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05
Word from the CEO
11
12
15
16
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22
24
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28
29
57
Word from the Chairman
Management’s Discussion and Analysis
Company Profile
Products
Current Company Goals
Proven Acquisition Strategy
Competitive Strengths
Key Business Risks
Executive Officers
Non-executive Directors
Consolidated Financial Statements
Glossary of Terms
Dear investors, partners, clients and colleagues,
They say slow and steady wins the race. And while we haven’t yet crossed the finish line,
it’s safe to say that 2021 and 2022 have marked COVID’s gradual transition into the
rear-view mirror.
While many of our colleagues are still safely and comfortably working from home, familiar
faces are slowly trickling back into our offices. We are enjoying lunches together, inspiring
each other during creative roundtables, and supporting one another through this important
shift. The “new” normal shaped our daily lives for so long, and now, the “old” normal is
coming full circle. COVID did indeed punctuate another year around the sun, but the
Stingray spirit is burning as bright as ever.
If we were living in a “global village” prior to the pandemic, it’s looking more like a “global
main street” now. The worldwide shift to remote work has made the world feel even more
close-knit, with online interactions ever more prevalent in our daily lives. This particular
type of globalization spelled new business opportunities for Stingray; at the time of this
writing, 50% of the world’s population is online, and APAC markets are slated to lead the
way in terms of growth (specifically China, India, and Indonesia). Projections show that
there will be 43 billion connected devices in people’s pockets by 2023, which is a threefold
increase compared to 2018. With these forecasts in mind, we are already setting our sights
on further high-value opportunities in the music subscription, connected car, connected
retail, consumer insights, and retail media spheres.
As Stingray works towards developing exciting new projects for our global community, we
are just as invested in maintaining steady, stable growth throughout our existing service
portfolio. Although COVID continues to impact our business, we are very proud to report that
revenues are up by 14% compared to the previous year. Revenues stood at $282.6 million,
Adjusted EBITDA(1) was $99.3 million and net income was $33.3 million ($0.47 per share). Cash
flow from operating activities was $83.7 million and Adjusted free cash flow(1) was 56.9 million.
This year has given us plenty of wins to celebrate. As businesses reopened in the wake
of the COVID lockdowns, Stingray Radio also started to recover and has consistently
outperformed its competitors.
Thanks to a new global deal with Amazon, our streaming subscription growth has accelerated
tremendously. Following Stingray’s acquisition of Chatter Research in 2021, our consumer
insights business unit has also gained an incredible amount of traction: interest is high,
our sales professionals’ calendars are booked solid, and our retail partners are eager to
continue expanding the scope of their work with us.
A connected car partnership with Tesla has been foundational to solidifying our presence in
the automotive space, and we have since received strong interest from other vehicle manu-
facturers. Projects move slowly and deliberately in this industry, and while we expect longer
lead times to bring these collaborations to fruition, the results will be well worth the wait.
Finally, 2022 marked the launch of our in-store retail media network, with Metro grocery
stores being our inaugural partner. This service gives brands the opportunity to run
programmatic digital audio campaigns in-store, leveraging purchaser proximity to drive
conversions. Both retail partners and advertisers have been thrilled with the immediate and
measurable results, and all key metrics are very strong. Stingray is proud to spearhead
this revolutionary point-of-sale advertising opportunity, and we see significant growth on
the horizon.
(1) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more infor-
mation on each non-IFRS measure and for reconciliations to the most directly comparable IFRS financial measure,
refer to “Supplemental Information on Non-IFRS Measures” on page 35 and “Reconciliation of Quarterly Non-IFRS
Measures” on page 44.
Annual Report 2022 | Stingray Group Inc. | 5
M
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F
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C
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H
T
Subscriptions
continue
to grow
In Q4 2022, our Subscription Video On Demand (SVOD) customers surged past 715,000,
representing a 36% increase compared to the same period last year and a 3% increase
sequentially. Given our current pace of growth, we expect to hit our ambitious goal of one
million subscribers within the next two years.
Stingray’s business has pivoted to strategic digital revenue streams, and we will continue
full steam with this approach. These new initiatives continue to grow and bring in greater
revenues each year, already outpacing the drop in revenue associated with our traditional
broadcast offerings.
We have
liftoff: a year
of high-profile
launches
Strategic partnerships are the lifeblood of Stingray’s business and mission. They allow us
to fill homes around the world with music, bring unforgettable karaoke sing-alongs to the
masses, and provide premium audiovisual entertainment around the clock.
In fiscal 2022, we made significant strides towards expanding our worldwide streaming
audience by millions of potential viewers. We launched a series of free, ad-supported TV
(FAST) channels and premium SVOD partnerships with major OTT providers across North
America, Europe, and Latin America with partners such as Claro, Pluto TV, Rakuten TV,
Samsung TV Plus, Struum and Totalplay.
An ever-
expanding
content
catalog
Stingray continued to tap into new audiences and markets thanks to a high-value part-
nership with Amazon’s Prime Video Channels in Canada, Mexico, and Brazil: subscribers
gained access to Stingray’s All Good Vibes offering, comprised of the following premium
entertainment services: Qello Concerts by Stingray, Stingray Karaoke, Stingray
Classica, Stingray DJAZZ, and Stingray Naturescape.
Expanding on our collaboration with Amazon, we also teamed up to launch Alexa Karaoke,
available through Yokee on Echo Show and Fire TV devices in the United Kingdom and
Spain. With a simple voice command – “Alexa, let’s karaoke” – users can unlock a catalog
of more than 70,000 licensed songs, representing a momentous stride for Stingray into
the world of voice services and voice AI.
New partnerships mean broader audiences, and more viewers mean an increased demand
for fresh, new content. This fiscal year, Stingray was hard at work producing world-class
content that viewers and listeners will enjoy over and over (and over) again.
One of these epic projects was the Qello Concerts World Tour: a three-week-long audio-
visual anthology of some of history’s most iconic live performances. With so many
venues still shuttered due to COVID, this streaming event aimed to fill the void in music
lovers’ hearts. Qello’s World Tour transported viewers from Japan to Australia and from
the Middle East to Africa, featuring genre-spanning acts like Blondie, Elton John, Rihanna,
and Ray Charles.
Not only did we look back on history, but we also watched history unfold! From July 2 to
July 17, Stingray partnered with the world-renowned Montreux Jazz Festival to host an
unforgettable live streaming event via Stingray’s Qello Concerts platform. Viewers were
instantly transported to the festival’s exceptional lakeside stage, which was graced by the
likes of Altin Gün, Annie Taylor, Hermanos Gutiérrez, Nathy Peluso, Oscar Anton, Priya Ragu,
Sam Fischer, Sofiane Pamart, and Yet No Yokai.
As a business that looks towards the future, our fiscal 2022 would have been incomplete
without a partnership with breakout social platform TikTok. Together, we launched TikTok
Radio, an all-new music channel available on Stingray Music across Canada and the United
States. From viral hits to tracks by rising stars, this channel is home not only to TikTok’s
favourite beats, but also trending sounds and introductions from some of its most popular
artists and creators.
Annual Report 2022 | Stingray Group Inc. | 6
New to
the family
If the pandemic has taught us anything, it’s that we’re stronger together. Our partners moti-
vate and encourage us to keep innovating, think outside the box, and continue to expand our
service offering beyond what we imagined to be possible. And sometimes, we see so much
potential and value in each other’s contributions that we decide to join forces permanently.
Setting our
(in)sights
on Chatter
Stingray’s first acquisition could not have come at a better time: with so many of us feeling
emotionally depleted by COVID, we acquired Calm Radio, the world’s largest online music
streaming service focused on wellness and relaxation. This important acquisition added
1,500 channels to the Stingray portfolio, all of which are focused on mindfulness and mental
wellness. It also grew our streaming subscriber base by more than 30,000 users, increasing
our overall average revenue per subscriber (ARPU) in the process.
We were also thrilled to further our relationship with longtime karaoke partner The Singing
Machine Company, a worldwide leader in consumer karaoke products with more than
1,000,000 products distributed worldwide every year. Stingray acquired a minority stake
in the company, cementing our status as the most trusted provider of karaoke solutions
across the globe.
In addition to securing and growing our presence within consumers’ homes through streaming
and karaoke, we expanded our retail footprint as well. Following the acquisition of InStore
Audio Network, the largest retail audio advertising network in the U.S., we successfully
added 16,000 pharmacy and grocery locations to our business portfolio. Given that our
retail partners can leverage this network as an additional advertising-based revenue
stream, this in turn presents an opportunity for Stingray to increase its revenue per loca-
tion exponentially.
Following Stingray’s acquisition of Chatter Research in 2021, we have started rolling out
AI-powered consumer insights solutions with retailers across North America.
Chatter’s SMS-based surveys perform better across all key metrics compared to traditional
methods, from opens and clicks to overall conversions. Chatter can also dynamically
respond to multiple consumer pain points in real time, thanks to an AI engine powered by
more than 30 million retail-centric data points (and counting).
Brands that want to leverage these consumer insights can get the ball rolling quickly.
Chatter can be implemented using a web tag that integrates with all major ecommerce
platforms, including Shopify, and from the moment its pre-trained AI powers on, it can
deliver immediate results.
Within three short months of launch, global retailer Staples was able to increase its NPS
score by 20% using our Chatter technology. This pilot campaign, which focused on their
curbside pickup service, initiated over 120,000 conversations throughout its lifecycle.
Chatter’s AI quickly detected that customers were most frustrated about having to call
the store to signal their arrival for pickup: with this information in hand, the team was able
to quickly and intentionally focus their efforts where the greatest impact could be made,
resulting in a 20% NPS boost.
Annual Report 2022 | Stingray Group Inc. | 7
Becoming a
retail media
pioneer
In a short period of time, Stingray’s Retail Media offering has evolved from nascent to
dominant. This service leverages our existing network of in-store streaming technology to
deliver powerful audio-based programmatic advertising solutions: location-based audio
campaigns allow advertisers to target high-intent shoppers who are aisles (not miles)
away with contextually relevant content, while providing retailers with an important new
revenue stream.
Life in the
fast lane
This past year, we were thrilled to welcome Dollarama, Walmart, and Metro to the Stingray
Retail Media Network. Our in-house creative teams are already hard at work producing
compelling audio ads that will be dynamically inserted into their existing music landscape.
Whether you’re in the car for five minutes or five hours, music is the perfect backdrop for
life on the road. This year, Stingray made major inroads into the connected car space,
a sector that has experienced tremendous growth. Cellular connectivity is expected to
become a standard in-vehicle feature within five years, and major players in the media and
entertainment sphere have already started developing solutions for these next-gen products.
Tesla is already one of Stingray’s partners, with 1.2 million cars currently on the road and
30,000 more being added each month. Following the success of our in-car karaoke collabora-
tion with Tesla, we are now working with VinFast to develop a unique offering for their vehicles.
VinFast is slated to be the first automotive brand to leverage Cerence Sing, a voice-controlled
in-car karaoke experience powered by Stingray Karaoke. This integrated system gives drivers
and passengers access to our entire catalogue of more than 100,000 top karaoke songs
in more than 12 languages. Driver mode is 100% voice controlled for safety reasons, while
classic mode (available only when parked safely) features visual enhancements and the
ability to interact with the car’s touchscreen.
Aside from spirited sing-alongs, Stingray has partnered with ACCESS Europe GmbH to
bring our music streaming service, Stingray Music, to cars. Drivers across Canada and the
United States will now be able to access our full catalog of expertly curated playlists thanks
to our partner’s In-Vehicle Infotainment platform (Twine4Car) and its car-centric App Store.
This is just the beginning of a very fruitful series of partnerships with automotive brands
that want to make music a key part of their connected car experience.
At the end of each year, I am always amazed at how much we can accomplish when we
work together. None of these achievements would have been possible without the collective
effort of Stingray’s dedicated employees, my Executive Team’s exemplary leadership, and
our partners’ support and unwavering trust in all that we do.
Rain or shine, music is what gets us through the day. It motivates us to keep pushing,
striving, and dreaming. While we don’t yet know what the coming year will hold, we can
say with confidence that Stingray will be at the ready with all the music and entertainment
we need to keep going.
Wishing you and your loved ones nothing but health and prosperity in the year to come.
Sincerely,
Eric Boyko
President, Co-founder and CEO
Annual Report 2022 | Stingray Group Inc. | 8
Music is how Stingray first made a name for itself on the world stage, and the power of
music to unite people of different cultures and preferences around the globe has fueled
our passion for growth and excellence. We’re proud of our musical roots that trace back
to curated audio channels and music streaming. But since Stingray’s inception, we’ve
also grown in so many new and exciting directions, and this year many of those efforts
came to fruition.
I
N In the beginning, there was music.
A
M
R
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C
E
H
T
Mark Pathy
Chairman of the Board
M
O
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F
D
R
O
W
The acquisition of the InStore Audio Network (ISAN) saw our revenue potential reach new
heights. We also made important gains with new Chatter partnerships and proximity-based
retail media activations. We’ve only just started to tap into these exciting opportunities for
Stingray’s Business segment, and as we leverage our expertise in digital audio advertising,
consumer insights, and retail media, there is simply no limit to how high we can soar.
To make the most of these opportunities, we need a first-rate team of innovative and agile
experts, and Stingray’s management certainly fits the bill. We could not be in better hands
when it comes to strategic thinking as well as driving timely and effective execution.
It is of course up to Stingray’s dedicated employees to ensure that vision is properly executed
and to bring our mission to life. Their relentless drive to achieve excellence and commitment
to the success of the company is the fuel in our tank, and their ability to weather the storm
of COVID has been exemplary. They have demonstrated that “agility” is more than just a
buzzword: it is what keeps us moving steadily forward, even if we have to forge new paths
along the way, as the winds of change swirl around us.
To our investors, partners, and other stakeholders: thank you for your confidence and
unwavering support throughout this unpredictable phase of our lives. It’s clear that
Stingray has emerged from the pandemic with renewed zeal, excited to take advantage
of the abundant opportunities at hand. We are delighted to have you by our side to share
in our prosperity.
The next fiscal year is shaping up to be one of immense potential, especially for Stingray
Business and our burgeoning retail media offering.
Until then, we will continue to serve our community of music lovers, as well as our brand and
retail partners, with great enthusiasm. Because good vibes are what we do best.
Annual Report 2022 | Stingray Group Inc. | 11
S
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A
The following is the annual report and
Management’s Discussion and Analysis
(“MD&A”) of the results of operations and
financial position of Stingray Group Inc.
(“Stingray” or “the Corporation”) and
should be read in conjunction with the
Corporation’s consolidated audited
financial statements and accompanying
notes for the years ended March 31, 2022
and 2021. This MD&A reflects information
available to the Corporation as at June
7, 2022. Additional information relating
to the Corporation is also available on
SEDAR at www.sedar.com.
Annual Report 2022 | Stingray Group Inc. | 12
Montreal-based Stingray Group Inc. (TSX: RAY.A;
RAY.B) is a leading music, media, and technology
company with over 1,000 employees worldwide.
Stingray is a premium provider of curated direct-
to-consumer and B2B services, including audio
television channels, over 100 radio stations, SVOD
content, 4K UHD television channels, FAST chan-
nels, karaoke products, digital signage, in-store
music, and music apps, which have been down-
loaded over 160 million times. Stingray reaches
400 million subscribers (or users) in 160 countries.
Y
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F
O
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P
S
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C
U
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P
Subscription
services
(apps & SVOD)
B2C Mobile
or OTT Apps
Expertly curated music channels, in all
genres, for all of life’s moments
The world’s leading streaming service
for full-length concert films and music
documentaries.
Over 100,000 karaoke songs with
on-the-go convenience and easy set-up.
Over 100,000 karaoke songs with optional
special effects, mics, and high-quality
karaoke videos.
Fans of the television show The Voice come
together to like, favorite, follow, and share
each other’s singing via social media.
Learn the piano from scratch, or for those
who have prior knowledge and want to
continue learning by practice playing
along to their favourite songs.
Piano
Academy
A relaxing music experience to increase
focus, sleep better, and reduce daily
stress.
Yokee
Karaoke
Yokee
Piano
The ultimate karaoke destination to
perform and record songs, add voice
effects, and share with a network of
dedicated singers.
Fun, professionally-designed piano lessons
for all levels that entertain as well as teach.
A Christian music and audiobook
experience to help remain inspired,
dedicated, and faithful to Him.
Yokee
Guitar
Easy-to-follow guitar tutorials to learn
and play.
Annual Report 2022 | Stingray Group Inc. | 17
Subscription
Video
On Demand
(SVOD)
Stingray
Retail Media
Network
Stingray’s SVOD offering is available through major entertainment services providers such
as Amazon, AT&T, Comcast, Telefonica, and growing in reach through new carriers such as
Optimum and Suddenlink by Altice, Claro Video, izzi, NOW, and Totalplay.
The following Stingray services are available as SVOD:
º Qello Concerts by Stingray: the world's leading streaming service for full-length
º
º
º
º
concerts and music documentaries.
Stingray Classica: a catalog of classical music, opera, and ballet performances
filmed in the world’s most renowned venues.
Stingray DJAZZ: live performances by the jazz icons of yesterday and today.
Stingray Karaoke: songs in all the most popular genres including pop, rock, country,
R&B/hip-hop, Disney, and much more.
Stingray Naturescape: offers an escape to a world of stunning nature scenes, all set
to peaceful soundtracks.
In fiscal 2022, we launched an entirely new category known as audio out-of-home (AOOH),
which represents the evolution of legacy in-store messaging. AOOH allows brands to
reach customers at the point-of-sale, with programmatic audio ads in the aisles. We’re
incredibly excited about the national retail partners we have on board, including Dollarama,
Walmart and Metro. Location-based AOOH is designed to cut through the endless stream of
in-store advertising using the power of audio, while leveraging proximity to speak directly
to high-intent shoppers.
None of this would be possible without our new partner, Hivestack, one of the world’s top
location-based ad servers. This collaboration – the first of its kind in Canada – integrates
Stingray’s proprietary network of media players with Hivestack’s programmatic system,
allowing for highly targeted ad delivery across our entire network of retail partners. Each
location is identified using a unique tag, which allows advertisers to easily run campaigns
on a local, regional, national, or cross-network level.
In the midst of pioneering this all-new audio advertising medium, we realized there was no
existing way to measure how many individual customers were exposed to an audio ad. So,
Stingray reached out to the Canadian Out-of-Home Marketing and Measurement Bureau
(COMMB), Canada’s top OOH market insights bureau, to develop an all-new measurement:
the audio impression. This AOOH measurement tool provides agencies with first-party
transaction data from our retail partners, so they can feel confident that they are receiving
credible information that is verified by a third-party source they already trust.
Finally, Stingray launched a partnership with Leger, the largest Canadian-owned market
research and analytics firm, to measure the effectiveness of our retail-based digital audio
offering. The firm will be rolling out a series of surveys to demonstrate the value that
AOOH can provide for brands that are looking to reach millions of high-intent shoppers
across Canada.
Annual Report 2022 | Stingray Group Inc. | 18
Radio in
Recovery
Many businesses that experienced a drop in revenue during the pandemic sought to
reduce their expenses, while others dealt with difficult supply chain issues that interrupted
their operations. In many cases, that meant a reduction in advertising spends. Stingray’s
team is dedicated to bringing advertisers back to radio, not only through traditional
radio advertising but also via our vast array of digital advertising products. From display
to social, from AOOH to programmatic outdoor, our advertising network is equipped to
offer retail, streaming, and broadcast media to reach customers while they shop, listen,
watch, travel, and play. The combination of radio’s broad reach with digital’s ability to
hyper-target specific customer demographics creates a very efficient and far-reaching
model for advertisers to grow their business.
Radio stations like Toronto’s boom 97.3, Ottawa’s Hot 89.9 and Live 88.5, Calgary’s 90.3 AMP
Radio and XL 103, and K97 in Edmonton achieved very positive ratings and retained top-tier
status within their respective markets. Keeping our radio stations among the most highly
ranked in each market is key to our revenue success. To that end, Stingray relaunched
CFXJ-FM in Toronto in February 2022, branded as “93.5 Today Radio.” In addition to
crowd-pleasing music, this new radio station embraces 24/7 audience interaction: the hosts
and audience are constantly engaging in dialogue via phone, text, direct messaging, and
social media.
In addition to the rebrand in Toronto, Stingray Radio has continued to increase its footprint
of regional and national stations and shows. On the East coast, the Q network brings
our award-winning classic rock content from Q104 Halifax to the rest of the Maritimes.
Meanwhile, out West, the popular Katie & Ed morning show – based at 90.3 AMP Radio in
Calgary – expanded their presence to include Z95.3 in Vancouver.
On the digital front, the Stingray Podcast Network proudly produces six in-house original
content podcasts. These shows cover a wide range of human interest topics including
sports, movies, technology, and music. Stingray’s “Behind The Vinyl” podcast, which
invites musicians to sit down and discuss how they created their greatest hits, won Best
Podcast at the Canadian Radio Awards in November of 2021. It was also nominated in the
Outstanding Music Series category at the Canadian Podcast Awards.
Annual Report 2022 | Stingray Group Inc. | 19
Y
N
A
P
M
O
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T
N
E
R
R
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S
L
A
O
G
1
2
3
4
5
6
Pursue a strategic and disciplined
approach to our M&A strategy by focusing
on three (3) vectors:
º
º
º
SVOD / APPs
Ad-based products
Business services
(Music, Digital Display, Insights
and Retail media)
Develop ad-based product offerings to enter
new markets and access new platforms. Free
Ad-supported Streaming TV channels (FAST),
traditional channels (MV and Audio channels)
and Audio Out-of-Home (Retail Media).
Continue to grow in the SVOD space
by buying or licensing content and
increasing our reach across platforms
and markets.
Continue to develop best-in-class
video apps, web-based solutions,
and mobile app.
Continue to develop distribution
in connected cars and devices.
Expand the reach of our business services
through an international expansion
strategy and insights offering.
Annual Report 2022 | Stingray Group Inc. | 21
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Annual Report 2022 | Stingray Group Inc. | 22
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d
2007
º Slep-Tone Entert. Corp/SoundChoice
(Karaoke Channel)
2009
º Canadian Broadcast Corp. (Galaxie)
º MaxTrax Music Ltd.
º Chum Satellites Services (CTV)
2010
º Marketing Senscity Inc.
º Concert TV Inc.
