expenses1
14,683
12,782
60,198
48,236
EBITDA
$
18,386
$
15,737
$ 65,390
$
55,280
Adjustments2
2,896
1,590
14,662
3,644
Adjusted EBITDA
$
21,282
$
17,327
$ 80,052
$
58,924
1 Total expenses exclude interest, taxes, depreciation and amortization.
2 As shown in Section 2.5 “Consolidated EBITDA and adjusted EBITDA”, adjusted EBITDA adjustments are comprised of share-based compensation and acquisition, integration
and other costs applicable to each segment.
Adjusted EBITDA for Registry Operations for the fourth quarter was $21.3 million, up 23 per cent compared to the same period last year. The
increase is primarily due to volume increases across the Saskatchewan Registries division, record high-value property registration revenue
within the Land Titles Registry and new revenue related to BASR. Total expenses increased in the quarter compared to the prior year
quarter due to continued work on registry enhancements provided by our Technology Solutions segment, partially offset by a decrease in
share-based compensation of $0.9 million due to a decrease in the Company’s share price compared to an increase in the same prior year
period. The increase in Registry Operations’ adjusted EBITDA margin during the quarter, compared to the prior period, was due to the same
reasons outlined above.
Adjusted EBITDA in 2024 increased to $80.1 million, up 36 per cent compared to the prior year due to the same factors noted above for the
quarter as well as a full year of fee adjustments in the Saskatchewan Registries pursuant to the Extension compared to five months in the
previous year. Total expenses increased in 2024 compared to the prior year due to an increase in share-based compensation of $3.1 million
and continued progress on registry enhancements. The increase in Registry Operations’ adjusted EBITDA margin for 2024, compared to the
prior year, was driven by the same explanations for the quarter in addition to the full year impact of the fee adjustments discussed above.
Management’s Discussion and Analysis
39
2024 ISC® Annual Report
3.2 Services
Services delivers solutions uniting public records data, customer authentication, corporate services, collateral management, asset recovery
and accounts receivable management to support registration, due diligence and lending practices across Canada.
Our offerings are generally categorized into three divisions: Corporate Solutions, Regulatory Solutions and Recovery Solutions. The table
below sets out the various offerings provided by the Services segment:
Division
Offering
Products
Corporate
Solutions
Incorporation Services
Nationwide Business Name Registration and Renewals
Security Filings and Registrations
Corporate Supplies
Minute Books
Seals and Stamps
Corporate Legal Packages
Regulatory
Solutions
Know-Your-Customer (“KYC”) and
Due Diligence
Individual Identification
Legal Entity Validation
Beneficial Ownership Validation
Account Onboarding Services
US and International Corporate Entity Validation
Corporate Profile or Business Name Searches
NUANS®1 Searches
Real Estate Searches
Vital Statistics Searches
Collateral Management
PPSA2/RDPRM3 Search and Registrations
Bank Act Filing
Notice of Security Interest (Fixture) Registrations
Land Searches
US UCC4 Search and Filings
Recovery
Solutions
Asset Recovery
Fully managed service across Canada
Identification, retrieval and disposition of movable assets
Accounts Receivable Management
Early-stage collection activities
Late-stage collection activities
1 A NUANS® report is a search that provides a comprehensive comparison of proposed corporate, business or trademark names with existing names already in use by other
businesses and corporations. NUANS® name reports reserve the proposed name for 90 days, providing the time necessary to prepare and file incorporations, extra-provincial
registrations, amalgamations or other relevant corporate filings.
2 Personal Property Security Act.
3 Registre des Droits Personnels et Réels Mobiliers (translated as Register of Personal and Real Movable Rights).
4 Uniform Commercial Code.
Competition
Our competitors vary by market and geography. They primarily include other intermediaries and suppliers to lenders and legal professionals.
Corporate Solutions
Corporate Solutions captures revenue from nationwide search, business name registration and corporate filing services sold primarily to
legal professionals or to the general public directly or indirectly through our government relationships. It further derives revenue from our
corporate supplies business where our customers include legal professionals and the general public.
Management’s Discussion and Analysis
2024 ISC® Annual Report
40
Incorporation Services
• Corporate Solutions provides a convenient, cost-effective method to incorporate businesses online or through our staff-assisted process.
Leveraging our online technology platforms, Corporate Solutions services legal customers and the general public through a team of
experienced law clerks in Ontario and Quebec.
• The Company has historically held one of two exclusive licences, which has allowed us to access the Ontario Business Registry (the
“OBR”) electronically on behalf of customers. Ontario has been transitioning to a new licensing model and launched the first phase of its
new public portal in October 2021 and subsequently took steps to further open this portal in the first quarter of 2023. During the third
quarter of 2023, an extension to the contract with the Government of Ontario that retained our preferential access rights to the end of
January 2025 was renegotiated. Subsequent to the expiry of the extension of the contract, the Company continues to access the OBR;
however, this access is no longer exclusive. We believe that our strong customer service supported by the industry-leading Registry
Complete platform will allow us to differentiate our service from the public portal. The Company also has non-exclusive licences to do the
same in all other provincial and federal (Corporations Canada) corporate registries across Canada.
• In addition to incorporations, various other corporate filings are often required to operate a business. These include amendments to a
company’s governing articles, amalgamations, the continuance of a company, a change in registered address or changes to a board of
directors. Corporate Solutions also provides online and real-time NUANS® and business name searches, registered agents of service and
corporate document preparation to assist in the organization and maintenance of a business.
Corporate Supplies
• Corporate Solutions provides a comprehensive array of corporate supplies to help companies organize and maintain their corporate
legal documents. This is primarily offered through the most common corporate supplies in packaged or individual formats, including
customized corporate minute books, corporate seals/embossers, bylaws and share certificates, as well as a large variety of rubber and
self-inking stamps.
Regulatory Solutions
Regulatory Solutions captures revenue from our KYC, collateral management and general due diligence service offerings. The Company
uses its proprietary platform to assist customers with intuitive business rules and advanced automation to deliver regulatory services to
support their credit/banking and legal processes. Public registry data is leveraged to provide insights and improved customer experience
through a single technology. Our technology is supplemented with deep subject-matter knowledge offered through our legal professionals
in three locations (Montreal, Que.; Toronto, Ont.; and Vernon, B.C.).
Our technology platform, Registry Complete, is a unified and streamlined platform that enables our customers to search and register with
various ministries across Canada in a secure cloud-based environment. This enhanced service allows our customers to take advantage of
expanded Application Programming Interface (“API”) service offerings, improved tools, faster turnaround and a greater array of services in
the pursuit of exceptional and expedient due diligence checks and customer service. It also addresses key operational gaps in the modern
legal and financial industries landscape.
Our customer base includes both legal and non-legal customers, such as financial institutions and auto and equipment finance companies.
Know-Your-Customer and Due Diligence
• Regulatory Solutions supports legal and financial institution due diligence activities for compliance purposes through the KYC verification
(corporate and individual), public records search and registration services across Canada. Customers can obtain numerous reports
and intelligence to verify and authenticate customer data to comply with internal customer onboarding policies mandated by Federal
Anti-Money Laundering regulations. Using a web-based tool and associated APIs that provide real-time access to validate and verify
an individual’s or a business’ existence, our KYC service aggregates information from multiple trusted sources to provide reliable and
accurate identification of an individual and/or a business and its principals.
• Our public records search offerings include corporate profiles, business name searches, NUANS®, PPSA searches, security searches and
real estate searches.
• Due diligence is an essential component of most merger and acquisition and financing transactions, where searches are performed to
obtain a complete understanding of all legal obligations associated with a person or business. During a due diligence undertaking, law
firms, lenders and/or other professional advisors will often order a series of public records searches to verify third-party information.
These searches are commonly referred to as security (or securities) searches.
• Regulatory Solutions provides security searches that can be conducted against an individual, business or corporation, property and assets
across the country. Searches will reveal both present and historical information relating to debts and liabilities, pending and potential
lawsuits, bankruptcy, liens, judgments and sales of assets across Canada.
• Regulatory Solutions also provides account onboarding services and customer care.
Management’s Discussion and Analysis
41
2024 ISC® Annual Report
Collateral Management
• To ensure or to perfect a security interest against the personal property of a debtor, secured parties need to register in the statutory
registry under applicable personal property legislation. Registering provides the secured party with statutory protection and priority
against other parties with competing security interests against the applicable movable collateral. Once a secured party has been paid out,
or the security against the debtor is otherwise terminated, registrations (or liens) are then discharged and removed from the applicable
security registry.
• Regulatory Solutions services the adjudication and completes the loan fulfilment process, which involves detailed searches and
registrations to be completed to perfect the security interest. The Company has invested in technology, processes and innovation to
ensure customer and industry digitization strategies are supported. This allows us to offer a complete lien registry solution that reaches
further than the traditional registry submission services and includes PPSA/RDPRM searches and management, fixture filings, garage/
repair liens and US UCC filings.
Recovery Solutions
Recovery Solutions offers fully-managed asset recovery accompanied by accounts receivable management services to our customers.
Recovery Solutions allows us to provide our customers with a full service offering across the credit life cycle from origination to recovery.
By connecting the registrations from our other offerings to our Recovery Solutions services, we provide our customers with a seamless
recovery process.
Our customers include most of the major banks as well as credit unions and other creditors.
Asset Recovery
• Recovery Solutions offers a fully-managed service across Canada, which aids in facilitating and co-ordinating asset recovery on behalf of
our customers. Asset recovery involves identification, retrieval and disposal of movable assets such as automobiles, boats, recreational
vehicles and other forms of portable physical assets used as collateral security for primarily consumer-focused credit transactions.
• Our customers enjoy a complete turnkey solution where our team manages every step in the asset recovery process, including co-
ordinating bailiffs, investigators and auctions. Our process also allows us to increase recoveries through our superior supply chain
management experience.
• The process is managed through our proprietary software platform, Recovery Complete. This platform allows for secure end-to-end
management of assignments from origination through to settlement.
Accounts Receivable Management
• As a licenced collections agency, the Company’s subsidiary performs recovery services related to past due accounts in both a first-party
capacity representing our customers and a third-party collections capacity.
• Our customers receive a complete collections solution where they can assign overdue accounts at any stage in the default process to be
pursued in a manner that is respectful to all parties.
Revenue
Revenue is earned through transaction fees for search and registration services provided through incorporation, KYC, public records due
diligence and collateral management services. All government fees associated with the service are either embedded in the transaction or
management service fee or charged in addition. Additional revenue is earned in Recovery Solutions through management fees and
commissions earned by the provision of asset recovery and accounts receivable management services. Corporate supplies are charged a
per-unit fee in the same manner as a retail transaction product.
Key drivers for our revenue include increased regulatory and compliance requirements; the growing trend towards outsourcing business
processes and services to realize cost savings and focus on core business activities; economic activity that can affect credit lending,
mergers, acquisitions, incorporations and various new business start-up activities; and economic conditions impacting consumer behaviour,
which can affect the financing or default of new and used movable property in our collateral management and asset recovery business.
Our revenue in Corporate Solutions and Regulatory Solutions is reasonably diversified and has little seasonality; instead, it fluctuates in line
with general economic drivers. In particular, our collateral management services experience seasonality aligned to vehicle and equipment
financing cycles, which are generally more robust in the second and fourth quarters. Recovery Solutions does not have specific seasonality
but is counter-cyclical to our other business in that it can perform better in poor economic conditions.
Management’s Discussion and Analysis
2024 ISC® Annual Report
42
SERVICES REVENUE
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Regulatory Solutions
$
19,821
$
18,850
$ 82,553
$
76,166
Recovery Solutions
3,978
2,567
14,844
10,791
Corporate Solutions
2,943
3,951
12,799
14,755
Services revenue
$
26,742
$
25,368
$ 110,196
$ 101,712
Revenue for Services was $26.7 million for the fourth quarter of 2024, an increase of 5 per cent or $1.4 million compared to the same period
in 2023. Revenue for the quarter saw growth in the Recovery and Regulatory Solutions divisions, which was partially offset by a decline in
the Corporate Solutions division when compared to the fourth quarter of 2023. Growth in the Regulatory Solutions division is due to the
growth in KYC and due diligence activities from existing customers as Anti-Money Laundering policies continue to be enhanced for the
lending industry. Growth in the Recovery Solutions division was due to an increase in individual Asset Recovery assignments and sales.
Revenue on a year-over-year basis increased by 8 per cent to $110.2 million compared to $101.7 million during 2023, due to growth in the
Regulatory Solutions and Recovery Solutions divisions, which offset lower Corporate Solutions revenue for the same reasons as outlined for
the quarter above.
The following graph demonstrates the growth in Services revenue over the past five years. These revenue increases are the result of new
customer onboarding, increased regulatory requirements within the lending industry, the addition of value-added services and transaction
growth combined with the acquisition of various value add businesses.
2024
2023
2022
2021
2020
Regulatory Solutions
Recovery Solutions
Corporate Solutions
Services Revenue by type
for the year ended December 31,
(CAD millions)
47.7
56.4
3.7
7.4
58.3
75.2
9.5
15.3
65.9
92.1
10.9
Note: Related Party and other revenue not displayed in the graphs. Values may not add due to rounding.
14.8
76.2
101.7
10.8
14.8
82.6
110.2
12.8
4.9
Services Revenue by type
for the year ended December 31, 2024
13.5%
74.9%
11.6%
Regulatory Solutions
Recovery Solutions
Corporate Solutions
2023
2024
26.7
Services revenue1
for the three months ended December 31,
(CAD millions)
+5%
Corporate Solutions
Recovery Solutions
Regulatory Solutions
15%
74%
11%
1 Internal related parties and other revenue not displayed in graph. Values may not add due to rounding.
25.4
10%
74%
16%
2023
2024
110.2
Services revenue1
for the year ended December 31,
(CAD millions)
13%
75%
12%
+8%
Corporate Solutions
Recovery Solutions
Regulatory Solutions
101.7
11%
75%
14%
Management’s Discussion and Analysis
43
2024 ISC® Annual Report
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Services Revenue by type1
(CAD millions)
Recovery Solutions
Regulatory Solutions
Corporate Solutions
3.4
23.6
30.9
2.9
18.9
25.6
2.9
19.8
26.7
3.6
20.2
27.0
3.3
3.8
3.7
4.0
2.4
20.1
26.1
2.9
19.4
25.6
2.6
18.9
25.4
2.9
17.8
24.7
4.0
3.6
3.3
4.0
1 Related Party and other revenue not displayed in graph. Values may not add due to rounding.
Regulatory Solutions
Regulatory Solutions revenue for the fourth quarter of 2024 was $19.8 million, an increase of $1.0 million or 5 per cent compared to $18.9
million for the same quarter in 2023. Services saw growth in KYC and due diligence activities from existing customers as Anti-Money
Laundering policies continue to be enhanced for the lending industry.
For the full year, revenue in 2024 was $82.6 million, an increase of $6.4 million or 8 per cent compared to $76.2 million in 2023. Annual
revenue growth has been due to an increase in KYC and due diligence activities from existing customers as the compliance environment
continues to be more stringent within the lending industry, contributing to the volume increases in Regulatory Solutions. However, this
growth was partially offset following the sudden and unexpected introduction of a ban by the Government of Ontario on NOSIs at the start
of June 2024, which impacted our collateral management offering.
Recovery Solutions
Revenue in Recovery Solutions for the fourth quarter of 2024 was $4.0 million, an increase of $1.4 million or 55 per cent compared to $2.6
million from the same prior year period. Growth during the quarter was due to an increase in individual Asset Recovery assignments and an
increase in completion of vehicle sales for which the Company receives a commission.
Revenue for 2024 was $14.8 million, an increase of $4.1 million or 38 per cent compared to $10.8 million for 2023 for the same reasons as
noted for the quarter.
Corporate Solutions
Corporate Solutions revenue for the fourth quarter was $2.9 million, a decrease of $1.0 million or 26 per cent compared with the fourth
quarter of 2023. Revenue was down because of the expected attrition of non-contract customers in conjunction with the continued
opening of the OBR.
For the year ended December 31, 2024, annual revenue was $12.8 million, a decrease of $2.0 million or 13 per cent compared to $14.8 million
for the same period of 2023, due to the same reasons as noted for the change in the quarter.
Our Services segment revenue by division for the last eight quarters is shown in the following graph.
The top 20 Services customers for 2024 comprised 67 per cent of revenue, while the top 100 Services customers made up nearly 84 per
cent of revenue. No single customer accounted for more than 25 per cent of revenue.
Management’s Discussion and Analysis
2024 ISC® Annual Report
44
SERVICES EXPENSES, EBITDA AND ADJUSTED EBITDA
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Revenue
$
26,742
$
25,368
$ 110,196
$ 101,712
Total expenses1
21,656
20,880
87,647
80,669
EBITDA
$
5,086
$
4,488
$ 22,549
$
21,043
Adjustments2
(80)
22
391
20
Adjusted EBITDA
$
5,006
$
4,510
$ 22,940
$
21,063
1 Total expenses exclude interest, taxes, depreciation and amortization.
2 As shown in Section 2.5 “Consolidated EBITDA and adjusted EBITDA”, adjusted EBITDA adjustments are comprised of share-based compensation and acquisition, integration
and other costs applicable to each segment.
Adjusted EBITDA for Services was $5.0 million for the fourth quarter, up $0.5 million or 11 per cent from the same quarter in the prior year.
The increase was primarily due to increased growth in Regulatory Solutions and Recovery Solutions revenue partially offset by higher costs
for the quarter driven by investment in people to support continued business growth and higher costs of goods sold with respect to higher
Regulatory Solutions revenue.
For the year, Services adjusted EBITDA was $22.9 million, up from $21.1 million or 9 per cent in the prior year, primarily driven by revenue
growth in Regulatory Solutions and Recovery Solutions, offset by the same explanations for the quarter. Further increasing total expenses
was $0.4 million in share-based compensation due to the increase in the Company’s share price during the year, which is not reflected in
adjusted EBITDA.
3.3 Technology Solutions
Technology Solutions provides the development, delivery and support of registry (and related) technology solutions, generating revenue
through the following:
• sale of software licences related to our technology platforms;
• provision of technology solution definition and implementation services; and
• provision of monthly hosting, support and maintenance services.
We offer RegSys – a complete registry solution that provides a readily transferable technology platform capable of serving a wide range of
registry needs. RegSys is a multi-register platform that delivers the flexibility, scalability and features that enable public sector organizations
to deliver enhanced services to businesses and citizens.
With a full suite of integrated modules that provide core functionality for submission, enforcement and inquiry processing, RegSys delivers
solutions enabling the provision of core services to citizens in a user-friendly, efficient manner across multiple access points. The RegSys solution
has also been used to manage other legal registers such as intellectual property, securities, licences, charities, UCC and pension schemes.
+11%
2023
2024
4.5
5.0
Services adjusted EBITDA
for the three months ended December 31,
(CAD millions)
+9%
2023
2024
21.1
22.9
Services adjusted EBITDA
for the year ended December 31,
(CAD millions)
Management’s Discussion and Analysis
45
2024 ISC® Annual Report
Q4 2024
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
Technology Solutions revenue by type
(CAD millions)
Related Party
Third Party
2.6
7.4
3.5
8.2
2.4
7.4
3.1
7.1
4.0
4.8
4.7
5.0
2.4
6.1
1.6
4.8
3.6
7.9
1.6
4.3
2.7
3.7
3.2
4.3
Note: Values may not add due to rounding.
Competitors in this segment include other registry software providers that develop and provide software platforms to manage registries.
On the technology services side, our competitors include all technology services organizations that provide application development,
systems integration and/or application management services. This includes large multinationals or local niche players, both of which we can
partner with to complement our offerings depending on the customer’s needs.
Technology Solutions does not experience seasonality but does fluctuate due to the timing of project-related revenue.
TECHNOLOGY SOLUTIONS REVENUE
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Third Party
$
2,371
$
3,604
$ 11,570
$
9,268
Related Party
5,022
4,312
18,609
13,906
Technology Solutions revenue
$
7,393
$
7,916
$ 30,179
$
23,174
Revenue in Technology Solutions was $7.4 million for the quarter, a decrease of $0.5 million or 7 per cent compared to the fourth quarter of
2023. Third Party revenue for the quarter was $2.4 million, a decrease of $1.2 million compared to the fourth quarter of 2023 due to the
timing of revenue recognition on solution definition and implementation contracts.
Related Party revenue for the fourth quarter of 2024 was $5.0 million, an increase of $0.7 million or 16 per cent compared to the same
quarter in 2023. The increase in Related Party revenue is primarily a result of continued delivery of registry enhancements for the
Saskatchewan Registries division in Registry Operations. Related party revenue in any quarter is dependent on resources used or consumed
internally. Our intent is to continue to service the needs of internal customers as efficiently and effectively as possible, including the
provision of service through related party resources. Therefore, segment revenue may continue to fluctuate over time, particularly as we
pursue additional Third Party revenue.
2023
2024
7.4
Technology Solutions revenue
for the three months ended December 31,
(CAD millions)
(7)%
Related Party
Third Party
68%
32%
7.9
54%
46%
2023
2024
23.2
30.2
Technology Solutions revenue
for the year ended December 31,
(CAD millions)
+30%
Related Party
Third Party
40%
60%
62%
38%
Management’s Discussion and Analysis
2024 ISC® Annual Report
46
Revenue for the year was $30.2 million, an increase of $7.0 million from $23.2 million in 2023.
Third Party revenue for 2024 increased to $11.6 million from $9.3 million in 2023 due to continued progress with contracts previously
announced and ongoing solution definition and implementation contracts. The solution definition and implementation revenue was
supported by consistent hosting, support and maintenance revenue during the year.
Related Party revenue for the year increased to $18.6 million from $13.9 million due to the same factors as outlined for the quarter,
complemented by the development of the system to support BASR in the first half of the year.
The following graph provides details on Technology Solutions revenue over the past five years. While Technology Solutions Third Party
revenue was impacted by the COVID-19 pandemic through delays in active solution definition and implementation contracts as well as new
projects coming to market, we began to see renewed interest in procurement activities for these projects in 2022. This translated into new
wins announced in 2023 and the return of Third Party revenue to historical trends.
TECHNOLOGY SOLUTIONS EXPENSES, EBITDA AND ADJUSTED EBITDA
2023
2024
2.2
(1.5)
Technology Solutions adjusted EBITDA
for the three months ended December 31,
(CAD millions)
2023
2024
0.3
0.8
Technology Solutions adjusted EBITDA
for the year ended December 31,
(CAD millions)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
2024
2023
2022
2021
2020
Third Party
Related Party
Technology Solutions revenue by type
(CAD millions)
9.8
10.8
20.6
9.5
18.1
8.6
Note: Values may not add due to rounding.
