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Logistec Corporation

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Sector Industrials
Industry Marine Shipping
Employees 1001-5000
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FY2019 Annual Report · Logistec Corporation
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Our Mission 
and Purpose 

LOGISTEC’s strategy towards 2023 is guided by our mission 

and purpose: We pride ourselves on building and sharing our 

expertise  in  order  to  contribute  to  the  success  of  our 

customers and our communities. Our people are dedicated 

to finding solutions that support reliable supply chains and 

protect our environment and our water  resources. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
IT STARTS WITH 
OUR  PURPOSE.  

Words from our 
President and CEO 

The  LOGISTEC  family  is  today  unified  under 

one strong brand, all working towards  the same 

purpose,  which  is  anchored  by  our  shared 

values. At the core of LOGISTEC’s success is our 

people’s  pride,  ingenuity,  resourcefulness  and, 

most  of  all,  trusted  expertise.  The  result:  a 

diverse 

and 

agile 

team  where 

great 

achievements  come  from  true  collaboration, 

empowerment, 

integrity,  and  accountability 

towards  each  other,  our  customers,  and  our 

communities. 

Through  our  relentless  drive  to  always  go 

beyond,  our  people  go  the  extra  mile  to  make 

great  things  happen,  enabling  us  to  seize  new 

opportunities  for  our  customers  and  our 

communities. 

A  clear  purpose,  common  goals  and  a  well- 

defined  strategic  plan  guide  us  all  in  this  new 

decade ahead. 

MADELEINE PAQUIN  
PRESIDENT AND CEO  

4 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Our Financial Results in 2019 

RESULTS FUELED BY PASSION  

We  are  pleased  to  report  that  2019  was  definitely  a 

comeback  year  for  the  LOGISTEC  family.  This  is  a 

testament to the expertise of our leaders in the field, and 

our  unwavering  passion  and  determination  to  strive  to 

continuously  push  boundaries  and  seek  new  ways  to 

improve our operations. Our focus in 2019 was to return 

to  an  upward  momentum  of  growth  and  more 

importantly,  profitability.  This  starts  with  adopting  the 

right strategy in each of our businesses and, even more 

important, ensuring we have the right leaders in the right 

places. 

Highlights for the year include revenue of $639.9 million, 

$55.1 million  or  9.4%  more  than  in  2018.  The  overall 

consolidated profitability considerably improved in 2019 

with profit before income taxes reaching $35.1 million, a 

$13.8 million  or  64.9%  improvement  over  2018.  This 

translates into a profit for the year attributable to owners 

of the Company of $26.2 million and diluted earnings per 

share (“EPS”) of $2.00, bolstered up over the 2018 EPS 
level of $1.38. Adjusted EBITDA  (1)  reached a new record, 
closing at $89.6 million  (2), up 39.6% versus $64.2 million 
the previous year. 

Overall,  the  marine  services  segment  performed  well 

when  compared  to  its  2018  results,  with  a  positive 

upswing  of  $44.5 million  or  13.1%  to  $385.3 million  in 

revenue,  not  including  our  joint  ventures,  TERMONT 

Montréal  Inc.  (“TERMONT”)  and  Transport  Nanuk  Inc. 

The environmental services segment, despite a slow start 

and some challenges during the year, rallied and delivered 

a  solid  fourth  quarter,  allowing  them  to  close  the  year 

with revenue of $254.6 million, up 4.3% as compared to 

2018. 

(1) Adjusted EBITDA is a non-IFRS measure, please refer to the non- 
IFRS measure section on page 27. 

(2)  The  2019  figures  reflect  the  application  of  IFRS  16  Leases 
(“IFRS 16”) which had a favourable impact of $13.7 million on the 
adjusted EBITDA and for which the comparative  figures have not 
been  restated. Please refer to Notes 2 and 16 of the notes to 2019. 
consolidated financial statements for further details. 

The  profitability  of  both  marine  and  environmental 

services 

improved,  and  we  are  pleased  to  show 

significantly  better  results  for  FER-PAL  Construction 

Ltd. (“FER-PAL”), whose results were very disappointing 

in 2018. 

“We are pleased that the 
LOGISTEC family rallied and 
delivered a solid financial 
performance in 2019.” 

Jean-Claude Dugas, CPA, CA 

CHIEF FINANCIAL OFFICER  

LOGISTEC | 2019 ANNUAL REPORT 

5 

 
 
 
 
 
 
 
 
MARINE SERVICES  

Despite  continuous  market  uncertainty  and  volatility, 

customers  still  rely  on  their  products  being  shipped  and 

carried  across  the  globe  every  day. With  this  industry  so 

crucial to global trade, LOGISTEC works very closely with 

shippers  and  carriers,  and  leverages  its  network  of 

terminals  to  support  their  specific  needs  across  North 

America. 

The diversity of cargo types we handled and our extensive 

geographic network helped the performance of our cargo-

handling  activities.  Despite  a  marked  slowdown  in  the 

volume  of  steel  products  flowing  through  various 

terminals in our network, and this stemming largely from 

trade  tariffs  and  sanctions,  we  were  pleased  to  see 

increased  bulk  and  wind  cargo.  Project  cargo  volumes 

improved  over  last  year,  and  more  than  made  up  for  the 

reduced activity in Montréal (QC) related to the build-out 

of  the  Samuel  De  Champlain  Bridge.  We  also  saw 

increased  activity  from  our  new  break-bulk  terminal  in 

Cleveland (OH)  as  well  as  overall  bulk  activity  in  the  

St.  Lawrence  Seaway.  Other  terminals  also  showed  ups 

and downs, but overall, volumes increased as did results for 

our break-bulk and bulk terminals. 

Our port logistics business also performed well. These are 

composed  of  three  facilities  located  in  Québec  and 

Virginia,  which  provide 

logistics  services  such  as 

transloading of cargoes into containers from/to rail/truck, 

and local drayage to port terminals. 

Our joint venture container terminals in Montréal did well, 

albeit  volumes  remained  flat.  Unfortunately,  additional 

costs  were  absorbed  from  the  extension  of  our  Viau 

terminal, as we get ready for increased capacity. Phase 2 of 

our  Viau  container  terminal  entails  investments  of  some 

$35.0 million,  which  are  being  made  by  all  TERMONT 

partners,  and  will  add  some  250,000  twenty-foot 

equivalent  unit’s  (“TEUs”)  of  capacity  to  our  container 

terminals on the island of Montréal. This will bring our total 

capacity  to  1.1 million  TEUs,  or  slightly  over  50%  of  the 

port’s  total  capacity.  As  volumes  continue  to  grow  at  the 

port,  we  are  in  discussions  with  the  Montréal  Port 

Authority 

to 

develop 

further 

capacity 

at 

Contrecoeur (QC). 

6 

2019 ANNUAL REPORT | LOGISTEC  

A COMPELLING VISION 
FOR OUR CUSTOMERS  

“Recognized for our people’s 
trusted expertise, we aim to be the 
go-to terminal partner, with unique 
technology to create 
comprehensive solutions for our 
customers.” 

Rodney Corrigan 

PRESIDENT, LOGISTEC STEVEDORING  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
We  are  pleased  with  the  results  of  acquisitions  made  in 

2018. The integration of Gulf Stream Marine, Inc. and Pate 

Stevedore Company, Inc. proceeds into a last phase, as we 

believe we can continue to strengthen our services through 

the  integration  of  our  information  and  cargo-tracking 

systems 

throughout  our  network.  These  strategic 

acquisitions  further  enable  us  to  provide  our  talent  with 

more 

development 

opportunities, 

foster 

greater 

collaboration and leverage best practices and tools, which 

in turn improves our service offering to our customers and 

our ability to respond to their specific needs. 

COASTAL SHIPPING  

Our arctic marine transportation business, which operates 

as  a  joint  venture  with  our  partners  The  North  West 

Company and Makivik Corporation, carried record volumes 

in 2019. This was led by the renewal of our contract with 

the  Government  of  Nunavut  and  resulted  in  17  voyages 

with  107  stops  to  over  40  communities  and  mines.  The 

weather  conditions  were  stable  and  navigation  was  quite 

fluid, with no major incidents. 

“We strongly believe that our 
business diversification will be 
a key enabler of our ongoing 
growth over the next decade.” 

Carl Delisle, CPA, CA 

VICE-PRESIDENT 
CORPORATE CONTROLLER  

LOGISTEC | 2019 ANNUAL REPORT 

7 

 
 
 
 
 
 
ENVIRONMENTAL SERVICES  

For  more  than  30  years,  SANEXEN  Environmental 

Services 

Inc. 

(“SANEXEN”)  has  been  providing 

municipalities and industries with soil management and 

environmental assessments  as well  as customized  and 

efficient solutions to complex environmental problems. 

Our team of engineers, scientists, and project managers 

are  adept  at  transforming  spent  resources  that  have 

traditionally  been  discarded,  into  valuable  resources – 

helping  to  solve  their  customers’  most  difficult 

problems  and  contributing 

to 

the 

sustainable 

development of communities and industries. 

The  financial  performance  of  our  environmental 

business  improved  considerably  in  2019  with  profit 

before  income  taxes  of  $9.8 million  on  revenue  of 

$254.6 million. This improvement was primarily led by 

sustainable improvements in FER-PAL, as well as strong 

activity 

in  our  traditional  environmental  services, 

namely  site  remediation  and  management  of  soils  and 

materials.  This  is  in  part  due  to  Montréal’s  continued 

strong  economy 

in 

real  estate  and 

industrial 

development. We also realized a number of projects of 

varying  sizes  and  complexities  in  other  communities 

across  Canada.  These  projects  have  allowed  us  to 

continue  to  build  on  and  implement  our  technical 

capabilities  and  demonstrate  to  our  customers  our 

ability to execute large complex  projects. 

Unfortunately,  this  strong  activity  was  negatively 

affected  by  reduced  rehabilitation  contracts 

in 

Montréal  and  lower-than-expected  revenue  coming 

from  our  woven  hose  manufacturing  business.  The 

latter  was  affected  by  lower  sales  of  firehoses,  due  to 

fewer fires in Western North America as compared to 

previous years. 

We  are  pleased  with  the  continued  improvement  of 

FER-PAL and are very focused on continuing to invest in 

improving our operation through the implementation of 

best  practices  and  project  management  tools.  We are 

optimistic that the business will continue to evolve over 

the coming years. 

A COMPELLING VISION 
FOR OUR CUSTOMERS  

“At the heart of LOGISTEC 
Environmental is the unparalleled 
energy and creativity necessary 
to develop truly innovative and 
tailored solutions for our 
customers. Our capacity to 
leverage these competencies and 
to bring them to market is key to 
growing.” 

Kevin Bourbonnais 

PRESIDENT, LOGISTEC ENVIRONMENTAL 
AND SANEXEN  

8 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
CELEBRATING 10 MILLION TONNES OF  
HIGH-QUALITY IRON ORE SHIPPED AT THE PORT 
OF SEPT-ÎLES (QC) 

PARK IN CONTRECOEUR (QC),   

Leading Safety Together 

Safety  and  security  are  paramount  to  the  LOGISTEC 

family. Our ambition is clear: all our people and partners 

must return home safely at the end of each day. As our 

most  precious  asset,  our  people  are  encouraged  to 

make safety their mission every day and strive to find 

innovative ways  to  instill  a  safe mindset  in  everything 

we do. In the last year, we have strengthened our safety 

team  and 

implemented  a  comprehensive  safety 

management system across our network of terminals. 

We  are  also  pleased  that, 

in  2019,  total  OSHA 

recordable  incidents  were  down  when  compared  to 

2018.  For  2020  onwards,  our  leaders  in  the  field  will 

continue to elevate safety to the next level and we will 

recognize those who go above and beyond in the drive 

for safety excellence. 

The LOGISTEC family in our 
communities 

MULTIPLE SCLEROSIS  
LUNCHEON GALA  

From day one, the LOGISTEC family has encouraged all 

of our teams to make a meaningful contribution to the 

social  and  economic  progress  of  our  communities  by 

getting involved at the local level, by suggesting how to 

make  things  better,  and  by  inspiring  innovation.  In 

2019, we offered our support to organizations active in 

communities  where  our  people  work  through  our 

program  The  LOGISTEC  Family  in  Our  Communities. 

We are happy to back the efforts of our team members 

who  volunteer  their  time  to  various  causes  related  to 

social solidarity and mutual assistance. In addition, we 

launched  the  Partners 

in  Planting 

initiative, 

in 

conjunction with Tree Canada, to introduce more trees 

into our communities in a sustainable, environmentally 

friendly way. 

THE GRAND DÉFI PIERRE LAVOIE  

LOGISTEC | 2019 ANNUAL REPORT 

9 

 
 
 
 
 
 
 
 
Driving Innovation for a 
Sustainable Future 

When we are recognized by experts in the industry for our 

innovative  approach  and  for  going  above  and  beyond  in 

what  we  do,  it  strongly  confirms  that  we  are  on  the  right 

path as a leader in marine and environmental services. We 

are driven to do even better and push even harder, whether 

it 

is  for  an  award-winning  enviro-project  with  our 

customers and partners, or for being the first in the world 

to address important sustainability challenges at ports and 

terminals,  or  for  pushing  our  products  almost  to  the 

breaking point to find ways to protect communities around 

the world in case of earthquakes, floods and other extreme 

weather  events.  We are  continuously  looking  for  ways  to 

improve  the  lives  of  our  communities  and  protect  our 

environment  through  our  passion,  hard  work,  solid 

collaboration,  and  research  and  development.  We  are 

pleased  to  present  a  selection  of  honours  conferred  on 

some of our major projects last year. 

10 

2019 ANNUAL REPORT | LOGISTEC  

  
 
 
 
 
 
 
 
 
TRACES QUÉBEC PROJECT WINNING AN 
ENVIROLYS AWARD 

In November 2019, SANEXEN and Avatek Immobilier, along with 

Traces Québec, were honoured with the “Innovation et protection 
de  l’environnement  –  Projet”  Award  at  the  10th  Edition  of 
innovative  project  focused  on  the 
ENVIROLYS  for  their 

traceability of residual materials in Québec, a first in the industry. 

Turning a landfill into safe and usable land, and tracking each piece 

of residual material (construction, renovation and demolition)  to 

ensure proper disposal or recycling. 

“We are proud to have led this 
important project. Waste from 
materials recovery facilities, 
including screened debris, are 
complicated types of waste for 
which there are few solutions 
today. Our team of scientists have 
been working on the responsible 
management of such waste for 
several years. We have developed 
advanced knowledge with our 
partners allowing us to optimize 
management of such waste 
and make a difference for our 
communities.” 

Eric Sauvageau 

EXECUTIVE VICE-PRESIDENT, SANEXEN  

LOGISTEC | 2019 ANNUAL REPORT 

11 

SANEXEN AND AVATEK IMMOBILIER  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
HYBRID FLEET WITH  
EFFENCO TECHNOLOGY 

Our  TERMONT  joint  venture  was  recognized  in 

September 2019 as the first port operator in the world 

to  use  a  fully  hybrid  vehicle  fleet.  Leveraging 

government funding and a collaboration with Effenco, 

who  converted  57  terminal  tractors  into  diesel- 

electric hybrid vehicles equipped with automatic stop-

start technology, we are thereby significantly reducing 

green-house gas emissions at our terminals in the Port 

of Montréal. 

“Thanks to our innovative mindset 
and perseverance, our team will have 
new equipment to ensure better 
management of our environmental 
footprint. And that’s just the 
beginning. Electrification is a key 
project of the future for TERMONT 
and our industry.” 

Julien Dubreuil 

GENERAL MANAGER  
TERMONT MONTRÉAL  

TERMONT TEAM WITH FRANÇOIS BONNARDEL, 
QUÉBEC MINISTER OF TRANSPORT 

12 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
SANEXEN PETROMONT PROJECT, VARENNES (QC)  

“Our people are perfectionists. 
Resilient. Relentless. Always 
ready to go beyond and 
challenge the status quo. 
Continuously pushing the 
boundaries to find new 
creative solutions. Whether 
they work at our corporate 
office, a port terminal, or on a 
remediation site, their role at 
LOGISTEC will always be 
challenging and they 
continuously find a way to rise 
to the occasion.” 

Madeleine Paquin, C.M. 

PRESIDENT AND CEO  

WINNER OF THE BROWNIE AWARD  

The  SANEXEN  team  was  recognized  at  the  2019  Canadian 

Brownfields Network’s Brownie Awards as great innovators and 

visionaries 

in  the  Sustainable  Remediation  &  Technological 

Innovation  category,  dedicated 

to 

the  rehabilitation  of 

contaminated  land  across  Canada.  SANEXEN  demonstrated 

leadership  and  innovation  in  environmental  soil  remediation, 

promoted  solutions  that  avoided  broader  environmental  impact 

and 

incorporated  ecological  principles  and  cost-effective 

technologies in their brownfield projects. 

LOGISTEC | 2019 ANNUAL REPORT 

13 

 
 
 
 
 
 
 
 
 
A LEADER IN RESILIENCE  

Aqua-Pipe,  SANEXEN’s  unique  seamless  structural 

technology,  was  recognized  as  an  industry-changing 

product  to  protect  water  infrastructure  in  the  case  of 

extreme  seismic  activity  and  flooding  events  following 

two  in-depth  tests  performed  at  Cornell  University’s 

Geotechnical  Lifelines  Large-Scale  Testing  Facility  in 

Ithaca (NY) last December. SANEXEN’s Innovation team 

partnered  with  Cornell’s  Lifelines  group  to  advance  its 

unique  seamless  structural  water  technology  through 

funding 

provided 

by 

Sustainable  Development 

Technology Canada  and  Transition énergétique  Québec. 

With  water,  utility  and  environmental  engineers  from 

major cities in the USA present for the testing, Aqua-Pipe 

was  subjected  to  real-scale  simulated  extreme  seismic 

activity  to  test  the  resilience  of  the  product  in  case  of 

earthquakes  or  floods,  and  the  results  far  surpassed 

expectations. Aqua-Pipe maintained its integrity and did 

not  rupture,  protecting  water  flowing  through  it,  and 

demonstrating  its  superior  functionality  for  protecting 

lifelines beyond water such as liquid and gas fuel conduits. 

14 

2019 ANNUAL REPORT | LOGISTEC  

CORNELL’S ENGINEERING TEAM AND 
SANEXEN AT CORNELL UNIVERSITY  

“These exceptional results far 
exceed what we had expected 
for Aqua-Pipe resilience 
through this testing and, most 
importantly, communities and 
cities now have a clear and 
proven solution that can protect 
and secure their underground 
infrastructure with certainty 
for everyday use and in cases of 
extreme seismic activity.” 

Benoît Côté 

PRESIDENT, SANEXEN WATER  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ready for 2020 

and beyond 

Last  November,  our  leadership  team  presented  the 

has  required  that  we  anticipate  our  customers’  future 

ACTION2023 Strategic Plan to our Board of Directors, 

challenges and deliver creative solutions that bring value 

which outlined how we will be expanding our horizons to 

not only today, but more importantly for tomorrow. We 

become  the  partner  of  choice  for  safe,  sustainable  and 

have and are developing technologies to address many of 

creative  solutions  in  the  marine  and  environmental 

these challenges. In our suite of water technologies, we 

services  segments.  This  exercise  drove  home  the 

can rehabilitate aqueducts with minimal excavation, and 

profound sense of pride that unites us all, not only with 

with  our  next  generation  of  Aqua-Pipe,  we  further 

regard to  our  purpose  and  our  values,  but  also  through 

differentiate ourselves by safeguarding water resources 

our shared  objectives. 

We  have  and  continue  to  benefit  from  our  diversity  of 

services  offered,  of  customers  we  serve,  and  of  our 

geographic network. This solid platform of services which 

focuses on customer needs is the base on which we will 

continue to grow. 

In cargo handling, we will continue to expand our network 

of  terminals  and  services,  while  maximizing  cargo 

volumes in each facility. Through market intelligence, we 

always  seek  to  position  our  services  in  line  with  the 

growth  of  imports  and  exports.  Our  growth  will  come 

from both organic and acquisition opportunities. 

We  also  have  ambitious  plans  for  our  environmental 

business. The rapid pace of development in urbanization, 

demographic  shifts,  climate  changes  and  technology 

in seismic and flood zones. We have also been pro-active 

to  develop  technologies  for  the  removal  of  lead  in 

drinking water, a challenge for many large municipalities 

today.  Furthermore,  we  are  developing  technologies  to 

deal  with  per-  and  polyfluoroalkyl  substances  (“PFAS”) 

and other emerging contaminants. 

Our business development team is being strengthened to 

ensure  increased  penetration  in  not  only  the  Canadian 

market,  but  also  in  the  USA.  We are  also  confident  that 

our subsidiary FER-PAL is also well-positioned to grow in 

its  markets,  particularly  Ontario,  Western  Canada  and 

the U.S. Midwest. 

In  the  end,  with  our  new  strategic  plan,  we  are  not 

breaking  with  our  past  commitments;  we  are  simply 

kickstarting  these  efforts  with  renewed  impetus  and 

engaging new stakeholders to make them happen. 

LOGISTEC | 2019 ANNUAL REPORT 

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Powered by Talent 

To accomplish this vision, our team will continue to focus 

on providing our people with a healthy, sound and agile 

work  environment  in  which  they  can  go  above  and 

beyond. 

It’s also about great leadership. Leaders are people  who 

make things happen. The most talented people aspire to 

work for passionate leaders that guide them with a clear 

purpose, and where they have the opportunity to work on 

the  most  captivating  projects  and  learn  from  the  best. 

Our 3,000 trusted experts are primed to blaze new trails 

and make great things happen. They are steadfast in their 

determination to grow our organization  profitably. 

I  would  like  to  take  this  opportunity  to  thank  them  for 

their  unwavering  passion  and  commitment.  I  recognize 

that  their  role  is  essential  to  realizing  our  vision  and  to 

continue to grow earnings sustainably. I look forward to 

working with them to pursue this journey together. 

(signed) Madeleine Paquin  
Madeleine Paquin, C.M. 
President and CEO, LOGISTEC 

16 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
“I am proud to lead this family. We have a great 
opportunity to contribute. With our people’s 
ingenuity and trusted expertise, we can be a 
catalyst for a new path. We will work closely with 
our communities for a more sustainable future. 
The LOGISTEC family is definitely ready for this 
new decade!” 

— MADELEINE PAQUIN  

LOGISTEC | 2019 ANNUAL REPORT 

17 

 
Financial 
Highlights 

SOLID TRACK RECORD 

$639.9M 

IN REVENUE  

78.8% 

INCREASE FROM 2015’s $358M  

$89.6M 

ADJUSTED EBITDA (1) 

$26.2M 

PROFIT ATTRIBUTABLE TO OWNERS OF 
THE COMPANY  

45.0% 

INCREASE OVER LAST YEAR’S $18M  

(1) Adjusted EBITDA is a non-IFRS measure, please refer to the non- IFRS measure section on page 27. 

18 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
M A R INE S E RV IC ES

ENV I RO NM EN TAL
S ERV IC ES

WATER  TEC HN OLOGY
S ERV IC ES

LOGISTEC | 2019 ANNUAL REPORT 

19 

 
 
 
 
 
 
22 0 19  F IN AN CIAL  HIGHLIGHTS  

(in thousands of dollars, except where 
indicated)  

2019 (5) 

2018 

2017 

2016 

2015 

Variation 
19-18 
% 

Variation 
19-15 
% 

9.4 

39.6 

45.0 

15.3 

19.4 

8.9 

6.9 

78.8 

59.1 

(10.1) 

123.7 

36.6 

454.6 

48.0 

Financial Results  

Revenue  

Adjusted EBITDA (1) (6) 

Profit for the year (2) 

Financial Position  

Total assets  

Working capital  

639,942 

584,878 

475,743 

343,326 

358,008 

89,611 

64,177 

74,741 

42,034 

56,321 

26,194 

18,060 

27,426 

18,858 

29,142 

734,738 

637,103 

513,539 

355,860 

328,415 

97,996 

82,099 

70,196 

75,745 

71,717 

Long-term debt (including the 
current portion) 

177,900 

163,297 

83,404 

60,325 

32,079 

Equity (2) 

280,371 

262,198 

228,574 

201,383 

189,413 

Per Share Information (3) 

Profit for the year (2) ($) 

Equity (2) ($) 

Outstanding shares, diluted 
(weighted average in thousands) 

Share price as at December 31 

2.00 

1.38 

2.11 

1.48 

2.34 

21.40 

19.96 

17.56 

15.77 

15.20 

13,103 

13,135 

13,016 

12,768 

12,458 

Class A Common Shares ($) 

39.60 

40.86 

44.04 

38.00 

44.01 

Class B Subordinate Voting 
Shares ($) 

Dividends declared per share 

40.00 

43.27 

44.75 

35.10 

38.00 

Class A Common Shares ($) 

0.3685 

0.3465 

0.3150 

0.3000 

0.2750 

Class B Subordinate Voting 
Shares ($) 

Financial Ratios  

0.4054 

0.3812 

0.3465 

0.3300 

0.3025 

Return on average equity (2) 

9.66% 

7.36% 

12.76% 

9.65% 

16.52% 

Profit for the year (2)/ revenue 

4.09% 

3.09% 

5.76% 

5.49% 

8.14% 

Net indebtedness/capitalization (4) 

36% 

38% 

28% 

18% 

4% 

Price/earnings ratio (Class B 
Subordinate Voting Shares) 

20.00 

31.36 

21.24 

23.76 

16.24 

(1)  Adjusted EBITDA is a non-IFRS measure, please refer to the non-IFRS measure section on page 27. 
(2)  Attributable to owners of the Company. 
(3)  For earnings per share per class of share, please refer to the selected quarterly information table on page 41 
(4)  Net indebtedness and capitalization are non-IFRS measures, please refer to the liquidity and capital resources section on page 32. 
(5)  The 2019 figures reflect the application of IFRS 16 Leases (“IFRS 16”) which the comparative figures have not been restated. Please 

refer to Notes 2 and 16 of the notes to 2019 consolidated financial statements for further details. 
(6)  The application of IFRS 16 had a favourable impact of $13.7 million on the adjusted EBITDA of 2019. 

20 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Introduction 

This  management’s  discussion  and  analysis  (“MD&A”)  of  operating  results  deals  with  LOGISTEC 
Corporation’s operations, results and financial position for the fiscal years ended December 31, 2019 and 
2018. All financial information contained in this MD&A and the attached audited consolidated financial 
statements  (“financial  statements”)  has  been  prepared  in  accordance  with  International  Financial 
Reporting Standards (“IFRS”).  

In  this  report,  unless  indicated  otherwise,  all  dollar  amounts  are  expressed  in  Canadian  dollars.  This 
MD&A should be read in conjunction with LOGISTEC’s financial statements and the notes (“2019 Notes”) 
thereon. 

Our Business 

The Company is incorporated in the Province of Québec and its shares are listed on the Toronto Stock 
Exchange  (“TSX”)  under  the  ticker  symbols  LGT.A  and  LGT.B.  The  Company’s  largest  shareholder  is 
Sumanic Investments Inc. 

The  operations  of  LOGISTEC  Corporation,  its  subsidiaries  and  its  joint  ventures  (collectively 
“LOGISTEC”,  the  “Company”,  “we”,  “us”,  or  “our”)  are  divided  into  two  segments:  marine  services  and 
environmental services. 

Marine Services 

LOGISTEC  provides  specialized  cargo  handling  and  other  services  to  a  wide  variety  of  marine  and 
industrial customers. The Company is one of Canada’s largest cargo handling companies and a growing 
player in the USA. Our services also include marine transportation and marine agency services.  

C A RG O  H A ND LI N G  

With a presence in 34 ports and 60 terminals across North America, our Company specializes in handling 
all  types  of  dry  cargo,  including  bulk,  break-bulk  and  containers.  Cargoes  handled  typically  consist  of 
forest products, metals, dry bulk, fruit, grain and bagged cargoes, containers, general and project cargoes. 
We  also  offer  container  stuffing  and  destuffing,  warehousing  and  distribution,  and  other  value-added 
services to industrial customers.  

Our strategy is focused on diversifying our operations to respond to our customers' needs and cover a 
wide geographical area with a broad cargo mix and a blend of import-export activities. This helps minimize 
the impact of market disruptions affecting any one particular region or cargo type. 

Our  extended  network  of  port  terminals  allows  us  to  specialize  our  facilities  and  thereby  tailor  our 
services to our customers’ specific cargo handling needs. This improves the quality of services, enhances 
operating efficiencies, lowers the risk of cargo damage, and ensures greater control over costs. In general, 
this strategy enables us to provide our customers with top-quality cost-competitive services. 

We aim to be the go-to terminal partner with unique technology to create comprehensive solutions and 
value-added port services. 

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22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

O TH ER  M A RI N E  S E R VI C ES  

Our  other  marine  services  include  coastal  transportation  of  cargoes  to  communities  in  the  Canadian 
Arctic through our 50%-owned joint venture Transport Nanuk Inc. (“Nanuk”). Nanuk owns a 50% interest 
in NEAS Group Inc. (“NEAS”), in partnership with an Inuit shareholder. NEAS owns five ice-class vessels 
and  performed  17  voyages  to  the  Arctic  in  2019.  We  served  over  40  communities  in  Nunavut  and 
Nunavik. Nanuk’s results are included in the Company’s results using the equity method of accounting.  

We also offer marine agency services to foreign shipowners and operators active in Canadian waters. A 
shipping agent is the local representative of a foreign shipping company and will usually take care of all 
routine matters on its behalf. The agency will ensure a berth for the incoming ship, obtain services from 
pilots  and  organize  the  necessary  contacts  with  the  stevedores.  The  agent  also  ensures  that  essential 
supplies,  crew  transfer,  customs  documentation  and  waste  declarations  are  all  arranged  with  port 
authorities. 

Environmental Services 

The Company,  through its subsidiaries SANEXEN Environmental  Services Inc.  (“SANEXEN”) and  FER-
PAL  Construction  Ltd.  (“FER-PAL”),  operates  in  the  environmental  sector.  We  deliver  creative  and 
customized solutions to industrial, municipal and governmental clients and partners. SANEXEN’s expert 
environmental  engineers  and  scientists,  combined  with  its  in-house  research  and  development  teams, 
utilizes, amongst others, innovative water technologies and offers key environmental services such as the 
rehabilitation  of  underground  water  mains,  site  remediation,  soils  and  materials  management,  risk 
assessment, and manufacturing of woven hoses. 

A Q UA -P IPE  

SANEXEN has developed the Aqua-Pipe technology, a process involving structural lining with minimal 
excavation,  for  the  rehabilitation  of  drinking  water  supply  lines  between  150  millimetres  and 
600 millimetres  in  diameter.  Aqua-Pipe  is  a  technology  which  creates  a  new  structural  pipe  made  of 
composite materials within aging pipes that have reached the end of their useful life.  

SANEXEN owns Niedner Inc. (“Niedner”), a manufacturer of woven hoses. Through Niedner, SANEXEN 
manufactures the structural lining used in the Aqua-Pipe process as well as woven hoses destined for the 
fire-fighting market and the energy industry. Niedner also produces the resin that is part of the Aqua-Pipe 
installation process. 