2011
º Music Choice International Ltd.
2012
º Musicoola Ltd.
º Zoe Interactive Ltd.
2013
º Executive Communication
º Emedia Networks Inc.
º Stage One Innovations Ltd.
º Intertain Media Inc
2014
º DMX LATAM (Mood Media)
º Archibald Media Group
º DMX Canada (Mood Media)
º Telefonica – On the Spot
2015
º Les réseaux Urbains Viva Inc.
º Brava Group (HDTV, NL and Djazz TV)
º Digital Music Distribution
º iConcerts Group
2016
º Nümedia
º Festival 4K B.V.
º Bell Media’s specialty music video
channels
º EuroArts Classical catalogue
2017
º Classica
º Nature Vision TV
º Yokee Music Ltd.
º C Music Entertainment Ltd.
º SBA Music PTY Ltd.
º Satellite Music Australia PTY Ltd.
2018
º Qello Concerts LLC
º Newfoundland Capital Corporation
º Novramedia
º DJ Matic
º New Glasgow
2019
º Drumheller Radio
2020
º Chatter Research Inc.
º Minority investment in The Podcast
Exchange (TPX)
2021
º Marketing Sensorial México
2022
º Calm Radio Corp
º Minority investment in The Singing Machine
º InStore Audio Network
Annual Report 2022 | Stingray Group Inc. | 23
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N
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T
S
We believe that the following competitive strengths will contribute to our ongoing commercial
success and future performance:
Unique and diversified world leading music
and video service provider
With more than 400 million subscribers in 160 countries, our total reach is one of the
largest relative to our peers. Our products and services are distributed through numerous
platforms including digital TV, satellite TV, IPTV, the Internet, mobile devices, Wi-Fi systems,
game consoles, and connected cars. With 101 radio licenses and more than 160 million
app downloads, Stingray reaches millions of radio listeners and app users every month.
Strong and predictable cash flow from
long-term contracts and client relationships
Apart from Radio and FAST offerings, our business model is based on subscription revenues
and long-term agreements with pay-TV providers and OTT platforms, which gives us
significant predictability of future cash flow, reduces cyclicality of earnings, and increases
customer retention.
Proprietary innovative technologies
We are a leader and innovator in the digital music space, and as such have developed
a unique set of proprietary technologies that provide us with an important competitive
advantage. We have extensive experience in developing technologies to distribute digital
music on multiple platforms such as TV, mobile devices, and the Web. For instance, we
introduced a second generation of UBIQUICAST allowing multiproduct distribution and a
third generation of our Commercial platform – the SB3 allowing simultaneous distribution
of digital display and HD music. We are also a leader in customer insights with Chatter, a
proprietary AI-powered platform that provides retailers with actionable feedback. Its unique
combination of SMS-based chats and machine learning technology captures real-time
shopper insights that allow businesses to improve customer satisfaction and drive sales.
Annual Report 2022 | Stingray Group Inc. | 24
Business agility
We have nimbly adjusted to (and take advantage of) emerging growth opportunities,
including steering our product development strategies by leveraging AI-driven data analysis
and decision making, and scaling our services through strategic partnerships in various
rapidly evolving markets.
Track record of successful acquisitions
and integrations
Since Stingray’s inception in 2007, we have completed 45 acquisitions representing outlays
of approximately $845 million, which brought new clients, new products and new geogra-
phical markets to our business. Stingray’s proven track record of successfully consummating
and integrating these acquisitions is a result of our experienced management team’s rigorous
and disciplined acquisition strategy. The versatility, portability and flexibility of Stingray’s
products and technologies permit us to efficiently integrate and support the complementary
products and technologies of the businesses we acquire.
Leading content curation expertise
Our business strategy is based on a lean-back, rather than lean forward, music consump-
tion model. Stingray provides some of the world’s most comprehensive music libraries and
channels, all programmed by experts curators around the world. Our music products and
services are adapted to local tastes and trends to create the ultimate user experience.
Annual Report 2022 | Stingray Group Inc. | 25
The key risks and uncertainties of our business drive our operating strategies. Additional risks
and uncertainties not presently known to us, or that we currently consider immaterial, may
also affect us. If any of the events identified in these risks and uncertainties were to occur,
Stingray’s business, financial condition and results of operations could be materially impacted.
For further discussion of the significant risks we face, refer to the Annual Information Form
for the year ended March 31, 2022 available on SEDAR at sedar.com.
Our key risks, in terms of severity of consequence and likelihood, are displayed as follows:
Public performance and mechanical
rights and royalties
We pay public performance and mechanical royalties to performers, songwriters and
publishers through contracts negotiated with labels and music rights collection societies
in various parts of the world. If public performance or mechanical royalty rates for digital
music are increased, our results of operations and financial performance and condition
may be adversely affected. We mitigate this risk by operating, whenever possible, under
statutory licensing regimes and structures applicable to a non-interactive music services.
The royalty rates to be paid pursuant to statutory licenses can be established by either
negotiation or through a rate proceeding conducted by the Copyright Board; such royalty
rates are generally stable and are not likely to fluctuate from year to year.
Integrating business acquisitions
The Corporation has made or entered into, and will continue to pursue, various acquisitions,
business combinations and joint ventures intended to complement or expand our business.
The Corporation may encounter difficulties in integrating acquired assets with our opera-
tions. Furthermore, the Corporation may not realize the benefits, economies of scale and
synergies we anticipated when we entered into these transactions. To mitigate this risk,
the Corporation has committed to develop and improve our operational, financial and
management controls, enhance our reporting systems and procedures and recruit, train
and retain highly skilled personnel, all of which will enable the Corporation to properly
leverage our services into new markets, platforms and technologies.
Long-term plan to expand into
international markets
A key element of our growth strategy is to continue to expand our operations into interna-
tional markets. For fiscal 2022, approximately 37% of our revenue is derived from customers
outside of Canada. Operating in international markets requires significant resources and
management attention and will subject us to regulatory, economic and political risks that
are different from those in Canada. To mitigate this risk, the Corporation has committed
to develop and improve our operational, financial and management controls, enhance our
reporting systems and procedures and recruit, train and retain highly skilled personnel,
all of which will enable the Corporation to continue to expand into international markets.
Annual Report 2022 | Stingray Group Inc. | 26
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S
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Dependence on Pay-TV providers
The majority of the Stingray Music pay-TV subscriber base is reached through a small
number of significant pay-TV providers who are all under long-term contracts. Packaging
decisions made by pay-TV providers in respect of service offerings can impact the subscriber
base. Moreover, the contractual obligations of pay-TV providers in Canada to distribute
Stingray Music are subject to changes in CRTC rules, including the CRTC’s policy frame-
work set forth in Broadcasting Regulatory Policy CRTC 2015- 96. We mitigate this risk by
understanding the business needs of pay-TV providers and offering compelling services,
distributed across multiple platforms and proprietary technologies, with a demonstrable
value proposition. Based on our strong relationships and our interpretation of the long-term
contracts with payTV providers, Stingray expects that all Canadian pay-TV providers will
continue to carry Stingray’s pay-audio service on the most widely distributed unregulated
first-tier package (where available).
Rapid growth in an evolving market
The audio and video entertainment industry is rapidly evolving. The market for online digital
music and videos has undergone rapid and dramatic changes in our relatively short history
and is subject to significant challenges. In addition, our growth in certain markets could be
impeded by existing contractual undertakings with competitors which forbid us to solicit
customers in such markets. To mitigate this risk, our skilled and experienced sales personnel
have placed a greater emphasis on cross-selling our growing suite of products and our
capable engineers continue to innovate and develop new products and proprietary tech-
nologies to distribute digital music, which in turn allows us to attract and retain customers
and expand our service offering on multiple digital platforms beyond the TV. To manage the
growth of our operations and personnel, we continue to improve our operational, financial
and management controls and our reporting systems and procedures.
Competition from other content providers
The market for acquiring exclusive digital rights from content owners is competitive. Many
of the more desirable music recordings are already subject to digital distribution agree-
ments or have been directly placed with digital entertainment services. We face increasing
competition for listeners and/or viewers from a growing variety of businesses that deliver
audio and/or video media content through mobile phones and other wireless devices.
The growth of social media could facilitate other forms of new entry that will compete
with the Corporation. To mitigate this risk, the Corporation continues to rely upon human
programming and content curation by award-winning music experts from around the world,
each of whom adapt to the tastes and trends of listeners in order to create the ultimate user
experience. In addition, the Corporation remains determined to create and acquire original
long-form content in order to grow its proprietary catalogue.
Pandemic
The COVID-19 pandemic has introduced significant uncertainties into our business landscape.
Any new pandemic or event that requires retailers to shutter or affects supply chains can
have an important detrimental impact on our radio advertising revenues.
Annual Report 2022 | Stingray Group Inc. | 27
Eric Boyko
President, CEO,
Co-founder and Director
Jean-Pierre Trahan
Chief Financial Officer
Lloyd Feldman
Senior Vice-President,
Corporate Secretary
and General Counsel
Mario Dubois
Senior Vice-President and
Chief Technology Officer
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O
Mathieu Péloquin
Senior Vice-President,
Marketing and
Communications
David Purdy
Chief Revenue
Officer
Ian Lurie
President, Radio
Valérie Héroux,
Vice-President,
Content Acquisition
and Programming
Ratha Khuong
General Manager,
Stingray Business
Sébastien Côté
Vice-President,
Human Resources
Annual Report 2022 | Stingray Group Inc. | 28
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D
I
Claudine Blondin
Director and Member of the
Corporate Governance and
the Human Resources and
Compensation Committees
François-Charles
Sirois
Director and Member of
the Human Resources and
Compensation Committee
Frédéric Lavoie
Director
Gary S. Rich
Director and Chairman of
the Human Resources and
Compensation Committee
Jacques Parisien
Director and Chairman
of the Corporate
Governance and Audit
Committees
Karinne Bouchard
Director and Audit
Committee
Mark Pathy
Chairman of the Board
of Directors
Pascal Tremblay
Director and Member
of the Corporate
Governance Committee
and Chairman of
the Audit Committee
Robert G. Steele
Director
Annual Report 2022 | Stingray Group Inc. | 29
BASIS OF PREPARATION AND FORWARD-LOOKING STATEMENTS
The following is the annual financial report and Management’s Discussion and Analysis (“MD&A”) of the results of operations and financial position of
Stingray Group Inc., (“Stingray” or “the Corporation”), and should be read in conjunction with the Corporation’s audited consolidated financial
statements and accompanying notes for the years ended March 31, 2022 and 2021. This MD&A reflects information available to the Corporation as at
June 7, 2022. Additional information relating to the Corporation is also available on SEDAR at www.sedar.com.
This MD&A contains forward-looking information within the meaning of applicable Canadian securities laws. This forward-looking information includes,
but is not limited to, statements with respect to management’s expectations regarding the future growth, results of operations, performance and business
prospects of the Corporation. This forward-looking information relates to, among other things, our objectives and the strategies to achieve these
objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimations and intentions, and may also include other
statements that are predictive in nature, or that depend upon or refer to future events or conditions. Statements with the words “could”, “expect”,
“may”, “will”, “anticipate”, “assume”, “intend”, “plan”, “believes”, “estimates”, “guidance”, “foresee”, “continue” and similar expressions are intended
to identify statements containing forward-looking information, although not all forward-looking statements include such words. In addition, any
statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections
regarding future events.
Although management believes the expectations reflected in such forward-looking statements are reasonable, forward-looking statements are based
on the opinions, assumptions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties
and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors
include, but are not limited to the following risk factors : increases in royalties and tariffs or restricted access to music rights; our dependence on Pay-
TV providers; the rapidly evolving audio and video entertainment industry; competition from other content providers and other media companies; the
expansion of our operations into international markets; our rapid growth and our growth strategy; our acquisitions, business combinations and joint
ventures; our reliance on third party hardware, software and related services; our dependence on key personnel; exchange rate fluctuations; economic
and political instability in emerging countries; royalty calculation methods; rapid technological and industry changes; development of new or alternative
media technologies ; unavailability of additional funding; failure to generate cash revenues; reliance on our credit facilities; costly and protracted litigation
in defence of copyrighted content; our inability to protect our proprietary technology; our inability to maintain our corporate culture; unfavourable
economic conditions; our exposure to foreign privacy and data security laws; unauthorized and pirated music and video content; natural catastrophic
events and interruption by man-made problems; pandemics, epidemics and other health risks; additional income tax liabilities; maintaining our
reputation; litigation and other claims; credit risk; liquidity risk; failure to comply with the Canadian Radio-television and Telecommunications Commission
(“CRTC”) requirements; failure to maintain or renew our CRTC licences; the increase in broadcasting licence fees payable by us; unfavourable changes
in government regulation affecting our industry.
In addition, if any of the assumptions or estimates made by management prove to be incorrect, actual results and developments are likely to differ, and
may differ materially, from those expressed or implied by the forward-looking statements contained in this MD&A. Such assumptions include, but are
not limited to, the following: our ability to generate sufficient revenue while controlling our costs and expenses; our ability to manage our growth
effectively; the absence of material adverse changes in our industry or the global economy; trends in our industry and markets; the absence of any
changes in law, administrative policy or regulatory requirements applicable to our business, including any change to our licences with the CRTC; minimal
changes to the distribution of the pay audio services by Pay-TV providers in light of recent CRTC policy decisions; our ability to manage risks related to
international expansion; our ability to maintain good business relationships with our clients, agents and partners; our ability to expand our sales and
distribution infrastructure and our marketing; our ability to develop products and technologies that keep pace with the continuing changes in technology,
evolving industry standards, new product introductions by competitors and changing client preferences and requirements; our ability to protect our
technology and intellectual property rights; our ability to manage and integrate acquisitions; our ability to retain key personnel; and our ability to raise
sufficient debt or equity financing to support our business growth. Accordingly, prospective purchasers are cautioned not to place undue reliance on
such statements. All of the forward-looking information in this MD&A is qualified by these cautionary statements. Statements containing forward-looking
information contained herein are made only as of the date of this MD&A. The Corporation expressly disclaims any obligation to update or alter statements
containing any forward-looking information, or the factors or assumption underlying them, whether as a result of new information, future events or
otherwise, except as required by law.
Annual Report 2022 | Stingray Group Inc. | 30
KEY PERFORMANCE INDICATORS
For the three-month period ended March 31, 2022 (“Q4 2022”):
$72.6 M
▲ 21.6% from Q4 2021
Revenues
$4.5 M
Or $0.06 per share
Net income
$21.0 M
$11.8 M
▼ 11.1% from Q4 2021
Adjusted EBITDA(1)
Or $0.17 per share
Adjusted Net income(1)
$22.1 M
▼ 9.7% from Q4 2021
Cash flow from
operating activities
Or $0.31 per share
$11.8 M
▼ 14.3% from Q4 2021
Adjusted free cash
flow(1)
Or $0.17 per share
For the year ended March 31, 2022 (“Fiscal 2022”):
$282.6 M
▲ 14.0% from Fiscal 2021
Revenues
$33.3 M
Or $0.47 per share
Net income
$83.7 M
▼ 19.7% from Fiscal 2021
Cash flow from
operating activities
Or $1.17 per share
$99.3 M
$56.4 M
$56.9 M
▼ 13.1% from Fiscal 2021
Adjusted EBITDA(1)
Or $0.79 per share
Adjusted Net income(1)
▼ 23.4% from Fiscal 2021
Adjusted free cash
flow(1)
Or $0.80 per share
Note:
(1) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page 35
and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
Annual Report 2022 | Stingray Group Inc. | 31
FINANCIAL AND BUSINESS HIGHLIGHTS
Highlights of the fourth quarter ended March 31, 2022
Compared to the quarter ended March 31, 2021 (“Q4 2021”):
Revenues increased 21.6% to $72.6 million from $59.7 million;
Adjusted EBITDA(1) decreased 11.1% to $21.0 million from $23.6 million. Adjusted EBITDA(1) by segment was $14.5 million
or 31.9% of revenues for Broadcasting and Commercial Music, $7.9 million or 29.0% of revenues for Radio and
$(1.4) million for Corporate;
Net income was $4.5 million ($0.06 per share) compared to $12.1 million ($0.17 per share);
Adjusted Net income(1) was $11.8 million ($0.17 per share) compared to $12.0 million ($0.16 per share);
Cash flow from operating activities decreased 9.7% to $22.1 million ($0.31 per share) compared to $24.5 million
($0.34 per share);
Adjusted free cash flow(1) decreased 14.3% to $11.8 million ($0.17 per share) compared to $13.8 million ($0.19 per
share);
Net debt to Pro Forma Adjusted EBITDA(1) ratio of 3.16x, compared to 2.81x; and
80,200 shares were repurchased and cancelled for a total of $0.6 million compared to 967,415 shares for a total of
$6.8 million.
Highlights of the year ended March 31, 2022
Compared to the year ended March 31, 2021 (“Fiscal 2021”):
Revenues increased 14.0% to $282.6 million from $247.9 million;
Adjusted EBITDA(1) decreased 13.1% to $99.3 million from $114.3 million. Adjusted EBITDA(1) by segment was
$58.3 million or 36.7% of revenues for Broadcasting and Commercial Music, $46.2 million or 37.4% of revenues for Radio
and $(5.2) million for Corporate;
Net income was $33.3 million ($0.47 per share) compared with $45.1 million ($0.61 per share);
Adjusted Net income(1) of $56.4 million ($0.79 per share) compared with $62.9 million ($0.86 per share);
Cash flow from operating activities decreased 19.7% to $83.7 million ($1.17 per share) compared to $104.2 million
($1.42 per share);
Adjusted free cash flow(1) decreased 23.4% to $56.9 million ($0.80 per share) compared to $74.4 million ($1.01 per
share);
Net debt to Pro Forma Adjusted EBITDA(1) ratio of 3.16x, compared to 2.81x; and
2,106,000 shares repurchased and cancelled for a total of $15.0 million compared to 1,530,180 shares for a total of
$10.2 million.
Note:
(1) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page 35
and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
Annual Report 2022 | Stingray Group Inc. | 32
Additional business highlights for the fourth quarter and subsequent events:
On May 12, 2022, the Corporation announced that METRO Inc. had joined the Stingray Retail Media Network. Under the
agreement, the Corporation is responsible for exclusive sales representation of all in-store digital audio advertising within
approximately 1,100 METRO network of food stores under several banners in Quebec and Ontario including Metro, Metro
Plus, Super C and Food Basics, as well as drugstores primarily under Jean Coutu and Brunet, Metro Pharmacy and Food
Basics Pharmacy banners.
On April 20, 2022, the Corporation announced that it had reached an agreement for the distribution of a suite of free ad-
supported channels (FAST channels) to TCL smart TVs in Australia, Brazil, India, Mexico and the United States. The new
services within the TCL app include Qello Concerts by Stingray, Stingray Karaoke, Stingray Classica, Stingray DJAZZ,
Stingray CMusic, Stingray Naturescape and Stingray Music channels for users to access at no extra cost.
On April 19, 2022, the Corporation announced that Walmart Canada had joined the Stingray Retail Media Network. Under
the agreement, the Corporation is responsible for exclusive sales representation, in partnership with the Walmart Connect
sales team, of all in-store digital audio advertising within the national Walmart Canada retail footprint.
On April 6, 2022, the Corporation launched Stingray All Good Vibes channels with Amazon’s Prime Video Channels in
Australia, a paid add-on subscription exclusive to Prime members. Prime members now have access to subscribe to
Qello Concerts by Stingray, Stingray Karaoke, Stingray Classica, Stingray DJAZZ, and Stingray Naturescape. The launch
showcased the quality and diversity of the Corporation's growing product portfolio and its strength in reaching new
audiences.
On March 23, 2022, the Corporation declared a dividend of $0.075 per subordinate voting share, variable subordinate
voting share and multiple voting share. The dividend will be payable on or around June 15, 2022, to shareholders on
record as of May 31, 2022.
On March 14, 2022, the Corporation announced that it had launched 17 free ad-supported channels (FAST channels) on
the streaming platform Galaxy TV in Canada and the United States.
On March 1, 2022, the Corporation announced a partnership with Leger, the largest Canadian-owned market research
and analytics firm, to measure the effectiveness of retail-based digital audio advertising in Canada. Leger will conduct
surveys to demonstrate that advertising campaigns connected to the Stingray Retail Media Network drive tangible results.
On February 23, 2022, the Corporation announced a partnership with TikTok, the leading destination for short-form
mobile video, to launch TikTok Radio. The collaboration will bring TikTok’s top trending music and artists to the
Corporation’s audience across multiple platforms.
On February 8, 2022, the Corporation declared a dividend of $0.075 per subordinate voting share, variable subordinate
voting share and multiple voting share. The dividend was paid on March 15, 2022 to shareholders on record as of
February 28, 2022.