13.9
23.2
9.3
10.2
16.0
5.8
18.6
30.2
11.6
Technology Solutions revenue
for the year ended December 31, 2024
61.7%
38.3%
Third Party
Related Party
Management’s Discussion and Analysis
47
2024 ISC® Annual Report
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Revenue
$
7,393
$
7,916
$ 30,179
$
23,174
Total expenses1
8,792
5,722
30,418
22,376
EBITDA
$
(1,399)
$
2,194
$
(239)
$
798
Adjustments2
(114)
30
559
28
Adjusted EBITDA
$
(1,513)
$
2,224
$
320
$
826
1 Total expenses exclude interest, taxes, depreciation and amortization.
2 As shown in Section 2.5 “Consolidated EBITDA and adjusted EBITDA”, adjusted EBITDA adjustments are comprised of share-based compensation and acquisition, integration
and other costs applicable to each segment.
Adjusted EBITDA for Technology Solutions was a loss of $1.5 million for the quarter compared to $2.2 million in the fourth quarter of 2023.
Timing of revenue recognition on solution definition and implementation contracts combined with increased costs in wages and salaries
and information technology services to support progress on new and ongoing contracts were the primary factors for the change in the
quarter.
Adjusted EBITDA for Technology Solutions was $0.3 million for the year ended December 31, 2024, compared to $0.8 million for 2023.
Progress continues to be made on existing and new Third Party solution definition and implementation contracts combined with related
party projects, including registry enhancements for the Saskatchewan Registries division in the Registry Operations segment and the
development of technology supporting BASR in the first half of the year.
3.4 Corporate and other
Corporate and other includes expenses related to our corporate activities and shared services functions. The operations of Regulis are also
reported in this segment. Eliminations of inter-segment revenue and costs are presented separately in the Financial Statements (refer to
Note 25) and therefore excluded below. Management believes this format provides a transparent representation of the Corporate and
other activities.
On March 8, 2024, Regulis launched the International Registry of Interests in Rolling Stock. Regulis holds a contract under the Luxembourg
Rail Protocol of the Cape Town Convention, which provides the exclusive right and obligation to develop, deliver and operate the
International Registry of Interests in Rolling Stock for a period of 10 years from the date the registry goes live as defined in the Luxembourg
Rail Protocol. The launch of this new international registry aligns well with ISC’s expertise in the development, management and operation
of registry solutions. Regulis is in its initial operating phase, promoting awareness of the Registry and benefits to potential customers.
Beginning in the first quarter of 2025, management intends to report Regulis within the Other Registries division of the Registry Operations
segment as its activities and objectives more closely align with the operational focus and responsibilities of that segment.
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Third Party
$
4
$
–
$
12
$
24
Related Party
39
37
155
150
Corporate and other revenue
$
43
$
37
$
167
$
174
Total expenses1
2,087
2,005
9,423
8,816
EBITDA
$
(2,044)
$
(1,968)
$
(9,256)
$
(8,642)
Adjustments2
640
282
3,000
2,162
Adjusted EBITDA
$
(1,404)
$
(1,686)
$
(6,256)
$
(6,480)
1 Total expenses exclude interest, taxes, depreciation and amortization.
2 As shown in Section 2.5 “Consolidated EBITDA and adjusted EBITDA”, adjusted EBITDA adjustments are comprised of share-based compensation and acquisition, integration
and other costs applicable to each segment.
Adjusted EBITDA for the three months and year ended December 31, 2024, was consistent with the respective prior year periods.
Management’s Discussion and Analysis
2024 ISC® Annual Report
48
4 Summary of Consolidated Quarterly Results
The following table sets out select results for the past eight quarters. Registry Operations experiences moderate seasonality, primarily
because Saskatchewan Land Registry revenue fluctuates in line with real estate transaction activity. Typically, the second and third quarters
of the fiscal year generate higher revenue, when real estate activity is traditionally highest. Fee adjustments made in July 2023 related to the
Extension Agreement have temporarily impacted revenue seasonality in the short-term as we realize the first full year of these fee
adjustments. Volume seasonality has also been impacted with the introduction of mortgage discharge fees starting in July 2023. Ontario
Property Tax Assessment Services revenue does not experience seasonality, as revenue is recognized evenly throughout the year under the
agreement with the Government of Ontario.
In Services, revenue for our Corporate Solutions and Regulatory Solutions divisions is diversified and has little seasonality; instead, it
fluctuates in line with general economic drivers. Some smaller categories of products or services can have some seasonal variation,
increasing slightly during the third and fourth quarters. In particular, our collateral management services experience seasonality aligned with
vehicle and equipment financing cycles, which are generally stronger in the second and fourth quarters. Our Recovery Solutions revenue
does not have specific seasonality but is generally counter-cyclical to our other business, in that it can perform better in poor economic
conditions.
Technology Solutions does not experience seasonality; however, this segment is impacted by the timing of procurement activities largely
undertaken by governments around the world and the timing of revenue recognition related to the progress of work on existing and new
solution definition and implementation contracts.
The balance of our corporate activities and shared services functions do not experience seasonality. Expenses are generally consistent from
quarter to quarter but can fluctuate due to the timing of project-related or acquisition activities. As a result, our EBITDA and adjusted
EBITDA margin fluctuates in line with the cumulative impact of the above factors.
2024
2023
(thousands of CAD)
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
Revenue
$ 62,186 $ 60,932
$ 67,848
$ 56,400
$ 57,491 $ 54,610 $ 53,295 $ 49,124
Expenses
49,338
49,707
47,631
49,819
43,683
43,334
40,965
38,565
Income before items
noted below
12,848
11,225
20,217
6,581
13,808
11,276
12,330
10,559
Net finance expense
(4,877)
(5,362)
(5,790)
(5,917)
(6,218)
(5,171)
(889)
(905)
Income before tax
7,971
5,863
14,427
664
7,590
6,105
11,441
9,654
Income tax expense
(2,675)
(1,660)
(4,108)
(241)
(1,876)
(1,871) (3,208) (2,790)
Net income
$ 5,296 $
4,203
$ 10,319
$
423
$
5,714 $
4,234 $
8,233 $
6,864
Other comprehensive
income (loss)
(158)
322
83
(26)
104
(27)
5
110
Total comprehensive income
$ 5,138 $
4,525
$ 10,402
$
397
$
5,818 $
4,207 $
8,238 $
6,974
EBITDA
$ 20,029 $ 18,042
$ 27,018
$ 13,355
$ 20,451 $ 16,900 $ 16,441 $ 14,687
Adjusted EBITDA
21,000
22,706
27,180
19,440
21,317
19,209
17,824
14,516
Adjusted net income
9,330
11,035
14,067
8,498
9,848
8,357
9,256
6,752
Free cash flow1
10,728
10,036
14,367
4,917
12,695
11,978
10,713
10,054
Adjusted free cash flow
13,179
15,942
15,664
11,636
13,975
14,444
12,468
9,883
EBITDA margin
32.2%
29.6%
39.8%
23.7%
35.6%
30.9%
30.8%
29.9%
Adjusted EBITDA margin
33.8%
37.3%
40.0%
34.5%
37.1%
35.2%
33.4%
29.5%
Earnings per share, basic
$
0.29 $
0.23
$
0.57
$
0.02
$
0.32 $
0.24 $
0.47 $
0.39
Earnings per share, diluted
$
0.29 $
0.23
$
0.56
$
0.02
$
0.32 $
0.23 $
0.46 $
0.38
Note: Quarterly values may not add to the annual measures due to rounding.
1 Free cash flow is not recognized as a measure under IFRS Accounting Standards, does not have a standardized meaning prescribed and may not be comparable to similar
measures reported by other companies; refer to Section 8.8 “Non-IFRS financial measures” for a discussion on why we use these measures, the calculation of them and their
most directly comparable financial measure calculated in accordance with IFRS Accounting Standards.
Management’s Discussion and Analysis
49
2024 ISC® Annual Report
Long-term Orientation
Strategic focus on the sustainability
of the business and the services
we deliver
Growth
Strategically leverage the investments
and achievements of 2024 while
intensifying our focus on organic
growth and continuing to execute on
accretive M&A opportunities
Values and Differentiation
Strategically focus on service delivery
quality – how we treat our customers
and employees remains at the core
5 Business Strategy
The Company’s strategy is influenced by a set of principles:
Leveraging our proven approach for sustainable growth, underpinned by our strategic principles, the updated pillars of our growth
strategy include:
(1) Organizational Excellence to Provide a Strong Foundation
• Deliver leading registry and regulatory services and solutions to customers through existing and new lines of business, ensuring an
exceptional customer experience for those interacting with ISC’s people and information.
• Deploy capital on M&A and internal investments to generate a return that exceeds our cost of capital and aligns with our long-term
return on invested capital (“ROIC”)1 target.
(2) Organic Growth in Our Three Segments
• Accelerate our revenue growth while maintaining strong adjusted EBITDA margins.
• Registry Operations: Operates registries and provides related services on behalf of governments and other institutions.
• Services: Delivers value-add services to the financial and legal sectors, utilizing public data and records.
• Technology Solutions: Designs, implements, and supports registry and regulatory technology solutions.
(3) M&A and Partnerships as an Accelerant
• Deploy capital on M&A and internal investments to generate a return that exceeds our cost of capital and aligns with our long-term
ROIC target.
• Acquisitions will continue to play an important part in our growth strategy, enabled by our strong free cash flow generation and
organizational capability.
• We look for companies that align with our customer needs, possess the right cultural fit, and have the ability to generate strong financial
returns for ISC shareholders.
This will enable us to execute on our next phase of growth. Having doubled the size of ISC on a revenue and adjusted EBITDA basis from
2013 to 2023, our goal is to again double the size of the Company, on a similar metrics basis and based on 2023 results, but in half the time
(five years), through a combination of organic growth and M&A.
1 The Company does not provide ROIC guidance and will not be disclosing the ROIC targets. Disclosure of the ROIC targets would reveal sensitive information, including
information relating to forecasted earnings and capital structure extending beyond a fiscal year.
Management’s Discussion and Analysis
2024 ISC® Annual Report
50
Our measures of success will be driven by a mix of:
TARGET
Profitable Annual Revenue Growth
Customer and Employee Satisfaction
MEASURES
Measured by progress towards doubling within
five years.
Measured by regular customer survey results and
employee turnover.
HOW
• Significant organic revenue growth targets2
• Supplemented with M&A and other growth
acquisitions, targeting one to two transactions
per year, ensuring the long-term returns exceed
our cost of capital.
• Ensure an exceptional customer experience
creating delighted customers and ISC ambassadors.
• Advance a high-performance organization that
people love working at.
2 Such as shown through our 2025 revenue guidance.
We regularly review and, if necessary, adjust our strategy to ensure that the Company remains well positioned in the long term, while being
adaptable to near-term factors.
6 Financial and Capital Management
6.1 Cash flow
Our primary source of operating cash flow is generated from revenue related to the Registry Operations and Services segments. Our
primary uses of these funds are operational expenses, capital and other growth-related expenditures, reduction of long-term debt and the
payment of dividends.
Historically, ISC has financed operations and met capital and finance expenditure requirements through cash provided from operating
activities. The Company has also used borrowings to supplement cash generated from operations to finance acquisition activities. The
Company believes that internally-generated cash flow, supplemented by additional borrowings that may be available to us through our
Credit Facility and Base Shelf Prospectus dated April 3, 2023, will be sufficient to meet cash requirements, capital expenditures, merger and
acquisition activity and anticipated dividend payments (refer to Note 15 in the December 31, 2024 Financial Statements, which are available
on our website at www.isc.ca and in the Company’s profile on SEDAR+ at www.sedarplus.ca for our existing Credit Facility). In connection
with the Extension Agreement, ISC entered into the Amended and Restated Credit Agreement with its syndicate of lenders discussed
further in Section 6.3 “Debt”.
Liquidity risk is managed based on financial forecasts and anticipated cash flow. The majority of cash is held with Canadian chartered banks
and the risk of loss is believed to be minimal. As at December 31, 2024, the Company held $21.0 million in cash compared to $24.2 million as
at December 31, 2023, a decrease of $3.2 million as the Company used cash to reduce its long-term debt (see Section 6.5 “Working capital”
for further details).
The Company expects to be able to meet its cash requirements, including being able to settle current liabilities of $72.0 million (December
31, 2023 – $63.5 million) and meet any unanticipated cash requirements due to changes in working capital commitments through a
combination of the realization of current assets and cash flow from operations. Such changes that would affect our liquidity may arise from,
among other factors, general economic conditions and the failure of one or more customers to pay their obligations. Deficiencies arising
from short-term working capital requirements and capital expenditures may be financed on a short-term basis with bank indebtedness or
on a permanent basis with offerings of securities.
Management’s Discussion and Analysis
51
2024 ISC® Annual Report
CONSOLIDATED FREE CASH FLOW AND ADJUSTED FREE CASH FLOW
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Adjusted free cash flow
$
13,179
$
13,975
$ 56,420
$
50,770
Add (subtract):
Share-based compensation recovery (expense)
1,141
(307)
(5,589)
(283)
Acquisition, integration and other costs
(2,112)
(559)
(6,293)
(4,104)
Registry enhancement capital expenditures
(1,480)
(414)
(4,490)
(943)
Free cash flow
$
10,728
$
12,695
$ 40,048
$
45,440
Add (subtract):
Cash additions to property, plant and equipment
47
144
1,436
394
Cash additions to intangible assets1
1,531
714
6,874
2,000
Interest received
(176)
(263)
(906)
(1,163)
Interest paid
2,677
3,840
13,540
8,533
Interest paid on lease obligations
109
123
485
400
Principal repayment on lease obligations
718
637
2,816
2,383
Net change in non-cash working capital2
6,715
4,263
6,884
(1,216)
Net cash flow provided by operating activities
$
22,349
$
22,153
$ 71,177
$
56,771
1 In 2023, ISC entered into the Extension Agreement which resulted in the acquisition of an intangible asset related to the right to manage and operate the Saskatchewan
Registries until 2053. Cash paid of $153.4 million in 2023 has been excluded from the above calculation due to its long-term and transformational nature.
2 Refer to Note 26 to the Financial Statements for reconciliation.
For the three months ended December 31, 2024, free cash flow was $10.7 million, down $2.0 million from $12.7 million in the fourth quarter
of the prior year. Strong results in Registry Operations and Services during the quarter were offset by higher sustaining capital expenditures,
including continued registry enhancements for the Saskatchewan Registries division within Registry Operations.
For the year ended December 31, 2024, free cash flow was $40.0 million, down $5.4 million from $45.4 million. The strong results from
operations were offset by higher share-based compensation expense due to an increase in the Company’s share price compared to a
decrease the prior year. In addition, increased interest due to increased borrowings associated with the Extension also contributed to a
reduction in free cash flow.
Adjusted free cash flow for the fourth quarter was $13.2 million, down 6 per cent compared to $14.0 million in the same quarter in 2023.
Strong results from Registry Operations and Services were offset by increased investment in information technology services primarily
related to project work in Technology Solutions. For the year ended December 31, 2024, adjusted free cash flow was $56.4 million, up 11 per
cent primarily driven by strength in Registry Operations due to increased volumes across the Saskatchewan Registries division in addition to
record high-value property registrations in the Saskatchewan Land Titles Registry and fee adjustments for the Saskatchewan Registries in
Registry Operations that took effect in July 2023.
The following table summarizes sources and uses of funds for the fourth quarter and year ended December 31, 2024 and 2023:
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Net cash flow provided by operating activities
$
22,349
$
22,153
$ 71,177
$
56,771
Net cash flow used in investing activities
(1,402)
(594)
(8,281)
(154,886)
Net cash flow (used in) provided by financing activities
(12,003)
(18,742)
(66,199)
87,799
Effects of exchange rate changes on cash held in
foreign currencies
29
(15)
104
30
Increase (decrease) in cash
$
8,973
$
2,802
$
(3,199)
$ (10,286)
Cash, beginning of period
12,021
21,391
24,193
34,479
Cash, end of period
$
20,994
$
24,193
$ 20,994
$
24,193
Management’s Discussion and Analysis
2024 ISC® Annual Report
52
NET CASH FLOW PROVIDED BY OPERATING ACTIVITIES
Net cash flow provided by operating activities for the quarter was $22.3 million, consistent with the fourth quarter of 2023.
For the year ended December 31, 2024, net cash flow provided by operating activities increased to $71.2 million compared to an inflow of
$56.8 million in the prior year. This variance is due to the growth in the Saskatchewan Registries division as well as in Services’ Regulatory
Solutions and Recovery Solutions divisions. This growth was further assisted by an $8.1 million positive change in net non-cash working
capital. The change is primarily attributable to the following:
• An increase of $6.1 million in cash flow associated with recognition of accounts payable and accrued liabilities and other liabilities. The
increase is primarily attributable to an increase in the Company’s share price during the year compared to a decrease in the share price in
the prior year, which has increased share-based compensation liabilities.
• An increase of $5.6 million related to the timing of income tax payments.
• A decrease of $1.8 million associated with the timing of prepaid expenses.
• A decrease of $1.6 million in cash flow due to the timing of Technology Solutions receipts related to contract assets and contract liabilities,
which is due to timing differences in revenue recognition and contract payments relative to the comparable year.
NET CASH FLOW USED IN INVESTING ACTIVITIES
Net cash used in investing activities for the quarter was $1.4 million compared to $0.6 million in the comparative period. The change in
the quarter was due to increased registry enhancement capital expenditures.
Net cash used in investing activities for the year-to-date was $8.3 million compared to $154.9 million in the prior year. The decrease was
primarily due to the payment of the Upfront Payment of $150.0 million in July 2023 partially offset by the increased capital expenditures
as noted above for the quarter. In addition, as part of our acquisition of Regulis completed in 2022, the Company paid $0.9 million of
additional contingent consideration during the year related to commencement of the operations of the International Registry of
Interests in Rolling Stock.
NET CASH FLOW USED IN FINANCING ACTIVITIES
Net cash flow used in financing activities during the quarter was $12.0 million, compared to $18.7 million in the fourth quarter of 2023. The
quarterly decrease was driven by:
• Proceeds on stock options exercised of $5.7 million.
• Lower cash interest expense due to reduced average interest rates and lower average long-term debt balances as we continue to
deleverage.
Net cash flow used in financing activities during the year ended December 31, 2024, was $66.2 million, compared to net cash flow provided
by financing activities of $87.8 million in the prior year. In addition to the stock option proceeds described above, the main drivers of the
change were the following:
• $34.0 million of borrowings in the current year to fund the Subsequent Payment and working capital, compared to $150.7 million of
borrowings in the same prior year quarter to fund the Upfront Payment and other costs associated with the Extension Agreement.
• In line with our deleveraging strategy, ISC voluntarily prepaid $44.0 million in debt, up from $39.0 million paid in the prior year.
• Interest paid increased $5.0 million compared to the prior year due to higher average long-term debt outstanding compared to 2023.
6.2 Sustaining capital expenditures
For the purpose of this analysis, sustaining capital expenditures include cash additions of sustaining property, plant and equipment and
intangible assets, excluding additions subject to business combinations. The capital expenditures listed below for the year ended December
31, 2024, also exclude cash paid during the period of $0.9 million related to the additional purchase consideration of Regulis discussed
above, which made up part of the intangible assets capitalized. Additionally, for the year ended December 31, 2023, the sustaining capital
Management’s Discussion and Analysis
53
2024 ISC® Annual Report
expenditures listed below exclude cash paid of $153.4 million in relation to the Extension Agreement. These capital expenditures have been
excluded from sustaining capital as they are not considered part of business-as-usual activities given the long-term and transformational
nature of the expenditure.
Three Months Ended December 31,
Year Ended December 31,
(thousands of CAD)
2024
2023
2024
2023
Registry Operations
$
113
$
28
$
695
$
189
Services
171
157
1,345
709
Technology Solutions
1,463
439
6,069
1,066
Corporate and other
(169)
234
201
430
Sustaining capital expenditures
$
1,578
$
858
$
8,310
$
2,394
Sustaining capital expenditures were $1.6 million for the quarter, an increase from $0.9 million in the fourth quarter of the prior
year. Sustaining capital expenditures were $8.3 million for the year ended December 31, 2024, compared to $2.4 million in 2023.
In both periods, the increase primarily resulted from increased system development work across our business segments, includ
ing registry enhancements.
6.3 Debt
At December 31, 2024, the Company’s debt was $167.6 million compared to $177.3 million at December 31, 2023.
In connection with the Extension Agreement, ISC entered into the Amended and Restated Credit Agreement with its syndicate of lenders
on July 5, 2023. The aggregate amount available under the Credit Facility is $250.0 million and consists of two revolving credit facilities of
$150.0 million and $100.0 million, respectively. In addition, ISC maintains access to a $100.0 million accordion option, providing the flexibility
to upsize the Credit Facility up to $350.0 million. The Consolidated Net Funded Debt to EBITDA financial covenant has been increased to
provide additional balance sheet flexibility to ISC. The expiry date of the Credit Facility of September 2026 remains unchanged. ISC funded
the Upfront Payment and other related transaction costs for the Extension by drawing on the Credit Facility.
On July 27, 2023, ISC announced that it has expanded the lenders under the Company’s Credit Facility to include BMO. The syndicated
Credit Facility now includes RBC, CIBC and BMO. The total amount available under the Credit Facility remained unchanged.
The Company was in compliance with all its covenants throughout the period. The amount of borrowing costs capitalized during 2024 and
2023 was nil.
In 2024, the Company made voluntary prepayments of $44.0 million (2023 – $39.0 million) against the Credit Facility to minimize interest
expense. Of the total voluntary prepayments, $14.0 million (2023 – $10.0 million) were made in the quarter ended December 31, 2024. In
addition, during 2024, the Company borrowed $34.0 million against the Credit Facility to fund the first of five annual payments of $30.0
million pursuant to the Extension Agreement as well as general working capital needs.
The Company is focused on continuing sustainable growth and deleveraging its balance sheet towards a long-term net leverage target of
2.0x – 2.5x. The prepayments described above are a reflection of deleveraging plans.
For further information on our Credit Facility, refer to Note 15 in the December 31, 2024, Financial Statements which are available on our
website at www.isc.ca and in the Company’s profile on SEDAR+ at www.sedarplus.ca.
Management’s Discussion and Analysis
2024 ISC® Annual Report
54
6.4 Total assets
Total assets were $520.0 million at December 31, 2024, compared to $536.3 million at December 31, 2023.