SANEXEN either performs the installation of Aqua-Pipe itself or licenses the technology to certified field 
installers. Developing, manufacturing and installing the product gives SANEXEN a competitive advantage 
as  it  allows  us  to  better  understand  all  aspects  of  the  product  and  its  installation,  and  enables  us  to 
continue to improve the product and better assist our licensees. FER-PAL is a certified field installer of 
the  Aqua-Pipe  technology.  Our  U.S.  operations  are  handled  through  SANEXEN  Water,  Inc.,  with  two 
offices, one near Philadelphia (PA) and the other in the vicinity of Los Angeles (CA), and through FER-PAL 
Construction  USA,  LLC,  with  offices  near  Chicago (IL)  and  Detroit (MI).  Using  this  technology, 
approximately 2,000 kilometres of water mains have been rehabilitated to date, directly or via licensees.  

SANEXEN  received  $1.0 million  from  Sustainable  Development  Technology  Canada  in  2018  and 
directed  the  funding  to  test  the  resiliency  of  the  next  generation  of  our  technology  under  extreme 
environmental conditions. In December 2019, SANEXEN confirmed that its trenchless structural cured 
in-place pipe technology was capable of withstanding extreme seismic and flooding conditions following 
tests performed at Cornell University in a large-scale lifelines testing facility. 

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22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

O TH ER  E N VI RO N M E N TA L  S E R VI CES  

The  Company  provides  services  for  the  characterization  and  remediation  of  sites  as  well  as  for  risk 
assessment and for soils and materials management and has carried out hundreds of projects involving a 
wide spectrum of decontamination issues. It offers turnkey solutions for the assessment of properties 
(phases I and II)  and  the  clean-up  of  soils,  groundwater,  buildings,  lagoons  and  underground  tanks. 
SANEXEN also analyzes and evaluates the human and environmental risks associated with contamination 
issues.  

Mission and Development Strategy 

LOGISTEC’s strategy towards 2023 is guided by our mission and purpose: we pride ourselves on building 
and sharing our expertise in order to contribute to the success of our customers and our communities. 
Our  people  are  dedicated  to  finding  solutions  that  support  reliable  supply  chains  and  protect  our 
environment and our water resources. 

In cargo handling, LOGISTEC is an innovative, solutions-based service provider in North America. We 
provide cargo handling, port logistics and other value-added services to industrial companies and carriers. 
Our growth strategy is based on organic growth and business combinations. We aim to maximize cargo 
handled  through  our  existing  network  of  terminals  while  also  diversifying  our  cargo  base,  where 
appropriate, to avoid overexposure to any specific commodity or product. Management is always seeking 
new business opportunities, and potential investment projects are regularly analyzed. Such opportunities 
may include the acquisition of other operators, the addition of port facilities, outsourcing and providing 
turnkey solutions or value-added solutions for existing or new customers. We apply very strict evaluation 
criteria from both a financial and a strategic fit perspective to all our projects. Indeed, prior to proceeding 
with an acquisition, we make sure that the investment is accretive, that it provides the proper return from 
future sustainable cash flows and, if financing is needed, that our financial position continues to present 
an  acceptable  debt  level  and  debt/capitalization  ratio.  We  are  striving  to  expand  our  geographical 
presence while maintaining a balanced portfolio of commodities or products handled. A potential business 
combination is pursued only if it will contribute to maximizing shareholder value. Furthermore, the 2018 
acquisition of Gulf Stream Marine, Inc. (“GSM”), which we discuss in the business combinations section of 
this MD&A, allows LOGISTEC to establish a stronghold in the U.S. Gulf region and represents a major 
expansion of our network of terminals in the USA. 

SANEXEN’s long-term business development strategy, while maintaining a strong focus on its traditional 
business (soils and materials management, site remediation and risk assessment), relies extensively on 
the development of Aqua-Pipe and the large potential of the North American market. Through Niedner, 
SANEXEN  controls  the  research,  development  and  production  of  the  lining  and  resin,  two  of  the  key 
components in the Aqua-Pipe process. The development of large-diameter woven hoses for Aqua-Pipe is 
an important part of SANEXEN’s growth plan. Through FER-PAL, the Company consolidates its position 
as a North-American leader in the installation of structural lining for the rehabilitation of drinking water 
supply lines.  

LOGISTEC | 2019 ANNUAL REPORT 

23 

 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Performance Factors 

Three  performance  factors  are  particularly  important  for  the  Company:  a  qualified  and  dedicated 
workforce, the use of innovative technologies and access to port facilities. 

Talent 

Our people are key to our successful business strategy, since they ensure the delivery of our services 
whether through our cargo handling facilities or on project sites. Our success is a reflection of their skills. 

We consider ourselves fortunate to count on a team of passionate and qualified people to manage our 
operations despite a competitive job market. We have developed in-house programs to motivate, train 
and retain our employees, and we benefit from a low personnel turnover rate. LOGISTEC’s success relies 
on its team of some 3,000 people across North America, from the Arctic to Brownsville (TX). This number 
is based on the full-time equivalent based on a regular work week of all salaried and hourly employees, 
including longshoremen whose services are retained directly or under multi-employer jurisdictions as a 
complement to our direct employees. The Company’s involvement in the environmental industry means 
that we require highly qualified personnel, as our solid reputation is based on our ability to attract and 
retain technical and professional staff. 

Being mostly a service provider (as opposed to a manufacturing business), employee benefits expense is 
the most significant expense for the Company and represented $313.1 million or 48.9% of revenue in 
2019 ($299.7 million or 51.2% of revenue in 2018). Please refer to Notes 5, 22 and 28 of the 2019 Notes 
and to page 29 of this MD&A for further details on employee compensation and benefits. 

Innovative Technologies 

Technology is not only shaping our customers’ needs, but also how our people work together to deliver 
our services. To create an increasingly compelling value proposition for our customers, we are constantly 
looking at how we can leverage the depth and breadth of our capabilities across our organization. In 2019, 
we worked with our experts across our marine and environmental services to identify how to enhance 
our processes to enable our professionals to consistently bring our best expertise to bear across all our 
projects. 

On the marine services front, across our growing network, our terminal operators leverage technology 
to optimize our operations, monitor our extensive fleet of equipment, and provide accurate and timely 
information to customers. In addition, our leaders in the field are recognized for their ability to develop 
unique cargo-handling solutions, addressing the specific challenges each supply chain brings. 

As one of Canada’s leading environmental services companies, our team combines deep expertise with 
innovation to develop technological solutions suited to meet our industrial customers’, public utilities’ and 
municipalities’  challenges,  including  the  next  generation  of  proven  water  technologies,  lead-free 
solutions, and per- and polyfluoroalkyl substances (“PFAS”) treatment and removal solutions. 

In 2019, our consolidated capital expenditures were at $34.6 million. Equipment and supplies constitute 
the  second  largest  expense  incurred  by  the  Company  as  shown  in  the  consolidated  statements  of 
earnings,  and,  totalled  $169.6 million  in  2019,  which  represents  26.5%  of  revenue  ($156.9 million  or 
26.8% of revenue in 2018). 

24 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Access to Port Facilities 

Access to port facilities is a key success factor for a cargo handling company. It is also a barrier to entry in 
this segment of our business. The number of port facilities with adequate characteristics (geographical 
location, draft, loading and warehousing capacity, access to land transportation, etc.) is limited, and such 
facilities are generally leased on a long-term basis. We are present in 34 ports and 60 terminals across 
North America. 

We lease the terminals where we operate and a majority of the warehouses we use. Most of our sites are 
under long-term leases, allowing us to invest in proper infrastructure and cargo handling equipment and 
technologies. The rent may be a fixed monthly charge, a throughput fee based on tonnage handled, or a 
combination of both. We have access to thousands of square metres of dock space along with several 
kilometres of dock front.  

In the Company’s consolidated statements of earnings, operating expense, which includes variable rent 
on leased properties, municipal taxes and maintenance costs of our sites, is the third largest expense at 
$43.2 million or 6.7% of revenue in 2019 ($46.0 million or 7.9% of revenue in 2018). (1) 

Tracking Performance 

In addition to a sophisticated accounting system that enables us to rigorously analyze the performance of 
each of our facilities and business units, we use a costing system that allows us to monitor our operations. 
We have developed a multitude of automated reporting and tracking tools that provide our managers 
with accurate and timely information, helping to optimize our operations.  

Our  senior  management  team  meets  once  a  month  to  discuss  results,  forecasts  and  development 
projects. This practice enables management to accurately assess results and development, and to allocate 
necessary resources as required in a timely manner. 

In addition to these monthly meetings, senior management provides our Board of Directors and our Audit 
Committee with quarterly performance reports. The Audit Committee’s members question management 
and  hold regular in  camera  discussions with the  independent auditor to  ensure  that  publicly  disclosed 
financial reports are accurate. 

Finally, before any financial or regulatory information is issued to the public, it is reviewed by a Disclosure 
Committee  composed  of  members  of  the  Company’s  senior  management,  the  President  and  Chief 
Executive Officer, the Chairman of the Board, and the Chairman of the Audit Committee. 

Ability to Perform 

We have achieved a profit every year since becoming a public company in 1969. Our history of success 
attests to our long-term financial stability and our ability to perform on a sustained basis in a changing 
environment. 

Business Strategy 

In the marine services segment, our business strategy is rooted in the diversification of the cargoes we 
handle, the wide geographical area covered by our facilities and a well-balanced mix of import and export 
activities. This strategy has proven particularly effective over the years, as we have seen fluctuations in 
mining, steel, forest products, containers and other cargo volumes, where negative situations are often 
offset by positive ones.  

(1) The 2019 figures reflect the application of IFRS 16, which had a favourable impact of $13.7 million and for which the comparative 

figures have not been restated. Please refer to Notes 2 and 16 of the 2019 Notes for further details. 

LOGISTEC | 2019 ANNUAL REPORT 

25 

 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

In  the  environmental  services  segment,  we  have  positioned  ourselves  as  a  leader  in  our  traditional 
markets,  and  we  are  counting  on  geographic  expansion  of  our  environmental  services  as  well  as  the 
commercialization  of  our  unique  water  technologies  across  the  North  American  markets.  These 
technologies include rehabilitation of underground water pipes, protecting water from lead service lines 
using an inner liner, and technologies to deal with emerging contaminants such as PFAS. 

We have sound internal expertise as well as access to a qualified labour force, an efficient, well-maintained 
and well-deployed fleet of equipment, and a solid reputation in both cargo handling and environmental 
services.  These  characteristics  have  earned  the  trust  of  our  customers,  suppliers  and  partners,  and 
contribute to our growth. 

Ability to Negotiate with Unions 

LOGISTEC  employs  union  and  non-union  workers  depending  on  the  company  and  location.  Over  the 
years,  we  have  proven  our  ability  to  negotiate  directly  or  through  employer  associations  and  reach 
agreements with unions where applicable. The Company is party to 35 active collective agreements. We 
signed two agreements in 2019, while seven were still being negotiated at the end of 2019 and four will 
expire in 2020.  

Borrowing Capacity 

LOGISTEC  generates  positive  cash  flows  from  operating  activities.  These  reached  $71.3 million  and 
$59.1 million in 2019 and 2018, respectively, which is more than sufficient to cover our usual investing 
and financing activities.  

At the end of 2019, our net indebtedness, defined as long-term debt (including the current portion) and 
short-term  bank  loans  net  of  cash  and  cash  equivalents,  was  $155.3 million,  whereas  our  equity 
attributable  to  owners  of  the  Company  totalled  $280.4 million,  giving  us  a  net  indebtedness/ 
capitalization ratio of 35.6%. 

The  Company  has  organized  its  banking  facilities  in  order  to  segregate  credits  available  to  its  wholly 
owned subsidiaries from credits available to non-wholly owned subsidiaries and joint ventures.  

LOGISTEC  has  a  committed  line  of  credit  provided  by  a  banking  syndicate.  It  allows  LOGISTEC 
Corporation  and  a  designated  subsidiary  to  borrow  funds  directly  from  this  credit  facility  to  cover 
operating and general corporate expenses and to issue bank guarantees. 

In  October  2019,  to  increase  its  financial  flexibility,  the  Company  and  its  wholly  owned  subsidiary, 
LOGISTEC USA Inc., renegotiated their credit agreement leading to an amendment to the existing credit 
agreement. The unsecured revolving credit facility was increased from $175.0 million to $300.0 million 
or the U.S. dollar equivalent, with maturity in October 2023. 

The  total  amount  available  through  this  committed  credit  facility  as  at  December 31,  2019  was 
$300.0 million  ($175.0 million  in  2018).  There  was  an  equivalent  of  $115.0 million  drawn  under  the 
facility ($104.5 million in 2018), and an additional $3.7 million was used for letters of credit ($3.8 million 
in 2018). The applicable interest rate on this revolving credit facility is variable, and depends on the form 
of borrowing, to which is added a margin that varies according to the level of leverage ratio achieved by 
the Company.  

26 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Non-IFRS Measure 

In this MD&A, the Company uses a measure that is not in accordance with IFRS. Adjusted earnings before 
interest  expense,  income  taxes,  depreciation  and  amortization  expense  (“adjusted  EBITDA”)  is  not 
defined  by  IFRS  and  cannot  be  formally  presented  in  financial  statements.  The  definition  of  adjusted 
EBITDA  excludes  the  Company’s  impairment  charge  and  includes  the  customer  repayment  of  an 
investment in a service contract. The definition of adjusted EBITDA used by the Company may differ from 
those  used  by  other  companies.  Even  though  adjusted  EBITDA  is  a  non-IFRS  measure,  it  is  used  by 
managers,  analysts,  investors  and  other  financial  stakeholders  to  analyze  and  assess  the  Company’s 
performance and management from a financial and operational standpoint.  

The following table provides a reconciliation of profit for the period to adjusted EBITDA. 

(in thousands of Canadian dollars, except per share amounts)  

2019 (1) 
$ 

2018 
$ 

2017 
$ 

2016 
$ 

2015 
$ 

Profit for the period 
PLUS: 
Depreciation and amortization expense 
Impairment charge 
Net finance expense 
Income taxes 
Customer repayment of an investment in a service 
contract 
Adjusted EBITDA   

26,437 

17,994 

27,356 

18,486 

32,873 

42,122 
— 
12,353 
8,699 

— 
89,611 

28,580 
6,821 
7,474 
3,308 

— 
64,177 

33,859 
2,917 
3,533 
6,211 

865 
74,741 

14,288 
— 
1,700 
7,268 

292 
42,034 

12,328 
— 
623 
10,288 

209 
56,321 

(1)  The 2019 figures reflect the application of IFRS 16 which had a favourable impact of $13.7 million on the adjusted EBITDA and 
for which the comparative figures have not been restated. Please refer to Notes 2 and 16 of the 2019 Notes for further details. 

Selected Annual Financial Information 
Years ended December 31 
(in thousands of dollars, except earnings and dividends per share)  
2019 (1) 
$ 

2018 
$ 

2017 
$ 

Variation 19-18 

$ 

% 

Revenue 
Profit attributable to owners of the Company 

639,942 
26,194 

584,878 
18,060 

475,743 
27,426 

55,064 
8,134 

Total basic earnings per share (2) 
Total diluted earnings per share (2) 

2.05 
2.00 

1.43 
1.38 

2.23 
2.11 

0.62 
0.62 

Total assets  
Total non-current liabilities  
Cash dividends per share: 
— Class A shares (3) 
— Class B shares (4) 
Total cash dividends 

734,738 
338,565 

637,103 
246,497 

513,539 
174,455 

97,635 
92,068 

0.3658 
0.4023 
4,864 

0.3383 
0.3721 
4,452 

0.3075 
0.3383 
3,917 

9.4 
45.0 

43.4 
44.9 

15.3 
37.4 

(1)  The 2019 figures reflect the application of IFRS 16 for which the comparative figures have not been restated. Please refer to 

Notes 2 and 16 of the 2019 Notes for further details. 

(2)  Combined for both classes of shares. 
(3)  Class A Common Shares (“Class A shares”). 
(4)  Class B Subordinate Voting Shares (“Class B shares”). 

LOGISTEC | 2019 ANNUAL REPORT 

27 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

2019 versus 2018 

Revenue was up by 9.4% in 2019, an increase of $55.1 million over 2018. Revenue in the marine services 
segment  totalled  $385.3 million  in  2019,  up  by  $44.5 million  from  $340.8 million  last  year.  The 
environmental services segment delivered revenue totalling $254.6 million, an increase of $10.5 million 
or 4.3% over revenue of $244.1 million in 2018. 

Profit attributable to owners of the Company increased by $8.1 million or 45.0% in 2019. Most of the 
variation  came  from  an  increase  in  our  environmental  services  segment,  mainly  due  to  the  improved 
results of FER-PAL when compared to last year. 

Total assets amounted to $734.7 million at the end of 2019, up by $97.6 million over 2018. This increase 
stems mainly from right-of-use assets following the application of IFRS 16, as fully described in Notes 2 
and 16 of the 2019 Notes. Our cash position increased by $7.2 million, this variation was essentially due 
to $71.3 million of positive cash flows from operating activities, which was more than enough to cover our 
$42.0 million cash outflows from investing and $23.6 million cash outflows from financing activities.  

Total non-current liabilities increased to $338.6 million in 2019, compared with $246.5 million in 2018. 
This is due mainly from lease liabilities following the application of IFRS 16, as fully described in Notes 2 
and 16 of the 2019 Notes.  

Cash dividends paid in 2019 increased by 9.3% to $4.9 million, compared with $4.5 million in 2018.  

2018 versus 2017 

Revenue was up by 22.9% in 2018, an increase of $109.1 million over 2017. The variation came from our 
marine  services  segment,  with  an  increase  of  $135.5 million  or  66.0%,  offset  by  our  environmental 
services segment, with a decrease of 9.7%.  

Profit attributable to owners of the Company decreased by $9.4 million or 34.2% in 2018. The variation 
came  from  a  decrease  in  our  environmental  services  segment,  mainly  due  to  a  significantly  lower 
performance by FER-PAL.  

Total assets amounted to $637.1 million at the end of 2018, up by $123.6 million over 2017. This growth 
in assets is due to investments in capital expenditures and to two business combinations, GSM and Pate 
Stevedore Company, Inc. (“Pate”). Please refer to the business combinations section of this MD&A for 
details on these business combinations. Our cash position increased by $11.4 million, mainly due to our 
issuance in long-term debt, net of repayment, of $72.3 million and cash flows from operating activities of 
$59.1 million.  This  was  partly  offset  by  our  investing  activities  of  $109.9 million,  dividends  paid  of 
$4.5 million, and income taxes paid of $10.0 million.  

Total non-current liabilities increased to $246.5 million in 2018, compared with $174.5 million in 2017. 
This  is  due  to  the  $79.9 million  increase  in  our  long-term  debt  in  2018  to  finance  our  investments  in 
capital expenditures. It also stems from the $5.9 million increase in deferred income tax liabilities. This 
was partly offset by a $15.5 million decrease in our other non-current liabilities. 

Cash dividends paid in 2018 increased by 13.7% to $4.5 million, compared with $3.9 million in 2017. 

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22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Business Combinations 
2018 Business Combinations 

GS M  

On March 1, 2018, the Company acquired 100% ownership of GSM Maritime Holdings, LLC, the ultimate 
owner of GSM, for a purchase price of US$67.6 million ($85.6 million), subject to certain adjustments. 
GSM performs cargo handling operations in the U.S. Gulf Coast for a diverse mix of customers.  

PA TE  

On May 25, 2018, the Company acquired 100% ownership of Pate for a purchase price of US$9.6 million 
($12.4 million), subject to certain adjustments. Pate provides cargo handling and distribution services at 
its Florida operations.  

As at March 30, 2019, the Company finalized estimates of the fair value of assets acquired and liabilities 
assumed. Consequently, intangible assets were increased by $5.6 million, property, plant and equipment 
was  increased  by  $1.9 million,  and  current  assets  were  decreased  by  $0.2 million  with  an  offsetting 
adjustment  to  goodwill  in  the  amount  of  $7.4 million.  The  comparative  figures  of  the  consolidated 
statements of financial position have been changed accordingly. 

Please refer to Note 27 of the 2019 Notes for further details.  

Results 

Significant accounting policies applied in the 2019 financial statements are described in Note 2 of the 
2019 Notes.  

Revenue 

Consolidated revenue totalled $639.9 million in 2019, an increase of $55.1 million or 9.4% over 2018. 
Consolidated revenue was positively affected by $4.2 million this year due to a strengthening of the U.S. 
dollar against the Canadian dollar. 

The  marine  services  segment  posted  revenue  of  $385.3 million  in  2019,  representing  higher  sales 
compared with $340.8 million in 2018.  This increase stems from two factors: the business combinations 
of GSM and Pate, which contributed an additional $40.8 million in sales during the year and, to a lesser 
extent, a general volume increase in our bulk and break-bulk terminals, which saw more activity this year 
than in 2018.  

Revenue from the environmental services segment totalled $254.6 million, compared with $244.1 million 
in  2018,  an  increase  of  $10.5 million.  This  is  mainly  due  to  higher  revenue  from  the  rehabilitation  of 
underground  water  mains,  site  remediation  and  decontamination  services  than  last  year,  which  was 
partially offset by lower revenue from woven hose manufacturing. 

Employee Benefits Expense 

For 2019, the employee benefits expense reached $313.1 million, an increase of $13.4 million or 4.5% 
over the $299.7 million recorded for the same period last year. The ratio of employee benefits expense 
to revenue was 48.9%, slightly down from 51.2% for the same period last year. This decrease stemmed 
from the environmental services segment where employee benefits expenses, as a percentage of revenue 
from  rehabilitation  of  underground  water  mains,  were  more  favourable  when  compared  to  last  year, 
mainly following the cost control improvements implemented at FER-PAL in 2019.  

LOGISTEC | 2019 ANNUAL REPORT 

29 

 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Equipment and Supplies Expense 

Equipment and supplies expense amounted to $169.6 million, an increase of $12.8 million or 8.1% over 
the same period in 2018. This variation reflects the overall increase in activity in 2019, as the overall ratio 
of equipment and supplies expense to revenue was 26.5%, in line with the 26.8% for the same period in 
2018.  

Operating Expense 

Operating expense stood at $43.2 million, or $56.9 million when we exclude the impact of the application 
of IFRS  16 for  2019.  The  ratio  of  operating  expense  to  consolidated revenue,  excluding  the impact  of 
IFRS 16, was 8.9%, which is in the same range as 7.9% for the same period last year. 

IFRS 16 requires the recognition of an asset and a related liability for all contractual obligations previously 
accounted for as operating leases under IAS 17 Leases (“IAS 17”), unless the contract term is 12 months or 
less or the underlying asset has a low value. Lease payments falling under the scope of IFRS 16 amounted 
to $13.7 million during 2019. Lease payments are presented in the consolidated statements of cash flows 
as  repayment  of  lease  liabilities  and  interest  paid,  instead  of  as  an  operating  expense.  Please  refer  to 
Notes 2 and 16 of the 2019 Notes for further details. 

Other Expenses 

Other expenses stood at $31.9 million, representing a variation of $2.1 million or 7.0% compared with 
the  same  period  in  2018.  This  increase  stems  from  two  factors:  the  integration  costs  of  the  two  new 
business  combinations  made  last  year,  and  the  professional  fees  incurred  to  analyze  business 
development opportunities. 

Depreciation and Amortization Expense  

Depreciation  and  amortization  expense  amounted  to  $42.1 million  in  2019,  up  $13.5 million  from 
$28.6 million last year. Of this increase, $11.6 million relates to depreciation of the additional right of use 
of assets created under IFRS 16.  

The  increased  depreciation  expense  related  to  IFRS  16  should  be  analyzed  in  conjunction  with  the 
reduced operating expense and increased finance expense. Please refer to Notes 2 and 16 of the 2019 
Notes for further details. 

Other Gains and Losses 

Other gains and losses varied by $4.8 million, from a $3.6 million gain in 2018 to a $1.2 million loss in 
2019. This variance is mainly related to unrealized exchange losses incurred in 2019 on translating net 
working capital denominated in U.S. dollars, given the stronger Canadian dollar. 

Impairment charge  

At the end of 2018, the Company reviewed the carrying amount of its intangible assets and determined 
that  cash  generating  units  associated  with  our  port  logistics  activities  in  Virginia  had  suffered  an 
impairment loss of $6.8 million. No impairment charge was recorded in 2019. 

Finance Expense  

Finance  expense  amounted  to  $12.9 million  in  2019,  an  increase  of  $4.9 million  over  the  $8.0 million 
reported  last  year.  Of  this  increase,  $4.0 million  relates  to  the  accretion  expense  of  the  additional 
liabilities  created under  IFRS  16.  The  remaining  variance  relates  to  a  higher borrowing  base following 
financing of the business combinations of GSM and Pate that occurred during the first half of 2018. 

The increased finance expense related to IFRS 16 should be analyzed in conjunction with the reduced 
operating expense and increased depreciation expense. Please refer to Notes 2 and 16 of the 2019 Notes 
for further details. 

30 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Income Taxes 

Income taxes stood at $8.7 million for 2019. When the profit before income taxes is adjusted to exclude 
the effect of the share of the profit of equity accounted investments, the 2019 tax rate computes to 32.9% 
compared with 25.1% in 2018. This variation is within normal parameters, and relates primarily to the 
$1.3 million non-tax-deductible items and the adjustment in respect to the return to the provision. Please 
refer  to  Note  8  of  the  2019  Notes  for  a  full  reconciliation  of  the  effective  income  tax  rate  and  other 
relevant income tax information. 

Segmented Profit Before Income Taxes 

The 2019 profit before income taxes from the marine services segment amounted to $25.3 million, up 
$3.6 million  from  the  $21.7 million  profit  in  2018.  From  an  operational  point  of  view,  cargo  handling 
performance was positive in 2019. The profitability, expressed as the overall ratio of profit before income 
taxes to revenue, was 6.6%, in line with the 6.4% last year. These figures reflect the higher finance expense 
following financing of the business combinations of GSM and Pate, the incremental expenses related to 
the transition to IFRS 16 and the unrealized exchange losses incurred on translating net working capital 
denominated in U.S. dollars, partially offset by no impairment charge in 2019. 

The 2019 profit before income taxes from the environmental services segment amounted to $9.8 million, 
a significant improvement over the $0.4 million loss incurred last year. This increase stems from higher 
revenue from the segment combined with a more favourable employee benefits expense as a percentage 
of revenue following notably the cost control improvements implemented at FER-PAL in 2019. 

Profit for the Year and Earnings per Share 

In 2019, the Company reported a profit of $26.4 million, of which $0.2 million was attributable to non-
controlling  interest,  amounting  to  a  $26.2 million  profit  attributable  to  owners  of  the  Company.  This 
translated  into  total  diluted  earnings  per  share  of  $2.00 of  which  $1.92 per  share  was  attributable  to 
Class A shares and $2.11 per share was attributable to Class B shares. 

All  other  items  of  the  consolidated  statements  of  earnings  varied  according  to  normal  business 
parameters. 

Dividends 

The Company’s Board of Directors determines the level of dividend payments. Although LOGISTEC does 
not have a formal dividend policy, the practice to date has been to maintain regular quarterly dividends 
with modest increases over the years. 

On August 7, 2019, the Company’s Board of Directors elected to increase the dividend payment by 3.0%. 

The following table describes the dividend payments schedule since January 2019, which are all eligible 
dividends for Canada Revenue Agency purposes. 

(in millions of dollars, except per share amounts) 

Declaration date 

Record date 

Payment date 

December 6, 2018 
March 15, 2019 
May 9, 2019 
August 7, 2019 
December 4, 2019 
March 17, 2020 

January 4, 2019 
April 4, 2019 
June 21, 2019 
September 27, 2019 
January 3, 2020 
April 3, 2020  

January 18, 2019 
April 18, 2019 
July 5, 2019 
October 11, 2019 
January 17, 2020 
April 17, 2020  

Per Class A 
share 
$ 
0.09075 
0.09075 
0.09075 
0.09350 
0.09350 
0.09350 

Per Class B 
share 
$ 
0.099825 
0.099825 
0.099825 
0.102850 
0.102850 
0.102850 

Total 

$ 
1.2  
1.2  
1.2  
1.2  
1.2  
1.2  

LOGISTEC | 2019 ANNUAL REPORT 

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22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Liquidity and Capital Resources 
Capital Management 

The Company’s primary objectives when managing capital are to: 

(cid:16)  Maintain a capital structure that allows financing options to the Company in order to benefit from 

potential opportunities as they arise; 

(cid:16)  Provide an appropriate return on investment to its shareholders.  

The Company includes the following in its capital: 

(cid:16)  Cash and cash equivalents and short-term investments, if any; 

(cid:16)  Long-term debt (including the current portion) and short-term bank loans, if any; 

(cid:16)  Equity attributable to owners of the Company. 

The capital is calculated as follows: 

(in thousands of dollars) 

Short-term bank loans 
Long-term debt, including the current portion 
Total indebtedness 
Less: 

Cash and cash equivalents 

Total net indebtedness 

Equity attributable to owners of the Company 

Capitalization 

Ratio of net indebtedness/capitalization 

As at  
December 31, 
2019 
$ 

As at  
December 31, 
2018 
$ 

— 
177,900 
177,900 

22,608 
155,292 

13,577 
163,297 
176,874 

15,393 
161,481 

280,371 

262,198 

435,663 

423,679 

35.6% 

38.1% 

The Company’s financial strategy is formulated and adapted according to market conditions in order to 
maintain a flexible capital structure that is consistent with the objectives stated above and corresponds 
to the risk characteristics of the underlying assets. In order to maintain or adjust its capital structure, the 
Company  may  refinance  its  existing  debt,  raise  new  debt,  pay  down  debt,  repurchase  shares  for 
cancellation purposes pursuant to normal course issuer bids or issue new shares. 

When looking at business investment opportunities, the Company uses discounted cash flow models to 
ensure  that  the  rate  of  return  meets  its  objectives.  Furthermore,  investment  opportunities  must  be 
accretive, therefore enhancing shareholder value. 

The decision to repay debt is based on an assessment of current levels of cash in relation to expected cash 
that  will  be  generated  from  operations.  The  Company  has  credit  facilities  with  various  financial 
institutions that can be utilized when investment opportunities arise. 

32 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Capital Resources 

Total assets amounted to $734.7 million as at December 31, 2019, up by $97.6 million over the closing 
balance of $637.1 million as at December 31, 2018. As mentioned earlier, this increase is mainly due to 
the application of IFRS 16, as fully described in Notes 2 and 16 of the 2019 Notes. 

Cash and cash equivalents totalled $22.6 million at the end of 2019, up by $7.2 million from $15.4 million 
as at December 31, 2018. The main items behind this increase were as follows: 

(in thousands of dollars) 

Sources: 
Cash generated from operations 
Issuance of long-term debt, net of repayment  

Uses: 
Acquisition of property, plant and equipment, net of proceeds from disposal 
Net change in short-term bank loans 
Interest paid 
Income taxes paid 
Repayment of lease liabilities 
Cash paid to non-controlling interests 
Changes in non-cash working capital items 
Dividends paid on Class A and Class B shares 

82,349 
18,619 
100,968 

(33,142) 
(13,577) 
(12,269) 
(11,947) 
(9,726) 
(7,972) 
(2,049) 
(4,864) 
(95,546) 

Working Capital 

As  at  December  31,  2019,  current  assets  totalled  $213.2 million  and  current  liabilities  totalled 
$115.2 million,  computing  into  working  capital  of  $98.0 million  for  a  current  ratio  of  1.85:1.  This 
compares with working capital of $82.1 million and a 1.65:1 ratio as at December 31, 2018. The increase 
is due to the repayment of the short-term bank loans and trade and other payables, partly offset by the 
current portion of lease liabilities recorded in 2019 following the application of IFRS 16, as fully described 
in Notes 2 and 16 of the 2019 Notes. 