On January 5, 2022, the Corporation announced that it had acquired InStore Audio Network, the largest in-store audio
advertising network in the United States, reaching 100 million shoppers each week in over 16,000 grocery retailers and
pharmacies across the US for total consideration of up to approximately $59.0 million subject to a specific earn out
mechanism set forth in the purchase agreement
Annual Report 2022 | Stingray Group Inc. | 33
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(in thousands of Canadian dollars, except
per share amounts)
Revenues
Operating expenses
Depreciation, amortization and
write-off
Net finance expense (income)(1)
Change in fair value of investments
Acquisition, legal, restructuring and
other expenses
Income before income taxes
Income taxes
Net income
3 months
March 31, 2022
Q4 2022
March 31, 2021
Q4 2021
March 31, 2022
Fiscal 2022
$
% of
revenues
$
% of
revenues
$
% of
revenues
12 months
March 31, 2021
Fiscal 2021
Recast (3)
% of
revenues
$
March 31, 2020
Fiscal 2020
$
% of
revenues
72,644
53,593
100.0 %
73.8 %
59,740
38,365
100.0 %
64.2 %
282,626 100.0 % 247,857 100.0 % 306,721 100.0 %
189,954 67.1 % 140,876 56.8 % 190,381 62.0 %
9,239
(769)
12
12.7 %
(1.1) %
0.0 %
9,821
(7,284)
–
16.4 %
(12.2) %
0.0 %
35,544 12.6 %
2.2 %
6,119
2
0.0 %
5,912
4,657
191
4,466
8.1 %
6.5 %
0.3 %
6.2 %
2,714
16,124
4,047
12,077
8,707
3.1 %
42,300 15.0 %
3.2 %
33,287 11.8 %
9,013
38,692 15.6 % 40,302 13.1 %
(0.5) % 42,822 14.0 %
(1,199)
(6,550)
3,787
(2.1) %
1.5 %
4,637
1.9 % 24,104
61,064 24.7 % 15,662
15,960
1,692
6.5 %
45,104 18.2 % 13,970
7.9 %
5.1 %
0.5 %
4.6 %
28.9 %
16.2 %
30.5 %
16.3 %
23,638
11,981
24,514
13,808
326,405
Adjusted EBITDA(2)
Adjusted Net income(2)
Cash flow from operating activities
Adjusted free cash flow(2)
Net debt(2)
Net debt to Pro Forma Adjusted
EBITDA(2)
21,023
11,780
22,127
11,833
369,082
3.16x
Net income per share basic
Net income per share diluted
Adjusted Net income per share basic(2)
Adjusted Net income per share diluted(2)
Cash flow from operating activities per
share basic
Cash flow from operating activities per
share diluted
Adjusted free cash flow per share
Basic and diluted(2)
0.06
0.06
0.17
0.17
0.32
0.31
0.17
–
–
–
–
–
–
–
–
–
4.5 %
27.1 %
6.8 %
20.3 %
39.6 %
20.1 %
41.0 %
23.1 %
–
–
–
–
–
–
–
–
–
2.81x
0.17
0.17
0.17
0.16
0.34
0.34
0.19
99,269 35.1 % 114,268 46.1 % 118,086 38.5 %
56,389 20.0 %
62,855 25.4 % 55,908 18.2 %
83,663 29.6 % 104,246 42.1 % 88,145 28.7 %
74,359 30.0 % 78,350 25.5 %
56,933 20.1 %
369,082
–
326,405
3.16x
0.47
0.47
0.79
0.79
1.18
1.17
0.80
–
–
–
–
–
–
–
–
2.81x
0.62
0.61
0.86
0.86
1.42
1.42
1.01
–
–
–
–
–
–
–
–
–
361,251
3.01x
0.18
0.18
0.74
0.74
1.16
1.16
1.03
–
–
–
–
–
–
–
–
–
Revenues by segment
Broadcasting and Commercial Music
Radio
Revenues
Revenues by geography
Canada
United States
Other Countries
Revenues
45,584
27,060
72,644
62.7 %
37.3 %
100.0 %
35,780
23,960
59,740
59.9 %
40.1 %
100.0 %
159,082 56.3 % 150,047 60.5 % 154,466 50.4 %
123,544 43.7 %
97,810 39.5 % 152,255 49.6 %
282,626 100.0 % 247,857 100.0 % 306,721 100.0 %
40,456
19,145
13,043
72,644
55.6 %
26.4 %
18.0 %
100.0 %
35,594
10,366
13,780
59,740
59.6 %
17.3 %
23.1 %
100.0 %
177,739 62.9 % 150,729 60.8 % 209,843 68.4 %
40,417 16.3 % 37,987 12.4 %
56,711 22.9 % 58,891 19.2 %
282,626 100.0 % 247,857 100.0 % 306,721 100.0 %
52,403 18.5 %
52,484 18.6 %
Notes:
(1)
Interest paid during Q4 2022 was $3.4 million (Q4 2021; $5.1 million) and $14.4 million during Fiscal 2022 (Fiscal 2021; $18.1 million and Fiscal 2020;
$17.4 million)
(2) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page 35
and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
(3) The 2021 comparative figures have been recast to adjust certain contracts that were recognized on a gross basis that should have been recognized on
net basis. This had the effect of reducing revenues and operating expenses of the Broadcasting and commercial music segment from previously
recorded $151.7 million and $74.2 million to recast $150.0 million $72.6 million, respectively. Consolidated revenues and operating expenses have been
reduced from $249.5 million to $247.9 million and $142.5 million to $140.9 million, respectively.
Annual Report 2022 | Stingray Group Inc. | 34
SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES
Adjusted EBITDA, Pro Forma Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net income,
Adjusted Net income per share, Adjusted free cash flow, Adjusted free cash flow per share, Net debt and Net debt to Pro
Forma Adjusted EBITDA ratio are non-IFRS measures that the Corporation uses to assess its operating performance. Refer to
“Supplemental information on Non-IFRS Measures” on page 54.
The following tables show the reconciliation of Net income to Adjusted EBITDA, to Adjusted Net income, LTM Adjusted
EBITDA and to Pro Forma Adjusted EBITDA:
3 months
12 months
(in thousands of Canadian dollars)
Net income
Net finance expense (income)
Change in fair value of investments
Income taxes
Depreciation and write-off of property and equipment
Depreciation of right-of-use assets
Amortization of intangible assets
Share-based compensation
Performance and deferred share unit expense
Acquisition, legal, restructuring and other expenses
Adjusted EBITDA
Net finance expense (income), excluding mark-to-market
losses (gains) on derivative financial instruments
Income taxes
Depreciation of property and equipment and write-off
Depreciation of right-of-use assets
Income taxes related to change in fair value of investments,
share-based compensation, performance and deferred
share unit expense, amortization of intangible assets, mark-
to-market losses (gains) on derivative financial instruments
and acquisition, legal, restructuring and other expenses
Adjusted Net income
March 31,
2022
Q4 2022
4,466
(769)
12
191
3,862
1,201
4,176
222
1,750
5,912
21,023
(1,381)
(191)
(3,862)
(1,201)
March 31,
2021
Q4 2021
12,077
(7,284)
–
4,047
3,082
1,436
5,303
235
2,028
2,714
23,638
(3,214)
(4,047)
(3,082)
(1,436)
March 31,
2022
Fiscal 2022
33,287
6,119
2
9,013
11,069
5,076
19,399
798
5,799
8,707
99,269
March 31,
2021
Fiscal 2021
45,104
(1,199)
3,787
15,960
11,653
5,660
21,379
851
6,436
4,637
114,268
(9,516)
(9,013)
(11,069)
(5,076)
(12,619)
(15,960)
(11,653)
(5,660)
(2,608)
11,780
122
11,981
(8,206)
56,389
(5,521)
62,855
(in thousands of Canadian dollars)
LTM Adjusted EBITDA
Synergies and Adjusted EBITDA for the months prior to the business acquisitions
which are not already reflected in the results
COVID-19 credits allocated due to mandated store closures
Pro Forma Adjusted EBITDA
March 31,
2022
Fiscal 2022
99,269
16,000
1,535
116,804
March 31,
2021
Fiscal 2021
114,268
190
1,825
116,283
Annual Report 2022 | Stingray Group Inc. | 35
The following table shows the reconciliation of Cash flow from operating activities to Adjusted free cash flow:
(in thousands of Canadian dollars)
Cash flow from operating activities
Add / Less :
Acquisition of property and equipment
Acquisition of intangible assets other than internally
developed intangible assets
Addition to internally developed intangible assets
Interest paid
Repayment of lease liabilities
Net change in non-cash operating working capital items
Unrealized loss (gain) on foreign exchange
Acquisition, legal, restructuring and other expenses
Adjusted free cash flow
3 months
12 months
March 31,
2022
Q4 2022
22,127
March 31,
2021
Q4 2021
24,514
March 31,
2022
Fiscal 2022
83,663
March 31,
2021
Fiscal 2021
104,246
(2,443)
(1,929)
(9,061)
(5,690)
(355)
(593)
(3,391)
(1,074)
(7,571)
(779)
5,912
11,833
(194)
(1,367)
(5,142)
(1,099)
(344)
(3,345)
2,714
13,808
(1,134)
(6,854)
(14,384)
(4,815)
24
787
8,707
56,933
(1,313)
(6,428)
(18,053)
(5,011)
10,632
(8,661)
4,637
74,359
The following table shows the calculation of Net debt and Net debt to Pro Forma Adjusted EBITDA ratio:
(in thousands of Canadian dollars)
Credit facilities
Subordinated debt
Cash and cash equivalents
Net debt
Net debt to Pro Forma Adjusted EBITDA
March 31,
2022
358,203
25,442
(14,563)
369,082
3.16
March 31,
2021
303,704
31,741
(9,040)
326,405
2.81
Annual Report 2022 | Stingray Group Inc. | 36
FINANCIAL RESULTS FOR THE QUARTERS AND YEARS ENDED
MARCH 31, 2022 AND 2021
CONSOLIDATED PERFORMANCE
Revenues
Revenues are detailed as follows:
(in thousands of Canadian dollars)
2022
2021 % Change
2022
2021 % Change
3 months
12 months
Revenues by geography
Canada
United States
Other Countries
Revenues
Global
40,456
19,145
13,043
72,644
35,594
10,366
13,780
59,740
13.7
84.7
(5.3)
21.6
177,739
52,403
52,484
282,626
150,729
40,417
56,711
247,857
17.9
29.7
(7.5)
14.0
Revenues in Q4 2022 increased $12.9 million or 21.6% to $72.6 million, from $59.7 million for Q4 2021. The increase was
primarily due to the acquisition of InStore Audio Network, to the gradual easing of COVID-19 restrictions and the return to
normal commercial operations, and to an increase in equipment and installation sales related to digital signage.
Revenues for Fiscal 2022 increased $34.7 million or 14.0% to $282.6 million, from $247.9 million for Fiscal 2021. The increase
was primarily due to the gradual easing of COVID-19 restrictions and the return to normal commercial operations and to the
acquisition of InStore Audio Network.
Canada
Revenues in Canada in Q4 2022 increased $5.0 million or 13.7% to $40.5 million, from $35.5 million for Q4 2021. Revenues
in Canada for Fiscal 2022 increased $26.9 million or 17.9% to $177.7 million, from $150.8 million for Fiscal 2021. Both increases
were primarily due to the gradual easing of COVID-19 restrictions and the return to normal commercial operations.
United States
Revenues in the United States in Q4 2022 increased $8.7 million or 84.7% to $19.1 million, from $10.4 million for Q4 2021.
The increase was primarily due the acquisition of InStore Audio Network and to an increase in subscription revenues.
Revenues in the United States for Fiscal 2022 increased $12.0 million or 29.7% to $52.4 million, from $40.4 million for
Fiscal 2021. The increase was primarily due to the acquisition of InStore Audio Network, to an increase in subscription
revenues and to the acquisition of Calm Radio.
Other Countries
Revenues in Other countries in Q4 2022 decreased $0.8 million or 5.3% to $13.0 million, from $13.8 million for Q4 2021. The
decrease was primarily due to a negative foreign exchange rate impact.
Revenues in Other countries for Fiscal 2022 decreased $4.2 million or 7.5% to $52.5 million, from $56.7 million for Fiscal 2021.
The decrease was primarily due to a negative foreign exchange rate impact and to a decrease in audio channel revenues.
Annual Report 2022 | Stingray Group Inc. | 37
Operating expenses
Operating expenses in Q4 2022 increased $15.2 million or 39.7% to $53.6 million, from $38.4 million for Q4 2021. The increase
was mainly due to higher operating and variable expenses, and to lower Canadian Emergency Wage Subsidy (CEWS)
($4.3 million), all related to the gradual easing of COVID-19 restrictions and the return to normal commercial operations.
Operating expenses for Fiscal 2022 increased $49.1 million or 34.8% to $190.0 million, from $140.9 million for Fiscal 2021.
The increase was primarily due to lower CEWS ($19.7 million) and to higher operating and variable expenses, all related to the
gradual easing of COVID-19 restrictions and the return to normal commercial operations.
Adjusted EBITDA(1)
Adjusted EBITDA in Q4 2022 decreased $2.6 million or 11.1% to $21.0 million from $23.6 million for Q4 2021. Adjusted EBITDA
margin was 28.9% compared to 39.6% for Q4 2021. The decrease was mainly due to lower CEWS and to higher operating
costs due to the return to normal commercial operations, partially offset by higher revenues in the Radio segment, and by the
acquisition of InStore Audio Network.
Adjusted EBITDA for Fiscal 2022 decreased $15.0 million or 13.1% to $99.3 million from $114.3 million for Fiscal 2021.
Adjusted EBITDA margin was 35.1% compared to 46.1% for Fiscal 2021. The decrease in Adjusted EBITDA was primarily due
to lower CEWS and to higher operating costs, partially offset by an increase in revenues in the Radio segment, all caused by
the gradual easing of COVID-19 restrictions and the return to normal commercial operations.
Depreciation, amortization and write off
Depreciation, amortization and write off decreased $0.6 million or 5.9% to $9.2 million from $9.8 million for Q4 2021.
Depreciation, amortization and write off for Fiscal 2022 decreased $3.2 million or 8.1% to $35.5 million, from $38.7 million for
Fiscal 2021. Both decreases were primarily due to less intangible assets to amortize compared to the prior period as certain
intangible assets are fully amortized.
Net finance expense (income)
Net finance income for Q4 2022 was $0.8 million compared to $7.3 million for Q4 2021. The decrease was mainly due to lower
gains on derivative financial instruments and on foreign exchange, partially offset by a gain on the change in fair value of
contingent consideration.
Net finance expense for Fiscal 2022 was $6.1 million compared to a Net finance income of $1.2 million for Fiscal 2021. The
variance was mainly related to a lower gain on derivative financial instruments and to a foreign exchange loss, partially offset
by a decrease in the fair value of contingent consideration and by lower interest expense.
Change in fair value of investments
In Q4 2022 and for cumulative Fiscal 2022, there was no gain or loss on fair value of investments as the securities held in
AppDirect Inc. were sold in Q3 2021. Losses of $2.4 million for Q3 2021 and $3.8 million for cumulative Fiscal 2021 were
recorded, both related to the sale of securities held in AppDirect Inc. which had a lower proceed than the estimated fair value
before the transaction occurred.
Note:
(1) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page 35
and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
Annual Report 2022 | Stingray Group Inc. | 38
Acquisition, legal, restructuring and other expenses
(in thousands of Canadian dollars)
Acquisition
Legal
Restructuring and other
Acquisition, legal, restructuring
and other expenses
2022
39
1,328
4,545
3 months
2021
Change $
2022
12 months
2021
Change $
1,107
424
1,183
(1,068)
904
3,362
282
2,505
5,920
2,439
623
1,575
(2,157)
1,882
4,345
5,912
2,714
3,198
8,707
4,637
4,070
In cumulative Fiscal 2021, a gain on legal expenses was recorded due to the reversal of a provision for professional fees due
to a change in estimates in the quarter.
Income taxes
The income tax expense recognized in comprehensive income was $0.2 million for Q4 2022 compared to $4.0 million for
Q4 2021. The effective tax rate for Q4 2022 was 4.1% compared to 25.1% for Q4 2021. The income taxes expense recognized
in comprehensive income was $9.0 million for Fiscal 2022 compared to $16.0 million for Fiscal 2021. The effective tax rate for
Fiscal 2022 was 21.3% compared to 26.1% for Fiscal 2021. Both decreases in the effective tax rate were due to the variance
in permanent differences.
Net income and Net income per share
Net income in Q4 2022 was $4.5 million ($0.06 per share) compared to $12.1 million ($0.17 per share) for Q4 2021. The
decrease was mainly related to a lower gain on derivative financial instruments and on foreign exchange, partially offset by
lower income tax expense.
Net income for Fiscal 2022 was $33.3 million ($0.47 per share) compared to $45.1 million ($0.61 per share) for Fiscal 2021.
The decrease was mainly related to lower operating results, to a lower gain on derivative financial instruments and to a foreign
exchange loss, partially offset by a decrease in the fair value of contingent consideration, by lower income tax expense and
by a loss on the fair value of investment in Fiscal 2021.
Adjusted Net income(1) and Adjusted Net income per share(1)
Adjusted Net income in Q4 2022 was $11.8 million ($0.17 per share), compared to $12.0 million ($0.16 per share) for Q4 2021.
The decrease was mainly due to a lower gain on foreign exchange and to lower operating results, partially offset by a decrease
in the fair value of contingent consideration.
Adjusted Net income for Fiscal 2022 was $56.4 million ($0.79 per share), compared to $62.9 million ($0.86 per share) for
Fiscal 2021. The decrease was mainly due to lower operating results and to a foreign exchange loss, partially offset by a
decrease in the fair value of contingent consideration and by lower income tax and interest expense.
Note:
(1) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page 35
and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
Annual Report 2022 | Stingray Group Inc. | 39
BUSINESS SEGMENT PERFORMANCE
BROADCASTING AND COMMERCIAL MUSIC
(in thousands of Canadian dollars)
Revenues
Operating expenses
Adjusted EBITDA(1)
Adjusted EBITDA margin(1)
Revenues
3 months
12 months
2022
45,584
31,060
14,524
31.9%
2021 % Change
27.4
59.4
(10.9)
(30.0)
35,780
19,483
16,297
45.5%
2022
159,082
100,767
58,315
36.7%
2021 % Change
6.0
38.8
(24.7)
(29.0)
150,047
72,594
77,453
51.6%
In Q4 2022, Broadcasting and Commercial Music revenues increased $9.8 million or 27.4% to $45.6 million, from $35.8 million
for Q4 2021. The increase was primarily due to the acquisition of InStore Audio Network, to the gradual easing of COVID-19
restrictions and the return to normal commercial operations, and to an increase in equipment and installation sales related to
digital signage.
Broadcasting and Commercial Music revenues for Fiscal 2022 increased $9.1 million or 6.0% to $159.1 million from
$150.0 million for Fiscal 2021. The increase was primarily due to the acquisition of InStore Audio Network and of Calm Radio,
and to the return to normal commercial operations, partially offset by a negative foreign exchange rate impact.
Adjusted EBITDA(1)
In Q4 2022, Broadcasting and Commercial Music Adjusted EBITDA decreased $1.8 million or 10.9% to $14.5 million from
$16.3 million for Q4 2021. The decrease in Adjusted EBITDA was primarily due to higher operating costs and reduced CEWS,
caused by the gradual easing of COVID-19 restrictions and the return to normal commercial operations, and to a decrease in
gross margin related to product mix, partially offset by the acquisition of InStore Audio Network.
Broadcasting and Commercial Music Adjusted EBITDA for Fiscal 2022 decreased $19.1 million or 24.7% to $58.3 million from
$77.4 million for Fiscal 2021. The decrease in Adjusted EBITDA was primarily due to reduced CEWS and higher operating
costs, caused by the gradual easing of COVID-19 restrictions and the return to normal commercial operations, to a decrease
in gross margin related to product mix and to a gain related to a settlement with SOCAN in Fiscal 2021 (refer to page 49),
partially offset by the acquisition of InStore Audio Network and Calm Radio.
Note:
(1) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page 35
and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
Annual Report 2022 | Stingray Group Inc. | 40
RADIO
(in thousands of Canadian dollars)
Revenues
Operating expenses
Adjusted EBITDA(1)
Adjusted EBITDA margin(1)
Revenues
3 months
12 months
2022
27,060
19,203
7,857
29.0%
2021 % Change
12.9
25.2
(8.9)
(19.3)
23,960
15,340
8,620
36.0%
2022
123,544
77,309
46,235
37.4%
2021 % Change
26.3
36.8
12.0
(11.3)
97,810
56,528
41,282
42.2%
Radio revenues are derived from the sale of advertising airtime, which is subject to the seasonal fluctuations of the Canadian
radio industry. Accordingly, the first and third quarter results tend to be the strongest and the second and fourth quarter results
tend to be the weakest in a fiscal year. However, for Fiscal 2021, Radio revenues did not follow historical patterns due to the
ongoing impact of the COVID-19 pandemic.
In Q4 2022, Radio revenues increased $3.1 million or 12.9% to $27.1 million from $24.0 million for Q4 2021. Radio revenues
for Fiscal 2022 increased $25.7 million or 26.3% to $123.5 million from $97.8 million for Fiscal 2021. Both increases were
largely due to the gradual easing of COVID-19 restrictions and the return to normal commercial operations.
Adjusted EBITDA(1)
In Q4 2022, Radio Adjusted EBITDA decreased $0.8 million or 8.9% to $7.9 million from $8.7 million for Q4 2021. The decrease
was primarily due to reduced CEWS, partially offset by higher revenues, all related to the gradual easing of COVID-19
restrictions and the return to normal commercial operations.
Radio Adjusted EBITDA for Fiscal 2022 increased $4.9 million or 12.0% to $46.2 million from $41.3 million for Fiscal 2021. The
increase was primarily due to higher revenues, partially offset by reduced CEWS, all related to the gradual easing of
COVID- 19 restrictions and the return to normal commercial operations.
CORPORATE
(in thousands of Canadian dollars)
Operating expenses
Adjust:
Share-based compensation
Performance and deferred share
unit expense
Adjusted EBITDA(1)
Adjusted EBITDA(1)
3 months
12 months
2022
3,330
2021 % Change
(6.0)
3,542
2022
11,878
2021 % Change
1.1
11,754
(222)
(235)
(5.5)
(798)
(851)
(6.2)
(1,750)
(1,358)
(2,028)
(1,279)
(13.7)
6.2
(5,799)
(5,281)
(6,436)
(4,467)
(9.9)
18.2
Corporate Adjusted EBITDA represents the head office operating expenses less the share-based compensation and
performance and deferred share unit expense.
Note:
(1) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page 35
and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
Annual Report 2022 | Stingray Group Inc. | 41
Quarterly results
Revenues fluctuated over the last eight quarters from $52.1 million in the first quarter of Fiscal 2021 to $72.6 million in the
fourth quarter of Fiscal 2022. The increases in Q2 2021 and Q3 2021 are due to progressive improvements in Radio advertising
bookings as provinces begin lifting restrictions on social and economic activity and to normal business seasonality. The
decrease in Q4 2021 is due to normal business seasonality. The increase in Q1 2022 was due to the gradual easing of
COVID-19 restrictions. The increase in Q2 2022 was due to the gradual easing of COVID-19 restrictions, to increased
equipment and installation sales related to digital signage and to the acquisition of Calm Radio. In Q3 2022, the increase was
mainly due to normal business seasonality and to an increase in subscription revenues. The decrease in Q4 2022 is mostly
due to normal business seasonality, partially offset by the acquisition of InStore Audio Network.