Registry
Technology
Corporate
As at December 31,
(thousands of CAD)
Operations
Services
Solutions
and Other
2024
Total assets excluding
intangibles, goodwill and cash
$
21,762
$
18,534
$ 10,418
$
11,381
$ 62,095
Intangibles
291,441
32,181
10,058
1,913
335,593
Goodwill
21,098
71,537
8,705
–
101,340
Cash
–
–
–
20,994
20,994
Total assets
$ 334,301
$ 122,252
$ 29,181
$
34,288
$ 520,022
Registry
Technology
Corporate
As at December 31,
(thousands of CAD)
Operations
Services
Solutions
and Other
2023
Total assets excluding
intangibles, goodwill and cash
$
23,281
$
17,812
$
5,843
$
12,158
$
59,094
Intangibles
303,548
42,322
4,874
1,026
351,770
Goodwill
21,098
71,537
8,631
–
101,266
Cash
–
–
–
24,193
24,193
Total assets
$ 347,927
$ 131,671
$ 19,348
$
37,377
$ 536,323
6.5 Working capital
Between December 31, 2023, and December 31, 2024, working capital decreased by $9.3 million.
As at December 31,
As at December 31,
(thousands of CAD)
2024
2023
Current assets
$ 47,568
$
48,332
Current liabilities
(71,991)
(63,496)
Working capital
$ (24,423)
$ (15,164)
The main drivers of the $9.3 million decrease in working capital compared to December 31, 2023, are as follows:
Free cash flow for 2024
$ 40,048
Financing and other items:
Repayment of long-term debt
(44,000)
Proceeds of long-term debt
34,000
Contractual payments on vendor concession liability
(30,500)
Dividends paid
(16,664)
Stock options exercised
7,817
Acquisitions and post-closing adjustments
(879)
All other cash flow differences
919
Total change in working capital
$
(9,259)
6.6 Outstanding share data
The number of issued and outstanding Class A Shares as at December 31, 2024, was 18,515,617 and the number of issued and outstanding
share options as of December 31, 2024, was 342,052. As of March 17, 2025, the number of issued and outstanding Class A Shares was
18,515,617 and the number of issued and outstanding share options was 342,052.
Management’s Discussion and Analysis
55
2024 ISC® Annual Report
6.7 Common share dividend
On November 5, 2024, the Board declared a quarterly cash dividend of $0.23 per Class A Share, paid on or before January 15, 2025, to
shareholders of record as of December 31, 2024.
6.8 Commitments
The Company has commitments over the next five years that include future minimum payments related to the vendor concession liability,
leasing of office space, information technology service agreements and other management services contracts. The following table
summarizes our commitments as of December 31, 2024:
(thousands of CAD)
2025
2026
2027
2028
2029
Thereafter
Total
Vendor concession liability1
$ 30,500
$ 30,500
$ 30,500
$ 30,500 $
500 $ 12,000 $ 134,500
Lease obligations2
2,054
1,767
1,651
1,541
625
412
8,050
Operating leases and non-lease
component of office leases3
1,787
1,515
1,467
1,417
1,040
4,935
12,161
Information technology4 and other
service agreements
5,218
4,933
4,694
4,226
800
–
19,871
Total
$ 39,559
$ 38,715
$ 38,312
$ 37,684 $
2,965 $ 17,347 $ 174,582
1 Refer to Note 16 to the Financial Statements.
2 Refer to Note 12 to the Financial Statements.
3 The Company leases all of its office space and certain office equipment. The office spaces have lease terms of between five and 10 years, with various options to extend. The
office equipment leases relate to photocopiers and have lease terms of five years. The Company does not have an option to purchase the leased assets at the expiry of the
lease period.
4 The Company has service agreements related to Information Technology with various service providers, including lease commitments for computer equipment where the
Company has taken the exemption for low-value assets. Other service agreements relate to service contracts associated with corporate and shared services infrastructure.
7 Business Risks
7.1 Financial instruments and financial risks
Financial instruments held in the normal course of business included in our consolidated statements of financial position as at December 31,
2024, consist of cash, trade and other receivables, accounts payable and accrued liabilities excluding share-based accrued liabilities, the
vendor concession liability and long-term debt.
The Company does not currently use any form of derivative financial instruments to manage our exposure to credit risk, interest rate risk,
market risk or foreign currency exchange risk. Refer to Note 20 to the Financial Statements for information pertaining to financial
instruments and related risk management.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of cash, trade and other receivables, accounts payable and accrued liabilities excluding share-based accrued liabilities
approximate fair value due to their immediate or relatively short-term maturity. The fair values of the vendor concession liability and
long-term debt are estimated by discounting the future contractual cash flows at the cost of borrowing to the Company.
CREDIT RISK
Credit risk is the risk that one party to a transaction will fail to discharge an obligation and cause the other party to incur a financial loss. The
Company extends credit to its customers in the normal course of business and is exposed to credit risk in the event of non-performance by
customers but does not anticipate such non-performance would be material. The Company monitors the credit risk and credit rating of
customers on a regular basis. The Company has significant concentration of credit risk among government sectors. Its customers are
predominantly provincial, federal and municipal government ministries and agencies and its private sector customers are diverse.
The majority of cash is held with Canadian chartered banks and the Company believes the risk of loss to be minimal. The maximum
exposure to credit risk at December 31, 2024, is $37.8 million (December 31, 2023 – $39.9 million), equal to the carrying value of the
Company’s financial assets: those being cash at $21.0 million (December 31, 2023 – $24.2 million), and trade and other receivables at $16.8
million (December 31, 2023 – $15.7 million). Quarterly reviews of the aged receivables are completed. The Company expects to fully collect
the carrying value on all outstanding receivables. Therefore, the risk to the Company is low.
Management’s Discussion and Analysis
2024 ISC® Annual Report
56
INTEREST RATE RISK
Interest rate risk arises from the effect of changes in prevailing interest rates on the Company’s financial instruments.
The Company is subject to interest rate risks on its debt. The Company has borrowings under the Credit Facility, which is managed with
prime loans, Canadian Overnight Repo Rate Average (“CORRA”) loans or letters of credit. Certain borrowings will bear interest at a base rate
of prime plus applicable margin varying between 0.20 per cent and 2.00 per cent per annum while other borrowings will bear interest at
CORRA rates between 1.50 per cent and 3.30 per cent per annum. The Company is managing its interest rate risk through its treasury
function, the continued focus on debt repayment and keeping excess cash in higher interest short-term savings.
LIQUIDITY RISK
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s cash resources are
managed based on financial forecasts and anticipated cash flows.
MARKET RISK
The Company’s exposure to market risk is limited to the deferred share units, share appreciation rights and performance share unit liabilities
whose fair values are affected by equity prices.
FOREIGN CURRENCY EXCHANGE RISK
The Company operates internationally and is exposed to fluctuations in various currencies, with the euro being the most material, followed
by the US dollar. Movements in foreign currencies against the Canadian dollar may impact revenue, the value of assets and liabilities and
affect the Company’s profit and loss. The Company’s exposure to other currencies is not significant at the end of the period.
7.2 Business risks and risk management
All companies are exposed to risk and are required to mitigate risks on a daily and long-term basis. A key component of creating strong and
sustainable corporate performance is to balance risk and reward.
ISC considers risks that may affect the Company’s ability to achieve its goals and objectives on an ongoing basis and implements processes
to manage those risks. ISC is continuously monitoring numerous existing and emerging risks. Our corporate strategies and plans are
designed to implement effective risk mitigation or management approaches on an ongoing basis.
The Board oversees ISC’s Enterprise Risk Management (“ERM”) framework. This includes ensuring appropriate management systems are in
place to ensure ISC’s risks are prudently managed.
The senior leadership team is accountable for providing executive oversight of ISC’s ERM activities, including the ongoing identification and
assessment of risks and the development of mitigation strategies to manage the corporate risks facing the Company.
A complete list of ISC’s key business risks is contained in the Company’s Annual Information Form available on the Company’s website at
www.isc.ca and in the Company’s profile on SEDAR+ at www.sedarplus.com.
8 Accounting Policies, Financial Measures and Controls
8.1 Off-balance sheet arrangements
The Company had no off-balance sheet arrangements as at December 31, 2024.
8.2 Related party transactions
Routine operating transactions with related parties are settled at agreed upon exchange amounts under normal trade terms. Refer to Note
23 in the December 31, 2024 Financial Statements, which are available on our website at www.isc.ca and in the Company’s profile on
SEDAR+ at www.sedarplus.ca for information about transactions with related parties.
Management’s Discussion and Analysis
57
2024 ISC® Annual Report
8.3 Critical accounting estimates
ISC’s critical accounting estimates are contained in Note 2 to the Financial Statements under the summary of use of estimates and
judgments and include references to:
• the carrying value, impairment and estimated useful lives of intangible assets and goodwill;
• the recoverability of deferred tax assets; and
• the amount and timing of revenue from contracts from customers recognized over time.
The preparation of the Financial Statements, in conformity with IFRS Accounting Standards, requires management to make estimates
and underlying assumptions and judgments that affect the accounting policies and reported amounts of assets, liabilities, revenue
and expenses.
Estimates and underlying assumptions are reviewed on an ongoing basis. Actual results may differ from these estimates. Revisions to
accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Critical accounting
estimates and judgments are those that have a significant risk of causing material adjustment.
8.4 Changes in accounting policies
The Company adopted the following new accounting pronouncements or policies and revised standards, along with any consequential
amendments, effective January 1, 2024, or on such date as they became applicable. These changes were made in accordance with
applicable transitional provisions.
Standard
Description
Amendments to IAS
1 – Classification of
Liabilities as Current
or Non-current
The amendments to IAS 1 affect only the presentation of liabilities as current or non-current in the
statement of financial position and not the amount or timing of recognition of any asset, liability,
income or expense, or the information disclosed about those items.
These amendments clarify that a company must classify a liability as current unless it has the right to
defer settlement of the liability for at least 12 months and that management’s intentions about whether
the company will exercise its rights to defer settlement do not affect classification of liabilities.
These amendments specify that covenants to be complied with after the reporting date do not affect
the classification of debt as current or non-current at the reporting date. Instead, the amendments
require a company to disclose information about these covenants in the notes to the financial
statements.
The Company adopted this amendment to IAS 1 effective January 1, 2024, which has had no impact on
the consolidated financial statements.
Amendments to
IFRS 16 – Lease
Liability in a Sale
and Leaseback
The amendment clarifies how a seller-lessee subsequently measures sale and leaseback transactions
that satisfy the requirements in IFRS 15 – Revenue from Contracts with Customers to be accounted for
as a sale.
The Company adopted this amendment to IFRS 16 effective January 1, 2024, which has had no impact
on the consolidated financial statements.
Amendments to
IAS 7 and IFRS 7
– Supplier Finance
Arrangements
The amendments add disclosure requirements and ‘signposts’ within existing disclosure requirements
that ask entities to provide qualitative and quantitative information about supplier finance arrangements.
The Company adopted these amendments to IAS 7 and IFRS 7 effective January 1, 2024, which have had
no impact on the consolidated financial statements.
Management’s Discussion and Analysis
2024 ISC® Annual Report
58
8.5 Financial measures and key performance indicators
Revenue, expenses, net income and net cash flow provided by operating activities are key performance indicators the Company uses to
manage its business and evaluate its financial results and operating performance. In addition to these results, which are reported in
accordance with IFRS Accounting Standards, certain non-IFRS measures are supplemental indicators of operating performance and
financial position as well as used for internal planning purposes. The Company evaluates its performance against these metrics by
comparing actual results to management budgets, forecasts and prior period results. These non-IFRS financial measures include adjusted
net income, adjusted earnings per share, basic, adjusted earnings per share, diluted, EBITDA, EBITDA margin, adjusted EBITDA, adjusted
EBITDA margin, free cash flow and adjusted free cash flow. Refer to Section 8.8 “Non-IFRS financial measures” for a discussion on why we
use these measures, the calculation of them and their most directly comparable financial measure calculated in accordance with IFRS
Accounting Standards. Refer to Section 2 “Consolidated Financial Analysis” and Section 6.1 “Cash flow” for a reconciliation of these measures
to the most directly comparable financial measure calculated in accordance with IFRS Accounting Standards.
8.6 Internal controls over financial reporting
The Company’s management, including the President and Chief Executive Officer and the Chief Financial Officer, is responsible for
establishing and maintaining appropriate internal controls over financial reporting. Internal controls over financial reporting have
been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements in accordance with IFRS Accounting Standards and management has concluded these controls were operating effectively
as of December 31, 2024.
No changes in our internal controls over financial reporting that have occurred during the period have materially affected or are reasonably
likely to materially affect our internal controls over financial reporting.
The IASB and IFRS Interpretations Committee (“IFRIC”) issued the following new standards and amendments to standards and
interpretations, which become effective for future periods.
Proposed Standard
Description
Effective Date
Amendments to
IAS 21 – Lack of
Exchangeability
The amendments to IAS 21 contain guidance to specify when a currency is
exchangeable and how to determine the exchange rate when it is not.
The amendment is effective for annual periods beginning on or after January 1, 2025.
The Company has assessed the impact of the adoption of this amendment, and it is
not expected to have an impact on the Company’s consolidated financial statements.
January 1, 2025
Amendments to
IFRS 9 and IFRS 7 –
Classification and
Measurement of
Financial Instruments
The amendments address matters identified during the post-implementation review
of the classification and measurement requirements of IFRS 9 – Financial Instruments.
The amendments include clarifications on the derecognition of financial liabilities
settled through electronic transfer and the classification of financial assets with
environmental, social and governance-linked features.
The amendments are effective for annual periods beginning on or after January 1,
2026. The amendments are currently being assessed by the Company to determine the
impact.
January 1, 2026
IFRS 18 –
Presentation and
Disclosures in
Financial Statements
The standard includes requirements for all entities applying IFRS for the presentation
and disclosure of information in financial statements.
The standard is effective for annual periods beginning on or after January 1, 2027.
The standard is currently being assessed by the Company to determine the impact.
January 1, 2027
IFRS 19 –
Subsidiaries without
Public Accountability:
Disclosures
The new standard specifies the disclosure requirements an eligible subsidiary is
permitted to apply instead of the disclosure requirements in other IFRS Accounting
Standards.
The standard is effective for annual periods beginning on or after January 1, 2027.
The Company has assessed the impact of the adoption of the standard and it is not
expected to have an impact on the Company’s consolidated financial statements.
January 1, 2027
Management’s Discussion and Analysis
59
2024 ISC® Annual Report
It should be noted that all internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
8.7 Disclosure controls and procedures
The Company’s management, including the President and Chief Executive Officer and the Chief Financial Officer, is responsible for
establishing and maintaining appropriate disclosure controls and procedures. Disclosure controls and procedures are designed to provide
reasonable assurance that relevant information is gathered and reported to senior management, including the President and Chief
Executive Officer and the Chief Financial Officer, on a timely basis so that appropriate decisions can be made regarding public disclosures.
Management has concluded these controls were operating effectively as of December 31, 2024.
8.8 Non-IFRS financial measures
This MD&A includes certain measures that have not been prepared in accordance with IFRS Accounting Standards, such as adjusted net
income, adjusted earnings per share, basic, adjusted earnings per share, diluted, EBITDA, EBITDA margin, adjusted EBITDA, adjusted
EBITDA margin, free cash flow and adjusted free cash flow. These measures are provided as additional information to complement IFRS
measures by providing further understanding of our financial performance from management’s perspective, to provide investors with
supplemental measures of our operating performance and, thus, highlight trends in our core business that may not otherwise be apparent
when relying solely on IFRS financial measures.
Management also uses non-IFRS measures to facilitate operating performance comparisons from period to period, prepare annual
operating budgets, and assess our ability to meet future capital expenditure and working capital requirements.
Accordingly, these non-IFRS measures should not be considered in isolation or as a substitute for analysis of our financial information
reported under IFRS Accounting Standards. Such measures do not have any standardized meaning prescribed by IFRS Accounting
Standards and therefore may not be comparable to similar measures presented by other companies.
Refer to Section 8.9 “Non-IFRS financial measures definition” for definitions of these measures. Refer to Section 2 “Consolidated Financial
Analysis” and Section 6.1 “Cash flow” for a reconciliation of these measures to the most directly comparable financial measure calculated in
accordance with IFRS Accounting Standards.
Non-IFRS performance
measure
Why we use it
How we calculate it
Most comparable IFRS
financial measure
Adjusted net income
Adjusted earnings per
share, basic
Adjusted earnings per
share, diluted
• To evaluate performance and
profitability while excluding
non-operational and share-
based volatility.
• We believe that certain
investors and analysts will
use adjusted net income and
adjusted earnings per share
to evaluate performance
while excluding items that
management believes do not
contribute to our ongoing
operations.
• Adjusted earnings per
share, basic is also used as a
component of determining
short-term incentive
compensation for employees.
Adjusted net income:
Net income
add
Share-based compensation expense,
acquisitions, integration and other
costs, effective interest component of
interest expense, debt finance costs
expensed to professional and consulting,
amortization of the intangible asset
associated with the right to manage and
operate the Saskatchewan Registries,
amortization of registry enhancements,
interest on the vendor concession
liability and the tax effect of these
adjustments at ISC’s statutory tax rate
Adjusted earnings per share, basic:
Adjusted net income divided by
weighted average number of common
shares outstanding
Adjusted earnings per share, diluted:
Adjusted net income divided by diluted
weighted average number of common
shares outstanding
Net income
Earnings per share, basic
Earnings per share,
diluted
Management’s Discussion and Analysis
2024 ISC® Annual Report
60
Non-IFRS performance
measure
Why we use it
How we calculate it
Most comparable IFRS
financial measure
EBITDA
EBITDA margin
• To evaluate performance and
profitability of segments and
subsidiaries as well as the
conversion of revenue.
• We believe that certain
investors and analysts use
EBITDA to measure our ability
to service debt and meet other
performance obligations.
• We believe that certain
investors and analysts use
EBITDA margin to evaluate the
performance of our business, as
well as our ability to generate
cash flows.
EBITDA:
Net income
add (remove)
Depreciation and amortization, net
finance expense, and income tax
expense
EBITDA margin:
EBITDA
divided by
Total revenue
Net income
Adjusted EBITDA
Adjusted EBITDA margin
• To evaluate performance and
profitability of segments and
subsidiaries as well as the
conversion of revenue while
excluding non-operational and
share-based volatility.
• We believe that certain
investors and analysts use
adjusted EBITDA to measure
our ability to service debt
and meet other performance
obligations.
• We believe that certain
investors and analysts use
adjusted EBITDA margin to
evaluate the performance of
our business, as well as our
ability to generate cash flows
from ongoing operations.
• Adjusted EBITDA is also used as
a component of determining
short-term incentive
compensation for employees.
Adjusted EBITDA:
EBITDA
add (remove)
share-based compensation expense,
acquisition, integration and other costs,
gain/loss on disposal of assets and asset
impairment charges if significant
Adjusted EBITDA margin:
Adjusted EBITDA
divided by
Total revenue
Net income
Free cash flow
• To show cash available for debt
repayment and reinvestment
into the Company on a levered
basis.
• We believe that certain
investors and analysts use this
measure to value a business
and its underlying assets.
• Free cash flow is also used as
a component of determining
short-term incentive
compensation for employees.
Net cash flow provided by operating
activities
deduct (add)
Net change in non-cash working capital,
cash additions to property, plant and
equipment, cash additions to intangible
assets, interest received and paid as well
as interest paid on lease obligations
and principal repayments on lease
obligations
Net cash flow provided
by operating activities
Management’s Discussion and Analysis
61
2024 ISC® Annual Report
Non-IFRS performance
measure
Why we use it
How we calculate it
Most comparable IFRS
financial measure
Adjusted free cash flow
• To show cash available for debt
repayment and reinvestment
into the Company on a
levered basis from continuing
operations while excluding
non-operational and share-
based volatility.
• We believe that certain
investors and analysts use this
measure to value a business
and its underlying assets based
on continuing operations while
excluding short-term non-
operational items.
Free cash flow
deduct (add)
Share-based compensation expense,
acquisition, integration and other costs
and registry enhancement capital
expenditures
Net cash flow provided
by operating activities
8.9 Non-IFRS financial measures definition
Adjusted net income is defined as net income adjusted for share-based compensation expense or income, acquisition,
integration and other costs, the effective interest component of interest expense, debt finance costs expensed to professional and
consulting, amortization of the intangible asset associated with the right to manage and operate the Saskatchewan Registries and
amortization of registry enhancement capital expenditures, interest on the vendor concession liability and the tax effect of these
adjustments at ISC’s statutory tax rate. We believe this measure provides useful information to evaluate earnings while excluding
non-operational and share-based volatility. Adjusted earnings per share, both on a basic and diluted basis, are calculated as
adjusted net income divided by the weighted average number of common shares outstanding for adjusted earnings per share,
basic and the diluted weighted average number of common shares outstanding for adjusted earnings per share, diluted.
EBITDA is defined as earnings before interest, taxes, depreciation and amortization expense. Adjusted EBITDA adjusts EBITDA for
share-based compensation expense or income, transactional gains or losses on assets, asset impairment charges and acquisition,
integration and other costs. These measures, in addition to net income and income from operations, remove fluctuations caused
by the above adjustments. EBITDA margin and adjusted EBITDA margin are calculated as a percentage of overall revenue.
Free cash flow is used as a financial measure of liquidity and financial strength. By adjusting for the swings in non-cash working
capital items due to seasonality or other timing issues, cash additions to property, plant and equipment and intangible assets, as
well as interest received and paid including interest paid on lease obligations and principal repayments on lease obligations, free
cash flow assists in the long-term assessment of liquidity and financial strength. Adjusted free cash flow adjusts for share-based
compensation expense or recovery, acquisition, integration and other costs and registry enhancement capital expenditures.
Adjusted free cash flow does not represent residual cash flow available for discretionary expenditures.