Long-Term Debt 

Total net indebtedness amounted to $161.5 million as at December 31, 2018, down by $6.2 million to 
$155.3 million as at December 31, 2019. This decrease is mainly attributable to positive cash flows from 
operating activities, which was more than sufficient to cover the usual investing and financing activities 
including the repayment of $13.6 million in short-term bank loans outstanding as at December 31, 2018. 

Under the terms of our various financing agreements, the Company, its subsidiaries and its joint ventures 
must satisfy certain restrictive covenants with respect to minimum financial ratios. As at December 31, 
2019, LOGISTEC Corporation complied with such covenants. In some cases, financing covenants may 
limit  the  ability  of  some  subsidiaries  or  joint  ventures  to  pay  dividends  to  LOGISTEC.  However, 
LOGISTEC  generates  sufficient  cash  flows  from  its  wholly  owned  subsidiaries  to  meet  its  financial 
obligations.  

LOGISTEC | 2019 ANNUAL REPORT 

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22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Payments Due by Period 

The following table provides a summary of the Company’s long-term debt and contractual obligations: 

Contractual Obligations  
as at December 31, 2019 
(in thousands of dollars) 

Long-term debt (1) 
Lease liabilities 
— Equipment 
— Occupancy 

Long-term liabilities due to non-

controlling interest 
Non-current liabilities (2) 
Total contractual obligations 

Total 
$ 

Less than 
1 year 
$ 

1 - 3 
years 
$ 

4 - 5 
years 
$ 

More than 
5 years 
$ 

190,744 

11,842 

10,758 

138,691 

29,453 

6,550 
117,209 

41,553 
11,012 
367,068 

2,518 
11,075 

738 
935 
27,108 

2,861 
20,292 

16,633 
2,896 
53,440 

967 
17,285 

24,182 
6,168 
187,293 

204 
68,557 

— 
1,013 
99,227 

Includes capital and interest. 

(1) 
(2)  Excluding long-term liabilities to shareholders. 

The reader is referred to Notes 10, 16, 21, 22, 23, and 30 of the 2019 Notes for further details about 
financial  risk  management,  lease  arrangements,  long-term  debt,  post-employment  benefit  assets  and 
obligations, non-current liabilities, and contingent liabilities and guarantees. 

Equity Attributable to Owners of the Company 

Equity  attributable  to  owners  of  the  Company  amounted  to  $280.4 million  as  at  December 31,  2019. 
Adding  total  net  indebtedness  yields  a  capitalization  of  $435.7 million,  which  computes  to  a  net 
indebtedness/capitalization ratio of 35.6%. This means that the Company has financial leverage available 
should the need arise. The net indebtedness/capitalization ratio is a non-IFRS measure and is reconciled 
above in the liquidity and capital resources section. 

As  at  March  17,  2020,  7,382,422  Class  A  shares  and  5,388,701  Class  B  shares  were  issued  and 
outstanding. Each Class A share is convertible at any time by its holder into one Class B share. Please refer 
to Note 24 of the 2019 Notes for full details on the Company’s share capital. 

Normal Course Issuer Bid (“NCIB”) 

The Company repurchased some of its shares for cancellation purposes pursuant to NCIBs. Pursuant to 
the current NCIB, which was launched on October 28, 2019, and will terminate on October 27, 2020, 
LOGISTEC  intends  to  repurchase,  for  cancellation  purposes,  up  to  369,296  Class  A  shares  and 
270,195 Class  B  shares,  representing  5%  of  the  issued  and  outstanding  shares  of  each  class  as  at  
October 15, 2019. 

Shareholders may obtain a free copy of the notice of intention regarding the NCIB filed with the TSX by 
contacting the Company. 

During  2019,  under  the  NCIB  programs,  9,100  Class  A  shares  and  39,800  Class  B  shares  were 
repurchased at average prices per share of $42.47 and $41.05, respectively. Please refer to Note 24 of 
the 2019 Notes for further details. 

34 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Equity in Joint Ventures 

The Company’s results include its share of operations in joint ventures, which are accounted for in the 
share of profit of equity accounted investments. The closing balance of $42.3 million at the end of 2019 
is mainly the result of the 2018 closing balance of $38.0 million, plus the 2019 share of profit of equity 
accounted investments of $8.7 million, less $4.1 million in dividends received, and our share of losses of 
a joint venture of $0.2 million. 

As  at  December 31,  2019,  the  Company’s  50%-equity  interests  are  in  the  following  joint  ventures: 
TERMONT  Terminal Inc.,  Transport  Nanuk  Inc.,  Québec  Mooring  Inc.,  Moorings  (Trois-Rivières)  Ltd., 
Québec Maritime  Services  Inc.,  9260-0873  Québec  Inc.  and Flexiport  Mobile  Docking  Structures Inc. 
The  Company  also  owns  49%-equity  interests  in  Qikiqtaaluk  Environmental  Inc.  and  Avataani 
Environmental Services Inc. 

None of the Company’s joint ventures are publicly listed entities and, consequently, do not have published 
price quotations. 

The  Company  has  one  significant  joint  venture,  TERMONT  Terminal  Inc.,  specialized  in  handling 
containers, which is aligned with the Company’s core business. Please refer to Note 14 of the 2019 Notes. 

Post-Employment Benefits 

The Company offers either defined benefit retirement plans or defined contribution retirement plans to 
its employees. The Company sponsors two defined benefit retirement plans.  

Considering that a majority of beneficiaries from the defined benefit retirement plans were pensioners 
already, the Company elaborated a derisking strategy with regard to these plans.  

A summary of the fair value of plan assets, benefit obligation, funded status of the retirement plans, and 
significant assumptions can be found in Note 22 of the 2019 Notes.  

Calculations  on  the  retirement  plans’  funded  statuses  have  been  performed  by  the  Company’s 
independent actuaries as of December 31, 2019. They calculated a benefit obligation of $39.4 million, 
compared with a fair value of plan assets of $21.4 million, which computed into a funded status deficit of 
$18.0 million.  The  Company  offers  supplemental  retirement  plans  to  senior  executives  (“SERP”).  The 
reader is referred to the description of the Senior Management Pension Plan in our information circular. 
These SERP are unfunded and the related obligation of $16.8 million is included in the above numbers. 
Excluding the SERP obligation, the funded status deficit amounts to $1.2 million.  

Management’s  assumption  for  the  discount  rate  was  4.0%  in  2018  and  3.3%  in  2019.  Actuarial 
calculations made for actual funding and cash disbursements use different assumptions and therefore 
compute into different funded statuses. The Company’s SERP are non-registered plans and, therefore, 
are not subject to actuarial valuations.  

The last actuarial valuation for the Senior Management Pension Plan of LOGISTEC Corporation is dated 
December 31, 2016  and  the  last  actuarial  valuation  for  the  Employee  Pension  Plan  of  LOGISTEC 
Corporation is dated December 31, 2018. Based on these valuations, the Company’s combined surplus 
amounts to $2.1 million when calculated using the going concern method, and to a combined deficit of 
$1.4 million when using the solvency method.  

LOGISTEC | 2019 ANNUAL REPORT 

35 

 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Other Items in the Consolidated Statements of Financial 
Position  

Financial position as at  
(in millions of dollars) 

December 31, 
2019 
$ 

December 31, 
2018 
$ 

Var. 

$ 

Var. 

% 

Explanation of variation 

Contract assets represent the gross 
unbilled amount that will be collected from 
customers for contract work performed in 
our environmental services segment. The 
decrease is mainly due to a greater number 
of contracts completed and invoiced prior 
to the year end in 2019, compared with the 
same period of 2018. 

The increase is due to 2019 tax instalments 
made which were higher than the current 
income taxes. 

This increase stems mainly from capital 
expenditures of $34.5 million, which 
exceeded the depreciation expense of 
$26.3 million. 

This increase stems from the application of 
IFRS 16, as fully described in Notes 2 and 
16 of the 2019 Notes. 

Contract assets 

10.6 

14.3 

(3.7) 

(25.8) 

Current income tax assets 

6.0 

3.0 

3.0 

100 

184.3 

181.3 

3.0 

1.7 

Property, plant and 

equipment 

Right-of-use assets 

Intangible assets 

Short-term bank loans 

89.6 

40.7 

— 

— 

89.6 

n.m. 

47.0 

(6.3) 

(13.3) 

This decrease stems mainly from the 
amortization expense of $4.3 million. 

13.6 

(13.6) 

n.m. 

The decrease is due to the repayment in 
short-term bank loans in 2019. 

Trade and other payables 

86.2 

98.7 

(12.5) 

(12.6) 

The decrease is in line with the reduction of 
contract assets as at December 31, 2019 
and stems mainly from a greater number of 
contracts completed prior to the year end 
in 2019. 

Current portion of lease 

liabilities 

Non-current lease 

liabilities 

Current portion of  
long-term debt 

9.8 

81.5 

9.4 

— 

— 

3.3 

Long-term debt 

168.5 

160.0 

Share capital 

Share capital to be issued 

n.m.: not meaningful 

40.2 

9.8 

9.8 

81.5 

6.1 

8.5 

5.2 

n.m.  This increase stems from the application of 
IFRS 16, as fully described in Notes 2 
and 16 of the 2019 Notes. 

n.m. 

n.m.  This variance stems from the $84.6 million 
issuance of long-term debt, partly offset by 
repayment of long-term debt of 
$66.0 million. 

5.3 

14.9  The variation is mainly due to the issuance 

35.0 

14.7 

(4.9) 

(33.3) 

of Class B shares in accordance with the 
terms of the 2016 acquisition of the non-
controlling interest in SANEXEN. 

Other items in the consolidated statements of financial position varied according to normal business parameters. 

36 

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22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Financial Risk Management 

By the nature of the activities carried out and as a result of holding financial instruments, the Company is 
exposed to credit risk, liquidity risk and market risk, especially interest rate risk and foreign exchange risk. 

Credit Risk 

Credit risk arises from the possibility that a counterpart will fail to perform its obligations. The Company’s 
exposure  to  credit  risk  is  primarily  attributable  to  its  cash  and  cash  equivalents,  trade  and  other 
receivables and non-current financial assets. Management believes the credit risk is limited for its cash 
and cash equivalents as the Company deals with major North American financial institutions. 

The Company conducts a thorough assessment of credit issues prior to committing to the investment and 
actively  monitors the  financial  health  of  its  investees on  an  ongoing  basis. In  addition,  the Company  is 
exposed to credit risk from customers. On the one hand, the Company does business mostly with large 
industrial, municipal and well-established customers, thus reducing its credit risk. On the other hand, the 
number  of  customers  served  by  the  Company  is  limited,  which  increases  the  risk  of  business 
concentration and economic dependency.  

Overall,  the  Company  serves  some  2,200  customers.  In  2019,  the  20  largest  customers  account  for 
39.7% (35.9% in 2018) of consolidated revenue, and not a single customer accounts for more than 10% 
of consolidated revenue and trade receivables in 2019 and 2018. 

Allowance for doubtful accounts and past due receivables are reviewed by management on a monthly 
basis. Trade and other receivables are written off once determined not to be collectable.  

Pursuant to their respective terms, net trade receivables are aged as follows: 

(in thousands of dollars) 

0-30 days 
31-60 days 
61-90 days 
Over 90 days (1) 

(1) 

Includes contract holdbacks amounting to $11,200 ($12,428 in 2018). 

The movements in the allowance for doubtful accounts were as follows: 

(in thousands of dollars) 

Balance, beginning of year 
Bad debt expense  
Write offs 
Balance, end of year 

As at  
December 31, 
2019 
$ 

As at  
December 31, 
2018 
$ 

56,528 
32,379 
16,635 
33,042 
138,584 

39,393 
39,183 
26,305 
37,076 
141,957 

2019 
$ 

2,364 
1,410 
(721) 
3,053 

2018 
$ 

4,053 
1,126 
(2,815) 
2,364 

The Company’s maximum exposure to credit risk with respect to each of its financial assets (cash and cash 
equivalents, trade  and  other receivables, and non-current  financial assets) corresponds  to  its  carrying 
amount. 

Liquidity Risk 

Liquidity risk is the Company’s exposure to the risk of not being able to meet its financial obligations when 
they become due. The Company monitors its levels of cash and debt, and takes appropriate actions to 
ensure it has sufficient cash to meet operational needs while ensuring compliance with covenants. 

LOGISTEC | 2019 ANNUAL REPORT 

37 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

The following are the contractual maturities of financial obligations: 

As at December 31, 2019 
(in thousands of dollars) 

Trade and other payables 
Dividends payable 
Lease liabilities 
Long-term debt 
Non-current liabilities 

As at December 31, 2018 
(in thousands of dollars) 

Short-term bank loans 
Trade and other payables 
Dividends payable 
Long-term debt  
Non-current liabilities 

(1) 

Includes principal and interest. 

Carrying 
amount 
$ 

Contractual 
cash flows (1) 
$ 

Less than  
1 year 
$ 

86,217 
1,245 
91,315 
177,900 
46,088 
402,765 

86,217 
1,245 
123,759 
190,744 
52,565 
454,530 

86,217 
1,245 
13,593 
11,842 
1,673 
114,570 

Carrying 
amount 
$ 

Contractual 
cash flows (1) 
$ 

Less than  
1 year 
$ 

13,577 
98,668 
1,973 
163,297 
46,980 
324,495 

13,577 
98,668 
1,973 
180,691 
53,969 
348,878 

13,577 
98,668 
1,973 
11,331 
1,046 
126,595 

1-3 years 
$ 

— 
— 
23,153 
10,758 
19,529 
53,440 

1-3 years 
$ 

— 
— 
— 
113,851 
19,989 
133,840 

More than  
3 years 
$ 

— 
— 
87,013 
168,144 
31,363 
286,520 

More than  
3 years 
$ 

— 
— 
— 
55,509 
32,934 
88,443 

Given the actual liquidity level combined with future cash flows that will be generated by operations, the 
Company believes that its liquidity risk is low to moderate. 

Market Risk 

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, 
will affect the Company’s results or the value of its financial instruments. The Company is mainly exposed 
to interest rate risk and foreign exchange risk. 

IN TE RE S T  R A TE  RIS K  

The Company is exposed to market risk related to interest rate fluctuations because a portion of its long-
term debt bear interest at floating rates. The Company manages this risk by maintaining a mix of fixed and 
floating rate borrowings in accordance with the Company’s policies. The Company had an interest rate 
swap contract with the Company’s main bank for an original principal notional amount of $25.0 million 
which was settled on October 31, 2019, following the renegotiation of the credit agreement. The interest 
rate swap contract was designated as a cash flow hedge to swap the floating rate of its debts to a fixed 
rate, thus decreasing the Company's sensitivity to interest rate fluctuations. As at December 31, 2018, 
the  degressive  notional  principal  amount  of  the  outstanding  interest  rate  swap  contract  was 
$18.8 million. The floating interest rate on the interest rate swap was CDOR and the fixed interest rate 
was 1.80%. The Company continues to monitor opportunities to reduce interest rate risk. 

SENS IT IV IT Y  A N A L YS IS  

As at December 31, 2019, the floating rate portion of the Company’s long-term debt is 70.5% (64.7% 
in 2018). All else being equal, a hypothetical variation of +1.0% in the prime interest rate on the floating 
rate  portion  of  the  Company’s  long-term  debt  held  as  at  December 31,  2019,  would  have  had  a 
negative impact of $1.3 million ($0.9 million in 2018) on profit for the year. A hypothetical variation of 
–1.0% in the prime interest rate would have had the opposite impact on profit for the year. 

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F O REI G N  E X CH A N GE  RIS K 

The Company provides services which it invoices in U.S. dollar and purchases equipment denominated in 
U.S.  dollar.  In  addition,  a  portion  of  the  Company's  long-term  debt  is  denominated  in  U.S.  dollar. 
Consequently,  it  is  exposed  to  risks  arising  from  foreign  currency  rate  fluctuations.  The  Company 
considers the risk to be limited and, therefore, does not use derivative financial instruments to reduce its 
exposure. 

During  2019,  all  else  being  equal,  a  hypothetical  strengthening  of  5.0%  of  the  U.S.  dollar  against  the 
Canadian dollar would have had a positive impact of $2.6 million ($2.2 million in 2018) on profit for the 
year  and  a  positive  impact  of  $12.0 million  ($12.2 million  in  2018)  on  total  comprehensive  income.  A 
hypothetical weakening of 5.0% of the U.S. dollar against the Canadian dollar would have the opposite 
impact on profit for the year and total comprehensive income.  

As at December 31, 2019, a total of $95.2 million or US$73.3 million ($78.1 million or US$57.1 million in 
2018) of cash and cash equivalents and trade and other receivables is denominated in foreign currencies. 
As at December 31, 2019, a total of $61.7 million or US$47.5 million ($46.3 million or US$33.9 million in 
2018) of trade and other payables is denominated in foreign currencies.  

Fair Value of Financial Instruments 

As at December 31, 2019 and 2018, the estimated fair values of cash and cash equivalents, trade and 
other receivables, short-term bank loans, trade and other payables, and dividends payable approximated 
their respective carrying values due to their short-term nature. 

The estimated fair value of long-term notes receivable, included in non-current financial assets, was not 
significantly  different  from  their  carrying  value  as  at  December 31,  2019  and  2018,  based  on  the 
Company’s estimated rate for long-term notes receivable with similar terms and conditions.  

The  estimated  fair  value  of  long-term  debt  was  $0.9 million  higher  than  its  carrying  value  as  at 
December 31, 2019 ($0.3 million higher in 2018) as a result of a change in financial conditions of similar 
instruments available to the company. The fair value of long-term debt is determined using the discounted 
future cash flows method and management's estimates for market interest rates for identical or similar 
issuances. 

Please refer to Note 10 of the 2019 Notes for further information related to the Company's fair value 
hierarchy.  

Business Risks 

The  business  risks  to  which  we  are  exposed  have  been  fairly  consistent  over  the  last  few  years.  The 
following is a summary of these major risks: 

Market Risk — The Company handles a wide variety of commodities and, although our geographical and 
product  diversification  strategy  should  protect  us  against  significant  impacts,  major  fluctuations  in 
specific commodities or in specific regions may affect our performance.  

Port Terminal Related Risks — Access to strategic terminals is critical to a successful cargo handling 
operation. Our facilities are generally leased on a long-term basis. Such leases give us operating rights in 
exchange for rent that are, to a large extent, fixed for the Company. Consequently, we quickly feel the 
financial impact of a major decline in cargo volumes. 

LOGISTEC | 2019 ANNUAL REPORT 

39 

 
 
 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Government Policies — Government investment in port infrastructure, legislation, tariffs or taxation 
powers can have a direct impact on profitability.  

Currency  Fluctuations  —  Fluctuations  in  the  Canadian/U.S.  dollar  conversion  rate  may  affect 
Canadian  companies.  This  situation,  although  it  may  affect  our  customers,  does  not  affect  us  directly. 
Indeed, we usually  provide  services  locally and are paid  in  the same  currency  in which we incur  costs. 
Hence,  fluctuations  in  the  U.S.  dollar  do  not  usually  have  a  significant  impact  on  our  results,  as  our 
U.S. subsidiaries are financially self-sustaining. As discussed in the previous section entitled financial risk 
management, the Company is mainly exposed to fluctuations in the U.S. dollar versus the Canadian dollar, 
particularly for its consolidated statements of financial position items held in U.S. dollars. However, the 
Company considers this risk to be relatively limited. 

Personnel and Labour Related Risks — Some of our facilities are located near small urban centres 
where it can be difficult to find qualified labour. In addition, the industry in our marine services segment 
is  strongly  unionized  and  there  is  always  a  risk  of  labour  disturbance  when  negotiating  collective 
agreements. 

Other external factors — Our marine services segment may be influenced by factors touching global 
trade  and  the  movement  of  goods  such  as:  extreme  weather  conditions,  climate  changes,  political 
instability  or  pandemic  outbreak.  Such  factors  could  impact  supply  and  demand  of  goods,  affect  the 
availability of labor, reduce volume, and change or create new customer trends which could impact our 
performance. 
Related Party Transactions 

In addition to compensation to key management personnel and dividends to shareholders that occur in 
the normal course of business and that are quantified in Note 28 of 2019 Notes, services rendered to or 
by  related  parties  are  essentially  professional  services,  rent,  management  fees,  and  operational  costs 
charged to or by joint ventures. These transactions are also in the normal course of business, and their 
consideration is established and agreed to by the related parties. Included in the amounts owed from joint 
ventures is Nanuk’s share of the post-employment benefit obligation of one of the Company’s sponsored 
retirement plans. 

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Selected Quarterly Information  

(in thousands of Canadian dollars, except per share amounts)  

Q1 
$ 

Q2 
$ 

Q3 
$ 

Q4 
$ 

Year 
$ 

2019 (1) 
Revenue 
Profit (loss) attributable to owners of the Company 

114,748 
(8,890) 

156,175 
5,927 

195,293 
17,393 

173,726 
11,764 

639,942 
26,194 

Basic earnings (loss) per Class A share 
Basic earnings (loss) per Class B Share  
Total basic earnings (loss) per share 

Diluted earnings (loss) per Class A share 
Diluted earnings (loss) per Class B share 
Total diluted earnings (loss) per share 

(0.67) 
(0.74) 
(0.70) 

(0.67) 
(0.74) 
(0.70) 

0.44 
0.49 
0.46 

0.43 
0.48 
0.45 

1.31 
1.44 
1.37 

1.27 
1.40 
1.33 

0.89 
0.97 
0.92 

0.86 
0.95 
0.90 

1.97 
2.16 
2.05 

1.92 
2.11 
2.00 

2018 
Revenue 
Profit (loss) attributable to owners of the Company 

82,442 
(9,477) 

149,182 
1,868 

184,537 
22,256 

168,717 
3,413 

584,878 
18,060 

Basic earnings (loss) per Class A share 
Basic earnings (loss) per Class B share 
Total basic earnings (loss) per share 

Diluted earnings (loss) per Class A share 
Diluted earnings (loss) per Class B share 
Total diluted earnings (loss) per share 

(0.72) 
(0.80) 
(0.75) 

(0.72) 
(0.80) 
(0.75) 

0.14 
0.16 
0.15 

0.14 
0.15 
0.14 

1.68 
1.85 
1.75 

1.62 
1.78 
1.69 

0.26 
0.28 
0.27 

0.25 
0.27 
0.26 

1.37 
1.51 
1.43 

1.32 
1.45 
1.38 

(1)  The 2019 figures reflect the application of IFRS 16 for which the comparative figures have not been restated. Please refer to 

Notes 2 and 16 of the 2019 Notes for further details. 

Seasonal Nature of Operations 

Marine services are affected by weather conditions and are therefore of a seasonal nature. During the 
winter months, the St. Lawrence Seaway is closed. There is no activity on the Great Lakes, reduced activity 
on the St. Lawrence River, and no activity in Arctic transportation due to ice conditions.  

Environmental services are also affected by weather conditions, as the majority of the specialized services 
offered involve upon the excavation of soils, which is more difficult during the winter. 

Historically, the first quarter and, to a lesser extent, the second quarter have always presented a lower 
level of activity and yielded weaker results than the other quarters. The third and fourth quarters are 
usually the most active. 

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22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Fourth Quarter of 2019 Results and Comparative Figures 

(in thousands of dollars, except per share amounts) 

Revenue 

Employee benefits expense  
Equipment and supplies expense 
Operating expense  
Other expenses  
Depreciation and amortization expense  
Share of profit of equity accounted investments  
Other gains and losses 
Impairment charge 
Operating profit 

Finance expense 
Finance income 
Profit before income taxes  

Income taxes  
Profit for the period 

Profit attributable to:  

Owners of the Company 

Non-controlling interest 
Profit for the period 

Basic earnings per Class A share  
Basic earnings per Class B share 

Diluted earnings per Class A share  
Diluted earnings per Class B share  

Revenue 

Q4 2019 
$ 

Q4 2018 
$ 

173,726 

168,717 

(80,738) 
(45,266) 
(12,295) 
(8,200) 
(10,063) 
3,075 
357 
— 
20,596 

(4,480) 
145 
16,261 

(4,477) 
11,784 

11,764 

20 
11,784 

0.89 
0.97 

0.86 
0.95 

(88,313) 
(46,026) 
(12,405) 
(8,023) 
(8,627) 
2,505 
2,841 
(6,821) 
3,848 

(2,128) 
60 
1,780 

1,658 
3,438 

3,413 

25 
3,438 

0.26 
0.28 

0.25 
0.27 

Consolidated revenue totalled $173.7 million in the fourth quarter of 2019, an increase of $5.0 million or 
3.0%  over  2018.  Consolidated  revenue  was  negatively  affected  by  $1.3 million  this  quarter  due  to  a 
strengthening of the Canadian dollar against the U.S. dollar. 

Revenue from the environmental services segment grew by 2.2% while revenue from the marine services 
segment increased by 3.6% quarter over quarter. This increase stems from a general volume increase in 
our bulk and break-bulk terminals, which saw more activity this quarter than in 2018.  

Employee Benefits Expense 

Employee benefits expense to revenue ratio for the fourth quarter of 2019 was lower at 46.5% compared 
with  52.3%  for  the  same  period  in  2018.  The  lower  ratio  is  mainly  derived  from  the  environmental 
services segment where employee benefits expense, as a percentage of revenue from rehabilitation of 
underground water mains, was more favourable when compared to the same period of last year, mainly 
following the cost control improvements implemented at FER-PAL in 2019. 

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Other Gains and Losses 

Other  gains  and  losses  for  the  fourth  quarter  of  2019  was  $0.4 million,  a  decrease  of  $2.5 million 
compared with the fourth quarter of 2018. This variance is mainly related to lower unrealized exchange 
gains incurred in 2019 on translating net working capital denominated in U.S. dollars, given the stronger 
Canadian dollar. 

Impairment Charge  

At the end of 2018, the Company reviewed the carrying amount of its intangible assets and determined 
that  cash  generating  units  associated  with  our  port  logistics  activities  in  Virginia  had  suffered  an 
impairment loss of $6.8 million. No impairment charge was recorded in 2019. 

Finance Expense  

Finance expense amounted to $4.5 million in the fourth quarter of 2019, an increase of $2.4 million over 
the  $2.1 million  reported  for  the  same  quarter  of  2018.  Of  this  increase,  $1.1 million  relates  to  the 
accretion expense of the additional liabilities created under IFRS 16. 

The increased finance expense related to IFRS 16 should be analyzed in conjunction with the reduced 
operating expense and increased depreciation expense. Please refer to Notes 2 and 16 of the 2019 Notes 
for further details. 

Profit for the Quarter and Earnings per Share 

In  the  fourth  quarter  of  2019,  the  Company  reported  a  profit  of  $11.8 million,  which  was  mainly 
attributable to owners of the Company. This translated into total diluted earnings per share of $0.90 of 
which $0.86 per share was attributable to Class A shares and $0.95 per share was attributable to Class B 
shares. The  primary  driver  of  these  excellent  fourth  quarter  results  came  from  SANEXEN,  where  site 
remediation and soils and materials management were extremely strong, following a very slow start of 
the year. Marine services also performed well. 

All  other  items  of  the  fourth  quarter  of  the  consolidated  statements  of  earnings  varied  according  to 
normal business parameters and were comparable to 2018 levels. 

Significant Judgments, Estimates and Assumptions 

In  the  application  of  the  Company’s  significant  accounting  policies,  management  is  required  to  make 
judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not 
readily apparent from other sources. The estimates and associated assumptions are based on historical 
experience and other factors considered to be relevant. Actual results may differ from those estimates. 
The measurement of some assets and liabilities in the preparation of the financial statements includes 
assumptions made by management that are described in Note 3 of the 2019 Notes. Further details on 
judgments,  estimates  and  assumptions  can  be  found  in  the  2019  Notes,  particularly  regarding  trade 
receivables (Notes 10 and 12), equity accounted investments (Note 14), lease arrangements (Note 16) 
goodwill  (Note  17),  finite-life  intangible  assets  (Note  18),  impairment  of  long-lived  assets  including 
goodwill  (Note  17),  deferred  income  taxes  (Note  8),  post-employment  benefits  (Note  22),  and  non-
current liabilities (Note 23). The Company’s significant accounting policies are applied consistently to all 
its reportable industry segments (Note 29). 

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22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Application of New and Revised IFRS 
Accounting Standard and Interpretation Issued and Adopted 

On January 1, 2019, the Company adopted the following standard and interpretation: 

I F RS   1 6  LE AS ES  

The financial  statements have  been  prepared  in  accordance  with  IFRS  16.  The  Company  adopted  this 
standard using the modified retrospective approach, therefore the comparative information has not been 
restated  and  continues  to  be  reported  under  IAS  17.  The  Company  used  the  practical  expedients 
exemptions for short-term leases, leases for which the underlying asset is of low value and applied a single 
discount rate to a portfolio of leases with similar remaining lease terms and relied on assessment of the 
onerous lease provisions, instead of performing an impairment review. 

The Company used the practical expedients exemptions not to reassess whether a contract is, or contains, 
a  lease  as  at  January  1,  2019.  Instead,  the  Company  reviewed  and  assessed  its  existing  lease 
arrangements  that  were  previously  identified  as  leases  under  IAS 17  and,  based  on  the  facts  and 
circumstances  that  existed  at  that  date,  concluded  that  the  initial  application  of  IFRS 16  has  had  the 
following impact regarding its recognition, measurement and disclosures: 

(cid:16)  Record  of  right-of-use  assets  of  $76.5 million,  representing  the  Company’s  right  to  use  the 

underlying assets included in lease arrangements; 

(cid:16)  Record of lease liabilities (including the current portion) of $76.5 million, representing the present 
value of lease payments, discounted using the interest rate implicit in these lease arrangements; 

(cid:16)  Right of use of assets are depreciated in accordance with IAS 16 Property, Plant and Equipment. The 
expenses  for  the  year  ended  December 31,  2019,  amount  to  $11.6 million  and  is  recorded  in 
depreciation and amortization in the consolidated statements of earnings; 

(cid:16)  Accretion  interest  expenses  on  the  lease  liability  amount  to  $4.0 million  for  the  year  ended 
December 31, 2019 and is recorded in finance expense in the consolidated statements of earnings. 

Please refer to Notes 2 and 16 of the 2019 Notes for further details. 

IF RI C  2 3  A C C O U NT I NG  F O R  U N CE R TA I NT IES   I N  I N C O ME  T AX ES   ( “IF RI C  2 3” )   

The financial statements have been prepared in accordance with IFRIC 23. The Company completed its 
assessment of the impact of this interpretation and the adoption does not have a material impact on the 
financial statements. 

Environmental Matters 
Climate Change 

It is not possible to assess the impact of climate change on our business at this time. We believe it may 
create concerns but also opportunities. Although it may have an impact on water levels in certain ports, it 
may also lead to a longer season for Arctic transportation. These are monitored regularly to ensure that 
we will be well positioned to deal with any changes that may occur in the flow of trade. 

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Other Environmental Concerns  

We handle various bulk commodities on sites that have had industrial activities for many years. It is more 
than  likely  that  some  sites  were  already  contaminated  from  such  activities  prior  to  our  arrival.  We 
normally make a baseline assessment of the sites’ contamination prior to signing a new lease. This limits 
our  liability  to  our  own  operations.  LOGISTEC  takes  environmental  matters  very  seriously  and  is 
committed to limiting and reducing its environmental footprint. 