Adjusted EBITDA(1) fluctuated over the last eight quarters from $25.5 million in the first quarter of Fiscal 2021 to $21.0 million
in the fourth quarter of Fiscal 2022. The increase in Q2 2021 was due to progressive improvements in Radio advertising
bookings as provinces begin lifting restrictions on social and economic activity, partially offset by higher operating costs and
lower CEWS. The increase in Q3 2021 was due to continuing improvements in Radio advertising bookings and normal business
seasonality and to a settlement with SOCAN (refer to page 49), partially offset by a special bonus to employees, lower CEWS
and higher operating costs. The decrease in Q4 2021 was due to normal business seasonality and to a settlement with SOCAN
in Q3 2021, partially offset by a special bonus to employees in Q3 2021. The increase in Q1 2022 was due to normal business
seasonality and change in product mix, partially offset by higher operating costs. The increase in Q2 2022 was due to higher
operating results, partially offset by reduced CEWS. In Q3 2022, the increase was mainly due to normal business seasonality.
The decrease in Q4 2022 was mainly due to normal business seasonality and to reduced CEWS, partially offset by the
acquisition of InStore Audio Network.
Net income fluctuated over the last eight quarters from a net income of $7.0 million in the first quarter of Fiscal 2021 to
$4.5 million in the fourth quarter of Fiscal 2022. In Q2 2021, the increase was due to higher operating results and positive
change in mark-to-market on derivative financial instruments, partially offset by higher income tax and legal expenses. In
Q3 2021, the increase was due to higher operating results, positive change in the fair value of contingent consideration, and
higher gain in mark-to-market on derivative financial instruments, partially offset by a negative change in fair value of
investments related to the sale of securities held in AppDirect Inc. In Q4 2021, the decrease was due to lower operating results,
partially offset by higher gains in mark-to-market on derivative financial instruments. In Q1 2022, the decrease was due to a
negative change in fair value of mark-to-market on derivative financial instruments and a lower foreign exchange gain, partially
offset by lower income tax expense, and lower acquisition and restructuring costs. In Q2 2022, the increase was due a positive
change in the fair value of contingent consideration, a positive change in fair value of derivative financial instruments and higher
operating results, partially offset by a foreign exchange loss. In Q3 2022, the increase is mainly due to higher operating results,
partially offset by a lower gain related to the change in the fair value of contingent consideration. The decrease in Q4 2022
was primarily due to lower operating results due to normal business seasonality and to higher restructuring and other expenses,
partially offset by lower income tax expense.
Note:
(1) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page 35
and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
Annual Report 2022 | Stingray Group Inc. | 42
Summary of Consolidated Quarterly Results
(in thousands of Canadian dollars,
except per share amounts)
Revenues by segment
Broadcasting and Commercial
Music
Radio
Total revenues
Revenues by geography
Canada
United States
Other countries
Total revenues
Adjusted EBITDA(1)
LTM Adjusted EBITDA(1)
Net income
Net income per share basic and
diluted
Adjusted Net income(1)
Adjusted Net income per share
basic(1)
Adjusted Net income per share
diluted(1)
Cash flow from operations
Adjusted free Cash Flow(1)
Quarterly dividend
March 31,
2022
FY2022
Dec. 31,
2021
Recast(2)
FY2022
Sept. 30,
2021
Recast(2)
FY2022
June 30,
2021
Recast(2)
FY2022
March 31,
2021
Recast(2)
FY2021
Dec. 31,
2020
Recast(2)
FY2021
Sept. 30,
2020
Recast(2)
FY2021
June 30,
2020
Recast(2)
FY2021
3 months
45,584
27,060
72,644
40,085
34,943
75,028
38,392
32,311
70,703
35,021
29,230
64,251
35,780
23,960
59,740
39,623
32,379
72,002
38,887
25,125
64,012
35,757
16,346
52,103
40,456
19,145
13,043
72,644
21,023
99,269
4,466
49,286
12,588
13,154
75,028
46,659
10,853
13,191
70,703
41,338
9,817
13,096
64,251
35,594
10,366
13,780
59,740
47,368
10,130
14,504
72,002
39,710
9,809
14,493
64,012
28,057
10,112
13,934
52,103
28,504
101,884
12,546
25,587
107,373
12,075
24,155
112,942
4,200
23,638
114,268
12,077
33,993
118,847
14,118
31,156
115,887
11,888
25,481
112,402
7,021
0.06
11,780
0.18
17,048
0.17
16,323
0.06
11,238
0.17
11,981
0.19
21,054
0.16
16,311
0.10
13,509
0.17
0.24
0.23
0.16
0.17
0.29
0.22
0.18
0.17
22,127
11,833
0.075
0.24
24,762
14,731
0.075
0.23
20,437
15,362
0.075
0.16
16,337
15,007
0.075
0.16
24,514
13,808
0.075
0.29
16,333
19,645
0.075
0.22
25,406
22,861
0.075
0.18
37,993
18,045
0.075
Notes:
(1) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page 35
and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
(2) The figures of the prior quarters of Fiscal 2022 and 2021 comparative figures have been recast to adjust certain contracts that were recognized on a
gross basis that should have been recognized on net basis. This had the effect of reducing revenues and operating expenses of the Broadcasting and
commercial music segment from previously recorded. Revenues have been recast from $41.0 million to $40.1 million for Q3 2022, from $39.1 million to
38.4 million for Q2 2022, from $35.6 million to $35.0 million for Q1 2022, from $36.4 million to $35.8 million for Q4 2021, from $40.2 million to $39.6
million for Q3 2021, from $39.2 million to $38.9 million for Q2 2021 and from $35.9 million to $35.8 million for Q1 2021, respectively.
Annual Report 2022 | Stingray Group Inc. | 43
Reconciliation of Quarterly Non-IFRS Measures
Adjusted EBITDA, Pro Forma Adjusted EBITDA, LTM Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net income,
Adjusted Net income per share, Adjusted free cash flow, Adjusted free cash flow per share, Net debt and Net debt to Pro
Forma Adjusted EBITDA ratio are non-IFRS measures that the Corporation uses to assess its operating performance. Refer to
“Supplemental information on Non-IFRS Measures” on page 54.
The following tables show the reconciliation of Net income to Adjusted EBITDA, to Adjusted Net income, to LTM Adjusted
EBITDA and to Pro Forma Adjusted EBITDA:
(in thousands of Canadian dollars)
Net income
Net finance expense (income)
Change in fair value of investments
Income taxes
Depreciation and write-off of
property and equipment
Depreciation of right-of-use assets
Amortization of intangible assets
Share-based compensation
Performance and deferred share
March 31,
2022
FY2022
4,466
(769)
12
191
Dec. 31,
2021
FY2022
12,546
1,999
3
4,115
Sept. 30,
2021
FY2022
12,075
(364)
(13)
2,874
3 months
June 30,
2021
FY2022
4,200
5,253
–
1,833
March 31,
2021
FY2021
12,077
(7,284)
–
4,047
Dec. 31,
2020
FY2021
14,118
(1,290)
2,434
4,900
Sept. 30,
2020
FY2021
11,888
2,774
461
4,654
June 30,
2020
FY2021
7,021
4,601
892
2,359
3,862
1,201
4,176
222
2,237
1,281
4,669
216
2,446
1,298
4,927
196
2,524
1,296
5,627
164
3,082
1,436
5,303
235
2,894
1,399
5,478
231
2,976
1,413
5,188
219
2,701
1,412
5,410
166
unit expense
1,750
659
1,300
2,090
2,028
1,780
1,312
1,316
Acquisition, legal, restructuring and
other expenses
Adjusted EBITDA
Net finance expense (income),
excluding mark-to-market losses
(gains) on derivative financial
instruments
Income taxes
Depreciation and write-off of
property and equipment
Depreciation of right-of-use assets
Income taxes related to change in
fair value of investments, share-
based compensation,
performance and deferred share
unit expense, amortization of
intangible assets, mark-to-
market losses (gains) on
derivative financial instruments
and acquisition, legal,
restructuring and other
expenses
Adjusted Net income
(in thousands of Canadian dollars)
LTM Adjusted EBITDA
Synergies and Adjusted
EBITDA for the months prior
to the business acquisitions
which are not already
reflected in the results
COVID-19 credits allocated
due to mandated store
closures
Pro Forma Adjusted EBITDA
5,912
21,023
779
28,504
848
25,587
1,168
24,155
2,714
23,638
2,049
33,993
271
31,156
(397)
25,481
(1,381)
(191)
(3,862)
(1,201)
(2,247)
(4,115)
(2,237)
(1,281)
(1,153)
(2,874)
(2,446)
(1,298)
(4,735)
(1,833)
(2,524)
(1,296)
(3,214)
(4,047)
(3,082)
(1,436)
(1,727)
(4,900)
(2,894)
(1,399)
(4,340)
(4,654)
(2,976)
(1,413)
(3,338)
(2,359)
(2,701)
(1,412)
(2,608)
11,780
(1,576)
17,048
(1,493)
16,323
(2,529)
11,238
122
11,981
(2,019)
21,054
(1,462)
16,311
(2,162)
13,509
3 months
March 31,
2022
FY2022
Dec. 31,
2021
FY2022
Sept. 30,
2021
FY2022
June 30,
2021
FY2022
March 31,
2021
FY2021
Dec. 31,
2020
FY2021
Sept. 30,
2020
FY2021
June 30,
2020
FY2021
99,269
101,884
107,373
112,942
114,268
118,847
115,887
112,402
16,000
19,500
1,428
842
190
1,043
2,466
3,490
1,535
116,804
3,051
124,435
2,492
111,293
1,369
115,153
1,825
116,283
1,000
120,890
-
118,353
-
115,892
Annual Report 2022 | Stingray Group Inc. | 44
The following table shows the reconciliation of Cash flow from operating activities to Adjusted free cash flow:
(in thousands of Canadian dollars)
Cash flow from operating
activities
Acquisition of property and
equipment
Acquisition of intangible assets
other than internally developed
intangible assets
Addition to internally developed
intangible assets
Interest paid
Repayment of lease liabilities
Net change in non-cash operating
March 31,
2022
FY2022
Dec. 31,
2021
FY2022
3 months
Sept. 30,
2021
FY2022
June 30,
2021
FY2022
March 31,
2021
FY2021
Dec. 31,
2020
FY2021
Sept. 30,
2020
FY2021
June 30,
2020
FY2021
22,127
24,762
20,437
16,337
24,514
16,333
25,406
37,993
(2,443)
(2,181)
(2,360)
(2,077)
(1,929)
(1,849)
(1,209)
(703)
(355)
(276)
(305)
(198)
(194)
(649)
(212)
(258)
(593)
(3,391)
(1,074)
(2,058)
(3,868)
(1,130)
(2,050)
(3,234)
(1,526)
(2,153)
(3,891)
(1,085)
(1,367)
(5,142)
(1,099)
(1,838)
(6,312)
(1,255)
(1,671)
(2,912)
(1,443)
(1,552)
(3,687)
(1,214)
working capital items
(7,571)
(1,533)
2,323
6,805
(344)
15,858
6,530
(11,412)
Unrealized loss (gain) on foreign
exchange
Acquisition, legal, restructuring and
other expenses (income)
Adjusted free cash flow
(779)
236
1,229
101
(3,345)
(2,692)
(1,899)
(725)
5,912
11,833
779
14,731
848
15,362
1,168
15,007
2,714
13,808
2,049
19,645
271
22,861
(397)
18,045
The following table shows the calculation of Net debt and of Net debt to Pro Forma Adjusted EBITDA ratio:
3 months
(in thousands of Canadian dollars)
Credit facilities
Subordinated debt
Cash and cash equivalents
Portion of the balance payable on
acquisition of InStore Audio
Network paid on January 5,
2022
Net debt
Net debt to Pro Forma Adjusted
March 31,
2022
FY2022
358,203
25,442
(14,563)
Dec. 31,
2021
FY2022
317,957
25,416
(11,266)
Sept. 30,
2021
FY2022
313,172
31,791
(8,475)
June 30,
2021
FY2022
305,779
31,766
(6,416)
March 31,
2021
FY2021
303,704
31,741
(9,040)
Dec. 31,
2020
FY2021
290,353
39,715
(9,827)
Sept. 30,
2020
FY2021
299,361
39,690
(10,906)
June 30,
2020
FY2021
303,504
39,665
(6,393)
–
369,082
42,471
374,578
–
336,488
–
331,129
–
326,405
–
320,241
–
328,145
–
336,776
EBITDA
3.16
3.01
3.02
2.88
2.81
2.65
2.77
2.91
Annual Report 2022 | Stingray Group Inc. | 45
LIQUIDITY AND CAPITAL RESOURCES FOR THE QUARTERS AND YEARS ENDED
MARCH 31, 2022 AND 2021
(in thousands of Canadian dollars)
Operating activities
Financing activities
Investing activities
Net change in cash
Cash – beginning of period
Cash – end of period
Adjusted free cash flow(1)
Operating Activities
3 months
12 months
2022
22,127
(15,430)
(3,400)
3,297
11,266
14,563
11,833
2021
24,514
(21,811)
(3,490)
(787)
9,827
9,040
13,808
2022
83,663
(59,510)
(18,630)
5,523
9,040
14,563
56,933
2021
104,246
(103,148)
5,430
6,528
2,512
9,040
74,359
Cash flow generated from operating activities amounted to $22.1 million for Q4 2022 compared to $24.5 million for Q4 2021.
The decrease was mainly due to higher restructuring and other expenses, to a lower foreign exchange gain and to lower
operating results, partially offset by the positive change in non-cash operating items.
Cash flow generated from operating activities amounted to $83.7 million for Fiscal 2022 compared to $104.2 million for
Fiscal 2021. The decrease was mainly due to lower operating results, to a foreign exchange loss and to higher restructuring
and other expenses, partially offset by the positive change in non-cash operating items.
Financing Activities
Net cash flow used in financing activities amounted to $15.4 million for Q4 2022 compared to $21.8 million for Q4 2021. The
decrease was mainly related to higher credit facilities borrowing, to a partial repayment of the subordinated debt in Q4 2021
and to less shares repurchased, partially offset by the repayment of the balance payable for the acquisition of InStore Audio
Network.
Net cash flow used in financing activities amounted to $59.5 million for Fiscal 2022 compared to $103.1 million for Fiscal 2021.
The decrease was mainly due to higher credit facilities borrowing, partially offset by the repayment of the balance payable for
the acquisition of InStore Audio Network.
Investing Activities
Net cash flow used in investing activities amounted to $3.4 million for Q4 2022 compared to $3.5 million for Q4 2021. The
decrease was primarily due to less internally developed intangibles assets, partially offset by higher acquisitions of property
and equipment.
Net cash flow used in investing activities amounted to $18.6 million for Fiscal 2022 compared to net cash flow generated by
investing activities of $5.4 million for Fiscal 2021. The net change was primarily due to the $18.9 million proceeds from the
sale of securities held in AppDirect Inc. during Fiscal 2021 and to higher acquisitions of property and equipment.
Adjusted free cash flow(1)
Adjusted free cash flow generated in Q4 2022 amounted to $11.8 million compared to $13.8 million for Q4 2021. The decrease
was mainly related to lower operating results, partially offset by lower interest paid.
Adjusted free cash flow generated in Fiscal 2022 amounted to $56.9 million compared to $74.4 million for Fiscal 2021. The
decrease was mainly related to lower operating results and to higher capital expenditures, partially offset by lower interest
paid.
Note
(1) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page 35
and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
Annual Report 2022 | Stingray Group Inc. | 46
Contractual Obligations
The Corporation is committed under the terms of contractual obligations with various expiration dates, primarily the rental of
properties and equipment, broadcast licences commitments and financial obligations under our credit agreement and
subordinated debt. The following table summarizes the Corporation’s undiscounted significant contractual obligations as at
March 31, 2022, including its estimated payments and commitments related to leasing contracts:
(in thousands of Canadian dollars)
Lease liabilities
Operating obligations
Broadcast licences commitments
Credit facilities
Subordinated debt
Accounts payables and accrued liabilities
Other liabilities
Total obligations
Broadcast licences and royalties
Less than
1 year
1,439
1,991
15,285
7,500
–
67,016
8,136
101,367
1 to 5
years
19,171
2,049
12,731
351,836
25,600
–
28,153
439,540
More
than 5
years
16,308
974
–
–
–
–
2,251
19,533
Total
36,918
5,014
28,016
359,336
25,600
67,016
38,540
560,440
A condition of the broadcast licences owned by the Corporation is to commit to fund Canadian Content Development (“CCD”)
over the initial term of the licences, which is usually seven years. The Corporation must also pay royalties for the use of music
for the majority of its music services. Through copyright collective societies, the Corporation pays royalties to two sets of rights
holders: rights holders in music works, which are the music and the lyrics; and, rights holders in artists’ performances and
sounds recordings, which are the actual performances and recordings of the musical works.
Annual Report 2022 | Stingray Group Inc. | 47
Capital resources
Our principal sources of liquidity are our net cash provided by operating activities and borrowings available under our revolving
facility. Our principal uses of cash are to repay our debt, finance our acquisitions and capital expenditures, pay dividends,
repurchase shares and provide for working capital. We expect that cash generated from operations and borrowings available
under our current credit facilities will be sufficient to meet our liquidity needs in the foreseeable future.
The credit facilities consist of a $375.0 million revolving credit facility and a $63.8 million term loan, both maturing in
October 2026. On May 28, 2021, the Corporation fully repaid, on maturity, its $20.0 million term loan.
The Corporation is required to make consecutive quarterly capital repayments of 2.50% of the initial drawdown of the term
loan. The remaining capital balance will be payable on maturity date, on October 25, 2026.
The credit facilities bear interest at (a) the bank’s prime rate (2.70% and 2.45% as at March 31, 2022 and 2021, respectively)
or US base rate if denominated in US dollars (4.00% and 3.75% as at March 31, 2022 and 2021, respectively) plus an applicable
margin based on a financial covenant, or (b) the banker’s acceptance rate (0.73% and 0.52% as at March 31, 2022 and 2021,
respectively) plus an applicable margin based on a financial covenant, or (c) LIBOR (0.21% and 0.11% as at March 31, 2022
and 2021, respectively) plus an applicable margin based on a financial covenant, at the Corporation’s option.
As of March 31, 2022, the Corporation had cash and cash equivalents of $14.6 million, a subordinated debt of $25.4 million
and credit facilities of $358.2 million, of which approximately $78.7 million was available.
The following table summarizes the impact on the Net debt(2) that occurred in the fiscal year ended March 31, 2022 including
related ratios:
Movement in Net debt(1)(2)
$21.3
$(58.5)
$15.0
$14.4
$50.5
$369.1
$326.4
As at March 31,
2021
Business
acquisitions
outlays,
balance
payable and
contingent
consideration
payments
Interests
payments
Share
repurchases
Dividend
payments
As at March 31,
2022
Remaining net
change of
revolving
facility and
cash
Notes:
In millions of Canadian dollars.
(1)
(2) This is a non-IFRS measure. Refer to “Supplemental Information on Non-IFRS Measures” on page 54 for more information on each non-IFRS measure
and for reconciliations to the most directly comparable IFRS financial measure, refer to “Supplemental Information on Non-IFRS Measures” on page
35 and “Reconciliation of Quarterly Non-IFRS Measures” on page 44.
Annual Report 2022 | Stingray Group Inc. | 48
CONSOLIDATED FINANCIAL POSITION
The following table shows the main variances that have occurred in the consolidated financial position of the Corporation for
the year ended March 31, 2022:
(in thousands of Canadian
dollars)
Trade and other receivables
March 31,
2022
66,666
March 31,
2021
61,114
Variance
5,552 ▲
Intangible assets
76,230
41,884
34,346 ▲
Goodwill
354,304
337,897
16,407 ▲
Accounts payables and
accrued liabilities
67,016
53,146
13,870 ▲
Other liabilities
60,997
60,027
970 ▲
Credit facilities
Subordinated debt
358,203
303,704
54,499 ▲
25,442
31,741
(6,299) ▼
Significant contributions
Timing of payments by clients
Additions through business
acquisition of Calm Radio and
InStore Audio Network, partially
offset by amortization of intangible
assets
Acquisition of InStore Audio
Network
Timing of payments to suppliers
and increase in operating
expenses
Increase of contingent
consideration for the acquisition
of InStore Audio Network, largely
offset by a decrease in the fair
value of derivative financial
instruments liability
Refer to the graph on previous
page
Debt repayment
SOCAN and Re:Sound legal proceedings
In May 2017, the Corporation, together with its Canadian Broadcast Distribution Undertaking customers (together, the
“Objectors”), presented an affirmative case before the Copyright Board of Canada to seek a reduction in the prescribed rates
and terms for the Pay Audio Services Tariff for the 2007-2016 period. SOCAN and Re:Sound (together, the “Collectives”)
opposed that case, but in the opinion of the Objectors failed to offer compelling alternatives other than a request to maintain
the status quo.
As of December 2020, the Objectors and SOCAN entered into a binding MOU that will result in a partial refund to the Objectors
of past royalties paid and a meaningfully reduced tariff burden for the present and future. On May 28, 2021, the Copyright
Board of Canada released a final decision relating to the Pay Audio Services Tariff. The decision and certified tariff were in line
with the Objectors expectations.
Annual Report 2022 | Stingray Group Inc. | 49
Transactions Between Related Parties
The key management personnel of the Corporation are the Chief Executive Officer, Chief Financial Officer and certain other
key employees of the Corporation.
Key management personnel compensation and director’s fees include the following:
(in thousands of Canadian dollars)
Short-term employee benefits
Share-based compensation
Performance share units
Deferred share units
Off-Balance Sheet Arrangements
12 months
2022
2021
5,074
525
2,533
954
9,086
5,727
465
1,755
2,908
10,855
The Corporation therefore has no off-balance sheet arrangements, except for the operating leases with terms of twelve months
or less, leases of low-value assets or leases that are not in scope of IFRS 16, that have, or are reasonably likely to have, a
current or future material effect on its consolidated financial position, financial performance, liquidity, capital expenditures or
capital resources.
Disclosure of Outstanding Share Data
Issued and outstanding shares and outstanding stock options consisted of:
Issued and outstanding shares:
Subordinate voting shares
Subordinate voting shares held in trust through employee share
purchase plan
Variable subordinate voting shares
Multiple voting shares
Outstanding stock options:
Stock options
June 3, 2022
March 31, 2022
51,517,622
51,768,422
(20,008)
397,780
17,941,498
69,836,892
(11,776)
397,780
17,941,498
70,095,924
3,469,807
3,469,807
The Corporation has a stock option plan to attract and retain employees, directors, officers and consultants. The plan provides
for the granting of options to purchase subordinate voting shares. Under this plan,10% of all multiple voting shares, subordinate
voting shares and variable subordinate voting shares issued and outstanding on a non-diluted basis is reserved for issuance.