Management’s Responsibility..........................................................................63
Independent Auditor’s Report........................................................................ 64
Consolidated Statements of Financial Position..........................................67
Consolidated Statements of Comprehensive Income............................ 68
Consolidated Statements of Changes in Equity....................................... 69
Consolidated Statements of Cash Flows.................................................... 70
Notes to the Consolidated Financial Statements.........................................71
1
Nature of the Business..............................................................................71
2
Basis of Presentation..................................................................................71
3
Material Accounting Policy Information ............................................73
4
Trade and Other Receivables..................................................................82
5
Contract Assets...........................................................................................82
6
Property, Plant and Equipment..............................................................83
7
Right-of-use Assets................................................................................... 84
8
Intangible Assets.........................................................................................85
9
Goodwill........................................................................................................ 86
10 Accounts Payable and Accrued Liabilities..........................................87
11
Contract Liabilities......................................................................................87
12 Lease Obligations...................................................................................... 88
13 Tax Provision............................................................................................... 88
14 Share-Based Compensation Plans.......................................................90
15 Debt................................................................................................................95
16 Vendor Concession Liability................................................................... 96
17 Liabilities Arising from Financing Activities........................................97
18 Earnings Per Share.....................................................................................97
19 Equity and Capital Management.......................................................... 98
20 Financial Instruments and Related Risk Management................... 99
21 Revenue........................................................................................................101
22 Interest expense........................................................................................101
23 Related Party Transactions....................................................................102
24 Compensation of Key Management Personnel..............................102
25 Segment Information..............................................................................102
26 Net Change in Non-Cash Working Capital....................................... 104
27 Commitments and Contingencies......................................................105
28 Pension Expense.......................................................................................105
29 Subsequent Events..................................................................................105
For the Year Ended
December 31, 2024
Consolidated
Financial
Statements
2024 ISC® Annual Report
62
Consolidated Financial Statements
63
2024 ISC® Annual Report
Management’s Responsibility
Management’s Report on Consolidated Financial Statements
The accompanying consolidated financial statements of Information Services Corporation were prepared by management, which is
responsible for the integrity and fairness of the information presented, including the many amounts that must, of necessity, be based
on estimates and judgments. These consolidated financial statements were prepared in accordance with IFRS Accounting Standards
as issued by the International Accounting Standards Board (“IASB”). Financial information appearing throughout our Management’s
Discussion and Analysis is consistent with these consolidated financial statements.
In discharging our responsibility for the integrity and fairness of the consolidated financial statements and for the accounting systems
from which they are derived, we maintain the necessary system of internal controls designed to ensure that transactions are authorized,
assets are safeguarded and proper records are maintained. These controls include quality standards in hiring employees, policies and
procedure manuals, a corporate code of conduct and accountability for performance within appropriate and well-defined areas of
responsibility.
The Board of Directors oversees management’s responsibilities for financial reporting through an Audit Committee, which is composed
entirely of directors who are neither officers nor employees of Information Services Corporation. This Committee reviews our
consolidated financial statements and recommends them to the Board of Directors for approval. Other key responsibilities of the Audit
Committee include reviewing our existing internal control procedures and planned revisions to those procedures and advising the
directors on accounting matters and financial reporting issues.
Deloitte LLP, who was appointed by the shareholders of Information Services Corporation upon the recommendation of the Audit
Committee and the Board of Directors’ approval, has performed an independent audit of the consolidated financial statements and that
report follows. The auditor has full and unrestricted access to the Audit Committee to discuss the audit and related findings.
Shawn B. Peters, CPA, CA, ICD.D
Robert (Bob) Antochow, CPA, CA, CMA
President and Chief Executive Officer
Chief Financial Officer
March 17, 2025
Consolidated Financial Statements
2024 ISC® Annual Report
64
Independent Auditor’s Report
To the Shareholders and the Board of Directors of Information Services Corporation:
Opinion
We have audited the consolidated financial statements of Information Services Corporation (the “Company”), which comprise the
consolidated statements of financial position as at December 31, 2024 and 2023, and the consolidated statements of comprehensive
income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material
accounting policy information (collectively referred to as the “financial statements”).
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at
December 31, 2024 and 2023, and its financial performance and its cash flow for the years then ended in accordance with IFRS Accounting
Standards as issued by the International Accounting Standards Board (“IASB”).
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are
independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in
Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated financial
statements for the year ended December 31, 2024. This matter was 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 this matter.
Goodwill Impairment Assessment – Services and Technology Solutions — Refer to Notes 3 and 9 to the
financial statements
Key Audit Matter Description
The Company’s annual assessment for goodwill impairment involves the comparison of the recoverable amount of each cash generating unit
(“CGU”) to its carrying value. The Company determines the recoverable amount of its CGU based on a value in use (“VIU”) analysis under the
income approach. The Company used the discounted cash flow method to determine the recoverable amounts of the Services and
Technology Solutions CGUs, which required management to make estimates and assumptions. The recoverable amounts for both the
Services and Technology Solutions CGUs exceeded their carrying values as of the measurement date and no impairments were recognized.
Given the magnitude of the goodwill balance in the Services and Technology Solutions CGUs the performance of audit procedures over
revenue forecasts, perpetual growth rates and the discount rates for both CGUs required an increased extent of audit effort, including the
need to involve fair value specialists.
How the Key Audit Matter Was Addressed in the Audit
Our audit procedures related to the revenue forecasts, perpetual growth rates and the discount rates used to determine the recoverable
amount of the Services and Technology Solutions CGUs included the following, among others:
• Evaluated management’s ability to accurately forecast by comparing management’s historical forecasts to actual results;
• Evaluated the reasonableness of management’s revenue forecasts through consideration of the following:
– historical results
– internal communications to management and the Board of Directors
– forecasted information included in Company press releases, analyst and industry reports and by assessing management’s pipeline for
the Technology Solutions CGU;
• With the assistance of fair value specialists:
– Evaluated the reasonableness of the perpetual growth rates by comparing management’s perpetual growth rates to forecasted
inflationary and economic growth applicable to Canada and Ireland;
– Evaluated the reasonableness of the discount rates by testing the source information underlying the determination of the discount
rates and developing a range of independent discount rates and comparing to the discount rates selected by management.
.
Consolidated Financial Statements
65
2024 ISC® Annual Report
Other Information
Management is responsible for the other information. The other information comprises:
• Management’s Discussion and Analysis
• The information, other than the financial statements and our auditor’s report thereon, in the Annual Report.
Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance
conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially misstated.
We obtained Management’s Discussion and Analysis prior to the date of this auditor’s report. If, based on the work we have performed on
this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in this
auditor’s report. We have nothing to report in this regard.
The Annual Report is expected to be made available to us after the date of the auditor’s report. If, based on the work we will perform on this
other information, we conclude that there is a material misstatement of this other information, we are required to report that fact to those
charged with governance.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting
Standards as issued by the IASB, and for such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout
the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made
by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
Consolidated Financial Statements
2024 ISC® Annual Report
66
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business units within the Company as a basis for forming an opinion on the financial statements. We are responsible for the direction,
supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Brian Ralofsky.
Chartered Professional Accountants
Regina, Saskatchewan
March 17, 2025
Consolidated Financial Statements
67
2024 ISC® Annual Report
Consolidated Statements of Financial Position
As at December 31,
As at December 31,
(thousands of CAD)
Note
2024
2023
Assets
Current assets
Cash
$
20,994
$
24,193
Trade and other receivables
4
16,778
15,673
Contract assets
5
6,131
2,649
Income tax recoverable
13
134
2,626
Prepaid expenses and deposits
3,531
3,191
Total current assets
47,568
48,332
Non-current assets
Property, plant and equipment
6
2,180
2,101
Right-of-use assets
7
6,002
8,682
Intangible assets
8
335,593
351,770
Goodwill
9
101,340
101,266
Deferred tax asset
13
27,339
24,172
Total non-current assets
472,454
487,991
Total assets
$
520,022
$
536,323
Liabilities
Current liabilities
Accounts payable and accrued liabilities
10
$
40,781
$
36,114
Vendor concession liability
16
22,562
20,816
Contract liabilities
11
3,001
2,764
Lease obligations – current portion
12
1,688
2,809
Income tax payable
13
3,959
993
Total current liabilities
71,991
63,496
Non-current liabilities
Lease obligations
12
5,407
7,055
Deferred tax liability
13
9,108
11,257
Long-term debt
15
167,553
177,302
Vendor concession liability
16
85,158
107,720
Other liabilities
14
528
714
Total non-current liabilities
267,754
304,048
Shareholders’ equity
Share capital
19
37,388
28,542
Equity settled employee benefit reserve
14
581
1,610
Accumulated other comprehensive income (loss)
36
(185)
Retained earnings
142,272
138,812
Total shareholders’ equity
180,277
168,779
Total liabilities and shareholders’ equity
$
520,022
$
536,323
See Note 27 for Commitments and Contingencies
See accompanying Notes
APPROVED BY THE BOARD OF DIRECTORS ON MARCH 17, 2025:
Joel Teal
Laurie Powers
Director
Director
Consolidated Financial Statements
2024 ISC® Annual Report
68
Consolidated Statements of Comprehensive Income
Year Ended December 31,
Year Ended December 31,
(thousands of CAD)
Note
2024
2023
Revenue
21
$
247,366
$
214,520
Expenses
Wages and salaries
70,609
59,999
Cost of goods sold
59,920
55,387
Depreciation and amortization
6, 7, 8
27,573
20,506
Information technology services
19,560
13,280
Occupancy costs
4,494
4,648
Professional and consulting services
7,688
5,981
Financial services
2,837
3,077
Other
3,814
3,669
Total expenses
196,495
166,547
Net income before items noted below
50,871
47,973
Finance income (expense)
Interest income
906
1,163
Interest expense
22
(22,852)
(14,346)
Net finance expense
(21,946)
(13,183)
Income before tax
28,925
34,790
Income tax expense
13
(8,684)
(9,745)
Net income
$
20,241
$
25,045
Other comprehensive income
Items that may be subsequently reclassified to net income
Unrealized gain on translation of financial statements of
foreign operations
221
192
Other comprehensive income
221
192
Total comprehensive income
$
20,462
$
25,237
Earnings per share ($ per share)
Total, basic
18
$
1.11
$
1.41
Total, diluted
18
$
1.11
$
1.39
See accompanying Notes
Consolidated Financial Statements
69
2024 ISC® Annual Report
Consolidated Statements of Changes in Equity
Equity
Accumulated
Settled
Other
Employee
Retained
Share
Comprehensive
Benefit
(thousands of CAD)
Note
Earnings
Capital
Income (Loss)
Reserve
Total
Balance at January 1, 2023
$
130,192
$
23,691
$
(377)
$
2,082
$ 155,588
Net income
25,045
–
–
–
25,045
Other comprehensive income
–
–
192
–
192
Stock options exercised
14
–
4,851
–
(472)
4,379
Dividend declared
19
(16,425)
–
–
–
(16,425)
Balance at December 31, 2023
$
138,812
$
28,542
$
(185)
$
1,610
$ 168,779
Balance at January 1, 2024
$
138,812
$
28,542
$
(185)
$
1,610
$ 168,779
Net income
20,241
–
–
–
20,241
Other comprehensive income
–
–
221
–
221
Stock options exercised
14
–
8,846
–
(1,029)
7,817
Dividend declared
19
(16,781)
–
–
–
(16,781)
Balance at December 31, 2024
$
142,272
$
37,388
$
36
$
581
$ 180,277
See accompanying Notes
2024 ISC® Annual Report
70
2024 ISC® Annual Report
70
Consolidated Financial Statements
Consolidated Statements of Cash Flows
Year Ended December 31,
Year Ended December 31,
(thousands of CAD)
Note
2024
2023
Operating
Net income
$
20,241
$
25,045
Add: Charges not affecting cash
Depreciation
6, 7
3,497
3,022
Amortization
8
24,076
17,484
Foreign exchange gains
(156)
(3)
Deferred tax recovery recognized in net income
13
(5,309)
(155)
Registry Operations service concession arrangement
–
(588)
Gain on disposal of property, plant and equipment
(2)
(1)
Net finance expense
21,946
13,183
Net change in non-cash working capital
26
6,884
(1,216)
Net cash flow provided by operating activities
71,177
56,771
Investing
Interest received
906
1,163
Proceeds on disposal of property, plant and equipment
2
1
Additions to property, plant and equipment
6
(1,436)
(394)
Additions to intangible assets
8
(6,874)
(155,430)
Acquisitions and post-closing adjustments
8
(879)
(226)
Net cash flow used in investing activities
(8,281)
(154,886)
Financing
Interest paid
22
(13,540)
(8,533)
Interest paid on lease obligations
12, 22
(485)
(400)
Principal repayments on lease obligations
12
(2,816)
(2,383)
Repayment of long-term debt
15
(44,000)
(39,000)
Proceeds of long-term debt
15
34,000
150,684
Financing fees
15
(11)
(593)
Dividends paid
19
(16,664)
(16,355)
Stock options exercised
14
7,817
4,379
Contractual payments on vendor concession liability
16
(30,500)
–
Net cash flow (used in) provided by financing activities
(66,199)
87,799
Effects of exchange rate changes on cash held in
foreign currencies
104
30
Decrease in cash
(3,199)
(10,286)
Cash, beginning of year
24,193
34,479
Cash, end of year
$
20,994
$
24,193
See accompanying Notes
Notes to the Consolidated Financial Statements
71
2024 ISC® Annual Report
71
2024 ISC® Annual Report
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 Nature of the Business
Information Services Corporation is the parent company of its subsidiary group (collectively, the “Company”, or “ISC”) and is a Canadian
corporation with its Class A Limited Voting Shares (“Class A Shares”) listed on the Toronto Stock Exchange (“TSX”) under the symbol ISC. The
Company is a provider of registry and information management services for public data and records. The head and registered office of the
Company is 300 – 10 Research Drive, Regina, Saskatchewan, S4S 7J7. The Company maintains Canadian office locations in Saskatchewan,
British Columbia and Ontario and international offices in Ireland and Luxembourg. ISC has three reportable segments: Registry Operations,
Services and Technology Solutions. A functional summary of these segments is as follows:
• Registry Operations delivers registry and information services on behalf of governments and private sector organizations. This segment
currently has two major clients: the Government of Saskatchewan and the Government of Ontario. Registry Operations offerings are
categorized into three divisions: Saskatchewan Registries, Ontario Property Tax Assessment Services and Other Registries.
– On July 5, 2023, the Company entered into an extension agreement (the “Extension Agreement”) to extend ISC’s exclusive right
to manage and operate the Saskatchewan Land Registry, the Saskatchewan Land Surveys Directory, the Saskatchewan Corporate
Registry and the Saskatchewan Personal Property Registry (collectively, the “Saskatchewan Registries”) until 2053. Under the Extension
Agreement, ISC also undertook to renew the registry technology systems and was granted the right to introduce and/or enhance fees
on certain transactions. Applicable fee adjustments became effective July 29, 2023. The master service agreement was also amended
and restated (the “Amended and Restated MSA”) to, among other things, implement certain incremental terms and conditions including
registry enhancement, the objectives of which are to enhance security features and protocols for the Saskatchewan Registries,
contemplate emerging and future technology enhancements, refresh and clarify governance practices and structure and provide
flexibility for change over the life of the extended term.
• Services delivers solutions uniting public records data, customer authentication, corporate services, collateral management, asset
recovery and accounts receivable management to support registration, due diligence and lending practices across Canada.
• Technology Solutions provides the development, delivery and support of registry (and related) technology solutions.
The balance of our corporate activities and shared services functions is reported as Corporate and other.
As at December 31, 2024, ISC’s principal revenue-generating segments were Registry Operations and Services.
2 Basis of Presentation
Statement of compliance
These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the IASB.
The Company’s Board of Directors (the “Board”) authorized the consolidated financial statements for the year ended December 31, 2024,
for issue on March 17, 2025.
Basis of measurement
The consolidated financial statements have been prepared on a going concern basis using the historical cost basis except for financial
instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if
market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for
measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based
payment transactions that are within the scope of IFRS 2 — Share-based Payment and measurements that have some similarities to fair
value but are not fair value, such as net realizable value in IAS 2 — Inventories or value in use in IAS 36 — Impairment of Assets.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the
inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which
are described as follows:
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
72
2022 ISC® Annual Report | Notes to the Consolidated Financial Statements
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or
indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
Functional and presentation currency
These consolidated financial statements are presented in Canadian dollars (“CAD”), which is the functional currency of the parent company.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of ISC and its wholly owned significant operating subsidiaries:
ISC Saskatchewan Inc. (“ISC Sask”), ISC Enterprises Inc. (“ISC Ent”), ESC Corporate Services Ltd. (“ESC”), Reamined Systems Inc. (“Reamined”),
Enterprise Registry Solutions Limited (“ERS”), Credit Risk Management Canada Ltd. (“CRM”), Credit Bureau of Stratford (1970) Limited
(“CBS”), Regulis S.A. (“Regulis”) and 15498465 Canada Inc. (“154”). All intragroup assets and liabilities, equity, income, expenses and cash
flows are eliminated in full on consolidation.
Use of estimates and judgments
The preparation of these consolidated financial statements, in conformity with IFRS Accounting Standards, requires management to make
estimates and underlying assumptions and judgments that affect the accounting policies and reported amounts of assets, liabilities, revenue
and expenses.
Estimates and underlying assumptions are reviewed on an ongoing basis. Actual results may differ from these estimates. Revisions to
accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Critical accounting
estimates and judgments are those that have a significant risk of causing material adjustment. Management believes that the following are
the significant accounting estimates and judgments used in the preparation of the consolidated financial statements:
• the carrying value, impairment and estimated useful lives of intangible assets (Note 8) and goodwill (Note 9);
• the recoverability of deferred tax assets (Note 13); and
• the amount and timing of revenue from contracts from customers recognized over time (Note 21).
The relevant accounting policies in Note 3 contain further details on the use of these estimates and assumptions.
Changes in accounting policies
The Company adopted the following new accounting pronouncements or policies and revised standards, along with any consequential
amendments, effective January 1, 2024, or on such date as they became applicable. These changes were made in accordance with
applicable transitional provisions.
Standard
Description
Amendments to IAS
1 — Classification of
Liabilities as Current
or Non-current
The amendments to IAS 1 affect only the presentation of liabilities as current or non-current in the
statement of financial position and not the amount or timing of recognition of any asset, liability,
income or expense, or the information disclosed about those items.
These amendments clarify that a company must classify a liability as current unless it has the right to
defer settlement of the liability for at least 12 months and that management’s intentions about whether
the company will exercise its rights to defer settlement do not affect classification of liabilities.
These amendments specify that covenants to be complied with after the reporting date do
not affect the classification of debt as current or non-current at the reporting date. Instead, the
amendments require a company to disclose information about these covenants in the notes to the
financial statements.
The Company adopted this amendment to IAS 1 effective January 1, 2024, which has had no impact on
the consolidated financial statements.
Notes to the Consolidated Financial Statements
73
2024 ISC® Annual Report
3 Material Accounting Policy Information
Revenue
The Company recognizes revenue either at a point in time or over time as determined by an analysis of the terms and performance
conditions of each individual customer contract on a contract-by-contract basis. The individual contract terms determine whether, when
and the amount of the revenue recognized.
The Company considers and assesses enforceability, collectability, contract combinations and modifications as part of the revenue
recognition process.
The revenue recognition policies associated with each of the Company’s revenue streams are as follows:
Registry Operations revenue
Registry Operations delivers registry and information services on behalf of governments and private sector organizations. This segment
currently has two major clients: the Government of Saskatchewan and the Government of Ontario.
Our offerings are categorized into three divisions: Saskatchewan Registries, Ontario Property Tax Assessment Services and Other Registries.
Saskatchewan Registries’ division revenue is recognized under the Amended and Restated MSA and is generated by earning fees from
end-use customers through registrations, searches, maintenance transactions and value-added services provided on behalf of the
Government of Saskatchewan.
The majority of the associated transaction fees under the Amended and Restated MSA are based on a flat price per transaction or a
percentage of the transaction value (ad valorem), or stand-alone selling price for each distinct service that is recognized at a point in time.
There is a smaller amount of fees generated under the Amended and Restated MSA related to programs and other registries whereby the
Company earns an annual operating fee or hosting and management fees versus revenue per transaction. Revenue from annual operating
fees and hosting and management contracts is recognized over time on a monthly basis.
A smaller portion of revenue in the Saskatchewan Land Registry is from value-added services and relates to our Geomatics business.
Geomatics revenue is contract dependent, based on the distinct goods or service promised to the customer and is either recognized at a
point in time or over time for support and maintenance contracts.
The Ontario Property Tax Assessment Services division has an exclusive agreement with the Government of Ontario (the “OPTA
Agreement”) by which Ontario Property Tax Assessment Services provides online property tax analysis services to over 440 municipalities
in Ontario, facilitating the management of property tax rates and distribution. Revenue is recognized over time throughout the term of the
OPTA Agreement.
On July 2, 2024, the Company commenced the management and operations of the Bank Act Security Registry (the “BASR”) through an
exclusive agreement with the Bank of Canada. The results of operations of BASR are included in the “Other Registries” division of Registry
Operations. Revenue for the BASR is earned through transaction fees for registration and search services. A flat fee is charged for these
services at the time the services are rendered. ISC collects and retains all fees charged for services under the BASR and records this as
revenue in exchange for paying a quarterly fee to the Bank of Canada, which is calculated based on the percentage of revenue collected.
This fee is accrued monthly and is recorded in cost of goods sold.
Standard
Description
Amendments to
IFRS 16 — Lease
Liability in a Sale and
Leaseback
The amendment clarifies how a seller-lessee subsequently measures sale and leaseback transactions
that satisfy the requirements in IFRS 15 — Revenue from Contracts with Customers to be accounted for
as a sale.
The Company adopted this amendment to IFRS 16 effective January 1, 2024, which has had no impact
on the consolidated financial statements.
Amendments to
IAS 7 and IFRS 7
— Supplier Finance
Arrangements
The amendments add disclosure requirements and ‘signposts’ within existing disclosure requirements
that ask entities to provide qualitative and quantitative information about supplier finance arrangements.
The Company adopted these amendments to IAS 7 and IFRS 7 effective January 1, 2024, which has had
no impact on the consolidated financial statements.
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
74
Amounts received from customers in advance of the satisfaction of our performance obligations are recorded as “contract liabilities” on our
consolidated statements of financial position. Amounts in “contract liabilities” are recognized as revenue as we render services to our
customers.
Services revenue
Services delivers solutions uniting public records data, customer authentication, corporate services, collateral management, asset recovery
and accounts receivable management to support registration, due diligence and lending practices across Canada.
The Company categorizes its Services revenue into three divisions, namely Corporate Solutions, Regulatory Solutions and Recovery
Solutions.
Corporate Solutions captures revenue from nationwide search, business name registration and corporate filing services sold primarily to
legal professionals or to the general public directly or indirectly through our government relationships. It further derives revenue from our
corporate supplies business where our customers include legal professionals and the general public. Revenue for Corporate Solutions is
recognized at a point in time when services are rendered, or goods are delivered.
Regulatory Solutions captures revenue from our Know-Your-Customer, collateral management and general due diligence service offerings.