EN VI R O N ME N T AL  P OLI C Y  

LOGISTEC has a health, safety and environment policy that recognizes the importance of environmental 
aspects of the business. It commits us to take into account the possible repercussions on the environment 
of all our current and future decisions and operations. 

The policy states that the Company will subscribe to certain principles, such as: 

(cid:16)  Meet or exceed current environmental laws and regulations in the conduct of all our operations; 

(cid:16)  Reduce our possible impacts on the environment by adopting protective and preventive measures;  

(cid:16)  Promote  the  installation  and  use  of  new  technologies  that  consume  less  energy  and  are  more 

environmentally friendly; 

(cid:16)  Adopt and apply an Environmental Management Program aimed at continuous improvement, as 

measured through the monitoring of the environmental impact of our activities; 

(cid:16) 

(cid:16) 

Implement and maintain Emergency Preparedness Plans designed to allow an immediate response 
to incidents and situations that may have an impact on the environment; 

Implement  an  Environmental  Training  Program  to inform  our  people  of  existing  environmental 
laws and regulations, to communicate to them the corporate Environmental Policy and to make 
them  aware  of  the  importance  of  their  participation  in  attaining  the  environmental  protection 
objectives adopted by LOGISTEC; 

(cid:16)  Regularly communicate the environmental performance results of our operations to the Board of 

Directors; 

(cid:16)  We  are  also  committed  to  reviewing  our  Policy  periodically  and  revising  it  in  light  of  new 

information regarding the types and locations of our activities. 

G REE N  M A RI NE  

As  proof  of  its  commitment  towards  the  environment,  LOGISTEC  has  been  a  certified  Green  Marine 
participant since 2009. Green Marine is a joint Canada-USA initiative aimed at implementing a marine 
industry environmental program throughout North America. Founded in 2008 by CEOs of leading marine 
services companies in Eastern Canada, including our CEO, Green Marine has rapidly gained a reputation 
for  credibility  and  transparency,  and  for  challenging  participant  companies  to 
improve  their 
environmental  performance  beyond  regulatory  compliance.  The  cornerstone  of  the  Green  Marine 
initiative  is  its  far-reaching  environmental  program,  which  makes  it  possible  for  any  marine  company 
operating in Canada or the USA to voluntarily improve its environmental performance by undertaking 
concrete and measurable actions. 

Although  the  program  was  originally  conceived  for  the  Great  Lakes  and  St.  Lawrence  corridor,  the 
interest  it  has  generated  throughout  the  marine  industry  has  enabled  it  to  evolve  and  cover  North 
America  in  its  entirety.  Companies  participating  in  the  voluntary  program  evaluate  their  performance 
yearly on a scale that ranges from regulatory compliance to excellence in their practices with respect to 
twelve priority environmental issues. The program is reviewed and adjusted every year to reflect new 
regulations and keep up with technological innovation. 

LOGISTEC | 2019 ANNUAL REPORT 

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22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

OP P O RT U NI TI ES  

Serving the marine industry may represent an opportunity from an environmental point of view. Indeed, 
carrying  goods  by  ship  is  one  of  the  most  economical  and  environmentally  friendly  means  of 
transportation. The large volume of cargoes being transported on each sailing generally converts into a 
lower consumption of energy per tonne of cargo handled versus ground transportation. Environmental 
pressures from authorities to lower greenhouse gas emissions may favour marine transportation (via the 
St. Lawrence Seaway for instance) which in turn may favour our business, since such ships will need to be 
loaded and unloaded. 

Our subsidiary SANEXEN is active in the field of environmental cleanup and rehabilitation of water mains, 
and  the  more  conscientious  businesses  and  municipalities  become,  the  more  opportunities  this  may 
represent for SANEXEN. 

Corporate Governance 
LOGISTEC has implemented high standards of corporate governance. LOGISTEC has in place corporate 
governance practices that are consistent with the requirements of National Policy 58-201 “Corporate 
Governance  Guidelines”  and  National  Instrument  58-101  “Disclosure  of  Corporate  Governance 
Practices”.  Of  LOGISTEC’s  12  directors,  nine  are  independent,  four  are  women,  and  the  roles  of 
Chairman and Chief Executive Officer are separate. The Governance and Human Resources Committee 
and the Audit Committee consist exclusively of independent directors. The Audit Committee, which is 
involved in the review of interim and annual reports and financial statements prior to their submission to 
the  Board  of  Directors  for  approval,  meets  separately  with  the  Company’s  independent  auditor.  The 
Board of Directors recommends the appointment of the independent auditor to shareholders after the 
Audit Committee has made a proper analysis. 

Pursuant  to  the  requirements  of  National  Instrument  52-109  “Certification  of  Disclosure  in  Issuers’ 
Annual and Interim Filings”, the President and Chief Executive Officer and the Chief Financial Officer are 
responsible for the establishment and maintenance of disclosure controls and procedures (“DC&P”) and 
internal  control  over  financial  reporting  (“ICFR”).  They  are  assisted  in  these  tasks  by  a  Certification 
Steering Committee, which is comprised of members of the Company’s senior management including the 
two previously mentioned executives. 

They have reviewed this MD&A, the annual financial statements, the annual information form and the 
information circular, which includes a compensation disclosure and analysis (the “Annual Filings”). Based 
on their knowledge, the Annual Filings do not contain any untrue statement of a material fact or omit to 
state a material fact required to be stated or that is necessary to make a statement not misleading in light 
of the circumstances under which it was made, for the period covered by the Annual Filings. Based on 
their knowledge, the annual financial statements, together with the other financial information included 
in the Annual Filings, fairly present in all material respects the financial condition, financial performance 
and cash flows of the Company, as of the date and for the periods presented in the Annual Filings. 

Under  the  supervision  of  the  Certification  Steering  Committee,  the  effectiveness  of  DC&P  was 
evaluated. Based upon this evaluation, the President and Chief Executive Officer and the Chief Financial 
Officer  concluded  that  the  DC&P  were  effective  as  at  the  end  of  the  fiscal  period  ended 
December 31, 2019,  and  that  the  design  of  these  DC&P  provided  reasonable  assurance  that  material 
information relating to the Company, including its consolidated subsidiaries, was communicated to them 
in a timely manner for the preparation of the Annual Filings, and that information required to be disclosed 
in its Annual Filings was recorded, processed, summarized and reported within the required time periods. 

The President and Chief Executive Officer and the Chief Financial Officer have also designed such ICFR, 
or  caused  it  to  be  designed  under  their  supervision,  to  provide  reasonable  assurance  regarding  the 
reliability  of  financial  reporting  and  the  preparation  of  financial  statements  in  accordance  with  IFRS. 
Under the supervision of the Certification Steering Committee, the effectiveness of ICFR was evaluated. 

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Based upon  this  evaluation,  the  President  and  Chief  Executive  Officer  and  the  Chief Financial  Officer 
concluded that ICFR is adequate and effective to provide such assurance as at December 31, 2019. 

There has been no change in the Company’s ICFR that occurred during the fourth quarter of 2019 that 
has materially affected, or is reasonably likely to materially affect, the Company’s ICFR.  

Outlook 
We can qualify 2019 as a good recovery year. Total consolidated revenue closed at $639.9 million, a 9.4% 
increase over 2018, while the profit before income taxes jumped back to $35.1 million in 2019 from some 
$21.3 million in 2018, a 64.9% improvement. As a comparison, in 2017, the profit before income taxes 
was $33.6 million. The progression of the Company's consolidated adjusted EBITDA (1) was even more 
impressive with a final $89.6 million (2) for 2019, compared to $64.2 million in 2018 and $74.7 million in 
2017. 

The  improvement  of  our  results  came  from  both  business  segments,  but  more  particularly  from  our 
environmental business where the financial improvement of FER-PAL had a positive impact on earnings. 
With  respect  to  the  marine  services  segment,  it  benefited  from  a  full-year  of  activity  from  the  2018 
business combinations. 

We actually started 2019 with a few uncertainties: U.S. tariffs and increasing trade tensions with China 
and Canada, together with the uncertainty related to Brexit, all elements that could influence the flow of 
cargo and the economy in general. Fortunately, these situations did not create a recession in 2019. 

The marine services industry often feels the trends of the economy sooner than other industries. Indeed, 
the cargo transported will be either transformed or sold, so if the owners of such cargo were to foresee 
trends  ahead,  they  would  adjust  their  procurement,  affecting  demand  in  the  marine  industry.  In  this 
regard,  although  global  container  volumes  are  still  growing,  the  pace  has  decreased  considerably: 
container growth volumes at the Port of Montréal reached 3.9% in 2019, slower than the 2018 and 2017 
rates of 9.2% and 6.2%, respectively. Another indicator of cargo movement is the Baltic Exchange Dry 
Index, which tracks freight rates for the world’s largest cargo ships. In early February 2020, this index 
dropped  to  the  lowest  level  since  March  2016,  apparently  influenced,  amongst  other  things,  by  the 
outbreak of the coronavirus in China, leading to lower activity from that country. The outbreak which is 
now spreading to other countries may also lead to lower global trade. These statistics and indices could 
be  early  indicators  of  a  slowdown  in  the  global  economy.  Furthermore,  rail  barricades  in  Canada  and 
continued U.S. tariffs could also impact our economy. 

Nevertheless, we are cautiously optimistic about our business for 2020. The marine services segment 
should  stay  the  course  and  remain  stable.  Our  environmental  services  segment  is  also  expected  to 
perform well. As mentioned, FER-PAL’s financial performance has improved considerably, and we expect 
even better returns following last year’s corrective efforts. 

We  are  particularly  proud  of  the  outstanding  performance  of  our  Aqua-Pipe  technology  in  its  seismic 
resistance tests. SANEXEN, together with a group of North America’s leading environmental public and 
municipal utility services and the world-renowned research team at Cornell University’s School of Civil 
and Environmental Engineering, subjected the Aqua-Pipe technology to a series of extreme seismic force 
testing at the university’s Geotechnical Lifelines Large-Scale Testing Facility in Ithaca (NY). The resilience 
achieved by the Aqua-Pipe technology surpassed the facility’s maximum testing capacity. Needless to say, 
many of our targeted customers in the USA were positively impressed by these results, which bodes well 
for future business. 

(1) Adjusted EBITDA is a non-IFRS measure, please refer to the Non- IFRS Measure section on page 27. 
(2) The 2019 figures reflect the application of IFRS 16 which had a favourable impact of $13.7 million on the adjusted EBITDA and for 
which the comparative figures have not been restated. Please refer to Notes 2 and 16 of the 2019 Notes to 2019 for further details. 

LOGISTEC | 2019 ANNUAL REPORT 

47 

 
 
 
 
 
22 0 19  M AN AGEMEN T’S  DIS C US SION   AN D  AN ALYS IS  

Our  consolidated  balance  sheet  is  very  sound  which  positions  LOGISTEC  favourably  for  growth 
opportunities.  With  this  in  mind,  we  have  renegotiated  our  banking  facilities  in  2019.  We  are  now 
equipped with a four-year $300.0 million credit facility, providing us the resources we need to serve our 
growth ambitions. Indeed, we are still in acquisition mode and are continuing to look at opportunities in 
both business segments, in order to create value for our shareholders. 

This MD&A along with the annual report, audited annual consolidated financial statements, the annual information form 
and the information circular and compensation disclosure and analysis are all filed on SEDAR’s website (www.sedar.com) 
and some of these documents can also be consulted on LOGISTEC’s website (www.logistec.com), in the investors section. 

The interim financial reports and financial press releases can also be consulted on SEDAR and LOGISTEC’s website. 

For the purpose of informing shareholders and potential investors about the Company’s prospects, sections of this document 
may  contain  forward-looking  statements,  within  the  meaning  of  securities  legislation,  about  the  Company’s  activities, 
performance and financial position and, in particular, hopes for the success of the Company’s efforts in the development and 
growth of its business. These forward-looking statements express, as of the date of this document, the estimates, predictions, 
projections, expectations or opinions of the Company about future events or results. Although the Company believes that 
the  expectations  produced  by  these  forward-looking  statements  are  founded  on  valid  and  reasonable  bases  and 
assumptions, these forward-looking statements are inherently subject to important uncertainties and contingencies, many 
of  which  are  beyond  the  Company’s  control,  such  that  the  Company’s  performance  may  differ  significantly  from  the 
predicted performance expressed or presented in such forward-looking statements. The important risks and uncertainties 
that  may  cause  the  actual  results  and  future  events  to  differ  significantly  from  the  expectations  currently  expressed  are 
examined  under  business  risks  in  this  document  and  include  (but  are  not  limited  to)  the  performances  of  domestic  and 
international economies and their effect on shipping volumes, weather conditions, labour relations, pricing and competitors’ 
marketing activities. The reader of this document is thus cautioned not to place undue reliance on these forward-looking 
statements. The Company undertakes no obligation to update or revise these forward-looking statements, except as required 
by law. 

(signed) Jean-Claude Dugas  
Jean-Claude Dugas, CPA, CA  
Chief Financial Officer 

March 17, 2020 

48 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22 0 19  C ONS OLIDATED  F IN AN CIAL  S TATEM EN TS 

Independent Auditors’ Report 

To the Shareholders of Logistec Corporation 

Opinion 

We  have  audited  the  consolidated  financial  statements  of  Logistec  Corporation  (the  "Entity"),  which 
comprise: 

(cid:120) 

(cid:120) 

(cid:120) 

(cid:120) 

(cid:120) 

the consolidated statements of financial position as at December 31, 2019 and 2018; 

the consolidated statements of earnings for the years then ended; 

the consolidated statements of comprehensive income for the years then ended; 

the consolidated statements of changes in equity for the years then ended; 

the consolidated statements of cash flows for the years then ended; and 

(cid:120)  notes to the consolidated financial statements, including a summary of significant accounting policies 

(Hereinafter referred to as the "financial statements"). 

In  our  opinion,  the  accompanying  financial  statements  present  fairly,  in  all  material  respects,  the 
consolidated  financial  position  of  the  Entity  as  at  December  31,  2019  and  2018,  and  its  consolidated 
financial  performance  and  its  consolidated  cash  flows  for  the  years  then  ended  in  accordance  with 
International Financial Reporting Standards (IFRS).   

Basis for Opinion 

We  conducted  our  audit  in  accordance  with  Canadian  generally  accepted  auditing  standards.    Our 
responsibilities under those standards are further described in the "Auditors’ Responsibilities for the Audit 
of the Financial Statements" section of our auditors’ report.   

We are independent of the Entity in accordance with the ethical requirements that are relevant to our 
audit of the financial statements in Canada and we have fulfilled our other 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. 

Emphasis of Matter – Change in Accounting Policy 

We draw attention to Note 2 to the consolidated financial statements which indicates that the Entity has 
changed  its  accounting  policy  for  leases  and  has  applied  that  change  using  a  modified  retrospective 
transition approach. 

Our opinion is not modified in respect of this matter. 

Other Information 

Management is responsible for the other information. Other information comprises: 

(cid:120) 

(cid:120) 

the information included in Management’s Discussion and Analysis filed with the relevant Canadian 
Securities Commissions; 

the information, other than the financial statements and the auditors’ report thereon, included in the 
Annual report 2019. 

LOGISTEC | 2019 ANNUAL REPORT 

49 

 
 
 
22 0 19  C ONS OLIDATED  F IN AN CIAL  S TATEM EN TS 

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 the information included in Management’s Discussion and Analysis filed with the relevant 
Canadian  Securities  Commissions  and  the  information,  other  than  the  financial  statements  and  the 
auditors’  report  thereon, included  in the  Annual report 2019  as at  the  date of  this  auditors’  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 the auditors’ report.   

We have nothing to report in this regard. 

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  International  Financial  Reporting  Standards  (IFRS),  and  for  such  internal  control  as 
management determines is necessary to enable the preparation of financial statements that are free from 
material misstatement, whether due to fraud or error. 

In  preparing  the  financial  statements,  management  is  responsible  for  assessing  the  Entity’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  Entity  or  to  cease 
operations, or has no realistic alternative but to do so. 

Those charged with governance are responsible for overseeing the Entity’s financial reporting process. 

Auditors’ 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  auditors’ report  that 
includes our opinion.  

Reasonable  assurance  is  a  high  level  of  assurance,  but  is  not  a  guarantee  that  an  audit  conducted  in 
accordance  with  Canadian  generally  accepted  auditing  standards  will  always  detect  a  material 
misstatement when it exists.  

Misstatements  can  arise  from  fraud  or  error  and  are  considered  material  if,  individually  or  in  the 
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the 
basis of the financial statements. 

As  part  of  an  audit  in  accordance  with  Canadian  generally  accepted  auditing  standards,  we  exercise 
professional judgment and maintain professional skepticism throughout the audit. 

We also: 

(cid:120) 

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. 

50 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
22 0 19  C ONS OLIDATED  F IN AN CIAL  S TATEM EN TS 

(cid:120)  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 Entity's internal control.  

(cid:120)  Evaluate  the  appropriateness  of  accounting  policies  used  and  the  reasonableness  of  accounting 

estimates and related disclosures made by management.  

(cid:120)  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 Entity's ability to continue as a going concern. If we 
conclude that a material uncertainty exists, we are required to draw attention in our auditors’ 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 auditors’ 
report. However, future events or conditions may cause the Entity to cease to continue as a going 
concern. 

(cid:120)  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. 

(cid:120)  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.   

(cid:120)  Provide  those  charged  with  governance  with  a  statement  that  we  have  complied  with  relevant 
ethical  requirements  regarding  independence,  and  communicate  with  them  all  relationships  and 
other matters that may reasonably be thought to bear on our independence, and where applicable, 
related safeguards. 

(cid:120)  Obtain sufficient appropriate audit evidence regarding the financial information of the entities or 
business activities within the Group Entity to express an opinion on the financial statements. We are 
responsible  for  the  direction,  supervision  and  performance  of  the  group  audit.  We  remain  solely 
responsible for our audit opinion. 

The engagement partner on the audit resulting in this auditors’ report is Yvon Dupuis. 

Montréal,  Canada  
March 17, 2020 
___________ 

*CPA auditor, CA, public accountancy permit No. A114306 

LOGISTEC | 2019 ANNUAL REPORT 

51 

 
 
  
 
 
 
 
 
 
 
22 0 19  C ONS OLIDATED  F IN AN CIAL  S TATEM EN TS 

Consolidated Statements of Earnings 

Years ended December 31 
(in thousands of Canadian dollars, except for per share amounts) 

Revenue 

Employee benefits expense  
Equipment and supplies expense 
Operating expense  
Other expenses  
Depreciation and amortization expense  
Share of profit of equity accounted investments  
Other gains and losses 
Impairment charge 
Operating profit 

Finance expense 
Finance income 
Profit before income taxes  

Income taxes  
Profit for the year  

Profit attributable to:  

Owners of the Company 

Non-controlling interest 
Profit for the year 

Basic earnings per Class A Common Share (1) 
Basic earnings per Class B Subordinate Voting Share (2) 

Diluted earnings per Class A share 
Diluted earnings per Class B share 

(1)  Class A Common Share (“Class A share”) 
(2)  Class B Subordinate Voting Share (“Class B share”) 

See accompanying notes to the consolidated financial statements. 

Notes 

4 

5 

15, 16, 18 
14 
6 
18 

7 

8 

9, 24 
9, 24 

9, 24 
9, 24 

2019 
$ 

2018 
$ 

639,942 

584,878 

(313,091) 
(169,640) 
(43,173) 
(31,936) 
(42,122) 
8,729 
(1,220) 
— 
47,489 

(12,854) 
501 
35,136 

(8,699) 
26,437 

26,194 

243 
26,437 

1.97 
2.16 

1.92 
2.11 

(299,682) 
(156,859) 
(46,028) 
(29,839) 
(28,580) 
8,111 
3,596 
(6,821) 
28,776 

(8,046) 
572 
21,302 

(3,308) 
17,994 

18,060 

(66) 
17,994 

1.37 
1.51 

1.32 
1.45 

52 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22 0 19  C ONS OLIDATED  F IN AN CIAL  S TATEM EN TS 

Consolidated Statements of Comprehensive Income 

Years ended December 31 
(in thousands of Canadian dollars) 

Profit for the year 

Other comprehensive income (loss) 

Notes 

2019 
$ 

2018 
$ 

26,437 

17,994 

Items that are or may be reclassified to the consolidated statements of earnings 
Currency translation differences arising on translation of foreign operations 
Unrealized gain (loss) on translating debt designated as hedging item of the net investment in 

foreign operations 

Loss on derivatives designated as cash flow hedges 
Income taxes relating to derivatives designated as cash flow hedges 

Total items that are or may be reclassified to the consolidated statements of earnings 

Items that will not be reclassified to the consolidated statements of earnings 

Remeasurement (losses) gains on benefit obligation 
Variation on retirement plan assets excluding amounts included in profit for the year 
Income taxes on remeasurement loss (gain) on benefit obligation and variation on retirement 

plan assets excluding amounts included in profit for the year 

Total items that will not be reclassified to the consolidated statements of earnings 

22 
22 

8 

Share of other comprehensive (loss) income of equity accounted investments, net of income 

taxes 
Items that will not be reclassified to the consolidated statements of earnings 

Total share of other comprehensive (loss) income of equity accounted investments, net of income 

taxes 

Other comprehensive (loss) income for the year, net of income taxes 

Total comprehensive income for the year 

Total comprehensive income (loss) attributable to: 

Owners of the Company 
Non-controlling interest 
Total comprehensive income for the year 

See accompanying notes to the consolidated financial statements. 

(5,916) 

9,871 

3,653 
(174) 
47 
(2,390) 

(4,384) 
1,680 

719 
(1,985) 

(4,377) 
(5) 
2 
5,491 

1,850 
(1,637) 

(41) 
172 

(26) 

(26) 

118 

118 

(4,401) 

22,036 

5,781 

23,775 

21,819 
217 
22,036 

23,805 
(30) 
23,775 

LOGISTEC | 2019 ANNUAL REPORT 

53 

 
 
  
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22 0 19  C ONS OLIDATED  F IN AN CIAL  S TATEM EN TS 

Consolidated Statements of Financial Position 

(in thousands of Canadian dollars) 

Assets 
Current assets 

Cash and cash equivalents 
Trade and other receivables 
Contract assets 
Current income tax assets  
Inventories  
Prepaid expenses and other 

Equity accounted investments  
Property, plant and equipment  
Right-of-use assets 
Goodwill  
Intangible assets  
Non-current assets  
Non-current financial assets 
Deferred income tax assets 
Total assets 

Liabilities 
Current liabilities 

Short-term bank loans 
Trade and other payables  
Contract liabilities 
Current income tax liabilities 
Dividends payable 
Current portion of lease liabilities 
Current portion of long-term debt  

Lease liabilities 
Long-term debt 
Deferred income tax liabilities 
Post-employment benefit obligations 
Contract liabilities 
Non-current liabilities 
Total liabilities 

Equity 
Share capital 
Share capital to be issued 
Retained earnings 
Accumulated other comprehensive income  
Equity attributable to owners of the Company 

Non-controlling interest 
Total equity 

Total liabilities and equity 

As at  
December 31, 
 2019 
$ 

As at  
December 31, 
 2018 
$ 

Notes 

12 

8 
13 

14 
15 
16 
17 
18 

19 
8 

21 
20 

8 
24 
16 
21 

16 
21 
8 
22 

23 

24 
24 

25 

22,608 
156,228 
10,593 
6,028 
12,569 
5,129 
213,155 

42,349 
184,304 
89,581 
140,617 
40,735 
2,417 
8,829 
12,751 
734,738 

— 
86,217 
5,356 
3,131 
1,245 
9,820 
9,390 
115,159 

81,495 
168,510 
21,156 
18,383 
2,933 
46,088 
453,724 

40,222 
9,811 
220,641 
9,697 
280,371 

643 
281,014 

15,393 
160,067 
14,282 
2,964 
10,711 
4,899 
208,316 

38,005 
181,284 
— 
142,672 
47,006 
2,173 
6,328 
11,319 
637,103 

13,577 
98,668 
5,225 
3,480 
1,973 
— 
3,294 
126,217 

— 
160,003 
21,465 
14,716 
3,333 
46,980 
372,714 

35,016 
14,717 
200,404 
12,061 
262,198 

2,191 
264,389 

734,738 

637,103 

Commitments, contingent liabilities and guarantees   

               16, 30 

See accompanying notes to the consolidated financial statements. 

On behalf of the Board 

(signed) James C. Cherry 
James C. Cherry, FCPA, FCA 
Director  

(signed) Madeleine Paquin 
Madeleine Paquin, C.M.  
Director 

54 

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22 0 19  C ONS OLIDATED  F IN AN CIAL  S TATEM EN TS 

Consolidated Statements of Changes in Equity 

(in thousands of Canadian dollars) 

Attributable to owners of the Company 

Notes 

Share 
capital 
$ 

Share 
capital 
to be 
issued  
$ 

Accumulated  
other comprehensive 
income (Note 25) 
$ 

Retained 
earnings 
$ 

Non-
controlling 
interest 
$ 

Total 
$ 

Total 
equity 
$ 

Balance as at January 1, 2019 

  35,016 

14,717 

12,061 

200,404 

262,198 

2,191  264,389 

Profit for the year 

— 

— 

— 

26,194 

26,194 

243 

26,437 

Other comprehensive (loss) income  
Currency translation differences 
arising on translation of foreign 
operations 

Unrealized gain on translating debt 
designated as hedging item of the 
net investment in foreign 
operations 

Remeasurement losses on benefit 

obligation and return on 
retirement plan assets, net of 
income taxes 

Cash flow hedges, net of income 

taxes 

Share of other comprehensive 
income of equity accounted 
investments, net of income taxes 
Total comprehensive income (loss) 

for the year 

Remeasurement of written put 

option liability 

Repurchase of non-controlling 

interests 

Repurchase of Class A shares 
Issuance and repurchase of Class B 

shares 

Issuance of Class B share capital to a 

subsidiary shareholder 

Dividends on Class A shares 
Dividends on Class B shares 
Balance as at December 31, 2019 

— 

— 

— 

— 

— 

— 

— 

— 
(6) 

22 

23 

23, 28 
24 

24 

306 

24 
24 
24 

4,906 
— 
— 
  40,222 

— 

— 

— 

— 

— 

— 

— 

— 
— 

— 

(5,890) 

— 

(5,890) 

(26) 

(5,916) 

3,653 

— 

3,653 

— 

3,653 

— 

(1,985) 

(1,985) 

(127) 

— 

(127) 

— 

(26) 

(26) 

— 

— 

— 

(1,985) 

(127) 

(26) 

(2,364) 

24,183 

21,819 

217 

22,036 

— 

— 
— 

— 

2,766 

2,766 

— 

2,766 

(35) 
(381) 

(35) 
(387) 

(1,765) 
— 

(1,800) 
(387) 

(1,384) 

(1,078) 

— 

(1,078) 

(4,906) 
— 
— 
9,811 

— 
— 
— 
9,697 

— 
(2,722) 
(2,190) 
220,641 

— 
(2,722) 
(2,190) 
280,371 

— 
— 
— 

— 
(2,722) 
(2,190) 
643  281,014 

See accompanying notes to the consolidated financial statements. 

LOGISTEC | 2019 ANNUAL REPORT 

55 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22 0 19  C ONS OLIDATED  F IN AN CIAL  S TATEM EN TS 

Consolidated Statements of Changes in Equity (Continued) 

(in thousands of Canadian dollars) 

Attributable to owners of the Company 

Share 
capital 
$ 

Notes 

Share 
capital 
to be 
issued  
$ 

Accumulated  
other comprehensive 
income (Note 25) 
$ 

Retained 
earnings 
$ 

Non-
controlling 
interest 
$ 

Total 
$ 

Total 
equity 
$ 

Balance as at January 1, 2018 

  29,019 

19,820 

6,606 

173,129 

228,574 

2,221  230,795 

Profit (loss) for the year 

— 

— 

— 

18,060 

18,060 

(66) 

17,994 

Other comprehensive income (loss) 
Currency translation differences 
arising on translation of foreign 
operation 

Unrealized loss on translating debt 
designated as hedging item of the 
net investment in foreign 
operations 

Remeasurement gains on benefit 

obligation and variation on 
retirement plan assets excluding 
amounts included in profit for the 
year, net of income taxes 

Cash flow hedges, net of income 

taxes 

Share of other comprehensive 
income of equity accounted 
investments, net of income taxes 
Total comprehensive income (loss) 

for the year 

Remeasurement of written put 

option liability 

Repurchase of Class A shares 
Issuance and repurchase of Class B 

shares 

Issuance of Class B share capital to a 

subsidiary shareholder  

Other dividend  
Dividends on Class A shares 
Dividends on Class B shares 
Balance as at December 31, 2018 

— 

— 

— 

— 

— 

— 

22 

23 
24 

24 

— 
(10) 

904 

— 

— 

— 

— 

— 

— 

— 
— 

— 

9,835 

— 

9,835 

36 

9,871 

(4,377) 

— 

(4,377) 

— 

(4,377) 

— 

(3) 

172 

172 

— 

(3) 

— 

118 

118 

— 

— 

— 

172 

(3) 

118 

5,455 

18,350 

23,805 

(30) 

23,775 

— 
— 

— 

15,644 
(174) 

15,644 
(184) 

(1,195) 

(291) 

— 
— 

— 

15,644 
(184) 

(291) 

24 

24 
24 

5,103 
— 
— 
— 
  35,016 

(5,103) 
— 
— 
— 
14,717 

— 
— 
— 
— 
12,061 

— 
(776) 
(2,565) 
(2,009) 
200,404 

— 
(776) 
(2,565) 
(2,009) 
262,198 

— 
— 
— 
— 

— 
(776) 
(2,565) 
(2,009) 
2,191  264,389 

See accompanying notes to the consolidated financial statements. 

56 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22 0 19  C ONS OLIDATED  F IN AN CIAL  S TATEM EN TS 

Consolidated Statements of Cash Flows 

Years ended December 31 
(in thousands of Canadian dollars) 

Notes 

2019 
$ 

2018 
$ 

Operating activities 
Profit for the year 
Items not affecting cash and cash equivalents  
Cash generated from operations 
Dividends received from equity accounted investments 
Contributions to defined benefit retirement plans 
Settlement of provisions 
Changes in non-cash working capital items  
Income taxes paid 

Financing activities 

Net change in short-term bank loans 
Issuance of long-term debt, net of transaction costs 
Repayment of long-term debt 
Repayment of lease liabilities 
Interest paid 
Issuance of Class B shares 
Repurchase of Class A shares  
Repurchase of Class B shares  
Dividends paid on Class A shares 
Dividends paid on Class B shares 

Investing activities 

Acquisition of property, plant and equipment 
Acquisition of intangible assets 
Acquisition of other non-current assets 
Proceeds from disposal of property, plant and equipment 
Proceeds from disposal of other non-current assets 
Business combinations 
Cash acquired in a business combination 
Interest received 
Cash paid to non-controlling interests 
Cash received on other non-current financial assets 
Repayment of other non-current liabilities 

26 

14 
22 
23 
26 

21, 26 
21, 26 

24 
24 
24 
24 
24 

15 
18 

15 

Net change in cash and cash equivalents 
Cash and cash equivalents, beginning of year 
Effect of exchange rate on balances held in foreign currencies of foreign 

operations  

Cash and cash equivalents, end of year 

Non-cash transactions and supplemental information 

26 

See accompanying notes to the consolidated financial statements. 