In Fiscal 2022, 95,000 options were exercised, 32,650 options were forfeited, and 434,204 options were granted to eligible
employees, subject to service vesting periods of 4 years.
Financial Risk Factors
Currency risk:
The Corporation is exposed to currency risk on sales and expenses that are denominated in currencies other than the
functional currency of the Corporation’s subsidiaries, primarily the US dollar and the euro. Also, additional earnings variability
arises from the translation of monetary assets and liabilities denominated in currencies other than the functional currency of
the Corporation’s subsidiaries at the rate of exchange at each balance sheet date, the impact of which is reported as a foreign
exchange gain or loss in the consolidated statements of comprehensive income (loss).
The Corporation's objective in managing its foreign currency risk is to minimize its net exposure to foreign currency cash flows,
by transacting with third parties in the above currencies to the maximum extent possible and practical, given that this will act
as natural economic hedges for each of these currencies.
Annual Report 2022 | Stingray Group Inc. | 50
Liquidity risk:
Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they become due. The
Corporation manages liquidity risk by continuously monitoring actual and budgeted cash flows under both normal and stressed
conditions. The Board of Directors also reviews and approves the Corporation’s operating and capital budgets, as well as any
material transactions out of the ordinary course of business, including proposals on mergers, acquisitions or other major
investments or divestitures.
Interest rate risk:
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in
market interest rates. The Corporation holds the majority of its cash and cash equivalents balance in accounts bearing interest
at rates less than 1.25%. The Corporation is, therefore, not materially exposed to future cash flow fluctuations coming from
changes in market interest rates for its cash and cash equivalents.
The credit facility is a variable interest rate instrument that is due in more than one year. This instrument is exposed to changes
in future interest rates that could result in future cash flow fluctuations. To manage its interest rate risk, the Corporation entered
into the following interest rate swap agreements:
(in thousands of Canadian dollars)
Currency
Fixed interest rate
(when applicable)
Initial nominal
value
Mark-to-market
Liabilities as at
March 31, 2022
Mark-to-market
Liabilities as at
March 31, 2021
CAD
CAD
CAD
CAD
CAD
CAD
0.81%
1.33%
2.19%
2.29%
—
—
$
50,000
50,000
50,000
50,000
200,000
100,000
100,000
$ 200,000
$ 400,000
$
$
$
—
—
—
—
—
604
860
1,464
1,464
$
$
$
945
403
494
1,938
3,780
642
948
1,590
5,370
Maturity
Swaps
October 25, 2024
October 25, 2024
October 25, 2021
October 25, 2024
Swaptions
October 25, 2024
October 25, 2024
Credit risk:
Credit risk is the risk of an unexpected financial loss to the Corporation if a customer or counterparty to a financial instrument
fails to meet contractual obligations, and it arises primarily from the Corporation's trade and other receivables.
The Corporation’s credit risk is principally attributable to its trade receivables. The amounts presented in the consolidated
statements of financial position are net of an allowance for expected credit risk, estimated by the Corporation’s management
and based, in part, on the age of the specific receivable balance and the current and expected collection trends. The
Corporation's exposure to credit risk is mainly influenced by the characteristics of each customer. Generally, the Corporation
does not require collateral or other security from customers for trade receivables; however, credit is extended following an
evaluation of creditworthiness. In addition, the Corporation performs ongoing credit reviews of its customers.
An allowance for expected credit losses is maintained to reflect an impairment risk for trade accounts receivable based on an
expected credit loss model. Bad debts are also provided for based on collection history and specific risks identified on a
customer-by-customer basis.
Annual Report 2022 | Stingray Group Inc. | 51
Critical Accounting Estimates
The preparation of the Corporation’s consolidated financial statements in conformity with IFRS requires management to make
judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Below is an overview of the areas that involved more judgement or complexity, and of items which are more likely to be
materially adjusted due to estimates and assumptions turning out to be wrong. Estimates are based on management’s best
knowledge of current events and actions that the Corporation may undertake in the future. Estimates and underlying
assumptions are reviewed on an ongoing basis. Any revision to accounting estimates are recognized in the period in which
the estimates are revised and in any future periods affected by these revisions.
The areas involving significant estimates or judgments are:
Estimation of current tax payable and current tax expense
In the calculation of current tax, the Corporation is required to make significant estimates due to the fact that it is subject to tax
laws of the many jurisdictions in which it operates. Recorded income taxes and tax credits are subject to review and approval
by tax authorities and therefore, could be different from the amounts recorded.
Recognition of deferred tax assets for tax losses available for carry-forward
In the calculation of deferred tax, estimates must be used to determine the appropriate rates and amounts and to take into
account the probability of their occurrence. Deferred income tax assets also reflect the benefit of unutilized tax losses that can
be carried forward to reduce income taxes in future years. The deferred tax assets include an amount which relates to carried
forward tax losses of some European and Australian subsidiaries. The subsidiaries have incurred the losses over the last
financial years before the acquisition by the Corporation. The subsidiaries now generate taxable income. The Corporation has
concluded that the deferred assets will be recoverable using the estimated future taxable income based on the approved
business plans and budgets for the subsidiaries.
Estimation of cost of defined benefit pension plans and present value of the net pension obligation
The cost of defined benefit pension plans and the present value of the net pension obligation are determined using actuarial
valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future.
These include the determination of the discount rate, mortality rates and future pension increases. Due to the complexity of
the valuation, the underlying assumptions and its long-term nature, the net pension obligation is highly sensitive to changes in
these assumptions.
Management engages the services of external actuaries to assist in the determination of the appropriate discount rate.
Management, with the assistance of actuaries, considers the interest rates of high quality corporate bonds that have terms to
maturity approximating the terms related to the defined benefit obligation. The mortality rate is based on publicly available
mortality tables. Future pension increases are based on expected future inflation rates.
Estimated fair value of certain investments
The fair value of investments that are not traded in an active market is determined using valuation techniques. The Corporation
uses judgement to select a valuation method and make assumptions that are mainly based on market conditions existing at
the end of each reporting period.
Annual Report 2022 | Stingray Group Inc. | 52
Estimated value in use and/or fair value less costs to sell of CGUs used in goodwill and broadcasting licences impairment
testing
Broadcast licences and goodwill are not amortized but are tested annually for impairment, or more frequently if events or
circumstances indicate that it is more likely than not that the value of broadcast licences and/or goodwill may be impaired.
Impairment exists when the carrying value of an asset or cash generating unit (“CGU”) exceeds its recoverable amount, which
is the higher of its fair value less costs to sell and its value-in-use. The fair value less costs to sell calculation is based on
available data from binding sales transactions in an arm’s-length transaction of similar assets, observable market prices, or
discounted cash flow projections less incremental costs for disposing of the asset. The value-in-use calculation is based on a
discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring
activities that the Corporation is not yet committed to or significant future investments that will enhance the asset’s performance
of the CGU being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow
model as well as the expected future cash inflows and the growth rate used for extrapolation purposes. The impact of COVID-19
on the Corporation was also considered in calculating the future cash flows. Depending on the measures taken by the federal
and provincial authorities to slow or stop the spread of COVID-19, such as the closure of non-essential businesses and social
distancing, actual results could differ materially from estimates used.
Estimation of fair value of identified assets, liabilities and contingent consideration recorded in business acquisitions
The contingent consideration and balance payable on business acquisitions related to business combinations is payable based
on the achievement of targets for growth in revenues for a period from the date of the acquisition and upon renewal of client
contracts. The fair value of the contingent consideration and balance payable on business acquisitions were estimated by
calculating the present value of the future expected cash flows.
Estimation of lease term of contracts with renewal options
The Corporation determines the lease term as the non-cancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease,
if it is reasonably certain not to be exercised. After the commencement date, the Corporation reassesses the lease term for
whether significant event or change in circumstances that is within its control and affects its ability to exercise (or not to
exercise) the option to renew (e.g., a change in business strategy) has occurred.
Business Combinations
Under the acquisition method, on the date that control is obtained, the identifiable assets, liabilities and contingent liabilities of
the acquired business are measured at their fair values. Depending on the complexity of determining the valuation for certain
assets, the Corporation uses appropriate valuation techniques in arriving at the estimated fair value at the acquisition date for
these assets. These valuations are generally based on a forecast of the total expected future net discounted cash flows and
relate closely to the assumptions made by management regarding the future performance of the related assets and the
discount rate applied as it would be assumed by a market participant.
Annual Report 2022 | Stingray Group Inc. | 53
SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES
Each of the below non-IFRS financial measures is not an earnings or cash flow measure recognized by International Financial
Reporting Standards (“IFRS”) and does not have a standardized meaning prescribed by IFRS. Our method of calculating such
financial measures may differ from the methods used by other issuers and, accordingly, our definition of these non-IFRS
financial measures may not be comparable to similar measures presented by other issuers. Investors are cautioned that non-
IFRS financial measures should not be construed as an alternative to net income determined in accordance with IFRS as
indicators of our performance or to cash flows from operating activities as measures of liquidity and cash flows.
Adjusted EBITDA
Adjusted EBITDA is a non-IFRS financial measure used by management to facilitate comparisons of operating performance of
the Corporation from period to period. Adjusted EBITDA is defined as earnings before Net finance expense (income), income
taxes, depreciation, amortization, share based compensation, acquisition, restructuring and other various costs and change in
fair value of investment. The Corporation believes that Adjusted EBITDA is an important measure when analyzing its operating
profitability without being influenced by financing decisions, non-cash items and income taxes strategies. Comparison with
peers is also easier as companies rarely have the same capital and financing structure. The Corporation also presents such
non-IFRS measure because it believes such non-IFRS measure is frequently used by securities analysts, investors and other
interested parties as measures of financial performance.
Adjusted EBITDA margin
Adjusted EBITDA margin ratio is a non-IFRS ratio used by management to analyze the profitability of the Corporation and
facilitate period-to-period comparisons, as well as comparison with peers. This ratio is calculated by dividing the amount of
Adjusted EBITDA for a given period by the amount of revenue for the same period. The Corporation believes that Adjusted
EBITDA margin is an important measure when analyzing its operating profitability without being influenced by financing
decisions, non-cash items and income taxes strategies. Comparison with peers is also easier as companies rarely have the
same capital and financing structure. The Corporation also presents such non-IFRS ratio because it believes such non-IFRS
ratio is frequently used by securities analysts, investors and other interested parties as measures of financial performance.
Adjusted free cash flow
Adjusted free cash flow is a non-IFRS measure used by management to assess the amount of cash generated after accounting
for capital expenditures and non-core charges. It is a useful measure because it demonstrates cash available to make business
acquisitions, pay dividends and reduce debt. Furthermore, this non-IFRS measure facilitates period-to-period comparisons.
Refer to page 36 for a reconciliation of free cash flow to cash flow from operating activities.
Adjusted free cash flow per share
Adjusted free cash flow per share is a non-IFRS ratio used by management to assess the amount of cash generated after
accounting for capital expenditures and non-core charges. It is a useful measure because it demonstrates cash available to
make business acquisitions, pay dividends and reduce debt. Furthermore, this non-IFRS measure facilitates period-to-period
comparisons. Adjusted free cash flow per share is calculated by dividing the amount of Adjusted free cash flow for a given
period by the number of outstanding shares for the same period (on a basic or diluted basis).
Adjusted Net Income
Adjusted Net Income is a non-IFRS measure used by management to assess performance of the Corporation as it provides
meaningful operating results and facilitates period-to-period operating comparisons. Additionally, the Corporation believes that
Adjusted Net income is an important measure as it shows stable results from its operations which allows users of the financial
statements to better assess the trend in the profitability of the business. Refer to page 35 for a reconciliation of Adjusted Net
Income to Adjusted EBITDA and Net income.
Adjusted Net Income per share
Adjusted Net Income per share is a non-IFRS ratio used by management to assess performance of the Corporation as it
provides meaningful operating results and facilitates period-to-period operating comparisons. Additionally, the Corporation
believes that Adjusted Net income per share is an important measure as it shows stable results from its operations which allows
users of the financial statements to better assess the trend in the profitability of the business. Adjusted Net Income per share
is calculated by dividing the amount of Adjusted Net Income for a given period by the number of outstanding shares for the
same period (on a basic or diluted basis).
Annual Report 2022 | Stingray Group Inc. | 54
LTM Adjusted EBITDA
Last twelve months (LTM) Adjusted EBITDA is a non-IFRS measure representing the Adjusted EBITDA of a given quarterly
period, plus the Adjusted EBITDA of the three quarters immediately preceding such referenced period. The Corporation
believes that LTM Adjusted EBITDA is a useful measure to evaluate the Corporation’s operating performance during the
immediately preceding twelve-month time period.
Pro Forma Adjusted EBITDA
Pro Forma Adjusted EBITDA is a non-IFRS measure representing LTM Adjusted EBITDA adjusted to include revenues and
cost savings synergies from acquisitions for the months prior to such acquisitions and other extraordinary items. For
Fiscal 2022, the synergies included derive from the acquisitions of InStore Audio Network and Calm Radio. For Fiscal 2021,
the synergies included derive from the acquisitions of Marketing Sensorial México and Chatter Research Inc. For Fiscal 2022
and 2021, Pro Forma Adjusted EBITDA includes an adjustment for credits that were given to various customers following the
mandated store closures required by governments. Management of the Corporation believes that Pro Forma Adjusted EBITDA
provides investors with useful financial metrics to assess and evaluate the Corporation’s operating performance from period-
to-period by adjusting for the impact of certain events that are non-recurring. The Corporation also presents such non-IFRS
measure because it believes such non-IFRS measure is frequently used by securities analysts, investors and other interested
parties as measures of financial performance.
Net debt
Net debt is a non-IFRS measure calculated as the Corporation’s credit facilities and subordinated debt for a given period less
the Corporation’s cash and cash equivalents for the same period. Net debt is an important measure as it reflects the principal
amount of debt owing by the Corporation at a particular date.
Net debt to Pro Forma Adjusted EBITDA ratio
Net debt to Pro Forma Adjusted EBITDA is a non-IFRS ratio calculated as Net debt divided by Pro Forma Adjusted EBITDA.
The Corporation believes that Net debt to Pro Forma Adjusted EBITDA is an important measure when analyzing the
Corporation’s debt repayment capacity on an annualized basis, taking into consideration the annualized Adjusted EBITDA of
acquisitions made during the last twelve months.
New standard adopted by the Corporation
There are no new standards adopted by the Corporation as of March 31, 2022.
Future Accounting Changes
There are no material future accounting changes as of March 31, 2022.
Annual Report 2022 | Stingray Group Inc. | 55
Evaluation of Disclosure Controls and Procedures and Internal Control Over Financial Reporting
Internal control over financial reporting ("ICFR") is a process designed to provide reasonable, but not absolute, assurance
regarding the reliability of financial reporting and of the preparation of financial statements for external purposes in accordance
with IFRS. The President and Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), together with
Management, are responsible for establishing and maintaining adequate disclosure controls and procedures ("DC&P") and
ICFR, as defined in National Instrument 52-109. The Corporation’s internal control framework is based on the criteria published
in the updated version released in May 2013 of the report Internal Control Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (“2013 COSO Framework”).
The DC&P have been designed to provide reasonable assurance that material information relating to the Corporation is made
known to the CEO and CFO by others, and that information required to be disclosed by the Corporation in its annual filings,
interim filings or other reports filed or submitted by the Corporation under securities legislation is recorded, processed,
summarized and reported within the time periods specified in securities legislation.
As at March 31, 2022, an evaluation was carried out, under the supervision of the CEO and the CFO, of the design and
operating effectiveness of the Corporation’s DC&P. Based on this evaluation, the CEO and the CFO concluded that the
Corporation’s DC&P were appropriately designed and were operating effectively as at March 31, 2022.
As at March 31, 2022, an evaluation was carried out, under the supervision of the CEO and the CFO, of the effectiveness of
the ICFR based on the 2013 COSO Framework. Based on this evaluation, they have concluded that the Corporation’s ICFR
were effective as at March 31, 2022.
There have been no changes in the Corporation’s internal control over financial reporting, except for the acquisition of Calm
Radio and InStore Audio Network, that occurred during the period that have materially affected, or are likely to materially affect,
the Corporation’s ICFR.
Management’s assessment of and conclusion on the design and the effectiveness of the Corporation’s ICFR as at June 7,
2022, did not include the controls or procedures of the operations of Calm Radio and InStore Audio Network. The Corporation
has accordingly availed itself of provision 3.3(1)(b) of Regulation 52-109 which permits exclusion of these acquisitions in the
design and operating effectiveness assessment of its ICFR for a maximum period of 365 days from the date of acquisition. The
following table summarizes the financial information for Fiscal 2022 for these entities:
(in thousands of Canadian dollars)
Results of operations
Revenues
Net income (loss)
Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Subsequent Events
There are no subsequent events.
Additional Information
Calm Radio
InStore Audio
Network
2,753
129
364
304
818
1,030
6,673
3,112
6,717
8,558
2,990
-
Additional information about the Corporation is available on our website at www.stingray.com and on the SEDAR website at
www.sedar.com
Annual Report 2022 | Stingray Group Inc. | 56
KPMG LLP
600 de Maisonneuve Blvd. West
Suite 1500, Tour KPMG
Montréal (Québec) H3A 0A3
Canada
Telephone
Fax
Internet
(514) 840-2100
(514) 840-2187
www.kpmg.ca
INDEPENDENT AUDITORS’ REPORT
To the Shareholders of Stingray Group Inc.
Opinion
We have audited the consolidated financial statements of GDI Integrated Facility Services Inc.
(the "Entity"), which comprise:
•
•
•
•
the consolidated statements of financial position as at March 31, 2022 and March 31, 2021
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 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 March 31, 2022 and March 31, 2021, 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.
KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent
member firms affiliated with KPMG International Limited, a private English company limited by guarantee. KPMG
Canada provides services to KPMG LLP.
Page 2
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements for the year ended March 31, 2022. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We have
determined the matter described below to be the key audit matter to be communicated in our auditors’
report.
Goodwill and broadcast licenses impairment assessments for certain cash
generating units
Description of the matter
We draw attention to Note 16 of the consolidated financial statements. The Entity’s goodwill and
broadcast licenses amount to $354,304 and $272,996 respectively. For the purpose of impairment
testing, broadcast licenses are allocated to groups of cash generating units ("CGUs"). Goodwill and
broadcast licenses are tested for impairment annually and when circumstances indicate the carrying
value may be impaired. The recoverable amounts of the CGUs have been determined based on their
value-in-use ("VIU") using a discounted cash flow model. A significant estimate used in determining
the recoverable amount is the measurement of the risk adjusted forecasted cash flows expected to be
generated. Significant estimates and assumptions used to determine the discounted cash flows
include the growth rate in revenue, operating expenses and discount rates.
Why the Matter is a Key Audit Matter
We identified goodwill and broadcast licenses impairment assessment for certain CGUs as a key
audit matter. This matter represented an area of significant risk of material misstatement for certain
groups of CGUs. This is due to the magnitude of the goodwill and the high degree of estimation
uncertainty in determining the recoverable amount. In addition, significant auditor judgment and
specialized skills and knowledge were needed in evaluating the results of our procedures due to the
sensitivity to the Entity’s determination of the recoverable amounts of the certain CGUs to minor
changes in significant assumptions.
How the Matter Was Addressed in the Audit
The following are the primary procedures we performed to address this key audit matter:
• We evaluated the Entity’s revenue growth rate assumptions for certain groups of CGUs, by
comparing those assumptions to the expected growth rates included in analyst reports of the
Entity and comparable entities.
• We compared certain groups of CGUs’ future cash flows to historical actual results. We evaluated
the Entity’s ability to accurately forecast future cash flows by comparing actual results to historical
cash flow forecasts.
• We involved valuation professionals with specialized skills and knowledge. They assisted us in
evaluating the reasonableness of the discount rate assumptions used by management in the
determination of the VIU by comparing them to discount rate ranges that were independently
developed using publicly available market data for comparable entities.
Page 3
Other Information
Management is responsible for the other information. Other information comprises:
•
•
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
a document likely to be entitled "Annual Report".
Our opinion on the financial statements does not cover the other information and we do not and will
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit and remain alert for
indications that the other information appears to be materially misstated.
We obtained the information included in Management’s Discussion and Analysis filed with the
relevant Canadian Securities Commissions 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.
The information, other than the financial statements and the auditors’ report thereon, included in
a document likely to be entitled "Annual Report" is expected to be made available to us after the date
of this auditors’ report. If, based on the work we will perform on this other information, we conclude
that there is a material misstatement of this other information, we are required to report that fact to
those charged with governance.
Responsibilities of Management and Those Charged with Governance for the
Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with International Financial Reporting Standards, 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.
Page 4
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:
•
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
intentional omissions,
misrepresentations, or the override of internal control.
involve collusion,
from error, as
fraud may
forgery,
• 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the 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.
• 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.
• 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.
Page 5
• 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.
• 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.
• Determine, from the matters communicated with those charged with governance, those matters
that were of most significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditors’ report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our auditors’ report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partner on the audit resulting in this auditors’ report is Alain Bessette.
Montréal, Canada
June 7, 2022
*CPA auditor, public accountancy permit No. A115894
Consolidated Statements of Comprehensive Income
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, except per share amounts)
Note
2022
2021
Recast (note 4)
Revenues
Operating expenses
Depreciation, amortization and write-off
Net finance expense (income)
Change in fair value of investments
Acquisition, legal, restructuring and other expenses
Income before income taxes
Income taxes
Net income
Net income per share — Basic
Net income per share — Diluted
Weighted average number of shares — Basic
Weighted average number of shares — Diluted
Comprehensive income
Net income
Other comprehensive income (loss), net of tax
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations
Items that will not be reclassified to profit and loss
Remeasurement gain (loss) on pension benefit obligations,
net of income tax payable of $1,004 (2021 — recovery of $3)
Total other comprehensive income (loss)
5
6
8
17, 29
9
$
282,626
$
247,857
189,954
35,544
6,119
2
8,707
42,300
9,013
140,876
38,692
(1,199)
3,787
4,637
61,064
15,960
33,287
$
45,104
0.47
0.47
$
$
0.62
0.61
70,968,954
71,463,581
73,266,886
73,435,192
$
$
$
10
11
11
11
11
$
33,287
$
45,104
(1,954)
(7,577)
2,780
826
(7)
(7,584)
Total comprehensive income
$
34,113
$
37,520
Net income is entirely attributable to Shareholders.