The Company uses its proprietary platform to assist customers with intuitive business rules and advanced automation to deliver regulatory
services to support their credit/banking and legal processes. Public registry data is leveraged to provide insights and improved customer
experience through a single technology. Our technology is supplemented with deep subject-matter knowledge offered through our legal
professionals in three locations (Montreal, Que.; Toronto, Ont.; and Vernon, B.C.). Revenue for Regulatory Solutions is recognized at a point
in time when services are rendered.
Recovery Solutions offers fully-managed asset recovery accompanied by accounts receivable management services to our customers.
Recovery Solutions allows us to provide our customers with a full service offering across the credit life cycle from origination to recovery.
Asset recovery involves the identification, retrieval and disposal of movable assets such as automobiles, boats, aircraft and other forms of
portable physical assets used as collateral security for primarily consumer-focused credit transactions. Accounts receivable management
involves the Company, as a licenced collection agency, performing recovery services related to past due accounts in both a first-party
capacity representing our customers and a third-party collections capacity. Recovery Solutions revenue in our Services segment includes
administration fees and commissions earned by the provision of asset recovery and accounts receivable management services.
Administration fee revenue is earned over time throughout the management of each asset recovery file or in accordance with each
accounts receivable management contract. Commissions and other revenue is earned at a point in time when services are delivered.
Commissions are not recognized until any variable component can be determined with sufficient certainty such that a significant reversal in
the amount recognized will not occur.
Much of our Services revenue involves interacting with government registries to access public records to provide services to our customers.
For this access, our Services segment usually pays a fee to the government. Where we provide simple searches to our customers,
government fees are not included in our revenue (government fees are recorded on a net basis) as they are passed through to our
customers. Where our services include a number of collateral management services, government fees are a key input to these services and
are recorded in revenue (government fees are recorded on a gross basis) as well as cost of goods sold.
Technology Solutions revenue
Technology Solutions provides the development, delivery and support of registry (and related) technology solutions, generating revenue
through the following:
• sale of software licences related to the technology platform;
• provision of technology solution definition and implementation services; and
• provision of monthly hosting, support and maintenance services.
Licensing revenue is determined by assessing each individual contract to determine whether the licence obligation is distinct from the other
performance obligations within the contract. The Company may have various types of licence obligations depending on the contract:
• If the licence obligation is distinct, the Company determines if the licence should be recognized at a point in time (“right to use”) or over
time (“right to access”) throughout the licence period.
– For contracts that provide the customer with a right to use the Company’s intellectual property (“IP”) at a point in time, licence revenue
is recognized once the technology is available for use and the control over the right to use the IP is transferred to the customer.
Notes to the Consolidated Financial Statements
75
2024 ISC® Annual Report
– For contracts that provide the customer with a right to access the Company’s IP over time, licence revenue is recognized over the
licence period.
• For those contracts where the licence obligation is determined not to be distinct from other performance obligations, the licence
revenue is allocated to the associated performance obligations and recognized upon achievement of performance applicable to
those obligations.
The Company is currently allocating the majority of its licence revenue along with the associated performance obligations and recognizing it
upon achievement of performance applicable to those obligations.
Revenue associated with solution definition and implementation services is recognized either at a point in time or over time depending on
the terms of the contract and the performance obligations therein. Most prevalent are contracts where the revenue is recognized over a
period of time. The Company has an enforceable right to payment for service work done and revenue is recognized over time using an
estimate of the proportion of costs incurred for work performed to date, relative to the total estimated cost of completing the performance
obligations of the contract.
Hosting, support and maintenance revenue is recognized according to the delivery of the performance obligations in the contract and the
stand-alone selling price allocated to the obligations. These services may be provided through either fixed-price, deliverable-based
contracts or fee-for-service contracts. Hosting contracts generally result in linear monthly revenue recognition over the term of the
contract. Service revenue from fixed-price contracts to provide services is recognized by reference to the stage of completion as defined in
the contract when the outcome of the contract can be estimated reliably. Service revenue from time and material contracts is recognized at
the contractual rates as labour hours are delivered and direct expenses are incurred.
Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is considered to exist
where the Company has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic
benefits expected to be received under it.
Amounts received from customers in advance of the satisfaction of our performance obligations are recorded as “contract liabilities” on our
consolidated statements of financial position. Amounts in “contract liabilities” are recognized into revenue either over the service period or
when performance obligations are achieved. Costs the Company incurs related to the fulfilment of a contract, but prior to reaching a
performance milestone, are recorded as a “contract asset” on the consolidated statements of financial position. Once the milestone is
achieved, these costs are recorded in the consolidated statements of comprehensive income.
Share-based compensation plans
The Company has established share-based compensation plans to provide directors and management of the Company with the
opportunity to participate in the long-term success of ISC and promote a greater alignment of interests between its directors, management
and shareholders.
A deferred share unit plan utilizing deferred share units (“DSUs”) and a stock option plan utilizing stock options were approved by the Board
in 2014. In 2020, a long-term incentive plan utilizing performance share units (“PSUs”) and share appreciation rights (“SARs”) was approved
by the Board and it was amended and restated in 2023, to include Restricted Share Units (“RSUs”).
All share-based compensation expenses are recognized in wages and salaries in the consolidated statements of comprehensive income. For
each plan, the Company recognizes compensation expense proportionately over the vesting period. The cumulative carrying value of all
active and recognized stock options is reflected in the equity settled employee benefits reserve in shareholders’ equity in the consolidated
statements of financial position. The fair value of units recognized in all other plans are reflected as obligations in the consolidated
statements of financial position in other liabilities and/or accounts payable and accrued liabilities.
For PSUs, RSUs and DSUs, compensation expense consists of the difference between the fair value of the units recognized at the start and
end of the reporting period plus the value of any units redeemed in the period. The fair value of the PSUs, RSUs and DSUs is based on the
market value of the Company’s Class A Shares on the TSX. Any change in estimate is recognized as an increase or decrease to the liability
and a corresponding charge or credit to expense at the end of the reporting period, as applicable. PSUs, RSUs and DSUs earn dividend
equivalent units (“DEUs”) in the form of additional PSUs, RSUs and DSUs, as applicable, at the same rate as dividends on Class A Shares.
For SARs, the Black-Scholes methodology is used to value each SAR grant when awarded. The inputs used in this valuation are described
below. At the end of each reporting period, the market value of the SARs is equivalent to the market value of the Company’s Class A Shares
in excess of the SARs’ grant value (the “in the money” portion) multiplied by the cumulative number of SAR units active and recognized that
are in the money at the reporting date. Compensation expense consists of the difference between the fair value of the units recognized at
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
76
the start and end of the reporting period plus the value of any units redeemed in the period. Any change in estimate is recognized as an
increase or decrease to the liability and a corresponding charge or credit to expense at the end of the reporting period, as applicable.
For the stock option plan, the Black-Scholes methodology is used to value each option when awarded. The Company has used the following
variables as inputs in the Black-Scholes methodology for the valuation of the SARs and the stock options. The inputs are subject to review
as applicable:
• Option term: the maximum duration before expiry;
• Risk-free rate: estimated based on 10-year Canada bond rate;
• Dividend yield: based on ISC’s three-year average annual yield rate; and
• Equity volatility: based on ISC’s three-year standard deviation of total shareholder return.
More details on each of the share-based compensation plans can be found in Note 14.
Business acquisitions
Business acquisitions are accounted for using the acquisition method. The consideration transferred in a business combination is measured
at fair value, which is calculated at the date of acquisition as the sum of the fair values of the assets transferred by the Company and the
liabilities incurred by the Company to the former owners of the acquiree in exchange for the control of the acquiree. Acquisition costs are
recognized in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair values, except the deferred tax
assets and liabilities, which are recognized and measured in accordance with IAS 12 — Income Taxes.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree
and the fair value of the acquirer’s previously held equity interest in the acquiree, if applicable, over the net of the identifiable assets
acquired and the liabilities assumed at the date of acquisition.
When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent
consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as part of the
consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement
period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are
adjustments that arise from additional information obtained during the “measurement period” (which cannot exceed one year from the
acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in fair value of the contingent consideration that do not qualify as a measurement period
adjustment depends on how the contingent consideration is classified. Contingent consideration classified as equity is not measured at
subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an
asset or a liability is remeasured at subsequent reporting dates in accordance with IFRS 9 — Financial Instruments, or IAS 37 — Provisions,
Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss recognized in net earnings or loss.
Business acquisitions versus asset acquisitions
Acquired businesses are assessed by management and where the acquired operations do not consist of inputs and substantive processes
with the ability to create outputs, the definition of a business is not met and in such cases the acquisition is treated as an asset acquisition.
When there is contingent consideration in an asset acquisition, an accounting policy choice exists whereby an entity may recognize a liability
for the expected variable payments at the time control of the underlying asset is obtained or they may only recognize such a liability as the
related activity that gives rise to the variability occurs. The Company has opted to recognize the liability only when the related activity that
gives rise to the variability occurs.
Property, plant and equipment
Property, plant and equipment are recorded at cost less accumulated depreciation and any provisions for impairment. Cost includes
expenditures that are directly attributable to the acquisition of the asset. The cost of self-developed assets includes materials, services,
direct labour and directly attributable overhead. Interest costs associated with major capital and development projects are capitalized
during the development period. Depreciation of assets under development will commence once they are operational and available for use.
The costs of maintenance, repairs, renewals or replacements that do not extend the productive life of an asset are charged to operations
when incurred. The costs of replacements and improvements that extend the productive life are capitalized.
Notes to the Consolidated Financial Statements
77
2024 ISC® Annual Report
The cost of replacing part 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 Company and its cost can be measured reliably. The carrying amount
of the replaced part is derecognized.
Depreciation is recorded on property, plant and equipment on the straight-line basis, which is the cost of the asset less its residual value over
the estimated productive life of each asset. The useful life of each asset is as follows:
Leasehold improvements
Shorter of lease term or useful life
Office furniture
2–10 years
Office equipment
2–10 years
Hardware
3–4 years
The estimated useful life and depreciation methods are reviewed at the end of each annual reporting period, with the effect of any changes
in estimate being accounted for on a prospective basis. Gains or losses arising from the disposition or retirement of an item of property,
plant and equipment are measured at the difference between the net disposal proceeds and the carrying amount of the asset and are
recognized in the consolidated statements of comprehensive income.
Intangible assets
Intangible assets consist of acquired and internally developed internal-use software and business solutions. They also include externally
acquired contracts, customer and partner relationships, brand, non-competes, other intangible assets and assets under development.
Intangible assets acquired
Internal-use software and business solutions acquired are carried at cost less accumulated amortization and any accumulated impairment
losses. Acquired contracts as well as internal-use software, business solutions, customer and partner relationships, brand, non-competes
and other intangible assets acquired through business combinations are initially recorded at their fair values based on the present value of
expected future cash flows, which involves estimates about future cash flows and discount rates.
Internally generated intangible assets
Research expenditures are expensed while expenditures for internal-use software developed internally and business solutions developed
internally and marketed externally are capitalized only when they meet the recognition criteria for internally generated intangible assets as
provided under IFRS Accounting Standards. An internally generated intangible asset arising from development is recognized if and only if all
of the following have been demonstrated:
• the technical feasibility of completing the intangible asset so that it will be available for use or sale;
• the intention to complete the intangible asset and use or sell it;
• the ability to use or sell the intangible asset;
• how the intangible asset will generate probable future economic benefits;
• the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible
asset; and
• the ability to reliably measure the expenditure attributable to the intangible asset during its development.
The amount initially recognized for an internally generated intangible asset is the sum of the expenditures incurred from the date when
the intangible asset first meets the recognition criteria. If no internally generated intangible asset can be recognized, development
expenditures are charged to operations in the period in which they are incurred. Subsequent to initial recognition, an internally generated
intangible asset is reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as an intangible
asset acquired separately.
Amortization of intangible assets
Amortization is recorded on intangible assets using the straight-line method over the corresponding estimated useful life of the applicable
assets. The estimated useful life and amortization methods are reviewed at the end of each annual reporting period, with the effect of any
changes in estimate being accounted for on a prospective basis. Gains or losses arising from the derecognition of an intangible asset are
measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the consolidated
statements of comprehensive income.
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
78
Internal-use software
3–15 years
Business solutions
3–7 years
Contracts
Term of contract
Customer and partner relationships
5–15 years
Brand, non-competes and other
4–15 years
Assets under development
N/A (not ready for use)
Impairment of tangible and intangible assets
At each statement of financial position date, the Company reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit (“CGU”) to which the asset
belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual CGUs;
otherwise, they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be identified.
Intangible assets not yet available for use are tested for impairment annually in December and whenever there is an indication that the asset
may be impaired.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or
CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An
impairment loss is recognized immediately in comprehensive income.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or CGU) is increased to the revised estimate of its
recoverable amount, insofar as the increased carrying amount does not exceed the carrying amount that would have been determined had
no impairment loss been recognized for the asset (or CGU) in prior years. A reversal of an impairment loss is recognized immediately in
comprehensive income.
Goodwill
Goodwill arising on the acquisition of a business represents the excess of the purchase price over the net fair value of the identifiable assets,
liabilities and contingent liabilities of the acquired business recognized at the date of acquisition. Goodwill is initially recognized as an asset at
cost and is subsequently measured at cost less any accumulated impairment losses.
Impairment of goodwill
For the purpose of impairment testing, goodwill is allocated to the CGUs expected to benefit from the synergies of the combination. CGUs
are tested for impairment annually or more frequently if events indicate that the units may be impaired. The Company’s operating
segments that correspond to the CGUs for impairment testing are disclosed in Note 9.
When the recoverable amount of the CGU is less than the carrying amount of the CGU, the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit and then to the other assets of the CGU on a pro-rata basis. An impairment loss
recognized for goodwill is not reversed in a subsequent year. During the current year, the annual review of goodwill was changed to
September 30 from December 31.
Financial instruments
Financial assets
The Company’s financial assets are classified as either financial assets at fair value through profit or loss (“FVTPL”), fair value through
other comprehensive income (“FVTOCI”) or amortized cost (“AC”). The Company determines the classification of financial assets at
initial recognition.
(i) Financial assets at FVTPL
Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized and
unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTPL are included in profit or loss in the
period in which they arise. The Company does not have any assets classified as FVTPL.
Notes to the Consolidated Financial Statements
79
2024 ISC® Annual Report
(ii) Financial assets at FVTOCI
Financial assets carried at FVTOCI are initially recorded at fair value plus transaction costs with all subsequent changes in fair value
recognized in other comprehensive income (loss). For investments in equity instruments that are not held for trading, the Company can
make an irrevocable election (on an instrument-by-instrument basis) at initial recognition to classify them as FVTOCI. On the disposal of the
investment, the cumulative change in fair value remains in other comprehensive income (loss) and is not recycled to profit or loss.
(iii) Financial assets at AC
Financial assets are classified at AC if the objective of the business model is to hold the financial asset for the collection of contractual cash
flows and the assets’ contractual cash flows solely comprise payments of principal and interest. The Company’s cash and trade and other
receivables are recorded at AC as they meet the required criteria.
Financial liabilities
The Company’s financial liabilities are initially recorded at fair value, net of transaction costs and are subsequently measured at AC, using the
effective interest method, with interest expense recognized on an effective yield basis.
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expenses over the
corresponding period. The effective interest rate is the rate that exactly discounts estimated future cash payments over the expected life of
the financial liability or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
The Company’s financial liabilities include accounts payable and accrued liabilities, excluding share-based accrued liabilities, vendor
concession liability and long-term debt, which are classified at AC.
Below is a summary showing the classification and measurement bases of our financial instruments:
Financial Instrument
IFRS 9 — Financial Instruments
Classification
Measurement
Assets
Cash
AC
Amortized cost using effective interest rate method
Trade and other receivables
AC
Amortized cost using effective interest rate method
Liabilities
Accounts payable and accrued liabilities excluding
share-based accrued liabilities
AC
Amortized cost using effective interest rate method
Vendor concession liability
AC
Amortized cost using effective interest rate method
Long-term debt
AC
Amortized cost using effective interest rate method
Impairment of financial assets
The Company recognizes lifetime expected credit losses (“ECL”) for trade and other receivables. The ECL on these financial assets are
estimated based on the Company’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic
conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value
of money where appropriate. The Company’s credit losses are historically low as most customers with credit are governments, banking
institutions and legal firms with strong credit.
For all other financial instruments, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial
recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Company
measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial
instrument that are possible within 12 months after the reporting date.
Leases
The Company assesses whether a contract is or contains a lease at inception of the contract. The Company recognizes a right-of-use asset and a
corresponding lease obligation for all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term
of 12 months or less) and leases of low-value assets (such as tablets and personal computers, small items of office furniture and telephones). For
these leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless
another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
80
The lease obligation 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 Company uses its incremental
borrowing rate as the discount rate.
Lease payments included in the measurement of the lease obligation are comprised of the following:
• fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
• amounts expected to be payable under a residual value guarantee;
• the exercise price under a purchase option that the Company is reasonably certain to exercise and lease payments in an optional renewal
period if the Company is reasonably certain not to terminate early; and
• payments of penalties for terminating the lease if the lease term reflects the exercise of an option to terminate the lease.
The lease obligation is presented in the consolidated statements of financial position with current and long-term classifications.
The lease obligation is subsequently measured by increasing the carrying amount to reflect the interest on the lease obligation (using the
effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Company remeasures the lease obligation (and makes a corresponding adjustment to the related right-of-use asset) whenever:
• the lease term has changed, or there is a significant event or change in circumstances resulting in a change in the assessment of exercise
of a purchase option, in which case the lease obligation is remeasured by discounting the revised lease payments using a revised
discount rate;
• the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in
which cases the lease obligation is remeasured by discounting the revised lease payment using an unchanged discount rate (unless the
lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used); and
• a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease obligation is
remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the
effective date of the modification.
Right-of-use assets comprise the initial measurement of the corresponding lease obligation and lease payments made at or before the
commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located, or
restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognized and measured
under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those
costs are incurred to produce inventories.
Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the right-of-use asset. If a lease transfers
ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the
related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of
the lease.
Right-of-use assets are presented as a separate line in the consolidated statements of financial position.
The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as
described in the “Property, Plant and Equipment” policy.
Variable rents that do not depend on an index or rate are not included in the measurement of the lease obligation and the right-of-use asset.
The related payments are recognized as an expense in the period in which the event or condition that triggers those payments occurs and
are included in the line “occupancy costs” in the consolidated statements of comprehensive income.
As a practical expedient, IFRS 16 — Leases permits a lessee not to separate non-lease components and instead, account for any lease and
associated non-lease components as a single arrangement. The Company has not used this practical expedient. For contracts that contain a
lease component and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to
each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the
non-lease components at amortized cost using the effective interest method.
Notes to the Consolidated Financial Statements
81
2024 ISC® Annual Report
Foreign currency
The individual financial statements of each subsidiary entity are presented in the currency of the primary economic environment in which
the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of
each subsidiary entity are presented in Canadian dollars, which is the functional currency of the parent company and the presentation
currency for the consolidated financial statements.
In preparing the individual subsidiaries’ financial statements, transactions in currencies other than the entity’s functional currency (foreign
currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period,
monetary items denominated in foreign currencies are translated at the rates prevailing at that date. Exchange differences are recognized in
earnings in the period in which they arise. Non-monetary items carried at fair value that are denominated in foreign currencies are translated
at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not translated.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Company’s foreign operations are
expressed in Canadian dollars using exchange rates prevailing at the end of the reporting period. Income and expense items are translated
at the average exchange rates for the period. Foreign currency gains and losses are recognized in other comprehensive income. The
relevant amount in the cumulative foreign currency translation adjustment is reclassified into earnings upon disposition or partial disposition
of a foreign operation and attributed to non-controlling interests as appropriate.
Recent accounting pronouncements
The IASB and IFRS Interpretations Committee (“IFRIC”) issued the following new standards and amendments to standards and
interpretations, which become effective for future periods:
Proposed Standard
Description
Effective Date
Amendments to
IAS 21 — Lack of
Exchangeability
The amendments to IAS 21 contain guidance to specify when a currency is
exchangeable and how to determine the exchange rate when it is not.
The amendment is effective for annual periods beginning on or after January 1, 2025.
The Company has assessed the impact of the adoption of this amendment and it is not
expected to have an impact on the Company’s consolidated financial statements.
January 1, 2025
Amendments to
IFRS 9 and IFRS 7 —
Classification and
Measurement of
Financial Instruments
The amendments address matters identified during the post-implementation review of
the classification and measurement requirements of IFRS 9 — Financial Instruments.
The amendments include clarifications on the derecognition of financial liabilities
settled through electronic transfer and the classification of financial assets with
environmental, social and governance-linked features.
The amendments are effective for annual periods beginning on or after January 1,
2026. The amendments are currently being assessed by the Company to determine
the impact.
January 1, 2026
IFRS 18 —
Presentation and
Disclosures in
Financial Statements
The standard includes requirements for all entities applying IFRS for the presentation
and disclosure of information in financial statements.
The standard is effective for annual periods beginning on or after January 1, 2027. The
standard is currently being assessed by the Company to determine the impact.
January 1, 2027
IFRS 19 —
Subsidiaries Without
Public Accountability:
Disclosures
The new standard specifies the disclosure requirements an eligible subsidiary is
permitted to apply instead of the disclosure requirements in other IFRS Accounting
Standards.
The standard is effective for annual periods beginning on or after January 1, 2027.
The Company has assessed the impact of the adoption of the standard and it is not
expected to have an impact on the Company’s consolidated financial statements.
January 1, 2027
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
82
4 Trade and Other Receivables
The components of trade and other receivables are as follows:
December 31,
December 31,
(thousands of CAD)
2024
2023
Trade receivables
$
15,765
$
14,607
GST/HST/VAT receivables
348
296
Other
665
770
Total trade and other receivables
$
16,778
$
15,673
5 Contract Assets
The components of contract assets are as follows:
December 31,
December 31,
(thousands of CAD)
2024
2023
Unbilled revenue
$
5,206
$
2,104
Contract fulfilment costs
925
545
Total contract assets
$
6,131
$
2,649
Unbilled revenue represents the aggregate asset value on the consolidated statements of financial position of all instances where revenue
has been recognized but not yet invoiced to the customer. Contract assets in this category are reclassified to trade receivables when the
customer is invoiced.
Contract fulfilment costs are costs the Company incurs related to the fulfilment of performance obligations in contracts where revenue is
recognized over time, but prior to reaching a performance milestone. Once the milestone is achieved, these costs, along with the associated
revenue, will be recognized in the consolidated statements of comprehensive income. Contract fulfilment costs also include payments for
recovery services, which are reimbursed to the Company by customers that have contracted the services. Once this reimbursement occurs,
this revenue is recognized in the consolidated statements of comprehensive income on a net basis with these costs.