26,437 
55,912 
82,349 
4,113 
(991) 
(194) 
(2,049) 
(11,947) 
71,281 

(13,577) 
84,649 
(66,030) 
(9,726) 
(12,269) 
258 
(387) 
(1,635) 
(2,703) 
(2,161) 
(23,581) 

(34,974) 
(122) 
(944) 
1,832 
151 
— 
— 
439 
(7,972) 
211 
(571) 
(41,950) 

5,750 
15,393 

1,465 
22,608 

17,994 
43,823 
61,817 
4,596 
(1,049) 
(359) 
4,119 
(10,037) 
59,087 

3,747 
134,653 
(62,382) 
— 
(7,241) 
562 
(177) 
(1,349) 
(2,505) 
(1,947) 
63,361 

(16,131) 
(208) 
(286) 
1,416 
215 
(97,998) 
2,501 
539 
(157) 
211 
— 
(109,898) 

12,550 
3,963 

(1,120) 
15,393 

LOGISTEC | 2019 ANNUAL REPORT 

57 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

1.  General Information 
LOGISTEC  Corporation  (the  “Company”)  provides  specialized  cargo  handling  and  other  services  to  a 
wide variety of marine, industrial and municipal customers. The Company has cargo handling facilities in 
34 ports across North America, and offers marine agency services to foreign shipowners and operators 
serving  the  Canadian  market.  The  Company  is  widely  diversified  on  the  basis  of  cargo  type  and  port 
location  with  a  balance  between  import  and  export  activities.  Furthermore,  the  Company,  through  its 
subsidiaries SANEXEN Environmental Services Inc. (“SANEXEN”) and FER-PAL Construction Ltd. (“FER-
PAL”), operates in the environmental services segment where it provides services for the rehabilitation 
of  underground  water  mains,  soils  and  materials  management,  site  remediation,  risk  assessment  and 
manufacturing of woven hoses.  

The  Company  is  incorporated  in  the  Province  of  Québec  and  is  governed  by  the  Québec  Business 
Corporations Act. Its shares are listed on the Toronto Stock Exchange (“TSX”) under the ticker symbols 
LGT.A  and  LGT.B.  The  address  of  its  registered  office  is  360  Saint-Jacques  Street,  Suite 1500,  
Montréal (QC) H2Y 1P5, Canada. 

The Company’s largest shareholder is Sumanic Investments Inc.  

These audited consolidated financial statements were approved by the Company’s Board of Directors on 
March 17, 2020. 

2. Summary of Significant Accounting Policies  
Significant accounting policies used in the preparation of these consolidated financial statements are set 
out below. 

Statement of Compliance 

These consolidated financial statements have been prepared in accordance with International Financial 
Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. 

Accounting Standard and Interpretation Issued and Adopted 

On January 1, 2019, the Company adopted the following standard and interpretation: 

I F RS   1 6  LE AS ES  

IFRS 16  Leases  (“IFRS  16”)  specifies  how  to  recognize,  evaluate  and  present  leases  and  provide 
information about them. The standard contains a unique model for lessee accounting which requires the 
recognition of assets and liabilities for all contracts unless the contract term is 12 months or less or the 
underlying  asset  has  a  low  value.  This  standard  replaces  IAS 17  Leases  (“IAS  17”),  IFRIC 4  Determining 
whether an arrangement contains a lease, SIC-15 Operating Leases — Incentives and SIC-27 Evaluating the 
substance of transactions in the legal form of a lease. 

The  consolidated financial  statements  have  been  prepared  in  accordance  with  IFRS 16.  The Company 
adopted this standard using the modified retrospective approach, therefore the comparative information 
has  not  been  restated  and  continues  to  be  reported  under  IAS 17.  The  Company  used  the  practical 
expedients exemptions for short-term leases, leases for which the underlying asset is of low value and 
applied  a  single  discount  rate  to  a  portfolio  of  leases  with  similar  remaining  lease  terms  and  relied  on 
assessment of the onerous lease provisions, instead of performing an impairment review. 

58 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

The Company used the practical expedients exemptions not to reassess whether a contract is, or contains, 
a  lease  as  at  January  1,  2019.  Instead,  the  Company  reviewed  and  assessed  its  existing  lease 
arrangements  that  were  previously  identified  as  leases  under  IAS 17  and,  based  on  the  facts  and 
circumstances  that  existed  at  that  date,  concluded  that  the  initial  application  of  IFRS 16  has  had  the 
following impact regarding its recognition, measurement and disclosures: 

(cid:16)  Record of right-of-use assets of $76,517 representing the Company’s right to use the underlying 

assets included in lease arrangements; 

(cid:16)  Record of lease liabilities (including the current portion) of $76,517 representing the present value 

of lease payments, discounted using the interest rate implicit in these lease arrangements; 

(cid:16)  Additional disclosures related to IFRS 16 are provided in Note 16.  

The following table reconciles the operating lease commitments disclosed under IAS 17 as at December 
31, 2018 and the lease liabilities recognized on January 1, 2019: 

Operating lease commitment as at December 31, 2018, as disclosed in the Company’s consolidated 

financial statements 

Recognition exemption for short-term and low-value asset leases 
Extension and termination options reasonably certain to be exercised 
Variable lease payments based on an index or a rate 
Discounted using the incremental weighted average borrowing rate of 4.70% 
Lease liabilities recognized as at January 1, 2019 

IF RI C  2 3  U N CE R T AI N TIE S   O VE R  I N C O ME  T AX  T R EA T ME N TS    

January 1, 
2019 
$ 

85,229 
(1,587) 
24,322 
(23,672) 
(7,775) 
76,517 

IFRIC 23 Uncertainty over Income Tax Treatments (“IFRIC 23”), clarifies how to apply the recognition and 
measurement  requirements  in  IAS 12  Income  Taxes,  when  there  is  uncertainty  over  income  tax 
treatments. 

The consolidated financial statements have been prepared in accordance with IFRIC 23. The Company 
completed its assessment of the impact of this interpretation and the adoption does not have a material 
impact on the consolidated financial statements. 

The Company has updated its significant accounting policies in the section below. 

Preparation 

The consolidated financial statements have been prepared on a historical cost basis, with the exception 
of certain financial instruments that are measured at fair value, including derivative financial instruments, 
post-employment  benefit  assets,  post-employment  benefit  obligations,  and  provisions  for  asset 
retirement obligations. Historical cost is generally based on the fair value of the consideration given in 
exchange for services. Fair value is defined as the price that would be received for the sale of an asset or 
paid for the transfer of a liability in a normal transaction between market participants on the valuation 
date.  

LOGISTEC | 2019 ANNUAL REPORT 

59 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Basis of Consolidation 

The consolidated financial statements include the accounts of the Company and its subsidiaries.  

SUBS IDI A RI ES  

Subsidiaries  are  all  entities  controlled  by  the  Company.  Control  is  achieved  where  the  Company  has 
power over the investee, exposure or rights to variable returns from its involvement with the investee, 
and the ability to use its power over the investee to affect the amount of these returns. The subsidiaries 
continue to be consolidated until the date that such control ceases. 

Revenue  and  expenses  of  subsidiaries  acquired  or  disposed  of  during  the  year  are  included  in  the 
consolidated statements of earnings and of comprehensive income from the effective date of acquisition 
of control and up to the effective date of loss of control, as appropriate. Total comprehensive income of 
subsidiaries is attributed to owners of the Company and to non-controlling interests. 

When  necessary,  adjustments  are  made  to  the  financial  statements  of  subsidiaries  to  bring  their 
accounting policies in line with those used by the Company. 

All intra-group transactions, balances, revenue, expenses, and cash flows are eliminated on consolidation 
until they are realized with a third party. Exchange differences on monetary items are recognized in profit 
or loss in the period in which they arise except for exchange differences on monetary items receivable 
from  or  payable  to  a  foreign  operation  for  which  settlement  is  neither  planned  nor  likely  to  occur 
(therefore forming part of the net investment in the foreign operation), which are recognized initially in 
other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary 
items.  

The following subsidiaries are wholly owned by the Company: 

BalTerm, LLC, CrossGlobe Transport, Ltd., GSM Intermediate Holdings, Inc., GSM Maritime Holdings, 
LLC,  Gulf  Stream  Marine,  Inc.  (“GSM”),  Les  Terminaux  Rideau  Bulk  Terminals  Inc.,  LOGISTEC 
Environmental  Services  Inc.,  LOGISTEC  Marine  Agencies  Inc.,  LOGISTEC  Marine  Services  Inc., 
LOGISTEC  Stevedoring  Inc.,  LOGISTEC  Stevedoring  (New  Brunswick)  Inc.,  LOGISTEC  Stevedoring 
(Nova Scotia) Inc., LOGISTEC Stevedoring (Ontario) Inc., LOGISTEC Stevedoring U.S.A. Inc., LOGISTEC 
USA Inc., MtlLINK Multimodal Solutions Inc. (85.82% in 2018), Niedner Inc., Pate Stevedore Company, 
Inc.  (“Pate”),  Ramsey  Greig  &  Co.  Ltd.,  SANEXEN  Environmental  Services  Inc.,  SANEXEN  Water,  Inc., 
SETL Real Estate Management Inc., Sorel Maritime Agencies Inc., and Tartan Terminals, Inc.  

The Company also holds a 51.03% investment in FER-PAL (51% in 2018) and a 77.91% investment in 
LOGISTEC Gulf Coast LLC (“LGC”) (70% in 2018). Refer to Note 23 for further details.  

BUS I NES S   C O MBI N A TI O NS  

The  Company  uses  the  acquisition  method  of  accounting  to  account  for  business  combinations.  The 
consideration  transferred  for  the  acquisition  of  a  subsidiary  is  the  fair  value  of  assets  transferred, 
liabilities incurred and equity interests issued by the Company. The consideration transferred includes 
the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-
(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3) (cid:70)(cid:82)(cid:86)(cid:87)(cid:86)(cid:3) (cid:68)(cid:85)(cid:72)(cid:3) (cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:71)(cid:3) (cid:68)(cid:86)(cid:3) (cid:76)(cid:81)(cid:70)(cid:88)(cid:85)(cid:85)(cid:72)(cid:71)(cid:17)(cid:3) (cid:44)(cid:71)(cid:72)(cid:81)(cid:87)(cid:76)(cid:262)(cid:68)(cid:69)(cid:79)(cid:72)(cid:3) (cid:68)(cid:86)(cid:86)(cid:72)(cid:87)(cid:86)(cid:3) (cid:68)(cid:70)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:15)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:79)(cid:76)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3) (cid:68)(cid:81)(cid:71)(cid:3) (cid:70)(cid:82)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:72)(cid:81)(cid:87)(cid:3)
liabilities assumed in a business combination are initially measured at their fair values at the acquisition 
date. On an acquisition-by-acquisition basis, the Company recognizes any non-controlling interest in the 
acquiree  either at fair  value  or  at  the  non-controlling  interest’s  proportionate  share in the recognized 
amounts of the acquiree’s net assets. 

Changes in the parent company’s ownership interest in subsidiaries that do not result in a loss of control 
are accounted for as equity transactions. 

60 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

N O N- C O N T R OL LI N G  I N T E RE S TS  

Non-controlling interests represent equity interests in subsidiaries owned by outside parties. The share 
of  net  assets  of  subsidiaries  attributable  to  non-controlling  interests  is  presented  as  a  component  of 
equity.  

EQ UI T Y  A C CO U N TE D  I N V ES T ME N TS    

Equity accounted investments consist of investments in joint ventures and associates of the Company. 

J OI N T  VE N T U RE S  

A joint venture is a contractual arrangement whereby the Company and other parties undertake to 
have  joint  control  over  an  arrangement,  which  exists  only  when  decisions  about  the  activities  that 
significantly  affect  the  returns  of  the  arrangement  require  the  unanimous  consent  of  the  parties 
sharing control.  It involves the establishment of a corporation or a partnership and the parties having 
joint control have rights to the net assets of the arrangement.  

AS S O CI A TES  

An  associate  is  an  entity  over  which  the  Company  has  significant  influence  and  that  is  neither  a 
subsidiary  nor  an  interest  in  a  joint  venture.  Significant  influence  is  the  power  to  participate  in  the 
financial and operating policy decisions of the investee, but is not control or joint control over those 
policies. 

The  profit  or  loss,  assets  and  liabilities  of  equity  accounted  investments  are  incorporated  in  these 
consolidated financial statements using the equity method of accounting. Under the equity method, an 
investment in a joint venture or associate is initially recognized in the consolidated statements of financial 
position at cost, and adjusted thereafter to recognize the Company’s share of profit or loss and of other 
comprehensive income or loss of the joint venture or associate. When the Company’s share of loss of a 
joint  venture  or  associate  exceeds  the  Company’s  interest  in  that  joint  venture  or  associate  (which 
includes any long-term interests that, in substance, form part of the Company’s net investment in the joint 
venture  or  associate),  the  Company  discontinues  recognizing  its  share  of  further  losses  unless  the 
Company has incurred legal or constructive obligations or made payments on behalf of the joint venture 
or associate. 

Any excess of the acquisition cost over the Company’s share of the net fair value of the identifiable assets, 
liabilities  and  contingent  liabilities  of  a  joint  venture  or  associate  recognized  at  the  acquisition  date  is 
recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the 
Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over 
the  acquisition  cost,  after  reassessment,  is  recognized  immediately  in  the  consolidated  statements  of 
earnings.  

When the Company transacts with its joint venture or associate, profit or loss resulting from transactions 
with the joint venture or associate is recognized in the Company’s consolidated financial statements only 
to the extent of interests in the joint venture or associate that are not related to the Company.  

Revenue Recognition 

Revenue is measured based on the consideration specified in a contract with a customer and excludes 
amounts collected on behalf of third parties. The Company recognizes revenue when it transfers control 
of a service or product to a customer. Determining the timing of the transfer of control (“at a point in time” 
or “over time”) requires judgment. The Company recognizes revenue from the following major sources:  

M A RI NE  S ER VI C E S  

The  Company  earns  revenue  from  stevedoring,  cargo  loading  and  unloading,  container  stuffing  and 
destuffing,  ship  dockage,  road  transportation,  storage  and  tailgating  (truck  loading  and  discharging). 

LOGISTEC | 2019 ANNUAL REPORT 

61 

 
  
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Revenue from  these  services  is recognized over time  as the services  are  performed  during  the  period 
between the arrival and departure of the cargo to or from the terminal.  

Fees  for  storage  are  recognized  over  time  for  material  stored  by  customers  under  short-term 
arrangements at the Company’s facilities based on a time-proportion basis. 

For arrangements that involve multiple performance obligations, the total consideration in the contract 
is  allocated  to  the  separate  performance  obligations  based  on  their  stand-alone  selling  prices,  and 
revenue is recognized when, or as, performance obligations in the contract are satisfied. The stand-alone 
selling price is determined based on the list prices at which the Company sells the services in separate 
transactions. 

E N VI R O N ME N T AL  S E R VI CE S  

The  Company  earns  revenue  in  the  environmental  services  segment,  where  it  provides  services  to 
industrial,  municipal  and  other  governmental  customers  for  the  rehabilitation  of  underground  water 
mains, site remediation, soils and materials management and risk assessment. 

Contracts with customers for these services generally comprise multiple performance obligations. There 
is  significant  integration  of  services  performed  by  the  Company  and,  as  such,  they  are  considered  to 
represent a single distinct performance obligation. Revenue from these services is recognized over time 
based on the stage of completion of work, which is determined on the basis of costs incurred.  

Under the cost method, the stage of completion at any given time is measured by dividing the cumulative 
costs incurred at the period end date by the sum of incurred costs and anticipated costs for completing a 
contract. The cumulative effect of changes to anticipated costs and revenue for completing a contract are 
recognized in the period in which the revisions are identified. In the event that the total anticipated costs 
exceed the total anticipated revenue on a contract, such loss is recognized in its entirety in the period in 
which  it  becomes  known.  Estimates  are  required  to  determine  the  appropriate  anticipated  costs  and 
revenue.  

EN VI R O N ME N T AL  G O OD S  

Revenue from the manufacturing of woven hoses is recognized at a point in time when control of the asset 
is transferred to the customer, generally when a customer takes possession of the goods. In contracts 
under which the Company provides custom products or services and for which it has an enforceable right 
to  payment  for  performance  completed,  the  criteria  for  revenue  recognition  over  time  are  met  and, 
consequently, revenue is recognized under that method. 

Foreign Currencies 

F U N C TI O N AL  A ND  P RE S EN T A TI O N  C UR R E N C Y  

Items  included  in  the  financial  statements  of  each  of  the  Company’s  foreign  operations  are  measured 
using the currency of the primary economic environment in which the entity operates (the “functional 
currency”). The Company’s functional and presentation currency is the Canadian dollar. 

The financial statements of foreign operations that have a functional currency different from that of the 
Company’s  presentation  currency  are  translated  into  Canadian  dollars.  Assets  and  liabilities  are 
translated  at  the  rates  in  effect  at  the  end  of  the  reporting  period;  revenue  and  expense  items  are 
translated at the rates in effect on transaction dates. Gains or losses arising from translation are recorded 
in equity under the heading accumulated other comprehensive income — foreign currency translation. 

62 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

T R A NS AC TI O NS   A N D  B A LA N C E S  

Revenue  and  expense  items  arising  from  transactions  in  foreign  currencies  are  converted  into  the 
functional currency at the rates in effect on transaction dates. Monetary asset and liability items on the 
consolidated statements of financial position are translated into the functional currency at the rates in 
effect  at  the  end  of  the  reporting  period;  non-monetary  items  are  translated  at  the  rates  in  effect  on 
transaction dates. Exchange gains or losses arising from translation are recognized in the consolidated 
statements  of  earnings  under  the  heading  other  gains  and  losses,  except  where  hedge  accounting  is 
applied, as described under derivative financial instruments. 

Income Taxes 

Income tax expense comprises current and deferred income taxes. The income tax expense is recognized 
in the consolidated statements of earnings except to the extent that it relates to items recognized directly 
in  equity  or  in  other  comprehensive  income,  in  which  case  it  is  recognized  in  equity  or  other 
comprehensive income. 

C U R RE N T  I N C O ME  T AXE S  

Current income taxes are the expected taxes payable on the taxable profit for the year, using tax rates 
enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable 
with respect to previous years. 

DEF E R RE D  I N C O ME  T AX ES  

Deferred income taxes are recognized on temporary differences between the carrying amounts of assets 
and  liabilities  in  the  consolidated  financial  statements  and  the  corresponding  tax  basis  used  in  the 
computation of taxable profit. Deferred income tax assets and liabilities are measured at the tax rates that 
are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates 
that have been enacted or substantively enacted by the end of the reporting period. The measurement of 
deferred  income  tax  assets  and  liabilities  reflects  the  tax  consequences  that  would  follow  from  the 
manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying 
amount of its assets and liabilities.  

DEF E R RE D  I N C O ME  T AX  AS S E TS  

Deferred income tax assets are generally recognized for all deductible temporary differences to the 
extent that it is probable that taxable profit will be available against which the deductible temporary 
differences  can  be  utilized.  Such  deferred  income  tax  assets  are  not  recognized  if  the  temporary 
difference arises from the initial recognition (other than in a business combination) of other assets and 
liabilities in a transaction that affects neither the taxable profit nor the accounting profit.  

Deferred income tax assets are recognized for the carry forward of unused tax losses and unused tax 
credits to the extent that it is probable that future taxable profit will be available against which the 
unused tax losses and unused tax credits can be utilized. 

Deferred  income  tax  assets  arising  from  deductible  temporary  differences  associated  with 
investments in subsidiaries and associates, and interests in joint ventures are only recognized to the 
extent that it is probable that there will be sufficient taxable profit against which the benefits of the 
temporary differences can be utilized and they are expected to reverse in the foreseeable future. 

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and 
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow 
all or part of the asset to be recovered. 

LOGISTEC | 2019 ANNUAL REPORT 

63 

 
  
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

DEF E R RE D  I N C O ME  T AX  LI ABI LI TIES  

Deferred  income  tax  liabilities  are  generally  recognized  for  all  taxable  temporary  differences.  Such 
deferred  income  tax  liabilities  are  not recognized  if  the  temporary  difference  arises  from  the  initial 
recognition of  goodwill or  from  the  initial recognition  of  other  assets  and  liabilities  in  a transaction 
(other than in a business combination) that affects neither the taxable profit nor the accounting profit. 

Deferred  income  tax  liabilities  are  recognized  for  taxable  temporary  differences  associated  with 
investments in subsidiaries and associates, and interests in joint ventures, except where the Company 
is  able  to  control  the  reversal  of  the  temporary  difference  and  it  is  probable  that  the  temporary 
difference will not reverse in the foreseeable future. 

Cash and Cash Equivalents  

Cash and cash equivalents consist of cash on hand and in banks, highly liquid investments with maturity 
dates less than three months from the acquisition date, and highly liquid investments redeemable at all 
times without penalty. 

Trade and Other Receivables 

Trade receivables are amounts due from customers for the rendering of services or sale of goods in the 
normal course of business. Invoices are issued according to contractual terms and are usually payable 
upon receipt. The period between performance and payments for the performance is generally less than 
one  year.  Uninvoiced  amounts  are  presented  as  contract  assets.  Trade  and  other  receivables  are 
classified  as  current  assets  if  payment  is  due  within  one  year  or  less.  Trade  and  other  receivables  are 
initially  recognized  at  fair  value  and  subsequently  measured  at  amortized  cost,  less  impairment.  The 
Company maintains an allowance for doubtful accounts to provide for impairment of trade receivables. 
The  expense  relating  to  doubtful  accounts  is  included  within  other  expenses  in  the  consolidated 
statements of earnings.  

Contract Assets or Contract Liabilities 

Contract assets primarily relate to the gross unbilled amount for a given project that is expected to be 
collected  from  customers  for  contract  work  performed  to  date.  It  is  measured  at  cost  plus  profit 
recognized by the Company to date less progress billings. The contract assets are transferred to trade 
and  other  receivables  when  the  rights  become  unconditional.  This  usually  occurs  when  the  Company 
issues  an  invoice  to  the  customer.  If  progress  billings  for  a  given  project  exceed  costs  incurred  plus 
recognized profit, then the difference is presented as contract liabilities. 

Contract liabilities also relate to the advance consideration received from customers, for which revenue 
is usually recognized when the service is rendered or upon delivery of the goods. The contract liabilities 
are  presented  as  either  current  or  non-current  based  on  the  timing  of  when  the  Company  expects  to 
recognize revenue. 

The Company used the practical expedients exemptions as allowed by IFRS 15 Revenue from Contracts 
with Customers, therefore no information is provided about the remaining performance obligations as at 
December 31, 2019 and 2018 that have an original expected duration of one year or less. 

Inventories 

Inventories are measured at the lower of cost and net realizable value. Cost is determined on a first-in, 
first-out basis. Cost of work in progress and finished goods includes raw material cost, labour cost and 
appropriate overhead cost. Net realizable value represents the estimated sale price for inventories less 
all estimated costs of completion and costs necessary to make the sale.  

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2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Property, Plant and Equipment 

Property,  plant  and  equipment  are  stated  at  cost,  net  of  government  grants,  less  accumulated 
depreciation  and  accumulated  impairment  losses.  Cost  includes  expenditures  that  are  directly 
attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount 
or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits 
associated with the item will flow to the Company and the cost can be measured reliably. The carrying 
amount of a replaced asset is derecognized when replaced. Repairs and maintenance costs are recorded 
in the consolidated statements of earnings during the period in which they are incurred. 

Property, plant and equipment, less their residual value, are depreciated using the straight-line method 
over their estimated useful lives. The estimated useful lives are as follows: 

Buildings 
Machinery and automotive equipment 
Computer equipment 
Furniture and fixtures 
Leasehold improvements 

5 to 25 years 
3 to 20 years 
3 to 7 years 
3 to 10 years 
4 to 10 years 

The estimated useful lives, residual values and method of depreciation are reviewed annually, with the 
effect of any changes in estimates accounted for on a prospective basis.  

The  gain  or  loss  on  disposal  of  property,  plant  and  equipment  is  determined  by  comparing  the  sales 
proceeds with the carrying amount of the asset and is included in the consolidated statements of earnings. 

Leases 

LE AS E   A R RA N GE M E N TS   –   A C C OU N TI N G  PO LI C Y  AP PL I C A B LE  B E F O RE  J A N U A R Y  1,  2 0 1 9  

Leases were classified as either operating or finance leases based on the substance of the transaction at 
the inception of the lease.  

OP E RA TI N G  LE AS ES  

Leases in which a significant portion of the risks and rewards of ownership were retained by the lessor 
were classified as operating leases. Expenses under an operating lease were recognized in operating 
expenses  in  the  consolidated  statements  of  earnings  on  a  straight-line  basis  over  the  period  of  the 
lease. 

F I N A N CE   LE AS E S  

Leases in which substantially all the risks and rewards of ownership were transferred to the Company 
were classified as finance leases.  

Assets held under finance leases were initially recognized as assets of the Company at their fair value 
at  the  inception  of  the  lease  or,  if  lower,  at  the  present  value  of  the  minimum  lease  payments.  The 
corresponding liability to the lessor was included in the consolidated statements of financial position 
as a finance lease obligation and was classified in long-term debt.  

Lease  payments  were  apportioned  between  finance  expense  and  reduction  of  the  lease  obligation 
using  the  effective  interest  method  so  as  to  achieve  a  constant  rate  of  interest  on  the  remaining 
balance  of  the  liability.  A  finance  expense  was  charged  directly  to  the  consolidated  statements  of 
earnings, unless it was directly attributable to qualifying assets, in which case it was capitalized. 

LE AS E   A R RA N GE M E N TS   –   A C C OU N TI N G  PO LI C Y  AP PL I C A B LE  AF TE R  J A N U A R Y  1,  2 0 1 9  

At  inception  of  a  lease  arrangement, the Company  assesses  whether a  contract  is  or  contains  a  lease, 
based on whether the contract conveys the right to control the use of an identified asset for a period of 
time in exchange for consideration. 

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65 

 
  
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

S H OR T - TE R M  O R  L OW   V AL UE  LE AS ES  

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases 
that have a lease term of 12 months or less and leases of low-value assets. The Company recognizes 
the lease payment associated with these leases as an expense on a straight-line basis over the lease 
term in the consolidated statements of earnings under the caption operating expense.  

AL L  O THE R  LE AS ES  

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. 
The right-of-use asset is initially measured based on the initial amount of the lease liability adjusted for 
any lease payments made at or before the commencement date, plus any initial direct costs incurred 
and estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset 
or site on which it is located, less any lease incentives received. The assets are depreciated using the 
straight-line method over the earlier of the end of their estimated useful lives or the lease term. The 
lease term includes periods covered by an option to extend if the Company is reasonably certain to 
exercise that option.  

Lease liability is initially measured at the present value of the lease payments, discounted using the 
interest  rate  implicit  in  the  lease  or,  if  that  rate  cannot  be  readily  determined,  the  Company’s 
incremental  borrowing  rate.  Generally,  the  Company  uses  its  incremental  borrowing  rate  as  the 
discount rate.  

The lease liability is measured at amortized cost using the effective interest method. Lease payments 
are  apportioned  between  finance  expense  and  reduction  of  the  lease  liability  using  the  effective 
interest  method  to  achieve  a  constant  rate  of  interest  on  the  remaining  balance  of  the  liability.  A 
finance expense is charged directly to the consolidated statements of earnings. 

Lease liability is remeasured when there is a change in future lease payments arising from a change in 
an index or rate, if there is a change in the Company’s estimate of the amount expected to be payable 
under a residual value guarantee, or if the Company changes its assessment of whether it will exercise 
a  purchase,  extension  or  termination  option.  When  it  is  remeasured  in  this  way,  a  corresponding 
adjustment is made to the carrying amount of the right-of-use asset. 

Government Grants  

Government grants related to the acquisition of capital expenditures are reflected as a reduction of the 
cost of the related assets. Accordingly, they are recognized in the consolidated statements of earnings 
over the life of the depreciable asset as a reduced depreciation expense. Government grants for expenses 
are  recognized  as  a  reduction  of  the  related  expenses.  The  benefit  of  a  government  loan  at  a  below-
market rate of interest is treated as a government grant, measured as the difference between proceeds 
received and the fair value of the loan based on prevailing market interest rates.  

Goodwill 

Goodwill is measured as the excess of the acquisition cost over the Company’s share in the fair value of 
all  identified  assets  and  liabilities.  Goodwill  is  initially  recognized  as  an  asset  at  fair  value  and  is 
subsequently measured at cost less any accumulated impairment losses.  

For the purpose of impairment testing, goodwill is allocated to each of the Company’s cash-generating 
units (“CGU”) (or groups of CGUs) expected to benefit from the synergies of the combination, and which 
represent the lowest level within the Company at which goodwill is monitored for internal purposes. 

CGUs  to  which  goodwill  has  been  allocated  are  tested  for  impairment  annually,  except  when  certain 
criteria  are  met,  or  more  frequently  when  there  is  an  indication  that  the  unit  may  be  impaired. 
Recoverable amount is the higher of fair value less cost of disposal to sell and value in use. In assessing 
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount 

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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

rate that reflects current market assessments of the time value of money and the risks specific to the CGU 
for which the estimates of future cash flows have not been adjusted. If the recoverable amount of the 
CGU  is  less  than  the  carrying  amount  of  the  unit,  the  impairment  loss  is  allocated  first  to  reduce  the 
carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rated on 
the basis of the carrying amount of each asset in the unit. An impairment loss recognized on goodwill is 
not reversed in subsequent periods. 

On disposal of the relevant CGU, the attributable amount of goodwill is included in the determination of 
the gain or loss on disposal. 

Intangible Assets 

Intangible assets consist primarily of lease rights and location, and client relationships. Intangible assets 
have finite useful lives and are stated at cost less accumulated amortization and impairment losses.  

Intangible  assets  are  amortized  using  the  straight-line  method  over  their  estimated  useful  lives.  The 
estimated useful lives are as follows: 

Client relationships 
Computer software 
Lease rights and location 

2 to 15 years 
3 to 5 years 
15 to 21 years 

Research  expenditures  are  recognized  as  an  expense  as  incurred.  Development  expenditures  are 
recognized as an intangible asset when all the following criteria can be 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  measure  reliably  the  expenditure  attributable  to  the  intangible  asset  during  its 

development. 

Development  expenditures  that  do  not  meet  these  criteria  are  recognized  as  an  expense  as  incurred. 
Development expenditures previously recognized as an expense are not recognized as an intangible asset 
in a subsequent year. 

Impairment of Non-Financial Assets Other Than Goodwill  

At the end of each reporting date, the Company reviews the carrying amount 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 is estimated in order to determine the extent of the 
impairment loss (if any). Where it is not possible to estimate the recoverable amount for an individual 
asset, the Company estimates the recoverable amount of the CGU to which the asset belongs. 

If the carrying amount of an asset (or CGU) exceeds its recoverable amount, the carrying amount of the 
asset (or CGU) is reduced to its recoverable amount. An impairment loss is immediately recognized in the 
consolidated  statements  of  earnings.  Where  an  impairment  loss  subsequently  reverses,  the  carrying 
amount of the asset (or CGU) is increased to the revised estimate of its recoverable amount, but so that 
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 the consolidated statements of earnings. 