The accompanying notes are an integral part of these consolidated financial statements.
Annual Report 2022 | Stingray Group Inc. | 62
Consolidated Statements of Financial Position
March 31, 2022 and 2021
(In thousands of Canadian dollars)
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Income taxes receivable
Inventories
Other current assets
Non-current assets
Property and equipment
Right-of-use assets on leases
Intangible assets, excluding broadcast licences
Broadcast licences
Goodwill
Investments
Other non-current assets
Deferred tax assets
Total assets
Liabilities and Equity
Current liabilities
Credit facilities
Accounts payable and accrued liabilities
Dividend payable
Deferred revenues
Current portion of lease liabilities
Current portion of other liabilities
Income taxes payable
Non-current liabilities
Credit facilities
Subordinated debt
Deferred revenues
Lease liabilities
Other liabilities
Deferred tax liabilities
Total liabilities
Shareholders’ equity
Share capital
Contributed surplus
Deficit
Accumulated other comprehensive income (loss)
Total equity
Commitments (note 27)
Total liabilities and equity
Note
March 31,
2022
March 31,
2021
$
12
13
14
15
16
16
17
10
19
18
24
21
22
19
20
21
22
10
24
$
14,563
66,666
96
5,200
13,388
99,913
39,931
25,944
76,230
272,996
354,304
6,431
5,136
2,816
$
883,701
$
$
$
7,500
67,016
5,259
4,942
4,171
17,786
8,283
114,957
350,703
25,442
1,030
24,147
43,211
50,682
610,172
302,328
5,745
(31,103)
(3,441)
273,529
9,040
61,114
3,801
3,215
13,439
90,609
42,228
28,184
41,884
272,988
337,897
3,046
1,335
4,666
822,837
27,462
53,146
5,409
4,970
4,479
15,812
9,211
120,489
276,242
31,741
—
25,733
44,215
49,725
548,145
313,951
5,180
(40,172)
(4,267)
274,692
$
883,701
$
822,837
The accompanying notes are an integral part of these consolidated financial statements.
Approved by the Board of Directors,
(Signed) Eric Boyko, Director
(Signed) Pascal Tremblay, Director
Annual Report 2022 | Stingray Group Inc. | 63
Consolidated Statements of Changes in Equity
Years ended March 31, 2022 and 2021
(In thousands of Canadian
dollars, except number of share
capital)
Share Capital
Number
Amount
Contributed
surplus
Deficit
Accumulated other
comprehensive income (loss)
Cumulative
translation
account
Defined
benefit pension
plans
Total
shareholders’
equity
Balance at March 31, 2020
73,549,454
$ 322,366
$ 4,620
$
(56,407)
$
3,802
$
(485)
$ 273,896
Issuance of shares upon
exercise of stock options
(note 24)
Dividends
80,732
—
269
—
(125)
—
—
(27,376)
Repurchase and cancellation
of shares (note 24)
(1,530,180)
(8,700)
Share-based compensation
—
Employee share purchase
plan (notes 24 and 26)
Net income
Other comprehensive income
11,582
—
—
—
16
—
—
—
700
(15)
—
—
(1,493)
—
—
45,104
—
—
—
—
—
—
—
—
—
—
—
—
144
(27,376)
(10,193)
700
1
45,104
—
(7,577)
(7)
(7,584)
Balance at March 31, 2021
72,111,588
$ 313,951
$ 5,180
$
(40,172)
$
(3,775)
$
(492)
$ 274,692
Issuance of shares upon
exercise of stock options
(note 24)
Dividends
95,000
—
378
—
Repurchase and cancellation
of shares (note 24)
(2,106,000)
(11,970)
Share-based compensation
—
—
618
Employee share purchase
plan (notes 24 and 26)
Net income
Other comprehensive income
(loss)
(4,664)
(31)
—
—
—
—
31
—
—
(84)
—
—
—
(21,104)
(3,114)
—
—
33,287
—
—
—
—
—
—
—
—
—
—
—
—
294
(21,104)
(15,084)
618
—
33,287
—
(1,954)
2,780
826
Balance at March 31, 2022
70,095,924
$ 302,328
$ 5,745
$
(31,103)
$
(5,729)
$ 2,288
$ 273,529
The accompanying notes are an integral part of these consolidated financial statements.
Annual Report 2022 | Stingray Group Inc. | 64
Consolidated Statements of Cash Flows
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars)
Note
2022
2021
$
33,287
$
45,104
Operating activities:
Net income
Adjustments for:
Depreciation, amortization and write-off
Share-based compensation, PSU and DSU expenses
Interest expense and standby fees
Mark-to-market gains on derivative financial instruments
Change in fair value of investments
Share of results of joint venture
Equity gains on associates
Change in fair value of contingent consideration
Depreciation, amortization and accretion of other
liabilities
Interest expense on lease liabilities
Income tax expense
Income taxes paid
Net change in non-cash operating items
Financing activities:
Increase (decrease) of credit facilities
Decrease of subordinated debt
Payment of dividends
Proceeds from the exercise of stock options
Shares repurchased and cancelled
Shares purchased under the employee share purchase plan
Interest paid
Repayment of lease liabilities
Repayment of other liabilities
Unwind of interest rate swaps
Investing activities:
Business acquisitions, net of cash acquired
Acquisition of investments
Acquisition of investments in associates
Proceeds from the disposal of an investment
Acquisition of property and equipment
Acquisition of intangible assets other than internally
developed intangible assets
Addition to internally developed intangible assets
Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
8
8
17
17
17
8
8
8, 21
25
20
24
24
24
21
22
29
3
17
17
17
35,544
6,597
12,683
(3,397)
2
65
(241)
(7,555)
1,644
1,615
9,013
(5,570)
83,687
(24)
83,663
53,658
(6,400)
(21,254)
294
(15,084)
(430)
(14,384)
(4,815)
(50,495)
(600)
(59,510)
1,630
(703)
(2,508)
—
(9,061)
(1,134)
(6,854)
(18,630)
5,523
9,040
38,692
7,287
16,151
(13,818)
3,787
38
—
110
3,248
1,628
15,960
(3,309)
114,878
(10,632)
104,246
(21,901)
(8,000)
(21,967)
144
(10,193)
(339)
(18,053)
(5,011)
(18,318)
490
(103,148)
—
—
—
18,861
(5,690)
(1,313)
(6,428)
5,430
6,528
2,512
9,040
Cash and cash equivalents, end of year
$
14,563
$
The accompanying notes are an integral part of these consolidated financial statements.
Annual Report 2022 | Stingray Group Inc. | 65
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
1. BUSINESS DESCRIPTION
Stingray Group Inc. (the “Corporation”) is incorporated under the Canada Business Corporations Act. The Corporation is
domiciled in Canada and its registered office is located at 730 Wellington, Montréal, Québec, H3C 1T4. The Corporation
is a provider of multi-platform music services. It broadcasts high quality music and video content on a number of platforms
including radio stations, premium television channels, digital TV, satellite TV, IPTV, the Internet, mobile devices and game
consoles. A portion of the Corporation’s revenue is derived from the sale of advertising airtime, which is subject to the
seasonal fluctuations of the Canadian radio industry. Accordingly, the first and third quarter results tend to be the strongest
and the second and fourth quarter results tend to be the weakest in a fiscal year. However, for the year ended
March 31, 2021, Radio revenues did not follow historical patterns due to the ongoing impact of the coronavirus
(“COVID-19”) pandemic.
2. SIGNIFICANT CHANGES AND HIGHLIGHTS
The consolidated financial position and performance of the Corporation was particularly affected by the following events
and transactions during the year ended March 31, 2022:
On December 31, 2021, the Corporation signed an agreement to acquire all of the membership interest of
Pop Radio LLC, a company operating InStore Audio Network, an in-store audio advertising network in the United
States, for total consideration of US$47,788 ($60,586). It resulted in the recognition of goodwill (Note 16), intangible
assets (Note 15), a contingent consideration (Note 22) and a balance payable on acquisition (Note 22).
On October 26, 2021, the Corporation made a voluntary capital repayment on its subordinated debt under its
prepayment option of $6,400. The remaining capital balance of $25,600 will be payable on maturity date.
On October 15, 2021, the Corporation amended its existing $392,500 credit facilities by increasing the authorized
amount up to $442,500 and extending the maturity to October 15, 2026. The credit facilities consist of a revolving
credit facility for an authorized amount up to $375,000 and a non-revolving term facility of $63,750.
On September 21, 2021, the Corporation announced that the Toronto Stock Exchange had approved its normal course
issuer bid, authorizing the Corporation to repurchase up to an aggregate 3,222,901 subordinate voting shares and
variable subordinate voting shares (collectively, “Subordinate Shares”), representing approximately 10% of the public
float of Subordinate Shares as at September 13, 2021. Refer to note 24 for more information.
On August 11, 2021, the Corporation announced that it had acquired a minority interest of 20% in The Singing Machine
Company Inc., for a cash consideration of US$2,000 ($2,508).
On June 30, 2021, the Corporation signed an agreement to acquire all of the outstanding shares of Calm Radio Corp.
(“Calm Radio”), a provider of online music focused on the wellness and relaxation markets, for total consideration of
$8,171. It resulted in the recognition of goodwill (Note 16), intangible assets (Note 15) and contingent consideration
(Note 22).
On May 28, 2021, the Corporation fully repaid, on maturity, its $20,000 term loan.
Annual Report 2022 | Stingray Group Inc. | 66
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
3. BUSINESS ACQUISITIONS
FISCAL 2022
InStore Audio Network
On December 31, 2021, the Corporation purchased all of the membership interest of Pop Radio LLC, a company operating
InStore Audio Network, an in-store audio advertising network in the United States, for a total consideration of US$47,788
($60,586). As a result of the acquisition, goodwill of $18,567 was recognized related to the operating synergies expected
to be achieved from integrating the acquired business into the Corporation’s existing business. The goodwill will be
deductible for tax purposes.
The fair value of acquired trade receivables was US$5,629 ($7,136), which represented the gross contractual amount. The
contingent consideration arrangement requires the Corporation to pay, in cash, to the former owners, an amount not
exceeding US$11,843 ($15,015) over the next two years ending in April 2023, based on revenue target. The fair value of
the contingent consideration was determined using an income approach based on the estimated amount and timing of
projected cash flows. A portion of the balance payable on acquisition was subsequently paid on January 5, 2022 for an
amount of US$33,500 ($42,471).
The results of the business acquisition of Pop Radio LLC for the period ended March 31, 2022 are included in results since
the date of the acquisition. Revenues recorded from the acquisition date to March 31, 2022 were $6,673 and net income
was $3,112. Had the acquisition occurred at the beginning of the fiscal year, revenues related to this acquired business
would have been approximately $22,587 and net income would have been $7,742.
Assets acquired:
Cash and cash equivalents
Trade and other receivables
Other current assets
Intangible assets
Goodwill
Other non-current assets
Liabilities assumed:
Accounts payable and accrued liabilities
Deferred revenues
Net assets acquired at fair value
Consideration given:
Balance payable on business acquisition
Contingent consideration
Working capital payable
Preliminary
$
1,307
7,136
984
34,233
18,567
2,853
65,080
3,788
706
4,494
$
60,586
$
45,025
11,895
3,666
$
60,586
As of the reporting date, the Corporation has not completed the purchase price allocation over the identifiable net assets
and goodwill as information to confirm the fair value of certain assets and liabilities remains to be obtained.
Annual Report 2022 | Stingray Group Inc. | 67
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
Calm Radio Corp.
On June 30, 2021, the Corporation purchased all of the outstanding shares of Calm Radio, an online music streaming
service focused on the wellness and relaxation markets, for a total consideration of $8,171. As a result of the acquisition,
goodwill of $198 was recognized related to the operating synergies expected to be achieved from integrating the acquired
business into the Corporation’s existing business. The goodwill will not be deductible for tax purposes.
The fair value of acquired trade receivables was $159, which represented the gross contractual amount. The contingent
consideration arrangement requires the Corporation to pay, in cash, to the former owners, an amount not exceeding $8,000
over the next three years ending in August 2024, based on recurring monthly revenues targets. The fair value of the
contingent consideration was determined using an income approach based on the estimated amount and timing of
projected cash flows.
The Corporation finalized the assessment of the fair values of the assets acquired and liabilities assumed related to this
acquisition and some adjustments to the preliminary assessment have been recorded in the consolidated statements of
financial position as shown below.
The results of the business acquisition of Calm Radio for the period ended March 31, 2022 are included in results since
the date of the acquisition. Revenues recorded from the acquisition date to March 31, 2022 were $2,753 and net income
was $95. Had the acquisition occurred at the beginning of the fiscal year, revenues related to this acquired business would
have been approximately $3,688 and net income would have been $146.
Assets acquired:
Cash and cash equivalents
Trade and other receivables
Other current assets
Property and equipment
Intangible assets
Goodwill
Deferred tax assets
Liabilities assumed:
Accounts payable and accrued liabilities
Deferred revenues
Deferred tax liabilities
Net assets acquired at fair value
Consideration given:
Balance payable on business acquisition
Contingent consideration
Working capital payable
Preliminary Adjustments
Final
$
$
$
$
314 $
149
104
83
12,728
39
142
13,559
208
1,872
3,308
5,388
$
9
10
17
(27)
(647)
159
(142)
(621)
13
(232)
(402)
(621)
8,171 $
—
$
4,000 $
3,912
259
8,171 $
—
—
—
—
$
$
323
159
121
56
12,081
198
—
12,938
221
1,640
2,906
4,767
8,171
4,000
3,912
259
8,171
Annual Report 2022 | Stingray Group Inc. | 68
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
FISCAL 2021
Marketing Sensorial México
On May 6, 2020, the Corporation purchased all of the assets of Marketing Sensorial México (“MSM”) for a total
consideration of MXN 127,759 ($7,433). MSM is a Mexican leader in point-of-sale marketing solutions. As a result of the
acquisition, goodwill of $2,947 was recognized related to the operating synergies expected to be achieved from integrating
the acquired business into the Corporation’s existing business. The intangible assets and goodwill will be deductible for
tax purposes.
The Corporation finalized the assessment of the fair values of the assets acquired and liabilities assumed related to this
acquisition and no adjustment to the preliminary assessment have been recorded in the consolidated statements of
financial position.
Assets acquired:
Property and equipment
Intangible assets
Goodwill
Net assets acquired at fair value
Consideration given:
Balance payable on business acquisition
Contingent consideration
Final
1,765
2,721
2,947
7,433
5,236
2,197
7,433
$
$
$
$
Annual Report 2022 | Stingray Group Inc. | 69
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
4. SEGMENT INFORMATION
OPERATING SEGMENTS
The Corporation’s operating segments are aggregated in two segments: Broadcasting and commercial music and Radio.
The operating segments reflect how the Corporation manages its operations, resources and assets and how it measures
its performance. Both operating segments’ financial results are reviewed by the Chief operating decision maker (“CDOM”)
to make decisions about resources to be allocated to the segment and asses its performance based on adjusted earnings
before interest, taxes, depreciation and amortization (thereafter “Adjusted EBITDA”), and for which distinct financial
information is available. Adjusted EBITDA excludes from income before income taxes the following expenses: share-based
compensation, performance and deferred share unit expense, depreciation, amortization and write-off, net finance expense
(income), change in fair value of investments and acquisition, legal, restructuring and other expenses. There are no inter-
segment revenues for the periods.
The Broadcasting and commercial music segment specializes in the broadcast of music and videos on multiple platforms
and digital signage experiences and generates revenues from subscriptions or contracts.
The Radio segment operates several radio stations across Canada and generates revenues from advertising.
Corporate and eliminations is a non-operating segment comprising corporate and administrative functions that provide
support and governance to the Corporation’s operating business units.
The following tables present financial information by segment for the years ended March 31, 2022 and 2021.
Year ended
Revenues
Operating expenses
(excluding Share-based
compensation and PSU
and DSU expenses)
Adjusted EBITDA
Share-based compensation
PSU and DSU expenses
Depreciation, amortization
and write-off
Net finance expense
(income)
Change in fair value of
investments
Acquisition, legal,
restructuring and other
expenses
Income before income
taxes
Income taxes
Net income
Broadcasting and
commercial music
2021
2022
Radio
Corporate and
eliminations
2022
2021
2022
2021
Consolidated
2022
2021
$ 159,082 $ 150,047 $ 123,544 $ 97,810 $
— $
— $ 282,626 $ 247,857
100,767
56,528
$ 58,315 $ 77,453 $ 46,235 $ 41,282
77,309
72,594
5,281
(5,281)
4,467 183,357 133,589
99,269 114,268
(4,467)
798
5,799
851
6,436
798
5,799
851
6,436
35,544
38,692
35,544 38,692
6,119
(1,199)
6,119
(1,199)
2
3,787
2
3,787
$ 8,707 $
4,637
8,707
4,637
42,300 61,064
9,013 15,960
33,287 $ 45,104
$
Annual Report 2022 | Stingray Group Inc. | 70
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
Broadcasting and
commercial music
Radio
Corporate and
eliminations
Consolidated
March 31,
2022
March 31,
2021
March 31,
2022
March 31,
2021
March 31,
2022
March 31,
2021
March 31,
2022
March 31,
2021
Total assets
Total liabilities(1)
$ 268,160 $ 217,256 $ 615,541 $ 605,581 $
— $
— $ 883,701 $ 822,837
$ 97,569 $
85,194 $ 122,235 $ 116,727 $ 390,368 $ 346,224 $ 610,172 $ 548,145
(1) Total liabilities include operating liabilities, the Credit facilities and the Subordinated debt
Year ended
2022
2021
Broadcasting and
commercial music
Radio
2022
Consolidated
2021
2022
2021
Acquisition of property
and equipment
Addition to
right-of-use assets on
leases
Acquisition of intangible
assets
Acquisition of broadcast
licences
Goodwill recorded on
$
$
$
$
4,617 $
6,731 $
4,066 $
1,527 $
8,683 $
8,258
685 $
3,282 $
2,434 $
1,415 $
3,119 $
4,697
54,467 $
11,654 $
— $
— $
54,467 $
11,654
— $
— $
8 $
78 $
8 $
78
business acquisitions
$
18,765 $
2,947 $
— $
— $
18,765 $
2,947
Acquisition of property and equipment, right-of-use assets on leases, intangible assets, broadcast licences and goodwill,
includes those acquired through business acquisitions, whether they were paid or not, and none are related to the Corporate
segment.
As at March 31, 2022, approximately 75% (80% as at March 31, 2021) of the Corporation’s non-current assets are located in
Canada.
The 2021 comparative figures have been recast to adjust certain contracts that were recognized on a gross basis that should
have been recognized on a net basis. This had the effect of reducing revenues and operating expenses of the Broadcasting
and commercial music segment from previously recorded $151,658 and $74,205 to recast $150,047 and $72,594, respectively.
Consolidated revenues and operating expenses have been reduced from $249,468 to $247,857 and $142,487 to $140,876,
respectively.
Annual Report 2022 | Stingray Group Inc. | 71
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
5. REVENUES
DISAGGREGATION OF REVENUES
The following table presents the Corporation’s revenues disaggregated by reportable segment, primary geographical
market and product.
Reportable segments(3)
Year ended
2022
2021
2022
2021
2022
2021
Broadcasting and
commercial music
Radio
Total revenues
Geography
Canada
United States
Other countries
Products
Subscriptions (1)
Equipment and labor (2)
Advertising (2)
$
$
54,195
52,403
52,484
159,082
134,257
12,863
11,962
159,082
52,919 $
40,417
56,711
150,047
135,259
11,138
3,650
150,047 $
123,544
—
—
123,544
—
—
123,544
123,544
97,810 $
—
—
97,810
—
—
97,810
97,810 $
177,739
52,403
52,484
282,626
134,257
12,863
135,506
282,626
150,729
40,417
56,711
247,857
135,259
11,138
101,460
247,857
(1) Generally recognized over time
(2) Generally recognized at a point in time
(3) No revenues are generated from the Corporate Segment
UNSATISFIED PORTION OF PERFORMANCE OBLIGATIONS
The following table presents the revenues expected to be recognized over the next three years and thereafter related to
unsatisfied or partially satisfied performance obligations as at March 31, 2022. The table below excludes i) contracts with
a duration of one year or less and ii) variable consideration, such as revenues based on a number of subscribers or location
as they will likely vary throughout the term of the contracts.
2023
2024
2025 Thereafter
Equipment and labor
Subscriptions
$
$
3,695
15,688
19,383
—
12,207
12,207
—
6,526
6,526
—
3,306
3,306
$
$
Total
3,695
37,727
41,422
Annual Report 2022 | Stingray Group Inc. | 72
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
6. OPERATING EXPENSES
During the year ended March 31, 2021, the Corporation applied and qualified for the Canada Emergency Wage Subsidy
(“CEWS”), a Canadian federal government program created in response to the negative economic impact of the COVID-19
pandemic and designed to provide financial assistance to businesses who experienced a certain level of decrease in
revenues to help them retain their employees. During the year ended March 31, 2022, the Corporation recognized, as a
reduction of operating expenses, the subsidies claimed under the CEWS and other programs amounting to $5,437
(2021 – $25,161). As at March 31, 2022, the Corporation received most of the subsidies claimed from the Canadian federal
government.
The Corporation also received tax credits related to its research and development and multimedia activities, which
amounted $1,606 (2021 – $3,127) and was recorded as a reduction of operating expenses for an amount of $799 and as
a reduction of intangible assets for an amount of $807 (2021 - nil).