The Company does not have any contract acquisition costs at the end of the reporting period and did not recognize any amortization of
contract acquisition costs during the year (2023 — nil).
There were no impairment losses recognized on any contract asset during the reporting period (2023 — nil).
Notes to the Consolidated Financial Statements
83
2024 ISC® Annual Report
6 Property, Plant and Equipment
Leasehold
Office
Office
Assets Under
(thousands of CAD)
Improvements
Furniture
Equipment
Hardware
Development
Total
Cost
Balance at January 1, 2023
$
8,112
$
2,933
$
156
$
3,687
$
–
$ 14,888
Additions
3
–
–
317
679
999
Disposals
–
(391)
(1)
(1,022)
–
(1,414)
Transfers
13
–
–
9
(22)
–
Foreign exchange adjustments
–
–
–
2
–
2
Balance at December 31, 2023
$
8,128
$
2,542
$
155
$
2,993
$
657
$ 14,475
Additions
451
84
7
299
–
841
Disposals
(12)
–
–
(379)
–
(391)
Transfers
303
164
190
–
(657)
–
Foreign exchange adjustments
6
2
–
4
–
12
Balance at December 31, 2024
$ 8,876
$ 2,792
$
352
$ 2,917
$
–
$ 14,937
Accumulated depreciation
Balance at January 1, 2023
$
7,272
$
2,732
$
152
$
2,919
$
–
$ 13,075
Depreciation
254
38
2
417
–
711
Disposals
–
(391)
(1)
(1,022)
–
(1,414)
Foreign exchange adjustments
–
–
–
2
–
2
Balance at December 31, 2023
$
7,526
$
2,379
$
153
$
2,316
$
–
$ 12,374
Depreciation
371
47
40
313
–
771
Disposals
(12)
–
–
(379)
–
(391)
Foreign exchange adjustments
–
1
–
2
–
3
Balance at December 31, 2024
$ 7,885
$ 2,427
$
193
$ 2,252
$
–
$ 12,757
Carrying value
At December 31, 2023
$
602
$
163
$
2
$
677
$
657
$
2,101
At December 31, 2024
$
991
$
365
$
159
$
665
$
–
$ 2,180
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
84
7 Right-of-use Assets
(thousands of CAD)
Property and Equipment1
Cost
Balance at January 1, 2023
$
18,090
Additions and modifications
3,430
Disposals
(311)
Foreign exchange adjustments
12
Balance at December 31, 2023
$
21,221
Additions and modifications
23
Disposals
(9,002)
Foreign exchange adjustments
33
Balance at December 31, 2024
$
12,275
Accumulated depreciation
Balance at January 1, 2023
$
10,537
Depreciation
2,311
Disposals
(311)
Foreign exchange adjustments
2
Balance at December 31, 2023
$
12,539
Depreciation
2,726
Disposals
(9,002)
Foreign exchange adjustments
10
Balance at December 31, 2024
$
6,273
Carrying value
At December 31, 2023
$
8,682
At December 31, 2024
$
6,002
1 The Company’s right-of-use assets consist primarily of property leases associated with the lease of office space.
Notes to the Consolidated Financial Statements
85
2024 ISC® Annual Report
8 Intangible Assets
Internal Use
Business
Contracts,
Internal Use
Software –
Business
Solutions –
Brand, Non-
Customer
Assets
Software –
Internally
Solutions –
Internally
competes,
and Partner
Under
(thousands of CAD)
Acquired
Developed
Acquired
Developed
Other Relationships Development
Total
Cost
Balance at January 1, 2023
$ 31,407 $ 78,724 $
2,033 $
6,719 $
2,222 $ 96,812 $
4,089 $ 222,006
Acquired assets
–
–
–
–
–
277,634
–
277,634
Additions
–
–
–
–
–
–
2,588
2,588
Disposals
(43)
–
–
–
–
–
–
(43)
Transfers
–
1,585
–
373
–
–
(1,958)
–
Foreign exchange adjustments
–
–
14
19
–
9
24
66
Balance at December 31, 2023 $ 31,364 $ 80,309 $
2,047 $
7,111 $
2,222 $ 374,455 $
4,743 $ 502,251
Acquired assets
–
–
–
–
–
879
–
879
Additions
–
–
–
–
–
–
6,874
6,874
Disposals
(48)
(86)
–
(1,312)
–
–
–
(1,446)
Transfers
–
375
–
1,202
–
–
(1,577)
–
Foreign exchange adjustments
–
–
38
67
–
40
89
234
Balance at December 31, 2024 $ 31,316 $ 80,598 $ 2,085 $ 7,068 $ 2,222 $ 375,374 $ 10,129 $ 508,792
Accumulated depreciation
Balance at January 1, 2023
$ 22,069 $ 77,689 $
1,751 $
4,579 $
704 $ 26,221 $
– $ 133,013
Amortization
3,042
669
262
659
278
12,574
–
17,484
Disposals
(43)
–
–
–
–
–
–
(43)
Foreign exchange adjustments
–
–
12
11
–
4
–
27
Balance at December 31, 2023
$ 25,068 $ 78,358 $
2,025 $
5,249 $
982 $ 38,799 $
– $ 150,481
Amortization
2,943
764
22
917
900
18,530
–
24,076
Disposals
(48)
(86)
–
(1,312)
–
–
–
(1,446)
Foreign exchange adjustments
–
–
38
38
–
12
–
88
Balance at December 31, 2024 $ 27,963 $ 79,036 $ 2,085 $ 4,892 $ 1,882 $ 57,341 $
– $ 173,199
Carrying value
At December 31, 2023
$
6,296 $
1,951 $
22 $
1,862 $
1,240 $ 335,656 $
4,743 $ 351,770
At December 31, 2024
$
3,353 $ 1,562 $
– $ 2,176 $
340 $ 318,033 $ 10,129 $ 335,593
As part of the Regulis asset acquisition in 2022, the Company agreed to pay €0.6 million of additional consideration contingent upon
commencement of operations of the International Registry of Interests in Rolling Stock (“the Registry”) and up to €1.0 million in contingent
consideration payable over a period of 10 years based on a percentage of revenue generated by the Registry as set out in the share
purchase agreement. In the first quarter of 2024, the Registry commenced operations and, as a result, a payment of $0.9 million (€0.6
million) was made and recognized as an acquired contract intangible asset.
In 2023, ISC entered into the Amended and Restated MSA extending the term of the MSA from May 2033 to July 2053. The consideration
to be paid includes an upfront cash payment of $150 million (“Upfront Payment”), which was paid during 2023, five annual cash payments
of $30 million per year, which commenced in July 2024 (the “Subsequent Payments”) and annual contingent payments potentially payable
after 2033 if certain volume growth criteria are met. In addition, annual cost contribution amounts of $0.5 million over the 30-year term will
continue. In 2023, ISC capitalized the extension of the right to manage and operate the Saskatchewan Registries in accordance with IAS 38.
The liability for the contingent payments will only be recognized in the consolidated statement of financial position and consolidated
statement of comprehensive income as the related activity that gives rise to the variability occurs. Directly attributable costs of $3.4 million
were capitalized in 2023 as part of this intangible asset. The payments and directly attributable costs have been present valued in
accordance with IFRS 9 — Financial Instruments and included in acquired assets.
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
86
9 Goodwill
The components of goodwill are as follows:
December 31,
December 31,
(thousands of CAD)
2024
2023
Balance, beginning of year
$
101,266
$
101,240
Additions
–
–
Foreign exchange adjustment
74
26
Balance, end of year
$
101,340
$
101,266
For the purposes of the annual impairment testing, goodwill is allocated to the following CGUs, which are the groups of units expected to
benefit from the synergies of the business combinations:
December 31,
December 31,
(thousands of CAD)
2024
2023
Registry Operations
$
21,098
$
21,098
Services
71,537
71,537
Technology Solutions
8,705
8,631
Balance, end of year
$
101,340
$
101,266
The Company performs a goodwill impairment test annually and whenever there is an indication of impairment. During the current year, the
annual goodwill impairment test was changed to September 30 from December 31. The change was made to more closely align the
impairment testing date with our strategic and annual operating planning and forecasting process. No impairment of goodwill was identified
as a result of the Company’s most recent annual impairment test.
The Company uses the traditional cash flow approach for determining value in use for the Registry Operations segment, while value in use
for each of the Services and Technology Solutions segments was determined using the expected cash flow approach. The Company uses
the discounted cash flow method to determine the recoverable amount, which required management to make estimates and assumptions
related to revenue forecasts, related party costs, direct employee costs, corporate cost allocations, perpetual growth rates and discount
rates. The estimates and assumptions are highly sensitive to changes in customer demand and changes in the assumptions could
significantly impact the recoverable amount, the amount of any goodwill impairment charge, or both. In all cases, the operating and
investing cash flows of the segments used the Company’s most recent five-year plan (“multi-year plan”), with assumptions based on
experience and future expectations for business performance.
Registry Operations
Key assumptions for this segment include the performance of the Saskatchewan economy, revenue growth, related party costs, corporate
cost allocations required to support infrastructure and future technological investment. In 2024, annual impairment testing for this segment
used a pre-tax discount rate of 14.0 per cent (2023 — 14.4 per cent) and a perpetual growth rate of 2.0 per cent (2023 — 2.0 per cent). Given
the strong cash flow in Registry Operations relative to the size of goodwill, the risk of impairment is remote and as a result the traditional
cash flow approach was used for this segment.
Services
Key assumptions for this segment include the performance of the Canadian economy, revenue growth, including attracting new customers
and adding incremental value to existing customers, related party costs, corporate cost allocations required to support infrastructure and
future technological investment in and related to this infrastructure. The most material estimates and assumptions include revenue
forecasts, perpetual growth rates and discount rates. Performance during the multi-year planning period is consistent with past
performance, which experienced growth in operating cash flow in excess of the perpetual growth rate of 2.75 per cent (2023 — 2.75 per
cent) used in the annual test. In 2024, annual impairment testing for this segment used a pre-tax discount rate of 17.1 per cent (2023 — 17.8
per cent).
Technology Solutions
Key assumptions for this segment, which has operations in both Ireland and Canada, include revenue growth, the ability to attract new
customers, actual contract delivery performance compared to the level of performance anticipated when the contract was negotiated, the
level of support required by related party customers, direct employee costs and corporate cost allocations required to support
Notes to the Consolidated Financial Statements
87
2024 ISC® Annual Report
infrastructure, as well as future technological investment in and related to intellectual property. The estimates and assumptions with the
highest degree of subjectivity are revenue forecasts, perpetual growth rates and discount rates. This segment was negatively impacted by
COVID-19 as governments deferred registry projects and redirected attention to the preservation of the health and safety of their
populations. During the latter part of 2022, there was renewed procurement activity, which has generated an active pipeline of
opportunities as well as new solution definition and implementation contracts that are currently in the process of being delivered. This
renewed procurement activity and new customer contracts to be delivered during the multi-year planning period have resulted in segment
expectations returning to those consistent with pre-COVID-19 performance/trends, which experienced growth in operating cash flow in
excess of the perpetual growth rate of 2.0 per cent (2023 — 2.0 per cent) used in the annual impairment test. In 2024, annual impairment
testing for this segment used a pre-tax discount rate of 16.1 per cent (2023 — 17.1 per cent) in its Canada-based operations and 15.7 per cent
(2023 — 17.1 per cent) in its Ireland-based operations.
10 Accounts Payable and Accrued Liabilities
The components of accounts payable and accrued liabilities are as follows:
December 31,
December 31,
(thousands of CAD)
2024
2023
Trade payables
$
6,390
$
6,842
Accrued liabilities
17,202
12,941
Customer deposits
4,907
4,400
Dividend payable
4,258
4,141
Share-based accrued liabilities
8,024
7,790
Total accounts payable and accrued liabilities
$
40,781
$
36,114
Included in accrued liabilities is a provision for onerous contracts that relates to an ongoing investment in contracted work.
11 Contract Liabilities
The components of contract liabilities are as follows:
December 31,
December 31,
(thousands of CAD)
2024
2023
Amounts received in advance of Registry Operations’ Saskatchewan Registries
division maintenance and support contracts (i)
$
166
$
232
Amounts received in advance of Technology Solutions support
and delivery contracts (ii)
2,835
2,532
Total contract liabilities
$
3,001
$
2,764
(i) Revenue that relates to Registry Operations’ Saskatchewan Registries division maintenance and support contracts is recognized over time, while all other Saskatchewan
Registries division revenue is recognized at a point in time. A contract liability is recognized for payments received from end-use customers in advance of services being
provided and is recognized into revenue either at the point in time the service is rendered or over the service period.
(ii) Revenue and other income related to Technology Solutions contracts is recognized over time as the performance obligations in the contract are achieved. These
obligations may be based on a time period or on performance against commitments identified in the contract. A contract liability is recognized for payments received from
customers in advance and is recognized into revenue either over the service period or when performance against contractual commitments is achieved.
Revenue recognized during the year that had been included in the contract liability balance at the beginning of the year is as follows:
Year Ended December 31,
(thousands of CAD)
2024
2023
Registry Operations’ Saskatchewan Registries division maintenance and support contracts $
232
$
320
Technology Solutions support and delivery contracts
181
962
Total revenue recognized that was included in the balance at the
beginning of the year
$
413
$
1,282
The Company has elected to apply the practical expedient as per IFRS 15 B16 and does not disclose the value of unsatisfied performance
obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue
at the amount to which it has the right to invoice for services performed.
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
88
12 Lease Obligations
Year Ended December 31,
(thousands of CAD)
2024
2023
Balance, beginning of year
$
9,864
$
8,807
Additions
23
3,430
Interest expense
485
400
Effect of modification to lease terms
–
–
Lease payments1
(3,301)
(2,783)
Foreign exchange adjustments
24
10
Balance, end of year
$
7,095
$
9,864
1 Lease payments net of interest expense represent the principal portion of lease payments reflected on the consolidated statements of cash flows.
The Company’s lease obligations consist primarily of property leases associated with the lease of office space. Expenses for short-term leases
and leases of low-dollar-value items are not material. All extension options have been considered in the measurement of lease obligations.
The following table presents the contractual undiscounted cash flows for lease obligations:
Year Ended December 31,
(thousands of CAD)
2024
2023
Year 1
$
2,054
$
3,293
Year 2
1,767
2,044
Year 3
1,651
1,757
Year 4
1,541
1,641
Year 5
625
1,530
Thereafter
412
1,036
Balance, end of year
$
8,050
$
11,301
Unearned interest
(955)
(1,437)
Balance, end of year
$
7,095
$
9,864
Reflected as:
Lease obligations – current portion
$
1,688
$
2,809
Lease obligations
5,407
7,055
Balance, end of year
$
7,095
$
9,864
13 Tax Provision
The Company is subject to federal and provincial income taxes at an estimated combined statutory rate of 27.0 per cent (2023 — 27.0 per cent).
Year Ended December 31,
(thousands of CAD)
2024
2023
Current tax expense
$
13,993
$
9,900
Deferred tax recovery
(5,309)
(155)
Income tax expense
$
8,684
$
9,745
Notes to the Consolidated Financial Statements
89
2024 ISC® Annual Report
Income tax expense varies from the amounts that would be computed by applying the combined statutory income tax rate to earnings
before taxes for the following reasons:
Year Ended December 31,
(thousands of CAD)
2024
2023
Income before tax
$
28,925
$
34,790
Combined statutory income tax rate
27.00%
27.00%
Expected income tax expense
7,810
9,393
Increase (decrease) in income tax resulting from:
Non-deductible expenses
95
223
Income tax rate differential
502
19
Change in unrecognized deferred tax assets
278
100
Other
(1)
10
Income tax expense
$
8,684
$
9,745
Income tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities are as follows:
Net Balance
Recognized
Foreign
Net Balance
January 1,
in Profit
Exchange
December 31,
Deferred
Deferred
(thousands of CAD)
2024
or Loss
Movement
Acquisitions
2024
Tax Asset
Tax Liability
Property, plant
and equipment
$
264
$
(9) $
–
$
–
$
255
$
146
$
109
Right-of-use assets
(2,140)
690
(3)
–
(1,453)
(704)
(749)
Intangible assets
20,628
2,300
–
–
22,928
29,623
(6,695)
Goodwill
(2,201)
(381)
–
–
(2,582)
–
(2,582)
Non-capital losses
1,343
803
7
–
2,153
2,153
–
Lease obligations
2,444
(715)
3
–
1,732
923
809
Vendor concession liability
(9,845)
2,615
–
–
(7,230)
(7,230)
–
Share-based compensation
and other
2,422
6
–
–
2,428
2,428
–
Net deferred tax
assets (liabilities)
$ 12,915
$
5,309
$
7
$
–
$
18,231
$ 27,339
$
(9,108)
Net Balance
Recognized
Foreign
Net Balance
January 1,
in Profit
Exchange
December 31,
Deferred
Deferred
(thousands of CAD)
2023
or Loss
Movement
Acquisitions1
2023
Tax Asset
Tax Liability
Property, plant
and equipment
$
196
$
68
$
–
$
–
$
264
$
177
$
87
Right-of-use assets
(1,806)
(334)
–
–
(2,140)
(1,121)
(1,019)
Intangible assets
10,526
(914)
1
11,015
20,628
29,807
(9,179)
Goodwill
(1,799)
(402)
–
–
(2,201)
–
(2,201)
Non-capital losses
703
635
5
–
1,343
1,338
5
Lease obligations
2,131
313
–
–
2,444
1,394
1,050
Vendor concession liability
–
1,170
–
(11,015)
(9,845)
(9,845)
–
Share-based compensation
and other
2,805
(381)
(2)
–
2,422
2,422
–
Net deferred tax
assets (liabilities)
$
12,756
$
155
$
4
$
–
$
12,915
$ 24,172
$ (11,257)
1 See Notes 8 and 16.
In assessing the recovery of deferred tax assets, management considers whether it is probable that the deferred tax assets will be realized.
The recognition and measurement of the current and deferred tax assets and liabilities involves dealing with uncertainties in the application
of complex tax regulations and in the assessment of the recoverability of the deferred tax assets. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the periods in which the temporary differences are deductible.
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
90
Actual income taxes could vary from these estimates as a result of future events, including changes in income tax laws or the outcome of
tax reviews by tax authorities and related appeals. To the extent the outcome is different from the amounts initially recorded, such
differences, which could be significant, will impact the tax provision in the period in which the outcome is determined.
No deferred tax has been recognized in respect of temporary differences associated with investments in the Company’s subsidiaries where
the Company can control the timing and reversal of the temporary differences and it is probable that such differences will not reverse in the
foreseeable future.
At December 31, 2024, a deferred tax asset of $0.9 million (2023 — $0.4 million) has been recognized in respect of $6.8 million of tax losses
(2023 — $3.3 million) related to ERS. Management anticipates that ERS will earn sufficient future taxable income to utilize the tax losses,
which do not expire. A deferred tax asset of $1.1 million (2023 — $0.8 million) has been recognized at December 31, 2024, in respect of $4.0
million of tax losses (2023 — $2.9 million) related to CRM. Management anticipates that CRM will earn sufficient future taxable income to
utilize the tax losses, which do not commence expiry until 2042.
14 Share-Based Compensation Plans
The Company has established share-based compensation plans to provide directors and management of the Company with the
opportunity to participate in the long-term success of ISC and to promote a greater alignment of interests between its directors,
management and shareholders.
Share-based compensation expenses are recognized in wages and salaries on the consolidated statements of comprehensive income:
Year Ended December 31,
(thousands of CAD)
2024
2023
Performance share units
$
834
$
735
Share appreciation rights
3,469
(689)
Deferred share units
1,244
237
Restricted share units
42
–
Share-based compensation expense
$
5,589
$
283
Market price, beginning of year
$
22.18
$
24.17
Market price, end of year
$
26.19
$
22.18
Performance share units
Introduced in 2019, PSUs are granted with the objective of recognizing and rewarding management for performance and retention.
A PSU is a notional unit equivalent to a Class A Share granted by the Company to the participant, entitling such participant to receive the
PSU payment value, which is conditional on attaining specific PSU performance criteria.
PSU awards vest at the end of the specified vesting period – currently three years – if the performance conditions determined by the Board
in the grant agreement are met. PSUs earn dividend equivalent units in the form of additional PSUs at the same rate as dividends on Class A
Shares. The cash redemption value of the PSUs is equivalent to the market value of the Class A Shares when redemption takes place,
multiplied by a multiplier based on the grant agreement and the performance against the performance conditions as specified. The
maximum PSU payout multiplier is 150.0 per cent.
Notes to the Consolidated Financial Statements
91
2024 ISC® Annual Report
On the settlement date, the Company delivers to each participant a cash payment equal to the redemption value of the PSU. A summary of
the status of the PSU plan and the changes within the years ended December 31, 2024 and 2023, is as follows:
Total Units
Units
Short-Term
Long-Term
Total
(thousands of CAD, except number of units)
Granted
Recognized
Liability1
Liability2
Liability3
Balance at January 1, 2023
86,935
65,072
Units proportionally recognized in the
current period, from previous grants
–
14,517
August 14, 2023 grant
28,648
9,523
Dividend units
3,384
3,384
PSUs redeemed
(41,805)
(41,805)
PSUs forfeited
(5,202)
(2,732)
Balance at December 31, 2023
71,960
47,959
$
1,137
$
205
$
1,342
Balance at January 1, 2024
71,960
47,959
Units proportionally recognized in the
current period, from previous grants
–
15,255
March 21, 2024 grant
27,297
9,099
Dividend units
2,588
2,588
PSUs redeemed
(21,444)
(21,444)
PSUs forfeited
(2,677)
(2,677)
Balance at December 31, 2024
77,724
50,780
$ 1,201
$
263
$
1,464
1 Included within accounts payable and accrued liabilities on the consolidated statements of financial position.
2 Included within other non-current liabilities on the consolidated statements of financial position.
3 The liability balances include the impact of estimated performance adjustments by individual grant year.
Fully Vested Units:
Units Vested
Balance at December 31, 2023
24,121
Balance at December 31, 2024
21,779
Share appreciation rights
Introduced in 2019, SARs are granted with the objective of recognizing and rewarding management for creating sustainable, long-term
shareholder value, as well as retention. A SAR is a right granted by the Company to a participant to receive a cash payment equal to any
appreciation in the Class A Shares in excess of the SAR price at the grant date during a specified period.
SAR awards vest and become exercisable at a rate of 25.0 per cent on each anniversary of the grant date beginning with the first
anniversary, unless an alternate vesting schedule is specified by the Board at the time of the award. SARs expire eight years after the grant
date.