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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Provisions 

Provisions  include  provisions  for  warranty,  claims  and  litigation,  provisions  to  further  recognize  the 
Company’s share of losses of certain joint ventures for which it has incurred constructive obligations, and 
asset retirement obligations. Provisions are recognized when the Company has a legal or constructive 
obligation as a result of a past event, when it is probable that the Company will be required to settle the 
obligation, and when a reliable estimate can be made of the amount of the obligation.  

The  amount  recognized  as  a  provision  is  the  best  estimate  of  the  consideration  required  to  settle  the 
present  obligation  at  the  end  of  the  reporting  period,  taking  into  account  the  risks  and  uncertainties 
surrounding the obligation. When a provision is measured using the cash flows estimated to settle the 
present obligation, its carrying amount is the present value of those cash flows (where the effect of the 
time value of money is material). 

When some or all of the economic benefits required to settle a provision are expected to be recovered 
from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will 
be received, and the amount of the receivable can be measured reliably. 

W A R R A N T Y  

A subsidiary of the Company provides a limited warranty on its products to be free of defects in material 
and  workmanship  for  a  period  of  five  years  from  the  date  goods  are  sold.  The  provision  is  based  on 
management’s best estimate of the amount required to settle the obligation. 

CL AI M S   A N D  L IT IG A TI O N  

A  provision  for  claims  and  litigation  is  recognized  when  it  is  probable  that  the  Company  will  be  held 
responsible. The provision is based on management’s best estimate of the amount required to settle the 
obligation. 

AS S E T  RE TI RE M E N T  O B LIG A TI O NS  

The Company’s asset retirement obligations essentially derive from its obligations to remove assets and 
to restore its sites under lease arrangements. The fair value of a liability for an asset retirement obligation 
is recorded in the year in which it is incurred and when a reasonable estimate of fair value can be made. 
The fair value of a liability for an asset retirement obligation is the amount at which that liability could be 
settled in a current transaction between independent parties that is other than in a forced or liquidation 
transaction. The asset retirement cost is capitalized as part of the related asset and is amortized using a 
systematic and rational method over the asset’s useful life.  

Post-Employment Benefits 

Certain employees have entitlements under the Company’s retirement plans which are either defined 
contribution or defined benefit retirement plans. These plans take different forms depending on the legal, 
financial and tax regime of each country.  

For defined benefit retirement plans, the level of benefit provided is based on the length of service and 
earnings of the person entitled. Also, the cost of retirement is actuarially determined using the projected 
unit credit method pro-rated on service and management’s best estimate of expected plan investment 
performance, salary escalation and retirement ages of employees.  

The retirement  liability recognized  in the consolidated  statements  of  financial  position represents  the 
present  value  of  the  defined  benefit  obligation  as  reduced  by  the  fair  value  of  plan  assets.  Any  asset 
resulting from this calculation is limited to the present value of available refunds and reductions in future 
contributions to the plan. 

The net interest expense is calculated on the net defined benefit liability (asset) by applying the discount 
rate used to calculate the defined benefit obligation at the beginning of the year.  

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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Remeasurements  are  included  in  other  comprehensive  income,  namely  actuarial  gains  and  losses  on 
benefit  obligations  and  variation  on  plan  assets  excluding  amounts  included  in  profit  for  the  year. 
Actuarial gains and losses are recognized in full in the period in which they occur, in other comprehensive 
income, without recycling to the consolidated statements of earnings in subsequent periods. 

Past service cost is recognized at the earlier of the following two dates: 

i.  When the plan amendment or curtailment occurs; or 
ii.  When the entity recognizes related restructuring costs or termination benefits. 

Contributions for defined contribution retirement plans are recognized as an expense when employees 
have rendered service entitling them to the contributions.  

Financial Instruments  

Trade receivables and debt securities issued are initially recognized when they are originated. All other 
financial  assets  and  liabilities  are  initially  recognized  when  the  Company  becomes  a  party  to  the 
contractual  provisions  of  the  instruments.  Financial  assets,  unless  it  is  a  trade  receivable  without  a 
significant  financing  component,  and  financial  liabilities  are  initially  recorded  at  fair  value.  A  trade 
receivable without a significant financing component is initially measured at the transaction price. 

Transaction  costs  that  are  directly  attributable  to  the  acquisition  or  issuance  of  financial  assets  and 
financial liabilities (other than financial assets and financial liabilities measured at fair value through profit 
or  loss  (“FVTPL”))  are  added  to  or  deducted  from  the  fair  value  of  the  financial  assets  or  liabilities,  as 
appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial 
assets or financial liabilities measured at FVTPL are recognized immediately in profit or loss. 

F I N A N CI A L  AS S E TS  

CL AS S IF I C AT IO N  

All  financial  assets  that  do  not  meet  a  “solely  payment  of  principal  and  interest”  condition  shall  be 
classified  at  FVTPL.  For  those  that  meet  this  condition,  classification  at  initial  recognition  will  be 
determined based on the business model under which these assets are managed. Financial assets that 
are being managed on a “held for trading” or fair value basis are classified at FVTPL. Financial assets 
that are being managed on a “hold to collect and for sale” basis are classified at fair value through other 
comprehensive income. Finally, financial assets that are being managed on a “hold to collect” basis are 
classified at amortized cost.  

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably 
elect to present subsequent changes in the investment’s fair value in other comprehensive income. 
This election is made on an investment-by-investment basis. 

Cash and cash equivalents, trade and other receivables and non-current financial assets are classified 
at amortized cost.  

Interest income is recognized by applying the effective interest rate. The effective interest method is 
a method of calculating the amortized cost of a financial asset and of allocating interest income over 
the corresponding period. The effective interest rate is the rate that discounts estimated future cash 
receipts over the expected life of the financial asset, or, where appropriate, a shorter period. 

I M P AI R ME N T  OF   F I N A N C I A L  AS S E TS  

The Company recognizes a loss allowance for expected credit losses (“ECL”) on financial assets that 
are measured at amortized cost. 

The  Company  elected  to  apply  the  simplified  impairment  approach.  Therefore,  the  Company 
recognizes  lifetime  ECL  for  financial  assets  that  are  measured  at  amortized  cost.  Lifetime  ECL 
represents the expected credit losses that will result from all possible default events over the expected 

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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

life  of  a  financial  instrument.  ECL  are  estimated  using  a  provision  matrix  based  on  the  Company’s 
historical credit loss experience, 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 when 
appropriate. 

The Company considers a financial asset to be in default when the borrower is unlikely to pay its credit 
obligation in full. 

DE RE C O G NI TI O N  OF   F I N A N CI AL  AS S ETS  

The Company derecognizes a financial asset only when the contractual rights to the cash flow from the 
asset  expire  or  when  it  transfers  the  financial  asset  and  substantially  all  the  risks  and  rewards  of 
ownership of the asset to another party.  

F IN A N CI A L  LI AB ILI TI E S  

Financial liabilities are classified either at FVTPL or at amortized cost. 

CL AS S IF I C AT IO N  

Short-term bank loans, trade and other payables, dividends payable, long-term debt and liabilities due 
to non-controlling interests are classified at amortized cost 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  discounts  estimated  future  cash 
payments over the expected life of the financial liability, or, where appropriate, a shorter period. 

Long-term liabilities due to non-controlling interests included in the caption non-current liabilities in 
the consolidated statements of financial position include a written put option that is recognized at the 
present value of its exercise price. The Company has chosen to account for the remeasurement of the 
written put option liability at each reporting period within the retained earnings. 

DE RE C O G NI TI O N  OF   F I N A N CI AL  LI ABI LI TIES  

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are 
discharged, cancelled or expired. 

HED GE   OF   A  NE T  I N V ES T ME N T  I N  F O REI G N  OP E R A TI O NS    

The Company designated a debt denominated in U.S. dollars as a hedging item of a portion equivalent to 
its net investment in foreign operations, which uses the U.S. dollar as their functional currency. Hence, 
the effective portion of unrealized exchange gains or losses on translating debts denominated in U.S. 
dollars  and  designated  as  hedging  items,  net  of  related  income  taxes,  is  recognized  in  other 
comprehensive  income  (loss)  and  the  ineffective  portion  is  recognized  in  profit  or  loss.  Unrealized 
exchange  gains  or  losses  on  translating  debts  denominated  in  U.S.  dollars  and  designated  as  hedging 
items of the net investment in foreign operations, that are recognized in other comprehensive income 
(loss), are reclassified to profit or loss when they are subject to a total or partial disposal. 

Earnings per Share (“EPS”) 

Basic EPS are calculated by dividing the profit (loss) for the year attributable to owners of the Company 
by the weighted average number of Class A and Class B shares outstanding during the year. 

Diluted  EPS  are  calculated  by  adjusting  the  weighted  average  number  of  Class  A  and  Class  B  shares 
outstanding for dilutive instruments. Diluted EPS are calculated using the treasury stock method.  

Share Capital 

Class A and Class B shares are classified as equity. Incremental costs directly attributable to the issuance 
of shares are recognized as a deduction from equity. 

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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Share-Based Payment  

Equity-settled share-based payment to employees is measured at the fair value of the equity instruments 
at the grant date. The fair value determined at the grant date of the equity-settled share-based payments 
is expensed on a straight-line basis over the vesting period, based on the Company’s estimate of equity 
instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting 
period,  the  Company  revises  its  estimate  of  the  number  of  equity  instruments  expected  to  vest.  The 
impact  of  the  revision  of  the  original  estimates,  if  any,  is  recognized  prospectively  in  the  consolidated 
statements  of  earnings  such  that  the  cumulative  expense  reflects  the  revised  estimate,  with  a 
corresponding adjustment to the equity-settled employee benefits reserve. 

Accounting Standards and Amendments issued but not yet applied  

A number of new amendments are effective for annual periods beginning on or after January 1, 2020 and 
earlier  application  is  permitted.    The  Company  has  not  early  adopted  these  amended  standards  in 
preparing these consolidated financial statements: 

(cid:16)  Amendments to Hedge Accounting Requirements - IBOR Reform and its Effects on Financial 

Reporting (Phase 1); 

(cid:16)  Amendments to References to Conceptual Framework in IFRS Standards; 

(cid:16)  Definition of a Business (Amendments to IFRS 3); 

(cid:16)  Definition of Material (Amendments to IAS 1 and IAS 8). 

These amendments should not have a significant impact on the Company’s financial statements. 

3. Critical Accounting Judgments and Key Sources of Estimation 

Uncertainty  

In  the  application  of  the  Company’s  significant  accounting  policies,  which  are  described  in  Note 2, 
management is required to make judgments, estimates and assumptions about the carrying amounts of 
assets  and  liabilities  that  are  not  readily  apparent  from  other  sources.  The  estimates  and  associated 
assumptions  are  based  on  historical  experience  and  other  factors  that  are  considered  to  be  relevant. 
Actual results may differ from these estimates. 

The  estimates  and  underlying  assumptions  are reviewed  on  an  ongoing  basis.  Revisions to  accounting 
estimates are recognized in the period in which the estimate is revised if the revision affects only that 
period, or in the period of the revision and future periods if the revision affects both current and future 
periods. 

The  measurement  of  some  assets  and  liabilities  in  the  preparation  of  these  consolidated  financial 
statements includes assumptions made by management, in particular regarding the following items: 

Lease Term and Incremental Borrowing Rate 

The measurement of lease liabilities requires management to make assumptions about the lease term. 
The lease term includes periods covered by an option to extend if the Company is reasonably certain to 
exercise that option. In addition, the lease liability is remeasured if the Company changes its assessment 
of whether it will exercise a purchase, extension or termination option.  

Lease  liability  is  initially  measured  at  the  present  value  of  the  lease  payments,  discounted  using  the 
interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental 
borrowing rate.  

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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Significant changes to the assumptions used in the determination of the lease term or the incremental 
borrowing rate could significantly change the lease liabilities, and consequently the carrying amount of 
the right-of-use asset, which would impact the interest and amortization expenses. 

Business Combinations 

The determination of fair value associated with identifiable property, plant and equipment and intangible 
assets following a business combination requires management to make assumptions. More specifically, 
this is the case when the Company calculates fair values using appropriate valuation techniques, which 
are generally based on a forecast of expected future cash flows for intangible assets, and on a replacement 
cost  approach,  an  income-based  approach  and/or  a  market-based  approach  for  property,  plant  and 
equipment.  These  valuations  are  closely  related  to  the  assumptions  made  by  management  about  the 
future  return  on  the  related  assets  and  the  discount  rate  applied.  Significant  changes  to  these 
assumptions  could  significantly  change  the  fair  values  associated  with  identifiable  intangible  assets 
following a business combination, which would impact the amortization expense. 

Impairment of Long-Lived Assets, Including Goodwill  

At each reporting date, if any indication of impairment exists for long-lived assets, including goodwill, and 
at least annually for the goodwill, the Company performs an impairment test to determine if the carrying 
amounts are recoverable. The impairment review process is subjective and requires significant estimates 
throughout the analysis. Refer to Note 17 for a discussion on the Company’s goodwill impairment test. 

Income Taxes 

The  Company  determines  its  income tax  expense  and  its  income  tax  assets  and  liabilities  based  on  its 
interpretation of applicable tax legislation, including tax treaties between Canada and the United States, 
as well as underlying rules and regulations. Such interpretations involve judgments and estimates that 
may be challenged in government tax audits, to which the Company is regularly subject. New information 
may  also  become  available,  which  would  cause  the  Company  to  change  its  judgment  regarding  the 
adequacy  of  existing  income  tax  assets  and  liabilities.  Any  such  changes  will  have  an  impact  on  net 
earnings for the period in which they occur. 

In  the  calculation  of  income  taxes  and  deferred  tax  assets  and  liabilities,  estimates  must  be  used  to 
determine the appropriate rates and amounts, and to take into account the probability of realization of 
tax assets. Deferred tax assets also reflect the benefit of unused tax losses and deductions that can be 
carried forward to reduce current income taxes in future years. This assessment requires the Company 
to make significant estimates in determining whether or not it is probable that the deferred tax assets can 
be recovered from future taxable income and therefore, that they can be recognized in the Company's 
consolidated  financial  statements.  The  Company  relies,  among  other  things,  on  its  past  experience  to 
make this assessment. 

Contract Assets 

Contract  assets are  being  measured  at  cost  plus  profit recorded  by  the Company  to  date,  from  which 
progress  billings  are  subtracted.  The  Company  must  assess  the  profit  to  be  accounted  for  on  a  given 
contract,  which  is  based  under  the  anticipated  profit  on  the  contract  and  the  history  for  that  type  of 
contract. 

72 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Post-Employment Benefits 

The actuarial techniques used to assess the value of defined benefit retirement plans involve significant 
financial (discount rate) and demographic (compensation growth and mortality rates) assumptions. The 
Company uses the assistance of an independent actuary in the assessment of these assumptions. 

The actuarial assumptions used by the Company may differ materially from actual results in future years 
due to changing market and economic conditions, regulatory events, judicial rulings, withdrawal rates, or 
participant life spans. Refer to Note 22 for further details on the significant actuarial assumptions used in 
the measurement of the Company’s net benefit liability. 

Long-term Liabilities due to Non-Controlling Interests 

The determination of the liability resulting from the written put options granted to FER-PAL’s and the 
liability  related  to  LGC’s  non-controlling  interest  shareholders  require  the  use  of  estimates  and 
assumptions  regarding  the  future  performance  of  the  entities.  The  actual  amounts  payable  may  be 
materially different from those estimates at the reporting date as a result of unforeseen events, changes 
in circumstances and other matters outside of the Company’s control. Refer to Note 23 for further details.  

Long-Term Incentive Plans 

To determine the expense relating to long-term incentive plans, the Company must assess the probability 
of attaining each threshold creating a right to the long-term bonus, which depends on the expected results 
to be achieved. 

4. Revenue  

Revenue from cargo handling services 
Revenue from services relating to the rehabilitation of underground water mains 
Revenue from site remediation and soils and materials management services 
Revenue from the sale of goods 

2019 
$ 

382,651 
145,660 
81,614 
30,017 
639,942 

2018 
$ 

338,790 
134,554 
71,042 
40,492 
584,878 

Contract in the scope of IFRIC 12 Service Concession Arrangements 

In 2015, the Company entered into a service contract with a federal Crown corporation and a department 
of  the  Québec  government  whereby  the  Company  was  required  to  design,  construct  and  operate  a 
groundwater pumping and treatment system (the “System”) to better control migration of groundwater 
and  to  prevent  it  from  flowing  into  the  St.  Lawrence  River.  The  federal  Crown  corporation  and  the 
department  of  the  Québec  government  jointly  assume  the  management  of  the  land  bordering  the 
St. Lawrence River. 

The contract is for a period of 15 years and the construction of the System was completed in 2016. 

Management, maintenance and operating services are spread over a 15-year period and revenues are 
recognized over that period. They are subject to annual indexation, which will be based on the Consumer 
Price Index. These services are payable quarterly. In connection with the management, maintenance and 
operating services, the Company recorded revenue of $603 ($606 in 2018). 

An amount of $335 ($292 in 2018) is recorded in trade and other receivables and an amount of $222 
($211 in 2018) is recorded in other financial assets. In addition, an amount of $3,325 ($3,547 in 2018), 
which bears interest at a rate of 5.00%, is included in non-current financial assets. 

LOGISTEC | 2019 ANNUAL REPORT 

73 

 
  
 
 
 
 
 
 
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

5. Employee Benefits Expense  
The aggregate compensation of the Company’s employees, including that of members of key management 
personnel, is as follows: 

Wages, salaries and fringe benefits 
Defined benefit retirement plans (Note 22) 
Defined contribution retirement plans (Note 22) 
Government pension plans 
Other long-term benefits 

2019 
$ 

302,825 
2,060 
3,140 
3,373 
1,693 
313,091 

2018 
$ 

290,448 
1,897 
2,706 
3,149 
1,482 
299,682 

The compensation of key management personnel is further disclosed in Note 28. 

6. Other Gains and Losses  

Net foreign exchange (losses) gains  
Gain on disposal of property, plant and equipment 
Gain on remeasurement of a long-term liability due to a non-controlling interest 
Gain on post-closing adjustment for a purchase consideration related to a business 

combination  

7. Finance Expense 

Interest on short-term bank loans and other interest expense 
Interest on long-term debt 
Interest on lease liabilities 

2019 
$ 

(2,994) 
1,166 
608 

— 
(1,220) 

2019 
$ 

33 
8,861 
3,960 
12,854 

2018 
$ 

2,258 
838 
— 

500 
3,596 

2018 
$ 

404 
7,642 
— 
8,046 

74 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

8. Income Taxes 
The reconciliation of income taxes calculated at the statutory income tax rate to the income tax expense 
is as follows: 

Profit before income taxes 
Less: share of profit of equity accounted investments 
Parent company’s and subsidiaries’ profit before income taxes 

Income tax expense calculated at the statutory income tax rate of 26.60% (26.70% in 

2018) 

Non-deductible items and other 
Non-taxable income 
Change in deferred tax assets or tax losses not previously recognized 
Effect of foreign tax differences 
Adjustments in respect of the prior year 
Income tax expense recognized in profit or loss 

2019 
$ 

35,136 
(8,729) 
26,407 

7,024 
1,314 
— 
(540) 
177 
724 
8,699 

2018 
$ 

21,302 
(8,111) 
13,191 

3,522 
1,443 
(341) 
(943) 
— 
(373) 
3,308 

Effective income tax rate 

32.94% 

25.08% 

Components of the income tax expense for the years are as follows: 

Current income taxes 
Current income tax expense in respect of the current year 
Adjustments in respect of the prior year 

Deferred income taxes 
Deferred income tax expense recognized in the year 
Adjustments in respect of the prior year 
Income tax expense recognized in profit or loss 

Deferred Income Tax Balances 

2019 
$ 

8,751 
324 

(776) 
400 
8,699 

2018 
$ 

8,697 
18 

(5,016) 
(391) 
3,308 

The amounts recognized in the consolidated statements of financial position are as follows: 

Deferred income tax assets 
Deferred income tax liabilities 

As at  
December 31, 
2019 
$ 

As at  
December 31, 
2018 
$ 

12,751 
(21,156) 
(8,405) 

11,319 
(21,465) 
(10,146) 

Deferred income tax balances for which a right of offset exists within the same entity and jurisdiction are 
presented net in the consolidated statements of financial position as permitted by IAS 12 Income Taxes.  

LOGISTEC | 2019 ANNUAL REPORT 

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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

The movements in deferred income tax assets and liabilities, prior to this offsetting of balances, are shown 
below: 

Deferred income tax assets 

Property, 
plant and 
equipment 
$ 

Unused tax 
losses 
$ 

Post-
employment 
benefits 
$ 

Lease 
liabilities 
$ 

As at January 1, 2018 

486 

5,124 

3,540 

Other 
$ 

Total 
$ 

2,979 

12,129 

932 

2,597 

2,370 

4,179 

2 

(39) 

260 
6,543 

418 
19,284 

— 

— 

— 

— 

— 
— 

1,665 

1,272 

— 

158 
8,219 

— 

179 

(41) 

— 
3,678 

— 

358 

— 

— 
844 

158 

— 

— 
1,002 

(3,358) 

31 

(545) 
(12,720) 

(190) 

(4,397) 

20,085 

3,600 

19,256 

— 

222 
8,251 

719 

— 
— 

— 

47 

766 

(244) 
19,841 

(295) 
9,895 

(317) 
38,989 

Property, 
plant and 
equipment 
$ 

Right-of-
use assets 
$ 

Contract 
holdbacks 
and backlog 
$ 

Intangible 
assets 
$ 

Other 
$ 

Total 
$ 

— 

— 

— 

— 
— 

(6,046) 

(3,401) 

(191) 

(18,486) 

— 

(7,532) 

— 

(10,890) 

2,627 

2,312 

(3,900) 

1,070 

— 
(3,419) 

(579) 
(9,200) 

— 
(4,091) 

(1,124) 
(29,430) 

(3,490) 

(19,634) 

708 

2,482 

1,454 

(18,480) 

171 
(16,039) 

239 
(19,395) 

— 
(2,711) 

106 
(6,612) 

— 
(2,637) 

516 
(47,394) 

As at January 1, 2018 

(8,848) 

Acquisitions through business 

combinations 

Expense to statement of 

earnings  

Expense (benefit) to statement 
of comprehensive income 

Effect of foreign currency 
exchange differences 
As at December 31, 2018 

Expense (benefit) to statement 

of earnings  

Expense (benefit) to statement 
of comprehensive income 

Effect of foreign currency 
exchange differences 
As at December 31, 2019 

Deferred income tax liabilities 

Acquisitions through business 

combinations 

Benefit (expense) to statement 

of earnings  

Effect of foreign currency 
exchange differences 
As at December 31, 2018 

Benefit (expense) to statement 

of earnings  

Effect of foreign currency 
exchange differences 
As at December 31, 2019 

76 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Unused Tax Losses 

The Company has unused non-capital tax losses in the amount of $33,570 ($40,009 in 2018) of which 
$3,738 has not been recognized ($4,681 in 2018). These losses are expiring in the following years: 

Year 

2028 to 2031 
2032 
2033 
2034 
2035 
2036 
2037 
2038 
2039 
Indefinite 

As at  
December 31, 
2019 
$ 

As at  
December 31, 
2018 
$ 

558 
1,096 
950 
3,071 
3,321 
1,841 
6,975 
662 
3,296 
11,800 

1,320 
1,221 
2,583 
6,397 
5,587 
3,691 
13,157 
6,053 
— 
— 

Tax benefits of $8,251 ($8,219 in 2018) have been recorded related to unused non-capital tax losses, 
including $4,489 ($5,552 in 2018) from foreign subsidiaries. The Company also has $1,935 ($5,755 in 
2018) of unrecognized capital losses and deductible temporary differences that may be carried forward 
indefinitely. As at December 31, 2019, no deferred tax liability was recognized for temporary differences 
arising from investments in subsidiaries and joint ventures because the Company controls the decisions 
affecting the realization of such liabilities and it is probable that the temporary differences will not reverse 
in the foreseeable future. 

9. Earnings Per Share 
The earnings and weighted average number of Class A shares and Class B shares used in the calculation 
of basic and diluted earnings per share are as follows: 

Profit attributable to owners of Class A shares, basic ($) 
Profit attributable to owners of Class B shares, basic ($) 

Weighted average number of Class A shares outstanding, basic  
Weighted average number of Class B shares outstanding, basic  

Basic earnings per Class A share 
Basic earnings per Class B share 

Profit attributable to owners of Class A shares, diluted ($) 
Profit attributable to owners of Class B shares, diluted ($) 

Weighted average number of Class A shares outstanding, diluted 
Weighted average number of Class B shares outstanding, diluted  

Diluted earnings per Class A share  
Diluted earnings per Class B share 

2019 

2018 

14,540 
11,654 
26,194 

10,145 
7,915 
18,060 

7,388,122 
5,383,398 
12,771,520 

7,402,697 
5,250,558 
12,653,255 

1.97 
2.16 

14,152 
12,042 
26,194 

1.37 
1.51 

9,753 
8,307 
18,060 

7,388,122 
5,715,329 
13,103,451 

7,402,697 
5,732,050 
13,134,747 

1.92 
2.11 

1.32 
1.45 

LOGISTEC | 2019 ANNUAL REPORT 

77 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

10. Financial Risk Management 
Capital Management 

The Company’s primary objectives when managing capital are to: 

—  Maintain a capital structure that allows financing options to the Company in order to benefit from 

potential opportunities as they arise; 

—  Provide an appropriate return on investment to its shareholders. 

The Company includes the following in its capital: 

—  Cash and cash equivalents and short-term investments, if any; 

—  Long-term debt (including the current portion) and short-term bank loans, if any;  

—  Equity attributable to owners of the Company. 

The Company’s financial strategy is formulated and adapted according to market conditions in order to 
maintain a flexible capital structure that is consistent with the objectives stated above and corresponds 
to the risk characteristics of the underlying assets. In order to maintain or adjust its capital structure, the 
Company  may  refinance  its  existing  debt,  raise  new  debt,  pay  down  debt,  repurchase  shares  for 
cancellation purposes pursuant to normal course issuer bids or issue new shares. 

The Company’s Board of Directors determines the level of dividend payments. To date, the practice has 
been to maintain regular quarterly dividend payments with increases over the years. 

The capital is calculated as follows: 

Short-term bank loans 
Long-term debt, including the current portion 
Total indebtedness 
Less: 

Cash and cash equivalents 

Total net indebtedness 

Equity attributable to owners of the Company 
Capitalization 

As at  
December 31, 
2019 
$ 

As at  
December 31, 
2018 
$ 

— 
177,900 
177,900 

22,608 
155,292 

280,371 
435,663 

13,577 
163,297 
176,874 

15,393 
161,481 

262,198 
423,679 

Ratio of net indebtedness/capitalization 

35.6% 

38.1% 

As at December 31, 2019, the Company is in compliance with all of its obligations under the terms of its 
banking agreements. 

Financial Risk Management 

By the nature of the activities carried out and as a result of holding financial instruments, the Company is 
exposed to credit risk, liquidity risk and market risk, especially interest rate risk and foreign exchange risk. 

C RE DI T  RIS K  

Credit risk arises from the possibility that a counterpart will fail to perform its obligations. The Company’s 
exposure  to  credit  risk  is  primarily  attributable  to  its  cash  and  cash  equivalents,  trade  and  other 
receivables and non-current financial assets. Management believes the credit risk is limited for its cash 
and cash equivalents as the Company deals with major North American financial institutions. 

78 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

The Company conducts a thorough assessment of credit issues prior to committing to the investment and 
actively  monitors the  financial  health  of  its  investees on  an  ongoing  basis. In  addition,  the Company  is 
exposed to credit risk from customers. On the one hand, the Company does business mostly with large 
industrial, municipal and well-established customers, thus reducing its credit risk. On the other hand, the 
number  of  customers  served  by  the  Company  is  limited,  which  increases  the  risk  of  business 
concentration and economic dependency.  

Overall,  the  Company  serves  some  2,200  customers.  In  2019,  the  20  largest  customers  account  for 
39.7% (35.9% in 2018) of consolidated revenue, and not a single customer accounts for more than 10% 
of consolidated revenue and trade receivables in 2019 and 2018. 

Allowance for doubtful accounts and past due receivables are reviewed by management on a monthly 
basis. Refer to Note 12 for further details. 

The Company’s maximum exposure to credit risk with respect to each of its financial assets corresponds 
to its carrying amount. 

LI QU IDI T Y  RIS K  

Liquidity risk is the Company’s exposure to the risk of not being able to meet its financial obligations when 
they  become  due. The  Company  monitors its  levels  of  cash and  debt  and  takes appropriate  actions  to 
ensure it has sufficient cash to meet operational needs while ensuring compliance with covenants. 

The following are the contractual maturities of financial obligations: 

As at December 31, 2019 

Trade and other payables 
Dividends payable 
Lease liabilities 
Long-term debt 
Non-current liabilities 

As at December 31, 2018 

Short-term bank loans 
Trade and other payables 
Dividends payable 
Long-term debt  
Non-current liabilities 

(1) 

Includes principal and interest. 

Carrying 
amount 
$ 

Contractual 
cash flows (1) 
$ 

Less than  
1 year 
$ 

86,217 
1,245 
91,315 
177,900 
46,088 
402,765 

86,217 
1,245 
123,759 
190,744 
52,565 
454,530 

86,217 
1,245 
13,593 
11,842 
1,673 
114,570 

Carrying 
amount 
$ 

Contractual 
cash flows (1) 
$ 

Less than  
1 year 
$ 

13,577 
98,668 
1,973 
163,297 
46,980 
324,495 

13,577 
98,668 
1,973 
180,691 
53,969 
348,878 

13,577 
98,668 
1,973 
11,331 
1,046 
126,595 

1-3 years 
$ 

— 
— 
23,153 
10,758 
19,529 
53,440 

1-3 years 
$ 

— 
— 
— 
113,851 
19,989 
133,840 

More than  
3 years 
$ 

— 
— 
87,013 
168,144 
31,363 
286,520 

More than  
3 years 
$ 

— 
— 
— 
55,509 
32,934 
88,443 

Given the actual liquidity level combined with future cash flows that will be generated by operations, the 
Company believes that its liquidity risk is low to moderate. 

M A RKE T  RIS K  

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, 
will affect the Company’s results or the value of its financial instruments. The Company is mainly exposed 
to interest rate risk and foreign exchange risk. 

IN TE RE S T  R A TE  RIS K  

The Company is exposed to market risk related to interest rate fluctuations because a portion of its 
long-term debt bear interest at floating rates. The Company manages this risk by maintaining a mix of 

LOGISTEC | 2019 ANNUAL REPORT 

79 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

fixed and floating rate borrowings in accordance with the Company’s policies. The Company had an 
interest rate swap contract with the Company’s main bank for an original principal notional amount of 
$25,000 which was settled on October 31, 2019, following the renegotiation of the credit agreement. 
The interest rate swap contract was designated as a cash flow hedge to swap the floating rate of its 
debts  to  a  fixed  rate,  thus  decreasing  the  Company's  sensitivity  to  interest  rate  fluctuations.  As  at 
December 31, 2018, the degressive notional principal amount of the outstanding interest rate swap 
contract was $18,750. The floating interest rate on the interest rate swap was CDOR and the fixed 
interest rate was 1.80%. The Company continues to monitor opportunities to reduce interest rate risk. 