7. OTHER INFORMATION
Expenses by nature are as follows:
Salaries and other short-term employee benefits
Research and development
Equipment costs
Share-based compensation
PSU and DSU expenses
8. NET FINANCE EXPENSE (INCOME)
Interest expense and standby fees
Mark-to-market gains on derivative financial instruments
Change in fair value of contingent consideration
Depreciation, amortization and accretion of other liabilities
Interest expense on lease liabilities (note 21)
Foreign exchange loss (gain)
$
$
$
$
$
$
$
9. ACQUISITION, LEGAL, RESTRUCTURING AND OTHER EXPENSES
Acquisition
Legal
Restructuring and other
$
$
2022
96,566
11,149
6,869
798
5,799
2022
12,683
(3,397)
(7,555)
1,644
1,615
1,129
6,119
2022
282
2,505
5,920
8,707
2021
79,013
7,562
4,932
851
6,436
2021
16,151
(13,818)
110
3,248
1,628
(8,518)
(1,199)
2021
2,439
623
1,575
4,637
$
$
$
$
$
$
$
$
$
Annual Report 2022 | Stingray Group Inc. | 73
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
10. INCOME TAXES
The income tax expense consists of the following:
Current income tax:
Current year
Adjustment for prior years
Deferred income tax:
Origination and reversal of temporary differences
Change in substantively enacted tax rate
Adjustment for prior years
Total income tax expense
2022
10,308
(129)
10,179
(733)
(164)
(269)
(1,166)
9,013
$
$
2021
9,851
(177)
9,674
6,194
6
86
6,286
15,960
$
$
The following table reconciles income tax computed at the Canadian statutory rate of 26.5% (2021 — 26.5%) and the total
income tax expense for the years ended March 31.
2022
2021
Income before income taxes
$
42,300
$
61,064
Income tax at the combined Canadian statutory rate
(Decrease) increase resulting from:
Impact of foreign tax rate differences
Income taxes on non-deductible expenses and
non-taxable revenues
Change in recognized tax losses and deductible temporary
differences
Change in substantively enacted tax rate
Other
Total income tax expense
SIGNIFICANT ESTIMATE
11,210
(860)
(1,547)
266
(164)
108
9,013
$
16,182
(1,726)
1,548
—
6
(50)
15,960
$
Recorded income taxes and tax credits are subject to review and approval by tax authorities and therefore, final amounts
could be different from the amounts recorded.
Annual Report 2022 | Stingray Group Inc. | 74
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
RECOGNIZED DEFERRED TAX ASSETS AND LIABILITIES
The tax effects of significant components of temporary differences that give rise to deferred tax assets and liabilities are
as follows:
Property and equipment
Intangible assets, goodwill and
broadcast licences
Financing fees
Tax losses and Scientific Research and
Experimental Development
Expenditures (“SR&ED”) carried
forward
Investments
CRTC tangible benefits
Performance and deferred share unit
plans
Right-of-use assets on leases
Lease liabilities
Accrued pension benefit liability
Other
Deferred tax assets and liabilities
Offsetting of assets and liabilities
Net deferred tax assets and liabilities
2022
2021
Assets
Liabilities
Assets
Liabilities
$
2,067 $
3,261
$
1,837 $
2,940
839
514
66,879
—
934
980
65,134
—
6,105
—
7,479
3,213
—
7,485
1,457
25
29,184
(26,368)
$
2,816 $
—
66
—
—
6,844
—
—
—
77,050
(26,368)
50,682
7,670
—
7,390
2,596
—
5,270
1,941
327
28,945
(24,279)
$
4,666 $
—
—
—
—
4,844
—
—
1,086
74,004
(24,279)
49,725
Changes in deferred tax assets and liabilities for the year ended March 31, 2022 are as follow:
Property and equipment
Intangible assets, goodwill
and broadcast licences
Financing fees
Tax losses and SR&ED
carried forward
Investments
CRTC tangible benefits
Performance and deferred
share unit plans
Right-of-use assets on leases
Lease liabilities
Accrued pension benefit
liability
Other
Balance
as at March
31, 2021
(1,103)
$
Recognized
in net income
(90)
Recognized in
other
comprehensive
income (loss)
—
Exchange
rate
change
—
Business
acquisitions
—
Balance
as at March
31, 2022
(1,193)
(64,200)
980
7,670
—
7,390
2,596
(4,844)
5,270
1,941
(759)
(45,059)
1,371
(466)
(1,809)
(65)
89
617
(2,000)
2,215
520
784
1,166
$
—
—
—
—
—
—
—
—
(1,004)
—
(1,004)
(70)
—
(3,141)
—
(66,040)
514
8
—
—
—
—
—
—
—
(62)
234
—
—
—
—
—
6,103
(65)
7,479
3,213
(6,844)
7,485
—
—
(2,907)
1,457
25
(47,866)
Annual Report 2022 | Stingray Group Inc. | 75
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
Changes in deferred tax assets and liabilities for the year ended March 31, 2021 are as follow:
Property and equipment
Intangible assets, goodwill and
$
broadcast licences
Financing fees
Tax losses and SR&ED carried
forward
Investments
CRTC tangible benefits
Performance and deferred
share unit plans
Right-of-use assets on leases
Lease liabilities
Accrued pension benefit liability
Other
$
Balance
as at March
31, 2020
(1,226)
Recognized in
net income
123
Recognized in
other
comprehensive
income (loss)
—
Exchange
rate change
—
Balance
as at March
31, 2021
(1,103)
(62,811)
1,304
15,491
(2,829)
7,113
1,313
(5,608)
5,932
2,238
368
(38,715)
(1,445)
(324)
(7,807)
2,829
277
1,283
764
(662)
(300)
(1,024)
(6,286)
—
—
—
—
—
—
—
—
3
—
3
56
—
(14)
—
—
—
—
—
—
(103)
(61)
(64,200)
980
7,670
—
7,390
2,596
(4,844)
5,270
1,941
(759)
(45,059)
UNRECOGNIZED DEFERRED TAX ASSETS
The Corporation has operating tax losses carried forward of $30,331 (2021 – $43,047) that are available to reduce future
taxable income. A tax benefit was not recognized for $9,297 (2021 – $6,818) of these tax losses carried forward. Deferred
tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be
available against which the Corporation can utilize the benefits therefrom.
As at March 31, 2022 and 2021, the amounts and expiry dates of the tax losses carried forward were as follows:
Canada (1)
Netherlands
Belgium
Switzerland
2022
2023
2028
2038
2039
2040
2041
Indefinite
$
$
$
—
—
2,474
232
1,334
837
—
4,877
$
—
—
—
—
—
—
2,106
2,106
$
$
—
—
—
—
—
—
2,990
2,990
$
$
2,064
789
—
—
—
—
—
2,853
$
$
United
Kingdom
—
—
—
—
—
—
17,505
17,505
(1) Represents tax losses carried forward as per federal jurisdiction and tax losses available as per provincial jurisdictions may differ.
Annual Report 2022 | Stingray Group Inc. | 76
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
Canada (1)
Singapore
Switzerland
United Kingdom
2021
2022 (2)
2023
2028
2036
2037
2038
2039
2040
2041
Indefinite
$
$
—
—
—
51
323
2,992
808
4,465
1,535
—
10,174
$
$
—
—
—
—
—
—
—
—
—
579
579
$
$
3,335
2,032
360
—
—
—
—
—
—
—
5,727
$
$
—
—
—
—
—
—
—
—
—
26,567
26,567
(1) Represents tax losses carried forward as per federal jurisdiction and tax losses available as per provincial jurisdictions may differ.
(2)
These losses expired during the year ended March 31, 2022.
UNRECOGNIZED DEFERRED TAX LIABILITIES
The Corporation has not recognized a deferred tax liability for the undistributed earnings of its subsidiaries in the current
and prior years for those that the Corporation does not currently expect those undistributed earnings to reverse and
become taxable in the foreseeable future. A deferred income tax liability will be recognized when the Corporation expects
that it will recover those undistributed earnings in a taxable manner, such as the sale of the investment or through the
receipt of dividends.
11. EARNINGS PER SHARE
2022
2021
Net income
$
33,287
$
45,104
Basic weighted average number of subordinate voting shares,
variable subordinate voting shares and multiple voting shares
Dilutive effect of stock options
Diluted weighted average number of subordinated voting shares,
variable subordinated voting shares and multiple voting shares
Earnings per share — Basic
Earnings per share — Diluted
70,968,954
494,627
73,266,886
168,306
71,463,581
73,435,192
$
$
0.47
0.47
$
$
0.62
0.61
Annual Report 2022 | Stingray Group Inc. | 77
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
12. TRADE AND OTHER RECEIVABLES
Trade
Other receivables
Settlement receivable
Sales taxes receivable
2022
50,791
6,464
5,155
4,256
66,666
$
$
2021
45,381
7,355
5,155
3,223
61,114
$
$
As at March 31, 2022 and 2021, the Corporation had research and development tax credits receivable of $3,406 and
$3,506, respectively, from the provincial and federal governments, which relate to qualified research and development
expenditures under the applicable tax laws. As at March 31, 2022, the research and development tax credits receivable of
$2,738 was booked as a deduction of income tax payable. The amounts are subject to a government tax audit and the final
amounts received may differ from those recorded.
During the year ended March 31, 2021, the Corporation, together with its Canadian Broadcast Distribution Undertaking
customers (together, the “Objectors”), and SOCAN have entered into a binding memorandum of understanding that will
result in a partial refund to the Objectors of past royalties paid to Canadian collective societies. An amount of $5,155 was
therefore recognized in reduction of operating expenses and was still receivable as at March 31, 2022. The Corporation
started to receive a portion of the receivable after March 31, 2022 and expects to recover the full amount in the next twelve
months.
Annual Report 2022 | Stingray Group Inc. | 78
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
13. PROPERTY AND EQUIPMENT
Land,
buildings and
leasehold
improvements
Broadcasting
infrastructure
Furniture,
fixtures and
equipment
Computer
hardware
Other
Total
$
15,869 $
131
17,660 $
25,071 $
1,119
3,769
15,391 $
1,419
$
2,562
55
76,553
6,493
—
(21)
—
(48)
(40)
15,939
275
17
(219)
6
—
18,731
3,204
—
(564)
—
—
(4,298)
(126)
24,416
3,786
29
(1,139)
1,765
(71)
—
(301)
105
18,609
1,094
—
2,316
268
10
(73)
—
(29)
1,765
(4,739)
(61)
80,011
8,627
56
(2,024)
(2)
(50)
—
(46)
Cost
Balance at March 31, 2020
Additions
Additions through business
acquisition
Disposals and write-off
Foreign exchange
differences
Balance at March 31, 2021
Additions
Additions through business
acquisition
Disposals and write-off
Foreign exchange
differences
Balance at March 31, 2022
$
16,018 $
21,371 $
27,090 $
19,590 $
2,555
$
86,624
$
Accumulated depreciation
Balance at March 31, 2020
Depreciation for the year
Disposals and write-off
Foreign exchange
differences
Balance at March 31, 2021
Depreciation for the year
Disposals and write-off
Foreign exchange
differences
4,066 $
1,409
(12)
(34)
5,429
1,044
(218)
3,085 $
2,706
(31)
12,728 $
4,093
(3,587)
—
5,760
2,706
(694)
(219)
13,015
4,521
(465)
10,336 $
2,596
(36)
(11)
12,885
2,130
(71)
$
606
103
(15)
—
694
121
(29)
30,821
10,907
(3,681)
(264)
37,783
10,522
(1,477)
2
—
(54)
(83)
—
(135)
Balance at March 31, 2022
$
6,257 $
7,772 $
17,017 $
14,861 $
786
$
46,693
Net carrying amounts
March 31, 2021
March 31, 2022
$
$
10,510 $
9,761 $
12,971 $
13,599 $
11,401 $
10,073 $
5,724 $
4,729 $
1,622
1,769
$
$
42,228
39,931
Annual Report 2022 | Stingray Group Inc. | 79
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
14. RIGHT-OF-USE ASSETS ON LEASES
Cost
Balance at March 31, 2020
Additions
Reassessment of leases’ term
Foreign exchange differences
Balance at March 31, 2021
Additions
Reassessment of leases’ term
Foreign exchange differences
Balance at March 31, 2022
Accumulated depreciation
Balance at March 31, 2020
Depreciation for the year
Reassessment of leases’ term
Foreign exchange differences
Balance at March 31, 2021
Depreciation for the year
Reassessment of leases’ term
Foreign exchange differences
Balance at March 31, 2022
Net carrying amounts
March 31, 2021
March 31, 2022
Land and
buildings
Vehicles
Total
$
$
$
$
$
$
34,254
4,627
(407)
13
38,487
2,823
(2,211)
(84)
39,015
5,289
5,285
(35)
(4)
10,535
4,806
(1,970)
(43)
13,328
27,952
25,687
$
$
$
$
$
$
851
70
—
(13)
908
296
—
(15)
1,189
356
329
—
(9)
676
270
—
(14)
932
232
257
$
$
$
$
$
$
35,105
4,697
(407)
—
39,395
3,119
(2,211)
(99)
40,204
5,645
5,614
(35)
(13)
11,211
5,076
(1,970)
(57)
14,260
28,184
25,944
Annual Report 2022 | Stingray Group Inc. | 80
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
15. INTANGIBLE ASSETS, EXCLUDING BROADCAST LICENCES
Internally
developed
software
and apps
Music
catalog
Client list
and
relationships Trademarks
Licences,
website
application
and
computer
software
Non-
compete
agreements
Total
$
14,304 $
6,428
12,154 $
1,527
113,323 $
—
10,621 $
—
25,925
978
$
17,901 $
—
194,228
8,933
—
—
—
(3,574)
(336)
20,396
6,854
(41)
10,066
618
2,087
(3,587)
(982)
110,841
—
253
—
(392)
10,482
—
—
(1,207)
(788)
24,908
681
381
—
2,721
(8,368)
(183)
18,099
(2,722)
194,792
—
264
8,153
46,314
1,639
366
—
(21)
31,156
3,767
9,488
(1,710)
(177)
(247)
(110)
(1,899)
$
29,255 $
10,663 $
140,287 $
14,072 $
34,830
$
18,253 $
247,360
$
4,443 $
5,075
—
6,864 $
862
(1,299)
94,912 $
6,174
(3,587)
4,943 $
1,316
—
17,004
3,976
(1,025)
$
11,572 $
3,976
—
139,738
21,379
(5,911)
(259)
(33)
9,259
6,512
6,394
988
(919)
96,580
6,394
(198)
(758)
(131)
(2,298)
6,061
1,234
19,197
2,869
15,417
1,402
152,908
19,399
259
(12)
(1,123)
(98)
(144)
(59)
(1,177)
Cost
Balance at March 31, 2020
Additions
Additions through
business acquisition
Disposals and write-off
Foreign exchange
differences
Balance at March 31, 2021
Additions, net of tax credit of
$807
Additions through
business acquisitions
Foreign exchange
differences
Balance at March 31, 2022
Accumulated depreciation
Balance at March 31, 2020
Amortization for the year
Disposals and write-off
Foreign exchange
differences
Balance at March 31, 2021
Amortization for the year
Foreign exchange
differences
Balance at March 31, 2022
$
16,030 $
7,370 $
101,851 $
7,197 $
21,922
$
16,760 $
171,130
Net carrying amounts
March 31, 2021
March 31, 2022
$
$
11,137 $
13,225 $
3,672 $
3,293 $
14,261 $
38,436 $
4,421 $
6,875 $
5,711
12,908
$
$
2,682 $
1,493 $
41,884
76,230
Annual Report 2022 | Stingray Group Inc. | 81
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
16. GOODWILL AND BROADCAST LICENCES
Balance at March 31, 2020
Additions through business acquisition (note 3)
Additions
Foreign exchange differences
Balance at March 31, 2021
Additions through business acquisitions (note 3)
Additions
Foreign exchange differences
Balance at March 31, 2022
ANNUAL IMPAIRMENT ASSESSMENTS
Goodwill
Broadcast licences
$
$
337,824
2,947
—
(2,874)
337,897
18,765
—
(2,358)
354,304
$
$
272,910
—
78
—
272,988
—
8
—
272,996
Goodwill and broadcast licences are tested for impairment annually and when circumstances indicate the carrying value
may be impaired. The Corporation’s impairment test for goodwill and broadcast licences having indefinite useful lives was
based on the greater of value-in-use (“VIU”) and fair value less cost to sell (“FVLCS”) calculations determined by using a
discounted cash flow model. VIU and FVLCS of cash generating units (“CGUs”) are determined with significant
unobservable inputs and are considered level 3 within the fair value hierarchy.
CASH-GENERATING UNITS
For the purposes of assessing impairment, goodwill is allocated to those CGUs that are expected to benefit from synergies
of the related business combination and represent the lowest level within the Corporation at which management monitors
goodwill.
Broadcast licences are grouped at the CGU level, which is the lowest level for which there are largely independent cash
inflows. For broadcast licences impairment testing purposes, the Corporation has identified 14 CGUs, based on
geographical areas where interdependent cash inflows exist. Impairment charges and reversals, if any, are included as a
separate line on the consolidated statements of comprehensive income.
The carrying amounts of goodwill and broadcast licences allocated to each CGU and/or group of CGUs are set out in the
following tables.
Goodwill
Radio
Broadcast and commercial music
Broadcast licences
Toronto
Ottawa
Other(1)
2022
218,404
135,900
354,304
90,270
48,568
134,158
272,996
$
$
$
$
2021
218,404
119,493
337,897
90,270
48,568
134,150
272,988
$
$
$
$
(1) The carrying value of broadcast licences in each of the other CGUs is less than 10% of the total carrying value of broadcast licences.
Consequently, these other CGUs are grouped together for the purpose of note disclosure.
Annual Report 2022 | Stingray Group Inc. | 82
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
RADIO LICENCES IMPAIRMENT ASSESSMENTS
The recoverable amounts of the CGUs have been determined based on their VIU. The recoverable values have been
determined to be higher than the carrying amounts. As a result, no impairment was recorded.
The VIUs were calculated using unobservable (Level 3) inputs such as cash flow projections from financial budgets
approved by the Board of Directors. Growth rates used over the budget period are based on management’s estimates of
performance, which is established by considering historical growth rates achieved as well as anticipated fluctuations
including those resulting from the current economic environment. The growth rates depend also on whether the CGU
includes mature market stations versus start-up or evolving stations. Management assesses how the CGU’s market
position, relative to its competitors, might change over the budget period. The key assumptions used in the estimation of
the recoverable amount for the CGUs are the risk adjusted forecasted cash flows. The most significant assumptions that
form part of the risk adjusted forecasted cash flows relate to estimated growth in revenues and operating expenses.
Forecasts are based on the Corporation’s estimate of future performance for this mature industry. Management expects
the Corporation’s share of the market to be stable over the long-term budget period, despite that changes in rating results
could affect local market shares and relating growth rates.
CGU
Toronto
Ottawa
Other(1)
Five-year average
growth rate in
revenues
5.5%
6.6%
3.4% to 6.0%
Five-year average
growth rate in
operating expenses
3.9%
2.1%
(3.1)% to 2.8%
Terminal value
1.5%
1.5%
1.5%
Pre-tax discount
rate
9.3%
9.3%
9.1% to 9.4%
(1) The carrying value of broadcast licences in each of the other CGUs is less than 10% of the total carrying value of broadcast licences.
Consequently, these other CGUs are grouped together for the purpose of note disclosure.
The pre-tax discount rates applied to cash flow projections were derived from the Corporation’s weighted average cost of
capital (“WACC”). The discount rate calculation is based on the specific circumstances of the Corporation and its CGUs
and is derived from its WACC. The WACC takes into account both debt and equity. The cost of equity is derived from the
expected return on investment by the Corporation’s investors. The cost of debt is based on the interest-bearing borrowings
the Corporation is obliged to service. CGU-specific risk is incorporated by applying individual beta factors. The beta factors
are evaluated annually based on publicly available market data.
The possibility of new market entrants can have an impact on growth rate assumptions, as can adverse ratings results,
which would impact market share. However, management does not believe these would have a significant adverse effect
on the forecasts included in the budget and management’s conclusions on impairment would not be materially different as
a result. The determination of VIU is sensitive to the discount rates used and therefore management’s conclusions on
impairment could be materially different if the assumptions used to determine the discount rates changed.
By their nature, these estimates and assumptions are subject to measurement uncertainty, and consequently, actual results
could differ from estimates used. However, it has been determined that there is no reasonable change in assumptions that
would cause the carrying amount to exceed the estimated recoverable amount.
Annual Report 2022 | Stingray Group Inc. | 83
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
GOODWILL IMPAIRMENT ASSESSMENTS
The recoverable amount of the CGU has been determined based on its VIU. The recoverable amount has been determined
to be higher than the carrying amount. As a result, no impairment was recorded.
The VIU was calculated using unobservable (Level 3) inputs such as risk adjusted cash flows from financial budgets
approved by the Board of Directors covering a five-year period. The Corporation considered past experience, economic
trends as well as industry and market trends in assessing the level of cash flows that can be maintained in the future.
The most significant assumptions that form part of the risk adjusted forecasted cash flows relate to estimated growth in
revenues and operating expenses. Forecasts are based on the Corporation’s estimate of future performance for this mature
industry.
CGU
Broadcast and Commercial Music
Radio
Five-year average
growth rate in
revenues
9.8%
5.3%
Five-year average
growth rate in
operating expenses
3.7%
2.3%
Terminal value
Pre-tax discount
rate
2.5%
1.5%
9.0%
9.3%
The pre-tax discount rate represents the Corporation’s WACC as at the date of the assessment. Refer to the section above
for more information on discount rates calculation.
By their nature, these estimates and assumptions are subject to measurement uncertainty, and consequently, actual results
could differ from estimates used. However, it has been determined that there is no reasonable change in assumptions that
would cause the carrying amount to exceed the estimated recoverable amount.
Annual Report 2022 | Stingray Group Inc. | 84
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
17. INVESTMENTS
The table below provides a continuity of investments, investment in a joint venture and investments in associates:
Balance at March 31, 2020
Proceeds from disposal of an investment
Share of results of joint venture
Change in fair value, including foreign
exchange differences
Balance at March 31, 2021
Additions
Share of results of joint venture
Equity gains on associates
Change in fair value, including foreign
exchange differences
Balance at March 31, 2022
INVESTMENTS
Investments
Investment in a
joint venture
Investments
in associates
Total
$
23,548 $
(18,861)
—
628 $
—
(38)
1,556 $
—
—
25,732
(18,861)
(38)
(3,787)
900
703
—
—
—
590
—
(65)
—
—
1,556
2,508
—
241
$
12
1,615 $
—
525 $
(14)
4,291 $
(3,787)
3,046
3,211
(65)
241
(2)
6,431
The Corporation has equity instruments in private entities at fair value that are estimated using a market comparison
technique. The valuation model is based on market multiples derived from quoted price of companies comparable to the
investments and the expected EBITDA on the investments.