The participant is able to exercise the SARs as they vest. The cash redemption value of the SARs is equivalent to the excess of the market
value of the Class A Shares at the exercise date over the SAR price in the grant agreement.
On the settlement date, the Company delivers to each participant a cash payment equal to the redemption value of the SARs.
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
92
A summary of the status of the SAR plan and the changes within the years ended December 31, 2024 and 2023, is as follows:
Weighted
FV Market
Average
Price at
(thousands of CAD, except number
Award
Reporting
Units
Short-Term
Long-Term
Total
of units and per unit prices)
Units
Price
Period
Recognized
Liability1
Liability2
Liability
Balance at January 1, 2023
724,908
$
17.37 $
24.17
597,757
SARs proportionately recognized
in the year from grants awarded
in previous years
–
$
–
86,793
SARs granted August 14, 2023
78,270
$
24.64
15,496
SARs redeemed
(40,448)
$
16.45
(40,448)
SARs forfeited
(21,941)
$
21.14
(14,413)
Balance at December 31, 2023
740,789
$
18.08 $
22.18
645,185
$
2,924
$
509
$
3,433
Balance at January 1, 2024
740,789
$
18.08 $
22.18
645,185
SARs proportionately recognized
in the year from grants awarded
in previous years
–
$
–
58,687
SARs granted March 21, 2024
73,552
$
25.99
29,910
SARs redeemed
(337,471)
$
16.20
(337,471)
SARs forfeited
–
$
–
–
Balance at December 31, 2024 476,870
$
20.63 $
26.19
396,311
$
2,346
$
223
$
2,569
1 Included within accounts payable and accrued liabilities on the consolidated statements of financial position.
2 Included within other non-current liabilities on the consolidated statements of financial position.
Fully Vested Units:
Units Vested
Balance at December 31, 2023
484,769
Balance at December 31, 2024
278,848
A summary of the ending balance of the SAR plan for the years ended December 31, 2024 and 2023, is as follows:
(thousands of CAD, except number
Total Number
Number of
Grant
End of Year
Total
of units and per unit prices)
of Units
Units Accrued
Price
Share Price
Liability
Granted November 18, 2019
75,816
75,816
$
16.11
$
26.19
$
764
Granted March 26, 2020
106,880
106,880
$
13.71
$
26.19
$
1,334
Granted March 25, 2021
70,470
68,768
$
23.86
$
26.19
$
160
Granted March 24, 2022
76,906
69,209
$
22.81
$
26.19
$
234
Granted August 14, 2023
73,246
45,728
$
24.64
$
26.19
$
71
Granted March 21, 2024
73,552
29,910
$
25.99
$
26.19
$
6
Balance at December 31, 2024
476,870
396,311
$
2,569
(thousands of CAD, except number
Total Number
Number of
Grant
End of Year
Total
of units and per unit prices)
of Units
Units Accrued
Price
Share Price
Liability
Granted November 18, 2019
214,590
214,590
$
16.11
$
22.18
$
1,302
Granted March 26, 2020
255,334
251,576
$
13.71
$
22.18
$
2,131
Granted March 25, 2021
117,095
105,770
$
23.86
$
22.18
$
–
Granted March 24, 2022
80,524
58,748
$
22.81
$
22.18
$
–
Granted August 14, 2023
73,246
14,501
$
24.64
$
22.18
$
–
Balance at December 31, 2023
740,789
645,185
$
3,433
Notes to the Consolidated Financial Statements
93
2024 ISC® Annual Report
Deferred share units
The Company has established a DSU plan to provide directors of ISC with the opportunity to participate in the long-term success of ISC and
to promote a greater alignment of interests between its directors and shareholders. The Board may award DSUs at its discretion, from time
to time, in accordance with the plan and upon such other terms and conditions as the Board may prescribe. DSU awards vest according to
the vesting schedule approved by the Board at the time of the award.
DSUs earn dividend equivalent units in the form of additional DSUs at the same rate as dividends on Class A Shares. The participant is not
allowed to redeem the DSUs until termination of employment/directorship or death. The cash value of the DSUs is equivalent to the market
value of the Class A Shares when redemption takes place.
On each applicable redemption date, the Company delivers to each participant a cash payment equal to the redemption value of the DSUs,
or an equivalent number of Class A Shares purchased on the TSX. A summary of the status of the DSU plan and the changes within the
years ended December 31, 2024 and 2023, is as follows:
Short-Term
(thousands of CAD, except number of units)
Units
Units Recognized
Liability1
Balance at January 1, 2023
145,713
144,474
Units proportionally recognized in the current period, from previous grants
–
1,239
DSUs granted August 8, 2023
16,840
15,947
DSUs credited as a result of cash dividends paid
6,462
6,462
DSUs redeemed
–
–
DSUs forfeited
–
–
Balance at December 31, 2023
169,015
168,122
$
3,729
Balance at January 1, 2024
169,015
168,122
Units proportionally recognized in the current period, from previous grants
-
893
DSUs granted May 15, 2024
16,224
15,548
DSUs credited as a result of cash dividends paid
5,757
5,757
DSUs redeemed
(19,405)
(19,405)
DSUs forfeited
–
–
Balance at December 31, 2024
171,591
170,915
$
4,476
1 Included within accounts payable and accrued liabilities on the consolidated statements of financial position.
Fully Vested Units:
Units Vested
Balance at December 31, 2023
164,717
Balance at December 31, 2024
167,416
The fair value of the DSUs at December 31, 2024, has been calculated using the market value of the Company’s Class A Shares on the TSX.
Restricted share units
Introduced in 2023, RSUs are granted with the objective to aid in retention and succession planning for non-executive employees. RSU
awards vest according to the vesting schedule approved by the Board at the time of the award and the vesting period does not exceed
three years.
RSUs earn dividend equivalent units in the form of additional RSUs at the same rate as dividends on Class A Shares. The cash value of the
RSUs is equivalent to the market value of the Class A Shares when redemption takes place.
On each applicable redemption date, the Company delivers to each participant a cash payment equal to the redemption value of the RSUs,
or an equivalent number of Class A Shares purchased on the TSX. A summary of the status of the RSU plan and the changes within the
years ended December 31, 2024 and 2023, is as follows:
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
94
Long-Term
thousands of CAD, except number of units)
Units
Units Recognized
Liability1
Balance at January 1, 2024
–
–
Units proportionally recognized in the current period, from previous grants
–
–
RSUs granted June 3, 2024
4,445
1,482
RSUs credited as a result of cash dividends paid
115
115
RSUs redeemed
–
–
RSUs forfeited
–
–
Balance at December 31, 2024
4,560
1,597
$
42
1 Included within other non-current liabilities on the consolidated statements of financial position.
Fully Vested Units:
Units Vested
Balance at December 31, 2023
–
Balance at December 31, 2024
–
The fair value of the RSUs at December 31, 2024, has been calculated using the market value of the Company’s Class A Shares on the TSX.
Stock options
The Company established a stock option plan approved by shareholders in 2014 and subsequently amended and restated at various points.
The exercise price of options issued under the stock option plan is determined by the Board at the time of the grant but shall not be less
than the closing price for the Class A Shares on the TSX on the trading day immediately preceding the date of the grant.
Unless the Board determines otherwise, options granted will vest and become exercisable in equal tranches over the four years following
the date of the grant. Once vested, options may be exercised at any time within eight years of the date of the grant, after which they expire
and terminate.
A summary of the status of the stock option plan and the changes within the years ended December 31, 2024 and 2023, is as follows:
2024 2023
Weighted Average
Weighted Average
Units
Exercise Price
Units
Exercise Price
Outstanding, beginning of year
1,005,198
$
18.04
1,332,017
$
17.35
Stock options exercised1
(663,146)
$
17.93
(326,819)
$
15.21
Stock options forfeited
–
$
–
–
$
–
Outstanding, end of year
342,052
$
18.25
1,005,198
$
18.04
Vested and exercisable, end of year
342,052
1,005,198
1 During the period, a portion of the 663,146 (2023 - 326,819) options exercised were settled net, which resulted in the aggregate issuance of 510,976 (2023 - 303,143) shares
from treasury.
The number of options outstanding by grant date as of December 31, 2024, is shown in the following table:
Options Outstanding Options Exercisable
Weighted
Weighted
Weighted
Average
Average
Average
Units
Remaining
Exercise
Units
Exercise
Grant Date
Expiry Date
Outstanding
Contractual Years
Price
Outstanding
Price
May 17, 2017
May 17, 2025
137,790
0.4
$
18.85
137,790
$
18.85
May 16, 2018
May 16, 2026
204,262
1.4
$
17.85
204,262
$
17.85
342,052
1.0
$
18.25
342,052
$
18.25
Notes to the Consolidated Financial Statements
95
2024 ISC® Annual Report
The number of options outstanding by grant date as of December 31, 2023, is shown in the following table:
Options Outstanding Options Exercisable
Weighted
Weighted
Weighted
Average
Average
Average
Units
Remaining
Exercise
Units
Exercise
Grant Date
Expiry Date
Outstanding
Contractual Years
Price
Outstanding
Price
Aug 12, 2016
Aug 12, 2024
275,141
0.6
$
17.40
275,141
$
17.40
May 17, 2017
May 17, 2025
317,341
1.4
$
18.85
317,341
$
18.85
May 16, 2018
May 16, 2026
412,716
2.4
$
17.85
412,716
$
17.85
1,005,198
1.6
$
18.04
1,005,198
$
18.04
The carrying amount of the equity settled employee benefit reserve arising from these stock options as of December 31, 2024, totalled $0.6
million (December 31, 2023 — $1.6 million).
15 Debt
Following the execution of the Extension Agreement in 2023, the Company entered into an amended and restated credit agreement (the
“Amended and Restated Credit Facility”) in connection with its secured credit facility (the “Credit Facility”) initially provided by its lenders on
August 5, 2020, and maturing on September 17, 2026. The aggregate amount available under the Amended and Restated Credit Facility has
been increased from $150.0 million to $250.0 million and consists of ISC’s existing $150.0 million revolving credit facility together with a new
$100 million revolving credit facility. In addition, ISC will maintain access to a $100.0 million accordion option, providing the flexibility to
upsize the aggregate revolving credit facility up to $350.0 million.
The Credit Facility bears interest at a base rate of prime, Canadian Overnight Repo Rate Average (“CORRA”) loans, or letter of credit fee plus a
margin varying between 0.20 per cent and 3.30 per cent per annum (2023 — 0.20 per cent and 3.00 per cent per annum) depending on
the type of advance and the performance on certain covenants.
The Company is also required to pay a commitment fee quarterly in arrears on the unutilized portion of the Credit Facility, at a rate between
0.24 per cent and 0.60 per cent per annum (2023 — 0.24 per cent and 0.60 per cent per annum) depending on the performance on
certain covenants.
The Company is amortizing transaction costs of $0.8 million attributable to modifying the Credit Facility over the life of the facility, using an
effective interest rate that is currently 5.69 per cent. The amount of financing expense related to these costs and recognized in the
statements of comprehensive income for the year ended December 31, 2024, totalled $0.3 million (2023 — $0.2 million). Details of the debt
outstanding under the Credit Facility are as follows:
December 31,
December 31,
(thousands of CAD)
2024
2023
Non-current
Revolving term facility – principal component – beginning of year
$
178,000
$
66,316
Funds drawn from revolving term facility
34,000
150,684
Principal repayments during the year
(44,000)
(39,000)
Revolving term facility – principal component – end of year
$
168,000
$
178,000
Unamortized costs
(447)
(698)
Total debt
$
167,553
$
177,302
Financing available under the Credit Facility commitment is as follows:
December 31,
December 31,
(thousands of CAD)
2024
2023
Financing available:
Maximum available
$
250,000
$
250,000
Cash drawings – principal component
(168,000)
(178,000)
Letters of credit and other non-cash drawings
(1,793)
(1,761)
Total unused and available portion of the Credit Facility
$
80,207
$
70,239
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
96
The Amended and Restated Credit Facility contains financial covenants that require the Company to maintain a ratio of Consolidated Net
Funded Debt to EBITDA, as defined in the agreement, of less than 4.50:1 and EBITDA, as defined in the agreement, to interest expense ratio
of greater than 3:1. The Company was in compliance with all covenants throughout the year.
The indebtedness under the Credit Facility is secured by a first ranking security interest over substantially all of the Company’s assets
(subject to the Government of Saskatchewan’s security under a debenture), including security interests, pledges and guarantees granted by
certain of its subsidiaries.
The amount of borrowing costs capitalized during 2024 and 2023 was nil.
16 Vendor Concession Liability
The Extension Agreement outlines the consideration payable for the extension. The Subsequent Payments consist of five cash payments
of $30.0 million per year, totalling $150.0 million, which commenced in July 2024 with the final payment expected to be made in 2028.
The Amended and Restated MSA outlines the continuing annual cost contribution payments of $0.5 million, with the next payment
due in April 2025 and the final payment expected to be made in 2053. The payments have been present valued in accordance with
IFRS 9 — Financial Instruments.
(thousands of CAD)
Balance at January 1, 2023
$
–
Additions
124,204
Accretion
4,332
Balance at December 31, 2023
$ 128,536
Accretion
9,684
Payments
(30,500)
Balance at December 31, 2024
$ 107,720
The following table presents the contractual undiscounted cash flows for vendor concession liability:
(thousands of CAD)
December 31, 2024
Year 1
$
30,500
Year 2
30,500
Year 3
30,500
Year 4
30,500
Year 5
500
Thereafter
12,000
Balance, end of year
$ 134,500
Unearned interest
(26,780)
Balance, end of year
$ 107,720
Reflected as:
Vendor concession liability – current portion
22,562
Vendor concession liability – non-current portion
85,158
Balance, end of year
$ 107,720
Notes to the Consolidated Financial Statements
97
2024 ISC® Annual Report
17 Liabilities Arising from Financing Activities
The table below provides the reconciliation of movements of liabilities to cash flows arising from financing activities:
As at December 31,
As at December 31,
2023
Cash Flows
Non-cash Changes and Timing Items
2024
Dividends
Declared
Interest
Other
Interest payable
$
1,296
$ (13,540)
$
–
$
–
$ 12,421
$
177
Lease obligation including current
portion and interest paid
9,864
(3,301)
–
–
532
7,095
Long-term debt
177,302
(10,011)
–
262
–
167,553
Share capital
28,542
7,817
–
–
1,029
37,388
Dividends payable
4,141
(16,664)
16,781
–
–
4,258
Vendor concession liability
128,536
(30,500)
–
9,684
–
107,720
$ 349,681
$ (66,199)
$ 16,781
$ 9,946
$ 13,982
$ 324,191
As at December 31,
As at December 31,
2022
Cash Flows
Non-cash Changes and Timing Items
2023
Dividends
Declared
Interest
Other
Interest payable
$
379
$
(8,533)
$
–
$
–
$
9,450
$
1,296
Lease obligation including current
portion and interest paid
8,807
(2,783)
–
–
3,840
9,864
Long-term debt
66,047
111,091
–
164
–
177,302
Share capital
23,691
4,379
–
–
472
28,542
Dividends payable
4,071
(16,355)
16,425
–
–
4,141
Vendor concession liability
–
–
–
4,332
124,204
128,536
$ 102,995
$
87,799
$ 16,425
$ 4,496
$ 137,966
$ 349,681
18 Earnings Per Share
The calculation of earnings per share is based on net income after tax and the weighted average number of shares outstanding during the
year. Details of the earnings per share are set out below:
Year Ended December 31,
(thousands of CAD, except number of shares and earnings per share)
2024
2023
Net income
$
20,241
$
25,045
Weighted average number of shares, basic
18,185,434
17,820,729
Potential dilutive shares resulting from stock options
105,521
203,048
Weighted average number of shares, diluted
18,290,955
18,023,777
Earnings per share ($ per share)
Total, basic
$
1.11
$
1.41
Total, diluted
$
1.11
$
1.39
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
98
19 Equity and Capital Management
The Company’s authorized share capital consists of an unlimited number of Class A Shares, one Class B Golden Share (the “Golden Share”)
and an unlimited number of Preferred Shares, issuable in series. As at December 31, 2024, the Company has 18,515,617 Class A Shares issued
and outstanding, one Golden Share issued and outstanding and no Preferred Shares issued or outstanding. Class A Shares are entitled to
one vote per share. The Golden Share, held by Crown Investments Corporation of Saskatchewan on behalf of the Government of
Saskatchewan, has certain voting rights and obligations including the location of the head office and the sale of certain of the assets of the
Company. The Golden Share has no pre-emptive, redemption, purchase or conversion rights and is not eligible to receive dividends declared
by the Company. The Preferred Shares can be issuable at any time and may include voting rights.
Class A Class B
(thousands of CAD, except number of shares)
Number of Shares
Share Capital
Number of Shares
Share Capital
Balance at January 1, 2023
17,701,498
$
23,691
1
$
–
Stock options exercised for treasury shares1
303,143
4,851
–
–
Balance at December 31, 2023
18,004,641
$
28,542
1
$
–
Balance at January 1, 2024
18,004,641
$
28,542
1
$
–
Stock options exercised for treasury shares1
510,976
8,846
–
–
Balance at December 31, 2024
18,515,617
$ 37,388
1
$
–
1 See Note 14.
Dividends
The Company paid dividends to shareholders during the year ended December 31, 2024 of $16.7 million (2023 — $16.4 million) based on an
annual dividend rate of $0.92 per share (2023 — $0.92 per share).
Capital management
The Company’s objective in managing capital is to ensure that adequate resources are available to fund organic growth and to enable it
to undertake future growth opportunities while continuing as a going concern. The Company’s capital is composed of debt and
shareholders’ equity.
Operating cash flows are used to provide sustainable cash dividends to shareholders and fund capital expenditures in support of organic
growth. In addition, operating cash flows, supplemented throughout the year with the Credit Facility if necessary, are used to fund working
capital requirements.
Equity and the available but undrawn portion of the term facility will assist in financing future growth opportunities.
The Company’s capital at December 31, 2024, consists of long-term debt, vendor concession liability, lease obligations, share capital,
accumulated other comprehensive income, equity settled employee benefit reserve and retained earnings (comprising total
shareholders’ equity). During the current year, vendor concession liability and lease obligations were added to the Company’s definition
of capital.
December 31,
December 31,
(thousands of CAD)
2024
2023
Long-term debt
$
167,553
$
177,302
Vendor concession liability
107,720
128,536
Lease obligations
7,095
9,864
Share capital
37,388
28,542
Accumulated other comprehensive income
36
(185)
Equity settled employee benefit reserve
581
1,610
Retained earnings
142,272
138,812
Capitalization
$
462,645
$
484,481
Notes to the Consolidated Financial Statements
99
2024 ISC® Annual Report
20 Financial Instruments and Related Risk Management
The Company does not currently use any form of derivative financial instruments to manage its exposure to credit risk, interest rate risk,
market risk or foreign currency exchange risk.
Credit risk
Credit risk is the risk that one party to a transaction will fail to discharge an obligation and cause the other party to incur a financial loss. The
Company extends credit to its customers in the normal course of business and is exposed to credit risk in the event of non-performance by
customers but does not anticipate such non-performance would be material. The Company monitors the credit risk and credit rating of
customers on a regular basis. The Company has significant concentration of credit risk among government sectors. Its customers are
predominantly provincial, federal and municipal government ministries and agencies and its private sector customers are diverse.
The majority of cash is held with Canadian chartered banks and the Company believes the risk of loss to be minimal. The maximum
exposure to credit risk at December 31, 2024, is $37.8 million (December 31, 2023 — $39.9 million), equal to the carrying value of the
Company’s financial assets, which are itemized in the table below. Quarterly reviews of the aged receivables are completed. The Company
expects to fully collect the carrying value on all outstanding receivables. Therefore, the risk to the Company is low.
The following table sets out details of cash and ageing of receivables:
December 31,
December 31,
(thousands of CAD)
2024
2023
Cash
$
20,994
$
24,193
Trade and other receivables:
– current
15,566
14,160
– up to three months past due date
797
694
– greater than three months past due date
415
819
Total credit risk
$
37,772
$
39,866
Interest rate risk
Interest rate risk arises from the effect of changes in prevailing interest rates on the Company’s financial instruments.
The Company is subject to interest rate risks on its debt (Note 15). The Company has borrowings under the Credit Facility, which is managed
with prime loans, CORRA loans or letters of credit. Certain borrowings will bear interest at a base rate of prime plus applicable margin
varying between 0.20 per cent and 2.00 per cent per annum while other borrowings will bear interest at CORRA rates between 1.50 per
cent and 3.30 per cent per annum. The Company is managing its interest rate risk through its treasury function, the continued focus on
debt repayment and keeping excess cash in higher interest short-term savings.
The following table presents a sensitivity analysis to changes in market interest rates and their potential impact on the Company for the
years ended December 31, 2024 and 2023. As the sensitivity analysis is hypothetical, it should be used with caution.
December 31, 2024
December 31, 2023
(thousands of CAD)
+ 100 bps*
– 100 bps
+ 100 bps
– 100 bps
Increase (decrease) in interest expense
$ 1,748
$ (1,748)
$ 1,149
$ (1,149)
Decrease (increase) in net income before tax
$ 1,748
$ (1,748)
$ 1,149
$ (1,149)
Decrease (increase) in total comprehensive income
$ 1,276
$ (1,276)
$
839
$
(839)
* bps = basis point spread
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
100
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s cash resources are
managed based on financial forecasts and anticipated cash flows.
The following summarizes the contractual maturities for the Company’s financial liabilities at December 31, 2024:
Carrying
Contractual
0-6
7-12
12+
(thousands of CAD)
Amount
Cash Flows
Months
Months
Months
Long-term debt
$ 167,553
$ 184,347
$
4,737
$
4,813
$ 174,797
Vendor concession liability
107,720
134,500
500
30,000
104,000
Lease obligations
7,095
8,050
1,027
1,027
5,996
Accounts payable and accrued liabilities
40,781
40,781
40,781
–
–
Total liabilities
$ 323,149
$ 367,678
$ 47,045
$ 35,840
$ 284,793
Contractual cash flows for long-term debt and lease obligations include principal and interest.
Market risk
The carrying amount and fair value of the financial assets and financial liabilities are as follows:
December 31, 2024
December 31, 2023
Carrying
Carrying
(thousands of CAD)
Classification
Amount
Fair Value
Amount
Fair Value
Financial assets
Cash
AC
$ 20,994
$ 20,994
$
24,193
$
24,193
Trade and other receivables
AC
16,778
16,778
15,673
15,673
Financial liabilities
Accounts payable and accrued
liabilities excluding share-based
accrued liabilities
AC
32,757
32,757
28,324
28,324
Vendor concession liability
AC
107,720
103,052
128,536
124,329
Long-term debt
AC
167,553
157,850
177,302
176,061
Fair value of financial instruments
The carrying values of cash, trade and other receivables, accounts payable and accrued liabilities excluding share-based accrued liabilities
approximate fair value due to their immediate or relatively short-term maturity. The fair values of the vendor concession liability and
long-term debt are estimated by discounting the future contractual cash flows at the cost of borrowing to the Company.