SENS IT IV IT Y  A N A L YS IS  

As at December 31, 2019, the floating rate portion of the Company’s long-term debt is 70.5% (64.7% 
in  2018).  All  else  being  equal,  a  hypothetical  variation  of  +1.0%  in  the  prime  interest  rate  on  the 
floating rate portion of the Company’s long-term debt held as at December 31, 2019 would have 
had a negative impact of $1,253 ($870 in 2018) on profit for the year. A hypothetical variation of 
 –1.0% in the prime interest rate would have had the opposite impact on profit for the year. 

F O REI G N  E X CH A N GE  RIS K 

The Company provides services which is invoices in U.S. dollar and purchases equipment denominated 
in  U.S.  dollar.  In  addition,  a  portion  of  the  Company's  long-term  debt  is  denominated  in  U.S.  dollar. 
Consequently,  it  is  exposed  to  risks  arising  from  foreign  currency  rate  fluctuations.  The  Company 
considers the risk to be limited and, therefore, does not use derivative financial instruments to reduce 
its exposure. 

During 2019, all else being equal, a hypothetical strengthening of 5.0% of the U.S. dollar against the 
Canadian dollar would have had a positive impact of $2,649 ($2,194 in 2018) on profit for the year 
and a positive impact of $11,991 ($12,189 in 2018) on total comprehensive income. A hypothetical 
weakening of 5.0% of the U.S. dollar against the Canadian dollar would have had the opposite impact 
on profit for the year and total comprehensive income.  

As at December 31, 2019, a total of $95,209 or US$73,306 ($78,058 or US$57,121 in 2018) of cash 
and  cash  equivalents  and  trade  and  other  receivables  is  denominated  in  foreign  currencies.  As  at 
December 31, 2019, a total of $61,711 or US$47,514 ($46,313 or US$33,889 in 2018) of trade and 
other payables is denominated in foreign currencies.  

Fair Value of Financial Instruments 

As at December 31, 2019 and 2018, the estimated fair values of cash and cash equivalents, trade and 
other receivables, short-term bank loans, trade and other payables, and dividends payable approximated 
their respective carrying values due to their short-term nature. 

The estimated fair value of long-term notes receivable, included in non-current financial assets, was not 
significantly  different  from  their  carrying  value  as  at  December  31,  2019  and  2018,  based  on  the 
Company’s estimated rate for long-term notes receivable with similar terms and conditions.  

The  estimated  fair  value  of  long-term  debt  was  $921  higher  than  its  carrying  value  as  at 
December 31, 2019  ($300  higher  in  2018)  as  a  result  of  a  change  in  financial  conditions  of  similar 
instruments  available  to  the  Company.  The  fair  value  of  long-term  debt  is  determined  using  the 
discounted future cash flows method and management's estimates for market interest rates for identical 
or similar issuances. 

Financial instruments recognized at fair value are classified using a hierarchy that reflects the significance 
of the inputs used to measure the fair value. 

80 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

The fair value hierarchy requires that observable market inputs be used whenever such inputs exist. A 
financial instrument is classified in the lowest level of the hierarchy for which a significant input has been 
used to measure fair value.  

An  entity’s  own  credit  risk  and  the  credit risk  of  the  counterparty, in  addition  to the  credit  risk of  the 
financial instrument, were factored into the fair value determination of the financial liabilities, including 
derivative instruments.  

The Company presents a fair value hierarchy with three levels that reflects the significance of inputs used 
in determining the fair value assessments. The fair value of financial assets and liabilities classified in these 
three levels is evaluated as follows:   

—  Level 1: valuation based on quoted prices (unadjusted) observed in active markets for identical assets 

or liabilities; 

—  Level 2: valuation techniques based on inputs that are quoted prices of similar instruments in active 
markets, quoted prices for identical or similar instruments in markets that are not active, inputs other 
than quoted prices used in a valuation model that are observable for the instrument being valued, and 
inputs that are derived mainly from or corroborated by observable market data using correlation or 
other forms of relationship; 

—  Level 3: valuation techniques based significantly on inputs that are not observable in the market. 

For  the  year  ended  December  31,  2019,  no  financial  instruments  were  recorded  at  fair  value  and 
transferred between levels 1, 2 and 3. 

Sensitivity analysis 

On  December  31,  2019,  all  other  things  being  equal,  a  10.0%  increase  of  pre-established  financial 
performance threshold of acquired businesses related to the written put option would have resulted in a 
decrease of $2,923 in retained earnings for the year ended December 31, 2019 and an increase of the 
same  amount  in  total  liabilities.  A  10.0%  decrease  of  pre-established  financial  performance  threshold 
would have had the opposite estimated impact. 

11. Financial Instruments 
Financial assets and financial liabilities in the consolidated statements of financial position are as follows: 

Carrying amount 

Financial assets classified at amortized cost 

Cash and cash equivalents 
Trade and other receivables 
Non-current financial assets 

Financial liabilities classified at amortized cost 

Short-term bank loans 
Trade and other payables 
Dividends payable 
Long-term debt, including current portion 
Non-current liabilities 

As at 
December 31, 
2019 
$ 

As at 
December 31, 
2018 
$ 

22,608 
156,228 
8,829 
187,665 

— 
86,217 
1,245 
177,900 
46,088 
311,450 

15,393 
160,067 
6,177 
181,637 

13,577 
98,668 
1,973 
163,297 
46,980 
324,495 

The fair value of the Company’s financial instruments is disclosed in Note 10. 

LOGISTEC | 2019 ANNUAL REPORT 

81 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

12.  Trade and Other Receivables 

Trade receivables 
Allowance for doubtful accounts 
Contract holdbacks 
Net trade receivables 

Accrued revenue 
Commodity taxes 
Insurance reimbursement receivable related to claims 
Other 

As at  
December 31, 
2019 
$ 

As at  
December 31, 
2018 
$ 

125,389 
(3,053) 
16,248 
138,584 

11,985 
1,664 
1,633 
2,362 
156,228 

125,365 
(2,364) 
18,956 
141,957 

10,720 
1,566 
1,055 
4,769 
160,067 

Pursuant to their respective terms, net trade receivables are aged as follows since issuance of the invoice: 

0-30 days 
31-60 days 
61-90 days 
Over 90 days (1)  

(1) 

Includes contract holdbacks amounting to $11,200 ($12,428 in 2018). 

The movements in the allowance for doubtful accounts were as follows: 

Balance, beginning of year 
Bad debt expense  
Write offs 
Balance, end of year 

Credit risk exposure and mitigation are further discussed in Note 10. 

13.  Inventories 

Consumables 
Raw materials 
Work in progress 
Finished goods 

As at  
December 31, 
2019 
$ 

As at  
December 31, 
2018 
$ 

56,528 
32,379 
16,635 
33,042 
138,584 

39,393 
39,183 
26,305 
37,076 
141,957 

2019 
$ 

2,364 
1,410 
(721) 
3,053 

2018 
$ 

4,053 
1,126 
(2,815) 
2,364 

As at  
December 31, 
2019 
$ 

As at  
December 31, 
2018 
$ 

6,251 
2,412 
3,332 
574 
12,569 

5,274 
1,932 
3,098 
407 
10,711 

The cost of inventories recognized as an expense during the year is $45,935 ($51,795 in 2018) and was 
recorded in equipment and supplies expense in the consolidated statements of earnings. 

82 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

14.  Equity Accounted Investments 
Investments in Joint Ventures 

The Company’s results include its share of operations in joint ventures, which are accounted for using the 
equity  method.  The  Company’s  50%-equity  interests  are  in  the  following  joint  ventures:  TERMONT 
Terminal  Inc.,  Transport  Nanuk  Inc.,  Québec  Mooring  Inc.,  Moorings  (Trois-Rivières)  Ltd.,  Québec 
Maritime  Services  Inc.,  9260-0873  Québec  Inc.  and  Flexiport  Mobile  Docking  Structures  Inc.  The 
Company also owns 49%-equity interests in Qikiqtaaluk Environmental Inc. and Avataani Environmental 
Services Inc.  

None of the Company’s joint ventures are publicly listed entities and, consequently, do not have published 
price quotations. 

The  Company  has  one  significant  joint  venture,  TERMONT  Terminal  Inc.,  specialized  in  handling 
containers, which is aligned with the Company’s core business. The address of TERMONT Terminal Inc.’s 
registered  office  is  Port  of  Montréal,  Section 68,  P.O.  Box 36,  Station  K,  Montréal  (QC)  H1N 3K9, 
Canada.  

The following tables summarize the financial information of TERMONT Terminal Inc.: 

Statement of financial position 

Current assets (including cash and cash equivalents of $2,455 ($1,973 in 2018)) 
Non-current assets (1) 
Current liabilities  
Non-current liabilities (1) 
Net assets 

2019 
$ 

2018 
$ 

3,870 
85,108 
(787) 
(36,816) 
51,375 

3,432 
44,786 
(543) 
— 
47,675 

The Company’s share of net assets presented as an equity accounted investment 

25,694 

23,841 

Results 

Revenue 
Share of profit of an equity accounted investment 
Interest expense (1) 
Interest income (1) 
Income taxes 
Profit and total comprehensive income for the year 

The Company’s share of profit and total comprehensive income for the year 

Dividend received by the Company 

3,914 
6,006 
(1,749) 
1,783 
(797) 
8,204 

4,102 

2,250 

3,714 
6,907 
— 
29 
(760) 
8,984 

4,492 

2,250 

(1) Increases in non-current assets, non-current liabilities, interest expense and interest income are related to the application of IFRS 16. 

The Company also has interests in individually immaterial joint ventures. The following table provides, in 
aggregate, the financial information for those joint ventures: 

2019 
$ 

2018 
$ 

Carrying amount of interests in individually immaterial joint ventures 

16,655 

14,164 

Profit for the year 
Other comprehensive (loss) income  
Total comprehensive income for the year 

Dividends received by the Company 

4,627 
(43) 
4,584 

1,863 

3,619 
114 
3,733 

2,346 

LOGISTEC | 2019 ANNUAL REPORT 

83 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

15.  Property, Plant and Equipment 

Cost 

Machinery and 
automotive 
equipment 
$ 

Computer 
equipment, 
furniture 
and fixtures 
$ 

Land and 
buildings 
$ 

Leasehold 
improvements 
$ 

Construction 
in progress 
$ 

Total 
$ 

As at January 1, 2018 

66,747 

174,384 

3,873 

11,101 

9,955 

266,060 

Additions 
Additions through business 

combinations 

Disposals  
Transfers 
Effect of foreign currency 
exchange differences 
As at December 31, 2018 

Additions 
Disposals  
Transfers 
Effect of foreign currency 
exchange differences 
As at December 31, 2019 

Accumulated depreciation 

131 

5,433 

291 

615 
129 
— 

(328) 
4,580 

85 
(18) 
271 

1,206 

7,820 

14,881 

353 
(308) 
2,054 

(464) 
13,942 

20 
(10) 
792 

— 
— 
(14,200) 

24,563 
(5,614) 
— 

(619) 
2,956 

5,402 
305,292 

10,295 
— 
(11,044) 

34,557 
(10,299) 
— 

20,248 
(5,056) 
8,633 

6,555 
210,197 

24,121 
(9,468) 
7,978 

(4,108) 
228,720 

(83) 
4,835 

(519) 
14,225 

(41) 
2,166 

(5,722) 
323,828 

3,347 
(379) 
3,513 

258 
73,617 

36 
(803) 
2,003 

(971) 
73,882 

Land and 
buildings 
$ 

Machinery and 
automotive 
equipment 
$ 

Computer 
equipment, 
furniture and 
fixtures 
$ 

Leasehold 
improvements 
$ 

Construction 
in progress 
$ 

As at January 1, 2018 

10,082 

87,448 

Depreciation expense 
Disposals 
Effect of foreign currency 
exchange differences 
As at December 31, 2018 

Depreciation expense 
Disposals 
Effect of foreign currency 
exchange differences 
As at December 31, 2019 

Carrying amount 

As at December 31, 2018 
As at December 31, 2019 

2,022 
(357) 

1,219 
12,966 

2,734 
(795) 

(156) 
14,749 

Land and 
buildings 
$ 

60,651 
59,133 

19,441 
(6,913) 

1,934 
101,910 

22,075 
(7,969) 

(1,498) 
114,518 

3,038 

1,136 
7 

(446) 
3,735 

364 
(2) 

(78) 
4,019 

4,775 

823 
(229) 

28 
5,397 

1,102 
(56) 

(205) 
6,238 

— 

— 
— 

— 
— 

— 
— 

— 
— 

Total 
$ 

105,343 

23,422 
(7,492) 

2,735 
124,008 

26,275 
(8,822) 

(1,937) 
139,524 

Machinery and 
automotive 
equipment  
$ 

Computer 
equipment, 
furniture and 
fixtures 
$ 

Leasehold 
improvements 
$ 

Construction  
in progress 
$ 

Total 
$ 

108,287 
114,202 

845 
816 

8,545 
7,987 

2,956 
2,166 

181,284 
184,304 

As  at  December  31,  2019,  the  Company  has  no  property,  plant  and  equipment  under  order,  not  yet 
delivered ($1,601 in 2018). 

84 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

16.  Lease Arrangements 
Leases relate to lease agreements to rent offices, port facilities, and equipment that expire until 2039. The 
Company has the option to purchase some of the leased equipment at the end of the lease terms. The 
Company  also  has  the  option  to  renew  certain  lease  arrangements  to  rent  offices,  port  facilities  and 
equipment. Contingent rentals are determined based on the volume and type of cargo handled.  

Right-of-use assets 

Carrying amount 

Machinery 
and 
automotive 
equipment 
$ 

Computer 
equipment, 
furniture and 
fixtures 
$ 

Land and 
buildings 
$ 

Total 
$ 

As at January 1, 2019 

69,102 

7,201 

214 

76,517 

Additions 
Derecognition 
Depreciation expense 
Effect of foreign currency exchange differences 
As at December 31, 2019 

28,479 
(2,336) 
(9,190) 
(2,413) 
83,642 

892 
(45) 
(2,290) 
(265) 
5,493 

339 
(11) 
(88) 
(8) 
446 

29,710 
(2,392) 
(11,568) 
(2,686) 
89,581 

Lease liabilities 

Contractual undiscounted cash flows 
Less than 1 year 
Between 1 and 5 years 
More than 5 years 
Total undiscounted lease liabilities 

Lease liabilities as at December 31, 2019 
Current 
Non-current 

Amount recognized in the consolidated statements of earnings 

Leases under IFRS 16 

Interest on lease liabilities 
Expense related to variable lease payments, short-term and low-value assets not 

included in the measurement of lease liabilities 

Operating leases under IAS 17 

Minimum lease payments 
Variable payments 

As at  
December 31, 
2019 
$ 

13,593 
41,405 
68,761 
123,759 

9,820 
81,495 

2019 
$ 

3,960 

34,312 
38,272 

2018 
$ 
18,032 
16,920 
34,952 

LOGISTEC | 2019 ANNUAL REPORT 

85 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

17.  Goodwill 

Cost, beginning of year 
Business combinations (Note 27) 
Effect of foreign currency exchange differences 
Cost, end of year 

Accumulated impairment losses 

Net carrying amount 

Impairment Testing 

 As at 
December 31, 
2019 
$ 

 As at 
December 31, 
2018 
$ 

143,972 
— 
(2,055) 
141,917 

106,918 
33,629 
3,425 
143,972 

(1,300) 

(1,300) 

140,617 

142,672 

The carrying amount of goodwill has been allocated to the following CGUs or groups of CGUs: 

Carrying amount 

Stevedoring 
Aqua-Pipe 
Environment 
Agencies 

 As at 
December 31, 
2019 
$ 

 As at 
December 31, 
2018 
$ 

48,306 
86,445 
5,681 
185 
140,617 

50,361 
86,445 
5,681 
185 
142,672 

The recoverable amount of all CGUs or groups of CGUs has been determined based on value in use, which 
is calculated by discounting five-year cash flow projections from the budget approved by the Board of 
Directors  covering  a  one-year  period.  These  cash  flow  projections  reflect  past  experience  and  future 
expectations of financial performance. A growth rate of 3.0% (3.0% in 2018) has been used to extrapolate 
cash flow projections beyond that one-year period.  

The discount rates, before income taxes, used to calculate value in use are based on market data and were 
8.95% (12.80% in 2018) for Stevedoring and 8.95% (12.46% in 2018) for Aqua-Pipe and Environment. 
The decrease in the discount rate is mainly attributable to the adoption of IFRS 16, which has modified 
the debt/capitalization ratio used in this calculation. 

86 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

18. Intangible Assets 

Cost 

Lease 
rights and 
location 
$ 

Client 
relationships 
and backlog 
$ 

Computer 
software 
$ 

Total 
$ 

As at January 1, 2018 

16,980 

20,388 

1,961 

39,329 

Additions 
Addition through business combinations (Note 27) 
Impairment charge and disposal 
Effect of foreign currency exchange differences 
As at December 31, 2018 

Additions 
Effect of foreign currency exchange differences 
As at December 31, 2019 

Accumulated amortization 

— 
14,632 
(6,821) 
2,608 
27,399 

— 
(1,313) 
26,086 

62 
24,106 
— 
2,025 
46,581 

— 
(1,430) 
45,151 

146 
1,099 
— 
460 
3,666 

122 
(371) 
3,417 

Lease 
rights and 
location 
$ 

Client 
relationships 
and backlog 
$ 

Computer 
software 
$ 

208 
39,837 
(6,821) 
5,093 
77,646 

122 
(3,114) 
74,654 

Total 
$ 

As at January 1, 2018 

4,754 

17,824 

1,848 

24,426 

Amortization expense 
Effect of foreign currency exchange differences 
As at December 31, 2018 

Amortization expense 
Effect of foreign currency exchange differences 
As at December 31, 2019 

Carrying amount 

As at December 31, 2018 
As at December 31, 2019 

Accumulated Impairment Losses 

1,906 
465 
7,125 

1,374 
(406) 
8,093 

2,820 
214 
20,858 

2,270 
(208) 
22,920 

432 
377 
2,657 

635 
(386) 
2,906 

Lease 
rights and 
location 
$ 

Client 
relationships 
and backlog 
$ 

Computer 
software 
$ 

5,158 
1,056 
30,640 

4,279 
(1,000) 
33,919 

Total 
$ 

20,274 
17,993 

25,723 
22,231 

1,009 
511 

47,006 
40,735 

Balance, beginning of year 
Impairment charge on lease rights and location of the Company’s marine services segment 
Balance, end of year 

2019 
$ 

9,738 
— 
9,738 

2018 
$ 

2,917 
6,821 
9,738 

LOGISTEC | 2019 ANNUAL REPORT 

87 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

During  2018,  the  Company  has  performed  an  impairment  test  for  a  CGU  (port  logistics  activities  in 
Virginia) which had an indication that assets might be impaired and recorded an impairment charge of 
$6,821. The depreciation was explained by a decrease in profitability of the CGU. When calculating the 
value in use of these activities, the Company updates the projected cash flows according to the remaining 
useful  life  of  the  main  assets  of  the  CGU.  The  sales  forecasts  were  based  on  actual  operating  results, 
expected growth rates of the sector and management’s experience. The recoverable amounts of CGUs 
subject to impairment tests were based on the highest value between the fair value, less costs to sell value, 
and  value  in use.  The  recoverable amount  was  determined  to  be  its value  in  use using  a  discount rate 
before income tax of 13.4%. 

19.  Non-Current Financial Assets 

Non-current financial assets 
Contract holdbacks 
Other  

20. Trade and Other Payables 

Trade payables and accrued liabilities 
Payroll accruals 
Due to a non-controlling interest 
Provisions (Note 23) 
Other 

As at 
December 31, 
2019 
$ 

As at 
December 31, 
2018 
$ 

6,225 
2,600 
4 
8,829 

3,547 
2,627 
154 
6,328 

As at 
December 31, 
2019 
$ 

As at 
December 31, 
2018 
$ 

75,918 
4,741 
— 
593 
4,965 
86,217 

81,394 
5,284 
6,137 
823 
5,030 
98,668 

88 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

21.  Indebtedness 
Short-term bank loans 

As at December 31, 2018, FER-PAL had an overdraft lending facility of up to $15,000 available secured 
by all existing property of the business of FER-PAL, including equipment, trade and other receivables, and 
all property to be acquired in the future, it was due on demand and was  bearing interest at the bank at a 
prime  lending  rate  plus  0.75%.  As  at  December  31,  2018,  the  bank’s  lending  rate  was  2.70%  and  the 
overdraft facility was drawn at $13,577. Short-term bank loans have been repaid in full in 2019. 

Long-term debt 

As at  
December 31,  
2019 
$ 

As at  
December 31, 
2018 
$ 

Revolving credit facility, bearing interest at bankers’ prime rate and/or acceptance 
and LIBOR loans, with no principal repayment required until October 2023. The 
weighted average interest rate was 3.54% at December 31, 2019 (1) 

115,003 

104,527 

Unsecured long-term debt, bearing interest at 4.82% and 4.64%, without any principal 
repayment due before December 2022, to be paid in 20 equal consecutive quarterly 
payments, maturing in 2027 (2) 

50,000 

50,000 

Term credit facilities, bearing interest at prime rate plus 0.25% to 0.75%, with 

maturities ranging up to 4 years from the advance date (3) 

Non-interest-bearing government loan, maturing in 2022 

Loan for equipment purchases bearing interest from 0.50% to 6.20% 

Other 

Less: 
Current portion 

10,333 

1,200 

1,364 

— 
177,900 

9,390 
168,510 

574 

1,600 

3,932 

2,664 
163,297 

3,294 
160,003 

(1)  As of October 31, 2019, the Company and its wholly owned subsidiary, LOGISTEC USA Inc., solidarily renegotiated their 

credit agreement leading to an amendment to the existing credit agreement.  

The credit facility details are as follows: 

—  The  unsecured  revolving  credit  facility  was  increased  from  $175,000  to  $300,000  or  the  U.S.  dollar  equivalent,  with 

maturity in October 2023. 

—  The unsecured revolving credit facility is to be used for short-term and long-term cash flow needs and investment purposes, 
and to refinance existing indebtedness. The facility can be used in the form of direct advances, bankers’ acceptances, and 
letters of credit. As at December 31, 2019, US$50,049 ($65,004) was drawn from the credit facility.  

—  The interest rate charged on the borrowings made under this agreement depends on the form of the borrowing, to which is 

added a margin that varies according to the level of leverage ratio achieved by the Company. 

(2)  The unsecured long-term debt details are as follows: 

—  A $25,000 unsecured loan maturing in September 2027, and bearing  interest at 4.82%, paid quarterly. The repayment 

schedule begins in December 2022 and is to be paid in 20 equal consecutive quarterly instalments of $1,250.  

—  A $25,000 unsecured loan maturing in September 2027, and bearing  interest at 4.64%, paid quarterly. The repayment 

schedule begins in December 2022 and is to be paid in 20 equal consecutive quarterly instalments of $1,250. 

(3)  As of June 28, 2019, FER-PAL, extended their credit agreement to $21,750 by refinancing the overdraft lending facility and 

adding a demand loan.  

LOGISTEC | 2019 ANNUAL REPORT 

89 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

The credit facility details are as follows: 

—  A $10,000 overdraft facility due on demand, to be used for operating requirements. The facility can be used in the form of 
overdrafts, bankers’ acceptances and letters of credit. The advances are based on accounts receivable’s estimated worth of 
good quality. 

—  A demand loan for an amount of $10,000 due over 48 months in equal principal repayments plus monthly interests, bearing 

interest at prime rate plus 0.75%. 

—  A $750 corporate credit card credit facility. 

—  A risk management facility for an amount of $1,000 to be used in the form of foreign exchange forward contracts. 

The facility is secured by a general security agreement on all of its current and future assets. 

Long-term debt matures as follows: 

Total principal repayments required 

Less than 1 year 
Between 1 and 5 years 
More than 5 years 

Hedging instruments 

As at  
December 31, 
2019 
$ 

As at  
December 31, 
2018 
$ 

9,390 
141,010 
27,500 
177,900 

3,294 
121,339 
38,664 
163,297 

During the year ended December 31, 2019, an average amount of US$50,583 ($66,962) of the revolving 
credit facility denominated in U.S. dollars had been designated by the Corporation as hedging instruments 
of its net investment in foreign operations. As there was no hedge ineffectiveness during the year ended 
December 31, 2019, there was no impact on the consolidated statements of earnings. Consequently, a 
foreign exchange loss of $3,653 was reclassified to other comprehensive income. 

22. Post-Employment Benefit Assets and Obligations 
The  Company  has  various  defined  benefit  and  defined  contribution  retirement  plans  providing 
retirement benefits to its employees. 

The projected benefit obligation as at December 31, 2019, has been extrapolated using the projected 
benefit obligation based on the latest actuarial valuations. 

The  last  actuarial  valuation  for  the  Supplemental  Retirement  Plans  for  Senior  Executives  (“SERP”)  of 
LOGISTEC Corporation is dated December 31, 2017. 

The  Company’s  retirement  plans  may  be  exposed  to  various  types  of  risks.  The  Company  has  not 
identified any unusual risks to which its retirement plans are exposed. Regular asset-liability matching 
analyses are performed in order to align the investment policy with the plans’ obligations. Allocation to 
fixed-income investments is then adjusted following the evolution of the plans’ obligations. Fixed income 
investments are made up of bonds and annuities. Annuities are purchased when opportunities arise on 
financial markets.  

The weighted average duration of the defined benefit obligation is 15.7 years.  

90 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

The following table presents information concerning the defined benefit retirement plans, as established 
by an independent actuary: 

Benefit obligation, beginning of year 
Current service cost 
Interest cost 
Employees’ contributions 
Actuarial (loss) gain arising from experience adjustments 
Benefits paid 
Benefit obligation, end of year 

Fair value of plan assets, beginning of year 
Interest income 
Variation on plan assets, excluding amounts included in interest income 
Administrative fees 
Employer’s contributions (1) 
Employees’ contributions 
Benefits paid 
Fair value of plan assets, end of year 

2019 
$ 

(33,703) 
(1,548) 
(1,345) 
(114) 
(4,464) 
1,765 
(39,409) 

19,371 
762 
1,906 
(16) 
1,079 
114 
(1,765) 
21,451 

2018 
$ 

(34,387) 
(1,498) 
(1,215) 
(126) 
2,046 
1,477 
(33,703) 

20,606 
717 
(1,736) 
(13) 
1,148 
126 
(1,477) 
19,371 

Net benefit liability, end of year (2) 

(17,958) 

(14,332) 

(1)  Employer’s contributions include contributions made by an equity accounted investment of the Company of $83 ($96 in 2018). 
(2)  Post-employment benefit obligations in the consolidated statements of financial position include $425 ($384 in 2018) for defined 
contribution retirement plans provided to certain members of key management personnel, for which no contributions were made. 

The following table provides the reconciliation of the benefit obligation, the fair value of plan assets and 
plan deficit in respect of wholly and partially funded plans, and unfunded plans: 

Wholly and partially funded 
2018 
$ 

2019 
$ 

Unfunded (1) 

2019 
$ 

2018 
$ 

(13,326) 
— 
(13,326) 

Total 

2019 
$ 

(39,409) 
21,451 
(17,958) 

2018 
$ 

(33,703) 
19,371 
(14,332) 

Benefit obligation 
Fair value of plan assets 
Plan deficit 

(22,634) 
21,451 
(1,183) 

(20,377) 
19,371 
(1,006) 

(16,775) 
— 
(16,775) 

(1)  The unfunded plans consist of SERP. As at December 31, 2019, the plan deficit for the Canadian executives is $15,819 ($12,700 
in 2018) and $956 ($626 in 2018) for the American executives. The SERP are non-contributory and the Company plans to fund 
the benefits with future cash flows that will be generated by operations. 

Plan assets consist of: 

Derived from observable market data – Level 2 fair value 
Cash 
Bonds 
Canadian & foreign stock 
Non-observable market inputs – Level 3 fair value 
Annuity contracts 

As at 
December 31, 
2019 
$ 

As at 
December 31, 
2018 
$ 

— 
7,950 
10,281 

3,220 
21,451 

147 
7,263 
8,874 

3,087 
19,371 

LOGISTEC | 2019 ANNUAL REPORT 

91 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

The  following  table  provides  the  reconciliation  of  the  net  expense  for  all  defined  benefit  and  defined 
contribution  retirement  plans  in  the  employee  benefits  expense  in  the  consolidated  statements  of 
earnings for the years ended December 31: 

Current service cost 
Net interest expense 
Administrative fees 

Less: net expense assumed by an equity accounted investment of the Company 
Defined benefit cost recognized 

Net expense on defined contribution retirement plans 
Net expense for all defined benefit and defined contribution retirement plans 

Significant Actuarial Assumptions 

2019 
$ 

1,548 
583 
16 
2,147 

(87) 
2,060 

3,140 
5,200 

2018 
$ 

1,498 
499 
13 
2,010 

(113) 
1,897 

2,706 
4,603 

The significant actuarial assumptions used in the measurement of the Company’s net benefit liability are 
as follows: 

Accrued benefit liability 

Discount rate, end of year 
Expected rate of compensation increase 

Benefit cost 

Discount rate 
Expected rate of compensation increase 

SENS IT IV IT Y  A N A L YS IS   

2019 
% 

2018 
% 

3.3 
3.8 

4.0 
3.8 

4.0 
3.8 

3.5 
3.8 

As at December 31, 2019, all else being equal, a hypothetical variation of +1.0% in the discount rate would 
have a positive impact of $5,574 ($4,535 in 2018), whereas a hypothetical variation of –1.0% would have 
a negative impact of $6,623 ($5,698 in 2018) on the benefit obligation. 

As at December 31, 2019, all else being equal, a hypothetical variation of +1.0% in the expected rate of 
compensation increase would have a negative impact of $1,294 ($1,155 in 2018), whereas a hypothetical 
variation of–1.0% would have a positive impact of $1,224 ($1,075 in 2018) on the benefit obligation.  

Contributions to Retirement Plans 

Total  cash  payments  for  post-employment  benefits  for  2019,  consisting  of  cash  contributed  by  the 
Company to its funded retirement plans, cash payments made directly to beneficiaries for its unfunded 
other benefit retirement plans, and cash contributed to its defined contribution retirement plans, were 
$1,505 ($1,463 in 2018). 

The Company expects to make a contribution of $932 to the defined benefit retirement plans in 2020. 

92 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

23. Non-Current Liabilities 

Long-term liability due to a non-controlling interest in FER-PAL 
Long-term liability due to a non-controlling interest in SANEXEN (Note 24) 
Long-term liability due to a non-controlling interest in LGC  
Long-term incentive plans 
Advance due to a non-controlling interest 
Provisions 
Other 

Repurchase of Non-Controlling Interests 

F E R -P A L   

As at 
December 31,  
2019 
$ 

As at 
December 31,  
2018 
$ 

29,231 
6,394 
1,079 
2,541 
4,895 
1,013 
935 
46,088 

32,783 
5,765 
2,399 
4,197 
— 
790 
1,046 
46,980 

Following the  business combination  of  FER-PAL  on  July  6,  2017,  the Company  granted  the  49%  non-
controlling interest shareholders a put option, exercisable at any time after July 6, 2021, allowing them 
to  sell  all  the  remaining  shares  to  LOGISTEC  in  three  equal  tranches  over  three  fiscal  years  for  cash 
consideration based on a predetermined purchase price formula based on FER-PAL’s performance. On 
December 31, 2019, FER-PAL repurchased 0.03% interest held by the non-controlling interest for an 
aggregate purchase price of $786. As at December 31, 2019, following the accretion of interest and the 
reevaluation of  the  put  option,  a liability  of  $29,231  has  been  included  in  non-current  liabilities  in  the 
consolidated  statements  of  financial  position.  For  the  year  ended  December  31,  2019,  the  Company 
recognized a gain on remeasurement of $2,766 ($15,644 in 2018) in retained earnings. 