Foreign currency exchange risk
The Company operates internationally and is exposed to fluctuations in various currencies, with the euro being the most material, followed
by the US dollar. Movements in foreign currencies against the Canadian dollar may impact revenue, the value of assets and liabilities and
affect the Company’s profit and loss.
Based on the balance of foreign net monetary assets and net assets carried on the consolidated statements of financial position, the impact
of an increase (decrease) of 10.0 per cent in the euro relative to the Canadian dollar as at December 31, 2024, on net monetary assets was a
decrease (increase) of $0.1 million (December 31, 2023 — $0.2 million) and on net assets was an increase (decrease) of $1.7 million
(December 31, 2023 — $1.2 million). The impact of an increase (decrease) of 10.0 per cent in the US dollar relative to the Canadian dollar as at
December 31, 2024, on net monetary assets was a decrease (increase) of $0.1 million (December 31, 2023 — $0.1 million). The Company’s
exposure to other currencies was not significant at the end of the year.
Notes to the Consolidated Financial Statements
101
2024 ISC® Annual Report
21 Revenue
The Company derives its revenue from the transfer of goods or services either at a point in time or over time. This is consistent with the
revenue from third-party information disclosed for each reportable segment under IFRS 8 — Operating Segments (see Note 25). The
following table presents our third-party revenue disaggregated by revenue type. Sales and usage tax are excluded from revenue.
Segment revenue
Year Ended December 31,
(thousands of CAD)
2024
2023
Registry Operations
$ 125,588
$ 103,516
Services
110,196
101,712
Technology Solutions
11,570
9,268
Corporate and other
12
24
Total revenue
$ 247,366
$ 214,520
The following table presents our revenue disaggregated by the timing of revenue recognition:
Timing of revenue recognition
Year Ended December 31,
(thousands of CAD)
2024
2023
At a point in time
Registry Operations revenue
$ 107,626
$
84,922
Services revenue
107,738
100,086
Corporate and other
12
24
$ 215,376
$ 185,032
Over time
Registry Operations revenue
17,962
18,594
Services revenue
2,458
1,626
Technology Solutions revenue
11,570
9,268
$ 31,990
$
29,488
Total revenue
$ 247,366
$ 214,520
In the “over time” category, some Land Registry and Corporate Registry contracts result in linear revenue recognition over the life of the
contract. In Services, Recovery Solutions administration fee revenue is also recognized over the life of the asset recovery and accounts
receivable management file. Likewise, the hosting, support and maintenance portion of contracts related to Technology Solutions revenue
primarily results in linear revenue recognition over the life of the contract. Conversely, revenue recognition associated with the licence and
solution definition and implementation portion of contracts depends on milestone achievement or percentage of completion. In 2024, the
portion of Technology Solutions contract revenue recognized that was dependent on milestone achievement or percentage of completion
versus total revenue recognized was 56.0 per cent (2023 — 44.0 per cent). At December 31, 2024, the Company has contracts where the
milestone was either in progress or expected to be satisfied in the near term. For the unsatisfied portion of contracts dependent on
milestone achievement or percentage of completion, the Company expects that 74.4 per cent (2023 — 86.7 per cent) of the total will be
recognized in the next fiscal year.
22 Interest Expense
Year Ended December 31,
(thousands of CAD)
2024
2023
Interest expense on long-term debt
$ 12,421
$
9,449
Vendor concession liability accretion
9,684
4,332
Interest on lease liabilities
485
400
Effective interest component of interest expense
262
165
Total interest expense
$ 22,852
$
14,346
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
102
23 Related Party Transactions
Included in these consolidated financial statements are transactions with various Saskatchewan Crown corporations, ministries, agencies,
boards and commissions related to the Company by virtue of common control by the Government of Saskatchewan and non-Crown
corporations and enterprises subject to joint control and significant influence by the Government of Saskatchewan (collectively referred to
as “related parties”). The Company has elected to take the exemption under IAS 24 — Related Party Disclosures, which allows government-
related entities to limit the extent of disclosures about related party transactions with government or other government-related entities.
Routine operating transactions with related parties are settled at agreed-upon exchange amounts under normal trade terms. In addition,
the Company pays provincial sales tax to the Saskatchewan Ministry of Finance on all its taxable purchases. Taxes paid are recorded as part
of the cost of those purchases. Other amounts and transactions due to and from related parties and the terms of settlement are described
separately in these consolidated financial statements and the Notes thereto.
24 Compensation of Key Management Personnel
Key management personnel includes the directors, President and Chief Executive Officer, Chief Financial Officer, Executive Vice-Presidents,
Vice-Presidents, President, ESC and Head of ERS. The compensation of the key management team during the year was as follows:
Year Ended December 31,
(thousands of CAD)
2024
2023
Wages, salaries and short-term benefits
$
4,429
$
4,298
Share-based compensation
5,546
283
Defined contribution pension plans
233
229
Termination benefits
181
–
Total compensation
$
10,389
$
4,810
The compensation of directors and the President and Chief Executive Officer is determined by the Board upon recommendation of its Com
pensation Committee having regard to the performance of individuals and market trends. The values in the table above represent amounts
included in expenses during the year. Portions not paid in cash have been accrued as liabilities on the statement of financial position.
25 Segment Information
The Chief Executive Officer of the Company is the chief operating decision maker (“CODM”) and regularly reviews the operations and
performance by segment. The CODM uses adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) to
measure and assess each segment’s performance and make decisions about the allocation of resources to the operating segments, as
adjusted EBITDA helps to provide a better understanding about the performance of the Company by removing the impact of share-based
compensation, acquisition, integration and other costs. The CODM considers adjusted EBITDA to be a meaningful measure because it is not
impacted by long-term investment and financing decisions, but rather focuses on the performance of our day-to-day operations.
ISC has three reportable segments: Registry Operations, Services, and Technology Solutions, summarized as follows:
• Registry Operations delivers registry and information services on behalf of governments and private sector organizations;
• Services delivers products and services that utilize public records and data to provide value to customers in the financial and legal
sectors; and
• Technology Solutions provides the development, delivery and support of registry (and related) technology solutions.
Corporate and other includes our corporate activities and shared services functions. The Registry Operations and Services segments
operate substantially in Canada. The Technology Solutions segment operates both in Canada and in Ireland.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. We account
for transactions between reportable segments in the same way we account for transactions with external parties; however, we eliminate
them on consolidation.
Notes to the Consolidated Financial Statements
103
2024 ISC® Annual Report
Revenue and EBIT
For the year ended December 31, 2024
Registry
Technology
Corporate
Inter-Segment
Consolidated
(thousands of CAD)
Operations
Services
Solutions
and Other
Eliminations
Total
Revenue from third parties
$ 125,588
$ 110,196
$
11,570
$
12
$
–
$ 247,366
Plus: inter-segment revenue
–
–
18,609
155
(18,764)
–
Total revenue
$ 125,588
$ 110,196
$
30,179
$
167
$
(18,764)
$ 247,366
Total expenses including
net finance expense
(73,745)
(99,461)
(31,542)
(32,457)
18,764
(218,441)
Income (loss) before tax
51,843
10,735
(1,363)
(32,290)
–
28,925
Net finance expense
–
–
–
21,946
–
21,946
EBIT1
51,843
10,735
(1,363)
(10,344)
–
50,871
Depreciation and amortization
13,547
11,814
1,124
1,088
–
27,573
EBITDA2
65,390
22,549
(239)
(9,256)
–
78,444
Share-based compensation expense
3,297
391
559
1,342
–
5,589
Acquisition, integration and
other costs
11,365
–
–
1,658
(6,730)
6,293
Adjusted EBITDA
$ 80,052
$
22,940
$
320
$
(6,256)
$
(6,730)
$ 90,326
Additions to non–current assets,
including acquisitions
$
652
$
980
$
6,052
$
944
$
(11)
$
8,617
For the year ended December 31, 2023
Registry
Technology
Corporate
Inter-Segment
Consolidated
(thousands of CAD)
Operations
Services
Solutions
and Other
Eliminations
Total
Revenue from third parties
$ 103,516
$
101,712
$
9,268
$
24
$
–
$ 214,520
Plus: inter-segment revenue
–
–
13,906
150
(14,056)
–
Total revenue
$ 103,516
$
101,712
$
23,174
$
174
$
(14,056)
$ 214,520
Total expenses including net
finance expense
(56,321)
(90,753)
(23,659)
(23,053)
14,056
(179,730)
Income (loss) before tax
47,195
10,959
(485)
(22,879)
–
34,790
Net finance expense
–
–
–
13,183
–
13,183
EBIT1
47,195
10,959
(485)
(9,696)
–
47,973
Depreciation and amortization
8,085
10,084
1,283
1,054
–
20,506
EBITDA2
55,280
21,043
798
(8,642)
–
68,479
Share-based compensation expense
167
20
28
68
–
283
Acquisition, integration and
other costs
3,477
–
–
2,094
(1,467)
4,104
Adjusted EBITDA
$
58,924
$
21,063
$
826
$
(6,480)
$
(1,467)
$
72,866
Additions to non–current assets,
including acquisitions
$ 278,998
$
4,155
$
1,067
$
431
$
–
$ 284,651
1 EBIT is calculated as income before net finance expense and income tax expense.
2 EBITDA is calculated as income before depreciation and amortization, net finance expense and income tax expense.
Notes to the Consolidated Financial Statements
2024 ISC® Annual Report
104
Inter-segment revenues are charged among segments at arm’s-length rates, based on rates charged to third parties. Total consolidated
revenue is attributed to customers within Ireland and Canada. For the year ended December 31, 2024, revenue within Ireland was $8.7
million (2023 — $8.6 million) and the remainder was in Canada. No single customer represented more than 10.0 per cent of the total
consolidated revenue.
Assets and liabilities
As at December 31, 2024
Registry
Technology
Corporate
Inter-Segment
Consolidated
(thousands of CAD)
Operations
Services
Solutions
and Other
Eliminations
Total
Assets
Total assets, excluding
intangibles, goodwill and cash $ 21,762
$
18,534
$
10,418
$
11,381
$
–
$ 62,095
Intangibles
291,441
32,181
10,058
1,913
–
335,593
Goodwill
21,098
71,537
8,705
–
–
101,340
Cash
–
–
–
20,994
–
20,994
Total assets
$ 334,301
$ 122,252
$
29,181
$
34,288
$
–
$ 520,022
Liabilities
$ 126,200
$
14,779
$
11,520
$ 187,246
$
–
$ 339,745
As at December 31, 2023
Registry
Technology
Corporate
Inter–Segment
Consolidated
(thousands of CAD)
Operations
Services
Solutions
and Other
Eliminations
Total
Assets
Total assets, excluding
intangibles, goodwill and cash $
23,281
$
17,812
$
5,843
$
12,158
$
–
$
59,094
Intangibles
303,548
42,322
4,874
1,026
–
351,770
Goodwill
21,098
71,537
8,631
–
–
101,266
Cash
–
–
–
24,193
–
24,193
Total assets
$ 347,927
$
131,671
$
19,348
$
37,377
$
–
$ 536,323
Liabilities
$ 146,845
$
16,584
$
7,885
$
196,230
$
–
$ 367,544
Non-current assets are held in Canada, Ireland and Luxembourg. At December 31, 2024, the value of non-current assets, excluding deferred
tax assets, held in Ireland and Luxembourg was collectively $17.7 million (December 31, 2023 — $11.5 million), while the remainder was held
in Canada.
26 Net Change in Non-Cash Working Capital
The net change during the year comprised the following:
Year Ended December 31,
(thousands of CAD)
2024
2023
Trade and other receivables
$
(1,054)
$
(774)
Prepaid expenses
(339)
1,411
Contract assets
(3,416)
(1,671)
Accounts payable and accrued liabilities
6,224
1,014
Contract liabilities
197
41
Other liabilities
(186)
(1,088)
Income taxes
5,458
(149)
Net change in non-cash working capital
$
6,884
$
(1,216)
Income taxes paid, net of refunds received, for the year ended December 31, 2024, totalled $8.5 million (2023 — $10.0 million).
Notes to the Consolidated Financial Statements
105
2024 ISC® Annual Report
27 Commitments and Contingencies
As of December 31, 2024, the Company has commitments over the next five years as follows:
Operating Leases
IT and Other
and Non-Lease
Service
Component of
(thousands of CAD)
Agreements1
Office Leases
Total
2025
$
5,218
$
1,787
$
7,005
2026
4,933
1,515
6,448
2027
4,694
1,467
6,161
2028
4,226
1,417
5,643
2029
800
1,040
1,840
Thereafter
–
4,935
4,935
Total commitments
$ 19,871
$
12,161
$
32,032
1 Includes minimum lease commitments for low-value assets not recognized under IFRS 16.
Non-lease component of office leases
The Company leases all of its office space and certain office equipment. The office spaces have lease terms of between five and 10 years,
with various options to extend. The office equipment leases relate to photocopiers and have lease terms of five years. The Company does
not have an option to purchase the leased assets at the expiry of the lease period.
The Company separates the lease and non-lease components of office space, disclosing the lease payment commitments in Note 12.
Contingencies
Management’s estimate of liability for claims and legal actions is based upon claims submitted. As at December 31, 2024, the estimate of
liability was nil (December 31, 2023 — nil).
28 Pension Expense
The total pension costs under the Company’s defined contribution plans for the year were $2.6 million (2023 — $2.5 million).
29 Subsequent Events
On March 17, 2025, the Board declared a quarterly cash dividend of $0.23 per Class A Share, payable on or before April 15, 2025, to
shareholders of record as of March 31, 2025.
2024 ISC® Annual Report
106
Corporate Information
Board of Directors
Joel Teal
Saskatoon, Saskatchewan
Director since: 2013
Chair of the Board of Directors
Amber Biemans
Humboldt, Saskatchewan
Director since: 2023
Member of the Governance and Nominating Committee
Roger Brandvold
Calgary, Alberta
Director since: 2021
Member of the Compensation Committee
Doug Emsley
Regina, Saskatchewan
Director since: 2013
Chair of the Compensation Committee
Tony Guglielmin
Vancouver, British Columbia
Director since: 2013
Member of the Audit Committee
Iraj Pourian
Vancouver, British Columbia
Director since: 2016
Member of the Governance and Nominating Committee
Laurie Powers
Kelowna, British Columbia
Director since: 2018
Chair of the Audit Committee
Jim Roche
Ottawa, Ontario
Director since: 2021
Member of the Audit Committee
Heather Ross
Toronto, Ontario
Director since: 2018
Member of the Compensation Committee
Dion E. Tchorzewski
Regina, Saskatchewan
Director since: 2013
Chair of the Governance and Nominating Committee
More information on our directors and officers can be found in our most recent Annual Information Form or Management
Information Circular, which are available on our website at isc.ca, or through the System for Electronic Document Analysis and
Retrieval (“SEDAR+”) at www.sedarplus.ca.
ISC Leadership
Shawn B. Peters, CPA, CA, ICD.D
President and Chief Executive Officer
Robert (Bob) Antochow, CPA, CA, CMA
Chief Financial Officer
Todd Antill
Vice-President, Registry Operations
Loren Cisyk
EVP, Technology Solutions
Jeffrey Fallowfield
President, ESC Corporate Services Ltd.
Laurel Garven
Vice-President, Corporate Development and
Business Strategy
Ryan Graham
Vice-President, Corporate Services
Kathy E. Hillman-Weir, K.C., J.D., ICD.D
EVP, Corporate Governance and Registry Excellence
Catherine McLean
Vice-President, People and Culture
107
2024 ISC® Annual Report
Corporate Information
Corporate Information
Head Office
Suite 300
10 Research Drive
Regina, Saskatchewan S4S 7J7 Canada
Stock Exchange Listing & Symbol
Toronto Stock Exchange: ISC
Share Capital
Authorized — the Company’s authorized share capital
consists of an unlimited number of Class A Shares (“Class A
Shares”), one Class B Golden Share (“Golden Share”) and an
unlimited number of Preferred Shares.
Class A Limited Voting Shares
Issued and outstanding — 18,515,617 Class A Shares as at
December 31, 2024.
The Company’s articles and the ISC Act limit ownership of
Class A Shares, including joint ownership, to no more than
15 per cent of the Class A Shares issued and outstanding.
Class B Golden Share
Issued and outstanding — 1 Golden Share as at
December 31, 2024.
The Golden Share held by the Government of Saskatchewan
has certain voting rights with respect to the location of
the head office and the sale of all or substantially all of the
assets of the Company.
The Golden Share has no pre-emptive, redemption,
purchase or conversion rights and is not eligible to receive
dividends declared by the Company.
Preferred Shares
Issued and outstanding — Nil as at December 31, 2024.
Preferred Shares are issuable at any time and may include
voting rights.
Ownership
As of March 17, 2025, the Board and management are not
aware of any shareholder who directly or indirectly owns or
exercises, or directs control over, more than 10 per cent of
our Class A Shares, other than:
a) Crown Investments Corporation of Saskatchewan
(“CIC”), which holds 5,425,000 Class A Shares
representing 29.3 per cent of the issued and
outstanding Class A Shares;
b) CI Investments Inc., which holds 2,453,176 Class A Shares
representing approximately 13.2 per cent of the issued
and outstanding Class A Shares; and
c) QV Investors Inc., which holds 2,215,10 Class A Shares
representing 12.0 per cent of the issued and outstanding
Class A Shares.
Auditors
Deloitte LLP
Suite 900 – 2103 11th Avenue
Regina, Saskatchewan S4P 3Z8 Canada
Transfer Agent
TSX Trust Company
For inquiries related to shares, dividends, changes of
address:
• Toll-free inside North America: 1-800-387-0825
• www.tsxtrust.com
• shareholderinquiries@tmx.com
Regulatory Filings
The Company’s filings are available through the System for
Electronic Document Analysis and Retrieval (“SEDAR+”) at
www.sedarplus.ca.
Investor Contact Information
Jonathan Hackshaw
Senior Director, Investor Relations & Capital Markets
Toll-Free in North America: 1.855.341.8363
Outside North America: 1.306.798.1137
investor.relations@isc.ca
Corporate Information
Dividends on Class A Shares
Our objective is to achieve dividend growth over time while balancing our strategic business priorities. The payment of
dividends is not guaranteed and the amount and timing of any dividends payable by the Company will be at the discretion
of the Board and will be established based on our cash available for distribution, our financial requirements, any restrictions
imposed by our credit facilities, the requirements of any future financings and other factors existing at the time. The table
below shows annual dividends per Class A Share that have been declared by the Board for the last three years:
Dividends are eligible dividends pursuant to the Income Tax Act (Canada) as amended. An eligible dividend paid to a
Canadian resident is entitled to the enhanced dividend tax credit. For further information on tax implications, please consult
a tax advisor.
Non-IFRS Financial Measures
This report also includes certain measures which have not been prepared in accordance with IFRS Accounting Standards,
such as adjusted net income, adjusted earnings per share, basic, adjusted earnings per share, diluted, EBITDA, EBITDA margin,
adjusted EBITDA, adjusted EBITDA margin, free cash flow and adjusted free cash flow. Refer to Section 8.8 “Non-IFRS financial
measures” in the MD&A for a discussion on why we use these measures, the calculation of them and their most directly
comparable financial measure calculated in accordance with IFRS Accounting Standards. Refer to Section 2 “Consolidated
Financial Analysis” and Section 6.1 “Cash flow” in the MD&A for a reconciliation of these measures to the most directly
comparable financial measure calculated in accordance with IFRS Accounting Standards.
Cautionary Note Regarding Forward-Looking Information
This report contains forward-looking information within the meaning of applicable Canadian securities legislation including,
without limitation, statements related to the industries in which we operate, growth opportunities, and our future financial
position and results, including expected revenue, EBITDA margin and EBITDA. Forward-looking information involves known
and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those
expressed or implied by such forward-looking information. Important factors that could cause actual results to differ materially
from the Company’s plans or expectations include risks relating to changes in the condition of the economy, including those
arising from public health concerns, reliance on key customers and licences, dependence on key projects and clients, securing
new business and fixed-price contracts, identification of viable growth opportunities, implementation of our growth strategy,
competition, and other risks detailed from time to time in the filings made by the Company, including those detailed in ISC’s
Annual Information Form for the year ended December 31, 2024, and ISC’s audited Consolidated Financial Statements and
Notes and Management’s Discussion and Analysis for the fourth quarter and year ended December 31, 2024, included herein,
copies of which are filed on SEDAR+ at www.sedarplus.ca. The forward-looking information in this report is made as of
the date hereof and, except as required under applicable securities laws, ISC assumes no obligation to update or revise such
information to reflect new events or circumstances.
Year
Type
Ex-Dividend Date
Record Date
Payable Date
Amount
2024
Quarterly
Dec 31, 2024
Dec 31, 2024
Jan 15, 2025
$0.23
2024
Quarterly
Sep 27, 2024
Sep 30, 2024
Oct 15, 2024
$0.23
2024
Quarterly
Jun 28, 2024
Jun 30, 2024
Jul 15, 2024
$0.23
2024
Quarterly
Mar 27, 2024
Mar 27, 2024
Apr 15, 2024
$0.23
2023
Quarterly
Dec 28, 2023
Dec 28, 2023
Jan 15, 2024
$0.23
2023
Quarterly
Sep 28, 2023
Sep 30, 2023
Oct 15, 2023
$0.23
2023
Quarterly
Jun 29, 2023
Jun 30, 2023
Jul 15, 2023
$0.23
2023
Quarterly
Mar 30, 2023
Mar 31, 2023
Apr 15, 2023
$0.23
2022
Quarterly
Dec 29, 2022
Dec 31, 2022
Jan 15, 2023
$0.23
2022
Quarterly
Sep 29, 2022
Sep 30, 2022
Oct 15, 2022
$0.23
2022
Quarterly
Jun 29, 2022
Jun 30, 2022
Jul 15, 2022
$0.23
2022
Quarterly
Mar 30, 2022
Mar 31, 2022
Apr 15, 2022
$0.23
2024 ISC® Annual Report
108
Overview
Information Services Corporation
300 – 10 Research Drive
Regina, Saskatchewan S4S 7J7 Canada
investor.relations@isc.ca
isc.ca
TSX:ISC