The Company also has a call option, exercisable by LOGISTEC at any time after July 6, 2022, to purchase 
the remaining 48% shares from the non-controlling interest shareholders on the same terms as the put 
option. 

LG C  

The Company has an obligation to repurchase the 30% non-controlling interest shareholders in LGC on 
December 31, 2021, at the latest, or sooner upon the occurrence of certain events. The purchase price is 
the greater of: i) the book value of the 30% non-controlling interests or ii) a multiple of an agreed upon 
measure  of  financial  performance,  minus  LGC’s  debt.  On  August  9,  2019,  the  Company  repurchased 
7.91% interest in LGC held by the non-controlling interest for an aggregate purchase price of $610. For 
the year ended December 31, 2019, the Company recognized a gain on remeasurement of $608 in other 
gains and losses in the consolidated statements of earnings. As at December 31, 2019, a liability of $1,079 
is included in non-current liabilities in the consolidated statements of financial position.  

As a result of the non-participant nature of the non-controlling interests in the results of both FER-PAL 
and LGC, no profit is attributed to the non-controlling interests. 

LOGISTEC | 2019 ANNUAL REPORT 

93 

 
  
 
 
 
 
 
 
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Provisions 

As at December 31, 2018 
Additional provisions  
Settlement of provisions  
Reversal of provisions 
As at December 31, 2019 

Less: current provisions 
Non-current provisions 

Claims and 
litigation 
$ 

Deferred 
share units 
$ 

Share of losses 
of certain joint 
ventures 
$ 

623 
517 
(194) 
(508) 
438 

438 
— 

136 
347 
— 
— 
483 

— 
483 

480 
— 
(229) 
— 
251 

— 
251 

Other 
$ 

374 
172 
(3) 
(109) 
434 

155 
279 

Total 
$ 

1,613 
1,036 
(426) 
(617) 
1,606 

593 
1,013 

Other  provisions  include  provisions  for  warranty  and  provisions  for  asset  retirement  obligations. 
Provisions for asset retirement obligations essentially derive from the obligation to remove assets and to 
restore the sites under lease arrangements expiring until 2025. 

Reimbursements 

An amount of $1,633 ($1,055 in 2018) is recognized as an asset in trade and other receivables relative to 
the reimbursement to be received from the insurance company in connection with claims. 

24. Share Capital 
Authorized in an unlimited number: 

—  First Ranking Preferred Shares, non-voting, issuable in series; 

—  Second Ranking Preferred Shares, non-voting, issuable in series; 

—  Class  A  Common  Shares,  without  par  value,  30  votes  per  share,  convertible  into  Class  B 

Subordinate Voting Shares at the holder’s discretion; 

—  Class B Subordinate Voting Shares, without par value, one vote per share, entitling their holders to 

receive a dividend equal to 110% of any dividend declared on each Class A Common Share. 

Issued and outstanding (1) 

7,383,622 Class A shares (7,392,722 in 2018) 
5,396,901 Class B shares (5,273,334 in 2018) 

(1)  All issued and outstanding shares are fully paid. 

As at  
December 31, 
2019 
$ 

As at  
December 31, 
2018 
$ 

4,879 
35,343 
40,222 

4,885 
30,131 
35,016 

Repurchase of the Non-Controlling Interest in SANEXEN  

LOGISTEC entered into an agreement to acquire the remaining 29.78% equity interest it did not already 
own in SANEXEN for an aggregate consideration of $40,818 (the “SANEXEN Transaction”).  

As part of the SANEXEN transaction, the non-controlling interest shareholders of SANEXEN exchanged 
their common shares in the capital of SANEXEN for two classes of newly created non-voting and non-
dividend bearing preferred shares of SANEXEN, Class G Preferred Shares (“Class G shares”) and Class H 
Preferred  Shares  (“Class  H  shares”),  resulting  in  LOGISTEC  holding  100%  of  the  common  shares  of 
SANEXEN.  

94 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Immediately  following  the  share  exchange,  LOGISTEC  and  the  non-controlling  interest  shareholders 
entered into a put and call option agreement (“Option Agreement”) pursuant to which LOGISTEC was 
granted  call  options,  exercisable  in  whole  or  in  part  at  any  time,  to  acquire  from  the  non-controlling 
interest shareholders their Class G shares for cash consideration of $15,920, and to acquire their Class H 
shares in exchange for 754,015 Class B shares in the capital of LOGISTEC with a value of $24,898. 

Pursuant to the Option Agreement, each non-controlling interest shareholder was granted a put option 
to sell to LOGISTEC their Class G shares upon certain events, including termination of employment, and 
a  put  option  to  sell  to  LOGISTEC  their  Class  H  shares  as  to  one-fifth  (1/5)  on  each  of  the  first  five 
anniversaries of the signature of the Option Agreement, each at the same price and consideration as the 
call options granted to LOGISTEC. A 40% discount, representing $4,518, will be applied to the purchase 
price of the Class G shares of certain non-controlling interest shareholders should they leave SANEXEN 
voluntarily before March 24, 2021.  

During  2019,  148,567  Class  B  shares  were  issued  to  acquire  Class  H  shares  of  SANEXEN.  As  at 
December 31, 2019, there are 297,135 Class B shares to be issued and the related amount recorded in 
the Company’s financial statements as share capital to be issued is $9,811. 

The balances are as follows:  

Non-current liabilities 
Share capital to be issued  

Executive Stock Option Plan 

As at 
December 31, 
2019 
$ 

As at 
December 31, 
2018 
$ 

6,394 
9,811 

5,765 
14,717 

The Company had set aside 580,000 Class B shares pursuant to the Executive Stock Option Plan. Said 
options are granted at market price. There remains an unallocated balance of 180,000 Class B shares 
reserved for issuance pursuant to the plan. There were no outstanding options as at December 31, 2019 
and 2018. 

Employee Stock Purchase Plan (“ESPP”) 

Pursuant to the ESPP, 600,000 Class B shares were reserved for issuance. As at January 1, 2019, there 
remained  an  unallocated  balance  of  208,500  Class  B  shares  reserved  pursuant  to  this  ESPP.  Eligible 
employees designated by the Board of Directors need to have at least two years of service. Participation 
is on a voluntary basis. The subscription price is determined by the average high and low board lot trading 
prices of the Class B shares on the TSX during five days, consecutive or not, preceding the last Thursday 
of the month of May of the year the shares are issued (or the last Thursday of such other month as shall 
be determined by the Board, which shall be the month preceding the date of issuance), less a maximum 
10% discount. A non-interest-bearing loan offered by the Company is available to acquire said shares. 
The loans are reimbursed over a two-year period by way of payroll deductions. As at December 31, 2019, 
following  the  issuance  of  14,800  (23,250  in  2018)  Class  B  shares  under  this  ESPP,  there  remains  an 
unallocated  balance  of  193,700  Class  B  shares  reserved  for  issuance  pursuant  to  this  ESPP.  Those 
14,800 (23,250 in 2018) Class B shares were issued for cash consideration of $258 ($562 in 2018) and 
for non-interest-bearing loans of $298 ($489 in 2018), repayable over two years with a carrying value of 
$328 as at December 31, 2019 ($482 in 2018).  

LOGISTEC | 2019 ANNUAL REPORT 

95 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Normal Course Issuer Bid (“NCIB”) 

The Company repurchased some of its shares for cancellation purposes pursuant to NCIBs. Pursuant to 
the current NCIB, which was launched on October 28, 2019, and will terminate on October 27, 2020, 
LOGISTEC intends to repurchase for cancellation purposes, up to 369,296 Class A shares and 270,195 
Class B  shares, representing  5%  of  the  issued  and outstanding shares  of  each  class as at  October  15, 
2019. 

Shareholders may obtain a free copy of the notice of intention regarding the NCIB filed with the TSX by 
contacting the Company. 

Under  the  various  NCIBs,  repurchases  were  made  through  the  TSX  or  alternative  Canadian  trading 
systems. The tables below summarize the number of shares repurchased by NCIB and by year:  

Shares repurchased by bid  

Class A shares 

Class B shares 

Class A shares 
Average price  
$ 

Class B shares 
Average price 
$ 

NCIB 2017 (October 26, 2017 to October 25, 2018) 
Repurchase in 2017 
Repurchase in 2018 
Total NCIB 2017 

NCIB 2018 (October 26, 2018 to October 25, 2019) 
Repurchase in 2018 
Repurchase in 2019 
Total NCIB 2018 

NCIB 2019 (October 28, 2019 to October 27, 2020) 
Repurchase in 2019 
Total NCIB 2019 

Shares repurchased by year 

2018 
NCIB 2017 
NCIB 2018 
Total 2018 

2019 
NCIB 2018 
NCIB 2019 
Total 2019 

3,700 
700 
4,400 

3,000 
6,800 
9,800 

2,300 
2,300 

6,700 
7,800 
14,500 

19,700 
32,800 
52,500 

7,000 
7,000 

41.85 
46.48 
42.59 

48.34 
42.71 
44.43 

41.78 
41.78 

43.69 
48.73 
46.40 

49.15 
41.16 
44.16 

40.52 
40.52 

Class A 
shares 

Class B  
shares 

700 
3,000 
3,700 

6,800 
2,300 
9,100 

7,800 
19,700 
27,500 

32,800 
7,000 
39,800 

96 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

The number of shares varied as follows: 

Number of 
Class A 
shares 

Number of  
Class B  
shares 

Class A 
shares 

$ 

Class B 
shares 

$ 

As at January 1, 2018 

7,406,222 

5,113,255 

4,895 

24,124 

Repurchased under the NCIBs 
ESPP 
Conversion 
Exercise of option pursuant to the SANEXEN 

Transaction 

As at December 31, 2018 

Repurchased under the NCIBs 
ESPP 
Exercise of option pursuant to the SANEXEN 

Transaction 

As at December 31, 2019 

Dividends 

(3,700) 
— 
(9,800) 

(27,500) 
23,250 
9,800 

— 
7,392,722 

154,529 
5,273,334 

(9,100) 
— 

(39,800) 
14,800 

— 
7,383,622 

148,567 
5,396,901 

Details of dividends declared per share are as follows: 

Class A shares 
Class B shares 

Details of dividends paid per share are as follows: 

Class A shares 
Class B shares 

(3) 
— 
(7) 

— 
4,885 

(6) 
— 

— 
4,879 

2019 
$ 

0.37 
0.41 

2019 
$ 

0.37 
0.40 

(154) 
1,051 
7 

5,103 
30,131 

(250) 
556 

4,906 
35,343 

2018 
$ 

0.35 
0.38 

2018 
$ 

0.34 
0.37 

On  March  17,  2020,  the  Board  of  Directors  declared  a  dividend  of  $0.09350  per  Class  A  share  and 
$0.10285  per  Class  B  share,  which  will  be  paid  on  April  17, 2020,  to  all  shareholders  of  record  as  of  
April 3, 2020. The estimated dividend to be paid is $690 on Class A shares and $555 on Class B shares. 

25. Accumulated Other Comprehensive Income, Net of Taxes 

Gains on financial instruments designated as cash flow hedges 
Currency translation differences arising on translation of foreign operations 
Unrealized losses on translating debt designated as hedging item of the net 

investment in foreign operations 

As at 
December 31, 
2019 
$ 

As at 
December 31, 
2018 
$ 

8 
10,414 

(725) 
9,697 

135 
16,304 

(4,378) 
12,061 

LOGISTEC | 2019 ANNUAL REPORT 

97 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

26. Consolidated Statements of Cash Flows  
Items not Affecting Cash and Cash Equivalents 

Defined benefit and defined contribution retirement plan expense 
Depreciation and amortization expense  
Share of profit of equity accounted investments  
Finance expense 
Finance income 
Current income taxes 
Deferred income taxes 
Non-current assets 
Contract liabilities 
Non-current liabilities 
Impairment charge (Note 18) 
Other 

Changes in Non-Cash Working Capital Items 

Decrease (increase) in: 
Trade and other receivables  
Income taxes 
Prepaid expenses and other 
Inventories 

Increase (decrease) in: 
Trade and other payables  
Contract liabilities 

Non-Cash Transactions  

2019 
$ 

2,099 
42,122 
(8,729) 
12,854 
(501) 
9,075 
(376) 
(2,650) 
(400) 
3,749 
— 
(1,331) 
55,912 

2019 
$ 

8,034 
(808) 
(231) 
(1,861) 

(7,313) 
130 
(2,049) 

2018 
$ 

1,922 
28,580 
(8,111) 
8,046 
(572) 
8,715 
(5,407) 
173 
(400) 
1,727 
6,821 
2,329 
43,823 

2018 
$ 

9,881 
(1,323) 
979 
1,297 

(8,528) 
1,813 
4,119 

During 2019, the Company acquired property, plant and equipment, of which $400 ($817 in 2018) is 
unpaid at the end of the year. 

98 

2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Reconciliation of liabilities arising from financing activities 

The  following  table  provides  a  reconciliation  between  the  opening  and  closing  balances  for  financing 
activities, including cash and non-cash flow changes for the year 2019:  

Opening 

December 31, 
2018 
$ 

Cash 
 changes 

Non-cash 
changes 

Non-cash 
changes 

Ending 

Repayments 
$ 

Borrowings 
$ 

Debt from 
acquisitions/ 
adjustments 
$ 

Borrowings 
$ 

Foreign 
exchange 
$ 

December 
31, 2019 
$ 

Revolving credit 

facility 

Unsecured loan debt 
Term credit facility  
Government loan 
Equipment loan 
Lease liabilities 
Other 
Total 

104,527 
50,000 
574 
1,600 
3,932 
— 
2,664 
163,297 

(58,660) 
— 
(2,449) 
(400) 
(1,920) 
(9,726) 
(2,601) 
(75,756) 

72,917 
— 
11,634 
— 
98 
— 
— 
84,649 

— 
— 
614 
— 
(688) 
— 
(13) 
(87) 

— 
— 
— 
— 
— 
103,800 
— 
103,800 

(3,781) 
— 
(40) 
— 
(58) 
(2,759) 
(50) 
(6,688) 

115,003 
50,000 
10,333 
1,200 
1,364 
91,315 
— 
269,215 

The  following  table  provides  a  reconciliation  between  the  opening  and  closing  balances  for  financing 
activities, including cash and non-cash flow changes for the year 2018:  

Opening 

December 31, 
2017 
$ 

Cash 
changes 

Repayments 
$ 

Borrowings 
$ 

Non-cash 
changes 

Ending 

Foreign 
exchange 
$ 

December 31, 
2018 
$ 

Debt from 
acquisitions/ 
adjustments 
$ 

Revolving credit facility 
Unsecured loan debt 
Term credit facility  
Government loan 
Equipment loan 
Balance of sale 
Other 
Total 

47,962 
25,000 
1,861 
2,000 
3,686 
650 
2,245 
83,404 

(56,188) 
— 
(2,787) 
(400) 
(1,543) 
(650) 
(814) 
(62,382) 

107,921 
25,000 
1,500 
— 
222 
— 
10 
134,653 

— 
— 
— 
— 
1,379 
— 
1,066 
2,445 

4,832 
— 
— 
— 
188 
— 
157 
5,177 

104,527 
50,000 
574 
1,600 
3,932 
— 
2,664 
163,297 

27. Business Combinations 
2019 Business Combinations  

On  October  31,  2019,  the  Company  acquired  the  remaining  14.18%  interest  in  MtlLINK  Multimodal 
Solutions Inc. for a cash consideration of $1,800.  

2018 Business Combinations  

GS M  

On March 1, 2018, the Company acquired 100% ownership of GSM Maritime Holdings, LLC, the ultimate 
owner  of  GSM,  which  performs  cargo  handling  operations  in  the  U.S.  Gulf  Coast  for  a  diverse  mix  of 
customers, for a purchase price of US$67,600 ($85,634), subject to certain adjustments.  

This  acquisition  expands  the  Company’s  network  of  marine  terminals  and  provides  LOGISTEC  with  a 
strategic position in that region.  

LOGISTEC | 2019 ANNUAL REPORT 

99 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

Prior to the acquisition, a note receivable of US$4,000 ($5,067) was issued to an associate to acquire 
excluded  assets  from  the  transaction.  On  August  31,  2018  the  Company  completed  the  sale  of  its 
associate for a minimal cash consideration. Prior to the sale, the Company received a cash consideration 
of US$4,000 ($5,067) as reimbursement of the note receivable.  

The acquisition costs for GSM, included in the caption other expenses, amounted to $1,100. 

PA TE  

On  May  25,  2018,  the Company  acquired  100% ownership  of Pate  for a  purchase  price  of  US$9,599 
($12,364), subject to certain adjustments.  

Pate provides cargo handling and distribution services at its Florida operations. This acquisition continues 
to expand the Company’s network of marine terminals and strategically positions LOGISTEC in the U.S. 
Gulf Coast region.  

As at March 30, 2019, the Company finalized estimates of the fair value of assets acquired and liabilities 
assumed. Consequently, intangible assets were increased by $5,620, property, plant and equipment was 
increased  by  $1,945  and  current  assets  were  decreased  by  $177  with  an  offsetting  adjustment  to 
goodwill in the amount of $7,388. The comparative figures of the consolidated statements of financial 
position have been changed accordingly.  

At the acquisition date, the fair value of the underlying identifiable assets acquired and liabilities assumed 
was as follows: 

Cash and cash equivalents 
Current assets 
Property, plant and equipment 
Goodwill (1) 
Intangible assets 
Current liabilities 
Long-term debt 
Deferred income tax liabilities 

Purchase consideration 

Cash 

GSM 
$ 

Pate 
$ 

Total 
$ 

2,377 
23,815 
18,410 
30,229 
34,170 
(15,074) 
(cid:16) 
(8,293) 
85,634 

124 
1,093 
6,039 
3,400 
5,667 
(201) 
(3,758) 
(cid:16) 
12,364 

2,501 
24,908 
24,449 
33,629 
39,837 
(15,275) 
(3,758) 
(8,293) 
97,998 

85,634 
85,634 

12,364 
12,364 

97,998 
97,998 

(1)  The goodwill related to the acquisition of Pate is deductible for tax purposes. 

The  fair  value  of  receivables  acquired  of  $22,530,  which  includes  a  negligible  amount  deemed 
uncollectible as at the acquisition date, is included in the current assets. 

The purchase price allocation of GSM and Pate are final.  

Impact of the Business Combinations on the Results of the Company 

The  Company’s  results  for  the  year  ended  December  31,  2018,  include  $98,531  in  revenue,  and  an 
additional profit of $614 generated by GSM. They also include $3,913 in revenue and a profit of $842 
generated by additional business at Pate for the year ended December 31, 2018. 

If  these  business  combinations  had  been  completed  on  January  1,  2018,  the  Company’s  consolidated 
revenue and profit for the year ended December 31, 2018 would have totaled $598,735 and $18,718, 
respectively.  

100  2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

In  determining  these  estimated  amounts,  the  Company  assumes  that  the  fair  value  adjustments  that 
arose  on  the  acquisition  dates  would  have  been  the  same  had  the  acquisitions  occurred  on 
January 1, 2018. 

Goodwill 

Goodwill  mainly  arose  in  the  acquisitions  as  a  result  of  synergies  attributable  to  the  expected  future 
growth  potential  from  the  expanded  locations  and  intangible  assets  not  qualifying  for  separate 
recognition.  

28. Related Party Transactions  
Balances and transactions between the Company and its subsidiaries, which are related parties of the 
Company,  have  been  eliminated  on  consolidation  and  are  not  disclosed  in  this  note.  Details  of 
transactions between the Company and other related parties are disclosed hereafter. 

Trading Transactions 

The following tables summarize the Company’s related party transactions with its joint ventures for the 
years: 

Sale of services 
Purchase of services  

Amounts owed to joint ventures 
Amounts owed from joint ventures  

2019 
$ 

7,174 
767 

2018 
$ 

3,910 
845 

As at 
December 31, 
2019 
$ 

As at 
December 31, 
2018 
$ 

1,736 
2,929 

3,249 
975 

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or 
received.  

Transactions with Shareholders 

Transactions with the Company’s largest shareholder, Sumanic Investments Inc., were as follows:  

Dividends paid to Sumanic Investments Inc. 

Compensation of Key Management Personnel 

2019 
$ 

2,125 

2018 
$ 

1,963 

The compensation of directors and of other members of key management personnel(1) during the years 
ended was as follows: 

Short-term benefits 
Post-employment benefits 
Other long-term benefits  

2019 
$ 

4,684 
209 
(250) 
4,643 

2018 
$ 

7,966 
758 
1,030 
9,754 

(1)  The compensation of members of key management personnel includes the compensation of the president of one of the Company’s 

joint ventures. 

LOGISTEC | 2019 ANNUAL REPORT 

101 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

29. Segmented Information  
The  Company  and  its  subsidiaries  are  organized  and  operate  primarily  in  two  reportable  industry 
segments: marine services and environmental services. The accounting policies used within the segments 
are applied in the same manner as for the consolidated financial statements. 

The  Company  discloses  information  about  its  reportable  segments  based  upon  the  measures  used  by 
management in assessing the performance of those reportable segments. The Company uses segmented 
profit before income taxes to measure the operating performance of its segments. 

The financial information by industry and geographic segments is as follows: 

Industry Segments 

RE VE N UE ,  R ES UL TS   A N D  O T HE R  I NF O R M A TI O N  

2019 

Revenue 

Depreciation and amortization expense 
Share of profit of equity accounted investments  
Finance expense 
Finance income 
Profit before income taxes 

Acquisition of property, plant and equipment 

2018 

Revenue 

Depreciation and amortization expense 
Share of profit of equity accounted investments  
Impairment charge 
Finance expense 
Finance income 
Profit (loss) before income taxes 

Marine  
services 
$ 

Environmental 
services 
$ 

Total 
$ 

385,305 

254,637 

639,942 

29,803 
7,463 
9,581 
277 
25,338 

26,114 

12,319 
1,266 
3,273 
224 
9,798 

42,122 
8,729 
12,854 
501 
35,136 

8,443 

34,557 

Marine  
services 
$ 

Environmental 
services 
$ 

Total 
$ 

340,759 

244,119 

584,878 

18,167 
7,588 
6,821 
5,904 
260 
21,713 

10,413 
523 
— 
2,142 
312 
(411) 

28,580 
8,111 
6,821 
8,046 
572 
21,302 

Acquisition of property, plant and equipment, including business  

combinations 

28,588 

10,856 

39,444 

102  2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NN OTES   TO  20 19  C ON S OLIDATED  F IN AN CIAL  S TATEM EN TS 
years ended December 31, 2019 and 2018 
(in thousands of Canadian dollars, except for per share amounts) 

AS S E TS   A N D  LI A BILI TI E S    

2019 

Total assets 
Equity accounted investments 
Total liabilities 

2018 

Total assets 
Equity accounted investments 
Total liabilities 

Geographic Segments  

Marine  
services 
$ 

Environmental 
services 
$ 

Total 
$ 

463,823 
40,419 
323,674 

377,876 
36,524 
242,708 

270,915 
1,930 
130,050 

734,738 
42,349 
453,724 

259,227 
1,481 
130,006 

637,103 
38,005 
372,714 

The  Company's  revenue  from  external  customers  by  country  of  origin  and  information  about  its 
non-current assets by location of assets are detailed below: 

Revenue 

2019 
2018 

Non-current assets (1)  

As at December 31, 2019 
As at December 31, 2018 

Canada 
$ 

329,031 
327,236 

USA 
$ 

Total 
$ 

310,911 
257,642 

639,942 
584,878 

259,185 
231,466 

240,818 
179,674 

500,003 
411,140 

(1)  Non-current assets exclude non-current financial assets and deferred income tax assets. 

30. Contingent Liabilities and Guarantees 
As  at  December  31,  2019,  the  Company  has  outstanding  letters  of  credit  for  an  amount  of  $3,695 
($3,820 in 2018) relating to financial guarantees issued in the normal course of business. These letters of 
credit mature within the next 12 months. 

The  Company,  together  with  one  of  its  partners,  severally  guarantees  the  obligations  of  a  lease 
arrangement  in  one  of  its  joint  ventures.  The  guarantee  is  limited  to  a  cumulative  amount  of  $2,199 
($4,319 in 2018). 

As at December 31, 2019, the Company has contingent liabilities totalling $1,941 ($1,879 in 2018) for 
contingent obligations to remove assets and to restore sites under lease arrangements.  

The Company indemnifies its directors and officers for prejudices suffered by reason or in respect of the 
execution of their duties for the Company to the extent permitted by law. The Company has underwritten 
and maintains directors’ and officers’ liability insurance coverage. 

No amounts have been recorded in the consolidated financial statements related to the above contingent 
liabilities and guarantees.  

LOGISTEC | 2019 ANNUAL REPORT 

103 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
DDIRECTORS AND OFFICERS 

Directors  
James C. Cherry,, FCPA, FCA (1) (2) (3) 
Corporate Director 

Serge Dubreuil, Eng. (1) 
Consultant 
Corporate Director 

Curtis Jay Foltz (1)  
Consultant 
Corporate Director 

George Gugelmann (2) 
Private Investor 

George R. Jones (2) 
Corporate Director 

Madeleine Paquin, C.M. (3) 
President and Chief Executive Officer  
LOGISTEC Corporation 

Nicole Paquin  
Vice-President, Information Systems 
LOGISTEC Corporation 

Suzanne Paquin (3) 
President  
Transport Nanuk Inc. 

J. Mark Rodger (2) (3) 
Partner 
Borden Ladner Gervais LLP 

Luc Sabbatini (1) (2) 
Chief Executive Officer 
PBSC Urban Solutions Inc. 

Dany St-Pierre (2)  
President  
Cleantech Expansion LLC 

Luc Villeneuve, FCPA, FCA (1) (3) 
Corporate Director 

(1) Member of the Audit Committee 
(2) Member of the Governance and Human Resources Committee 
(3) Member of the Executive Committee 

Officers  

James C. Cherry,, FCPA, FCA  
Chairman of the Board  

Madeleine Paquin, C.M. 
President and Chief Executive Officer  

Jean-Claude Dugas, CPA, CA  
Chief Financial Officer  
Assistant-Secretary  

Stéphane Blanchette, CHRP  
Vice-President, Human Resources  

Nicole Paquin 
Vice-President, Information Systems  

Marie--Chantal Savoy  
Vice-President, Strategy and Communications 

Ingrid Stefancic, LL.B., FCIS, ACC. DIR. 
Vice-President, Corporate and Legal Services  
Corporate Secretary 

Suzanne Paquin  
Vice-President  

Carl Delisle, CPA, CA 
Vice-President 
Corporate Controller 

Mathieu Brunet, CPA, CGA 
Treasurer   

104  2019 ANNUAL REPORT | LOGISTEC  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CCORPORATE INFORMATION 

Subsidiaries  

Joint Ventures / Partnerships   

Banks  

BalTerm, LLC  
CrossGlobe Transport, Ltd. 
FER-PAL Construction Ltd. 
FER-PAL Construction USA, LLC 
GSM Intermediate Holdings, Inc. 
GSM Maritime Holdings, LLC 
Gulf Stream Marine, Inc. 
Les Terminaux Rideau Bulk Terminals Inc. 
LOGISTEC Environmental Services Inc. 
LOGISTEC Everglades LLC 
LOGISTEC Gulf Coast LLC 
LOGISTEC Marine Agencies Inc. 
LOGISTEC Marine Services Inc. 
LOGISTEC Stevedoring Inc. 
LOGISTEC Stevedoring (New Brunswick) Inc. 
LOGISTEC Stevedoring (Nova Scotia) Inc. 
LOGISTEC Stevedoring (Ontario) Inc. 
LOGISTEC Stevedoring U.S.A. Inc. 
LOGISTEC USA Inc. 
MtlLINK Multimodal Solutions Inc. 
Niedner Inc. 
Pate Stevedore Company, Inc. 
Ramsey Greig & Co. Ltd. 
SANEXEN Environmental Services Inc. 
SANEXEN Water, Inc 
SETL Real Estate Management Inc. 
Sorel Maritime Agencies Inc. 
Tartan Terminals, Inc. 

Associates 

St-Lawrence Mooring Inc.  

Avataani Environmental Services Inc. 
Flexiport Mobile Docking  
Structures Inc. 
Moorings (Trois-Rivières) Ltd. 
NEAS Inc. 
NEAS Group Inc. 
Northern Bear Shipping B.V. 
Northern Fox Shipping B.V. 
Northern Hare Shipping B.V. 
Northern Loon Shipping B.V. 
Northern Wolf Shipping B.V. 
Nunavik Eastern Arctic Shipping Inc. 
Nunavut Eastern Arctic Shipping Inc. 
Qikiqtaaluk Environmental Inc.  
Québec Maritime Services Inc.  
Québec Mooring Inc.  
TERMONT Montréal Inc.  
TERMONT Terminal Inc.  
Transport Aujaq Inc. 
Transport Inukshuk Inc. 
Transport Mitiq Inc. 
Transport Nanuk Inc.  
Transport Nunalik Inc.  
Transport Qamutik Inc. 
Transport Sinaaq Inc. 
Transport Umialarik Inc. 
9260-0873 Québec Inc. 

Independent Auditor 

KPMG LLP 

Bank of Montréal  
BMO Harris Bank  
Canadian Imperial Bank of 
Commerce 
Fédération des Caisses 
Desjardins du Québec 
HSBC Bank Canada 
National Bank of Canada 
Royal Bank of Canada 
The Bank of Nova Scotia  
The Toronto-Dominion Bank  

Transfer Agent and 
RRegistrar  

Computershare Investor  
Services Inc.  
1500 Robert-Bourassa Blvd. 
7th Floor 
Montréal (QC) H3A 3S8  

Shares Listed 

Toronto Stock Exchange  

Head Office 

LOGISTEC Corporation  
360 Saint-Jacques Street  
Suite 1500  
Montréal (QC) H2Y 1P5  

Tel.: (514) 844-9381  
Fax: (514) 844-9650  
E-mail addresses: 
info@logistec.com 
ir@logistec.com 
Internet: www.logistec.com  

Annual General and Special Meeting of Shareholders  

Wednesday, May 6, 2020 at 11:30 a.m. 
National Bank of Canada, 600 de La Gauchetière Street West, 4th Floor, Montréal (QC) 

Ticker Symbols 

LGT.A and LGT.B 

Trademarks 

LOGISTEC is a registered trademark in Canada and in the USA 
Aqua-Pipe is a registered trademark in Canada and in the USA 
CrossGlobe and logo are registered trademarks in the USA 
MtlLINK is a registered trademark in Canada 
SANEXEN is a registered trademark in Canada and in the USA 

LOGISTEC | 2019 ANNUAL REPORT 

105 

 
 
  
 
 
 
 
 
 
 
 
 
 
 
LOGISTEC Corporation 
360 Saint-Jacques Street  
Suite 1500 
Montréal (QC) H2Y 1P5  

www.logistec.com