All equity instruments in private entities are classified as financial assets at fair value through profit and loss.
SIGNIFICANT ESTIMATE
The fair value of investments that are not traded in an active market is determined using valuation techniques. The
Corporation uses judgment to select a variety of methods and make assumptions that are mainly based on market
conditions existing at the end of each reporting year. For details on the key assumptions used and the impact of changes
to these assumptions see Note 29.
Annual Report 2022 | Stingray Group Inc. | 85
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
18. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Trade
Accrued liabilities
Sales taxes payable
19. CREDIT FACILITIES
2022
18,374
44,394
4,248
67,016
$
$
2021
15,226
34,172
3,748
53,146
$
$
The credit facilities consist of a $375,000 revolving credit facility (“Revolving facility”) and a remaining $63,750 term loan
(“Term facility”), both maturing in October 2026. On May 28, 2021, the Corporation fully repaid, on maturity, its $20,000
term loan.
The credit facilities may be drawn in Canadian dollars in the form of prime rate loan or banker’s acceptances, in US dollars
in the form of US base rate loans or LIBOR loans, in Euro in the form of LIBOR loans, in British Pound in the form of SONIA
loans and in Australian dollars in the form of BBSY loans.
The credit facilities bear interest at (a) the bank’s prime rate (2.70% and 2.45% as at March 31, 2022 and 2021,
respectively) or US base rate if denominated in US dollars (4.00% and 3.75% as at March 31, 2022 and 2021, respectively)
plus an applicable margin based on a financial covenant, or (b) the banker’s acceptance rate (0.73% and 0.52% as at
March 31, 2022 and 2021, respectively) plus an applicable margin based on a financial covenant, or (c) LIBOR (0.21% and
0.11% as at March 31, 2022 and 2021, respectively) plus an applicable margin based on a financial covenant, at the
Corporation’s option.
In addition, the Corporation incurs standby fees based on a financial covenant, on the unused portion of the credit facilities
(0.40% for the years ended March 31, 2022 and 2021). The credit facilities are secured by guarantees from subsidiaries
and first ranking lien on universality of all assets, tangible and intangibles, present and future.
The tables below are a summary of the credit facilities:
March 31, 2022
Total available
Drawn
Letter of credit
Net available
Committed credit facilities
Revolving facility
Term facility
Total committed credit facilities
Less: unamortized deferred financing fees
Balance, end of year
$
$
375,000
63,750
438,750
Current portion
Non-current portion
$
$
$
$
$
$
295,586
63,750
359,336
(1,133)
358,203
7,500
350,703
750
—
750
$
$
78,664
—
78,664
Annual Report 2022 | Stingray Group Inc. | 86
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
March 31, 2021
Total available
Drawn
Letter of credit
Net available
Committed credit facilities
Revolving facility
Term facilities
Total committed credit facilities
Less: unamortized deferred financing fees
Balance, end of year
$
$
325,000
91,250
416,250
Current portion
Non-current portion
$
$
$
$
$
$
213,434
91,250
304,684
(980)
303,704
27,462
276,242
750
—
750
$
$
110,816
—
110,816
As at March 31, 2022 and 2021, a letter of credit amounting to $750 reduced the availability on the Revolving facility.
The Corporation is required to make consecutive quarterly capital repayments of 2.50% of the initial drawdown amount of
the Term facility. The remaining capital balance will be payable on maturity date, on October 15, 2026.
2023
2024
2025
2026
2027
Capital repayments of
the Term facility
7,500
$
7,500
7,500
7,500
33,750
63,750
$
As at March 31, 2022, the Corporation was in compliance with all the requirements of its credit agreement.
20. SUBORDINATED DEBT
The subordinated debt has a nominal value of $50,000 and matures on October 26, 2023. During the years ended on
March 31, 2022 and 2021, the Corporation made a voluntary capital repayments under its prepayment option of $6,400
and $8,000, respectively. The loan is unsecured and bears interest based on a financial covenant (6.65% as at
March 31, 2022 and 6.95% as at March 31, 2021). The remaining capital balance will be payable on maturity date.
Unamortized deferred financing fees amounted to $158 as at March 31, 2022 (2021 – $259).
Annual Report 2022 | Stingray Group Inc. | 87
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
21. LEASE LIABILITIES
The following table presents a summary of the activity related to the lease liabilities of the Corporation.
Lease liabilities, beginning of year
Additions
Payment of lease liabilities, including related interest
Reassessment of leases’ term
Disposal
Interest expense on lease liabilities (note 8)
Foreign exchange
Lease liabilities, end of year
Lease liabilities included in the consolidated
statements of financial position
Current portion
Non-current portion
2022
2021
$
$
$
$
$
30,212
3,119
(6,430)
(153)
—
1,615
(45)
28,318
March 31,
2022
4,171
24,147
28,318
$
$
$
$
$
30,853
4,703
(6,639)
(381)
32
1,628
16
30,212
March 31,
2021
4,479
25,733
30,212
The following table presents the maturity analysis of contractual undiscounted cashflows related to the lease liabilities of
the Corporation as of March 31, 2022.
Less than one year
One to five years
More than five years
Total undiscounted lease liabilities as at March 31, 2022
$
$
1,439
19,171
16,308
36,918
Annual Report 2022 | Stingray Group Inc. | 88
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
22. OTHER LIABILITIES
CRTC tangible benefits
Contingent consideration
Balance payable on business acquisitions
Accrued pension benefit liability (note 23)
Derivative financial instruments (note 29)
Performance share units payable
Other
Current portion
$
2022
28,240
19,204
2,559
2,837
1,464
5,046
1,647
60,997
(17,786)
$
2021
27,970
14,456
100
6,112
5,370
4,478
1,541
60,027
(15,812)
$
43,211
$
44,215
SIGNIFICANT ESTIMATE — CONTINGENT CONSIDERATION
In the event that certain predetermined sales volumes, specific contract renewals and other conditions are achieved by
the acquired companies, additional consideration may be payable in the future.
The fair value of the contingent consideration of $19,204 was estimated by calculating the present value of the future
expected outflows. For details of the key assumptions used and the impact of changes to these assumptions, see Note 29.
The estimates are based on discount rates ranging from 12% to 36%. During the year ended March 31, 2022, the
Corporation reassessed certain contingent consideration, as the actual sales revenues expected to be achieved by the
acquired companies were either above or below the maximum threshold, contingent services to be received are not
expected to be received in the future for one acquired company, and because of contractual rights to offset an amount
against a claim made by the Corporation to sellers of an acquired company.
Annual Report 2022 | Stingray Group Inc. | 89
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
23. EMPLOYEE BENEFIT PLANS
The Corporation maintains a defined contribution pension plan and defined benefit pension plans.
DEFINED CONTRIBUTION PENSION PLAN
The defined contribution pension plan covers the majority of the Corporation’s employees. The Corporation’s contributions
to the defined contribution pension plan are based on percentages of gross salaries and totaled $1,550 (2021 – $1,375).
DEFINED BENEFIT PENSION PLANS
The Corporation maintains a defined benefit pension plan (the “Basic Plan”) for a small group of the Corporation’s former
employees, which is not accepting new entrants at this time. The Basic Plan provides pension benefits based on the length
of service and the last five years of average earnings of each member.
The Basic Plan meets the definition of a designated plan under the Income Tax Act (Canada). The most recent funding
actuarial valuation for the Basic Plan was as of March 31, 2022.
In addition, the Corporation has two individual Supplementary Retirement Pension Arrangements (“SRPAs”), which each
provide pension benefits to a retired executive. These SRPAs provide benefits above the Income Tax Act (Canada) limit.
These plans are funded by the Corporation.
The Corporation measures its accrued benefit obligations and fair value of plan assets for accounting purposes as of
March 31 of each year. The obligations as at March 31, 2022 and the 2023 current service cost of the Plans are determined
based on membership data as at March 31, 2022.
Items related to the Corporation’s defined benefit pension plans are presented as follows in the consolidated financial
statements:
Consolidated statements of financial position
Accrued pension benefit liability, included in other liabilities (note 22)
Accrued pension benefit asset, included in other non-current assets
Net accrued pension liability
Consolidated statements of comprehensive income
Pension benefit expense, included in net finance expense (income)
Other comprehensive gains and accumulated other comprehensive losses
Actuarial (gains) losses recognized in other comprehensive income (loss)
Cumulative actuarial (gains) losses recognized in other comprehensive income
(loss)
2022
2021
$
$
$
$
$
(2,837)
1,633
$
(1,204)
$
193
$
(3,784)
(3,200)
$
$
(6,112)
532
(5,580)
234
10
584
Annual Report 2022 | Stingray Group Inc. | 90
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
The following summarizes the movements in the defined benefit pension plan balances:
Accrued benefit obligations
Balance, beginning of year
Interest cost
Benefits paid
Actuarial gains (losses):
Impact of changes in financial assumptions
Impact of changes in experience adjustments
Balance, end of year
Plan assets
Fair value, beginning of year
Interest income
Actuarial gains:
Return on plan assets, excluding interest income
Administrative expenses
Benefits paid
Fair value, end of year
Net accrued pension asset (liability)
2022
2021
Basic Plan
SRPAs
Basic Plan
SRPAs
$
$
$
$
$
4,805 $
130
(318)
6,112 $
167
(785)
4,482 $
151
(316)
6,139
194
(793)
(450)
(155)
4,012 $
(271)
(2,386)
2,837 $
444
44
4,805 $
364
208
6,112
5,337 $
144
522
(40)
(318)
5,645 $
— $
—
—
—
—
— $
4,492 $
151
1,050
(40)
(316)
5,337 $
—
—
—
—
—
—
1,633 $
(2,837) $
532 $
(6,112)
The Corporation determined that there was no limit on the defined benefit asset (asset ceiling) because the Corporation
has unimpaired rights to the surplus in the Basic Plan and it has the right to take contribution holidays when available.
Employer contributions to the SRPAs are estimated to be $232 in 2023.
Pension benefit expense recognized in the consolidated statements of comprehensive income (loss) as net finance
expenses (income) is as follows:
Interest cost
Interest income on plan assets
Administrative expenses
Defined benefit plan expense
2022
Basic Plan
130
$
(144)
40
26
$
SRPAs
167
—
—
167
$
$
2021
Basic Plan
151
(151)
40
40
$
$
SRPAs
194
—
—
194
$
$
Actuarial gains and losses recognized in other comprehensive income (loss) are as follows:
Basic Plan
2022
SRPAs
Total
Basic Plan
2021
SRPAs
Total
Cumulative actuarial losses (gains),
beginning of year
$
(209) $
793 $
584 $
353 $
221 $
574
Recognized actuarial losses (gains)
during the year
Cumulative actuarial losses,
end of year
(1,127)
(2,657)
(3,784)
(562)
572
10
$
(1,336) $
(1,864) $
(3,200) $
(209) $
793 $
584
Annual Report 2022 | Stingray Group Inc. | 91
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
The principal actuarial assumptions were as follows:
Discount rate for the accrued net benefit obligation
Future pension increases
2022
Basic Plan
3.5%
1.7%
SRPAs
3.5%
0.3%
2021
Basic Plan
2.8%
1.7%
SRPAs
2.8%
0.3%
As at March 31, 2022 and based on an actuarial review, the net remeasurement gain, before income tax recovery, recorded
in other comprehensive income (loss) of $3,784 (2021 – net remeasurement loss of $10) was primarily reflective of an
increase in the estimated discount rate for both plans and an actuarial loss on plan assets.
Plan assets for the Basic Plan consist of:
Equity funds
Fixed income funds
2022
73%
27%
100%
2021
68%
32%
100%
The pension plan has no direct investments in the Corporation nor any of its affiliates. Investments are diversified such that
the failure of any single investment would not have a material impact on the overall level of assets. The largest proportion
of assets is invested in equities, although there is a good portion also invested in bonds and other highly liquid assets. All
assets are invested in funds where the underlying securities have quoted market prices in an active market. The
Corporation believes that equities offer the best returns over the long-term with an acceptable level of risk.
Since the benefit payments are adjusted to the Consumer Price Index, the pension plan is exposed to inflation. It is also
exposed to interest rate risks and changes in life expectancy of pensioners. A large portion of the plan assets consist of
equity securities, which are exposed to equity market risk.
SIGNIFICANT ESTIMATE
The cost of defined benefit pension plans and the present value of the net pension obligation are determined using actuarial
valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the
future. These include the determination of the discount rate, mortality rates and future salary and pension increases. Due
to the complexity of the valuation, the underlying assumptions and its long-term nature, the net pension obligation is highly
sensitive to changes in these assumptions. Management engages the services of external actuaries to assist in the
determination of the appropriate discount rate. Management, with the assistance of actuaries, determines the applicable
discount rates using the interest rates on high quality corporate bonds that have terms to maturity approximating the terms
related to the defined benefit obligation. The mortality rate is based on publicly available mortality tables. Future salary
increases and pension increases are based on expected future inflation rates.
Changes in assumptions of all plans would have resulted in an increase (decrease) in the net defined benefit obligation as
presented below:
Discount rate — change of 0.5%
Future pension costs — change of 1.0%
Life expectancy — change by 1 year
Change in assumption
Increase Decrease
329
$
$
$
(304)
414
264
$
$
$
(213)
(276)
The sensitivity analysis above has been determined based on a method that extrapolates the impact on the net defined
benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.
The average duration of the defined benefit plan obligation at the end of the reporting period is 9.4 years.
Annual Report 2022 | Stingray Group Inc. | 92
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
24. SHARE CAPITAL
Authorized:
Unlimited number of subordinate voting shares, participating, without par value
Unlimited number of variable subordinate voting shares, participating, without par value
Unlimited number of multiple voting shares (10 votes per share), participating, without par value
Unlimited number of special shares, participating, without par value
Unlimited number of preferred shares issuable in one or more series, non-participating, without par value
Issued and outstanding:
The movements in share capital were as follows:
Year ended March 31, 2021
Subordinate voting shares and variable subordinate voting shares
As at March 31, 2020
Exercise of stock options
Repurchased and cancelled
Purchased and held in trust through employee share purchase plan
As at March 31, 2021
Multiple voting shares
As at March 31, 2020 and 2021
Year ended March 31, 2022
Subordinate voting shares and variable subordinate voting shares
As at March 31, 2021
Exercise of stock options
Repurchased and cancelled
Purchased and held in trust through employee share purchase plan
As at March 31, 2022
Multiple voting shares
As at March 31, 2021 and 2022
Number of
shares
Carrying
amount
55,607,956
80,732
(1,530,180)
11,582
54,170,090
17,941,498
72,111,588
54,170,090
95,000
(2,106,000)
(4,664)
52,154,426
17,941,498
70,095,924
$
$
$
$
$
$
$
$
304,140
269
(8,700)
16
295,725
18,226
313,951
295,725
378
(11,970)
(31)
284,102
18,226
302,328
To comply with the Broadcasting Act and the regulations and directions promulgated thereunder from time to time, which
permit non-Canadians (as defined in the Direction to the CRTC (Ineligibility of Non-Canadians) (SOR/97-192)) to own and
control, directly or indirectly, up to 20% of the voting shares and 20% of the votes of an operating licensee that is a
corporation, such as the Corporation, the Corporation has imposed restrictions respecting the issuance, transfer and, if
applicable, voting of the Corporation’s shares. Restrictions include limitations over foreign ownership of the issued and
outstanding voting shares.
Annual Report 2022 | Stingray Group Inc. | 93
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
TRANSACTIONS FOR THE YEAR ENDED MARCH 31, 2022
During the period, 95,000 stock options were exercised and consequently, the Corporation issued 95,000 subordinate
voting shares. The proceeds amounted to $294. An amount of $84 of contributed surplus related to those stock options
was transferred to the subordinate voting shares’ account balance.
During the year ended March 31, 2022, the Corporation declared dividends of $0.075 per subordinate voting share,
variable subordinate voting share and multiple voting share totalling $21,104, of which an amount of $21,254 was paid
during the year. A dividend payable of $5,259 is accrued in the consolidated statement of financial position as at
March 31, 2022 as it will be payable on or around June 15, 2022.
Share repurchase program
On September 21, 2021, the Toronto Stock Exchange (the "TSX") approved the implementation of a share repurchase
program, which took effect on September 27, 2021. This program allows the Corporation to repurchase up to an aggregate
3,222,901 subordinate voting shares and variable subordinate voting shares (collectively, the "Subordinate Shares"),
representing approximately 10% of the Subordinate Shares issued and outstanding as at September 13, 2021. In
accordance with TSX requirements, the Corporation is entitled to purchase, on any trading day, up to a total of 12,130
Subordinate Shares, representing 25% of the net average daily trading volume of the Subordinate Shares. When making
such repurchases, the number of Subordinate Shares in circulation is reduced and the proportionate interest of all
remaining shareholders in the Corporation's share capital is increased on a pro rata basis. All shares repurchased under
the share repurchase program will be cancelled upon repurchase. The share repurchase period will end no later than
September 26, 2022.
The following table summarizes the Corporation's share repurchase activities during the years ended March 31, 2022 and
2021.
Subordinate voting shares repurchased for cancellation (unit)
Average price per share
Total repurchase cost
Repurchase resulting in a reduction of:
Share capital
Deficit (1)
2022
2021
2,106,000
7.1622
15,084
11,970
3,114
$
$
$
$
1,530,180
6.6610
10,193
8,700
1,493
$
$
$
$
(1) The excess of net repurchase cost over the average book value of the Subordinate voting shares.
Annual Report 2022 | Stingray Group Inc. | 94
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
TRANSACTIONS FOR THE YEAR ENDED MARCH 31, 2021
During the year ended March 31, 2021, 80,732 stock options were exercised and consequently, the Corporation issued
80,732 subordinate voting shares. The proceeds amounted to $144. An amount of $125 of contributed surplus related to
those stock options was transferred to the subordinate voting shares’ account balance.
Also during the year, the Corporation declared dividends of $0.075 per subordinate voting share, variable subordinate
voting share and multiple voting share totalling $27,376, of which an amount of $21,967 was paid during the year.
A dividend payable of $5,409 was accrued in the consolidated statement of financial position as at March 31, 2021 as it
was payable on June 15, 2021.
25. SUPPLEMENTAL CASH FLOW INFORMATION
Trade and other receivables
Inventories
Other current assets
Other non-current assets
Accounts payable and accrued liabilities
Deferred revenues
Income taxes payable
Other payables
2022
2,031
(1,945)
1,255
(956)
2,104
(1,289)
(1,430)
206
(24)
$
$
2021
10,236
(70)
(2,308)
(240)
(18,220)
3,080
(6,171)
3,061
(10,632)
$
$
The following table summarizes the Corporation's additions not affecting cash and cash equivalents activities during the
years ended March 31, 2022 and 2021.
Additions to property and equipment
Additions to intangible assets, excluding broadcast licences and
intangible assets acquired through business acquisitions
2022
(434)
165
(269)
$
$
2021
803
1,192
1,995
$
$
Annual Report 2022 | Stingray Group Inc. | 95
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
26. SHARE-BASED COMPENSATION
STOCK OPTION PLAN
The Corporation has a stock option plan to attract and retain employees, directors, officers and consultants. The plan
provides for the granting of options to purchase subordinate voting shares. Under this plan, 10% of all multiple voting
shares, subordinate voting shares and variable subordinate voting shares issued and outstanding on a non-diluted basis
are reserved for issuance. The terms and conditions for acquiring and exercising options are set by the Board of Directors.
Unless otherwise determined by the Board of Directors, each option shall expire at the latest on the seventh anniversary
of the grant date. The total number of shares issued to a single person cannot exceed 10% of the Corporation’s total issued
and outstanding common shares on a fully diluted basis.
Under the stock option plan, 3,469,807 stock options were outstanding as at March 31, 2022 (3,163,253 as at
March 31, 2021). Outstanding options are subject to employee service vesting criteria which range from nil to four years
of service.
The following summarizes the changes in the plan’s position for the years ended March 31, 2022 and 2021:
Options outstanding, beginning of year
Granted
Exercised (note 24)
Forfeited
Options outstanding, end of year
2022
Number of
options
Weighted
average
exercise price
3,163,253 $
434,204
(95,000)
(32,650)
3,469,807
6.30
6.97
3.09
5.18
6.48
2021
Number of
options
Weighted
average
exercise price
2,431,819 $
833,174
(80,732)
(21,008)
3,163,253
4.99
4.63
1.79
8.89
6.30
7.02
Exercisable options, end of year
1,970,675 $
6.97
1,449,918 $
The following is a summary of the information on the outstanding stock options as at March 31, 2022 and 2021:
Exercise price
March 31, 2022
$ 4.63
5.60
6.13
6.25
6.92
7.00
7.03
7.27
7.62
7.69
7.92
8.61
9.00
$ 6.48
Outstanding
options
Weighted average
outstanding
contractual life
outstanding (years)
Number of options
outstanding
748,422
672,374
21,929
287,880
359,933
25,000
44,248
311,047
482,850
22,124
43,698
433,746
16,556
3,469,807
5.18
4.18
4.85
3.15
6.18
3.36
6.62
4.21
5.23
6.87
6.60
6.19
4.89
5.00
Exercisable
options
Number
142,106
336,187
10,965
287,880
—
25,000
—
311,047
482,850
—
32,774
325,310
16,556
1,970,675
Annual Report 2022 | Stingray Group Inc. | 96
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
Exercise price
March 31, 2021
$ 0.46
4.63
5.60
6.13
6.25
7.00
7.27
7.62
7.92
8.61
9.00
$ 6.30
Outstanding
options
Weighted average
outstanding
contractual life
outstanding (years)
Number of options
outstanding
35,000
833,173
672,374
21,929
287,880
25,000
311,047
482,850
43,698
433,746
16,556
3,163,253
1.17
6.18
5.18
5.85
4.15
4.36
5.21
6.23
7.60
7.19
5.89
5.78
Exercisable
options
Number
35,000
—
168,093
5,482
287,880
25,000
311,047
362,138
21,849
216,873
16,556
1,449,918
The weighted average fair value of the stock options granted during the year ended March 31, 2022 was $1.41 per stock
option (2021 — $0.71). This fair value was estimated at the date on which the options were granted by using the
Black-Scholes option pricing model with the following assumptions:
Weighted average volatility
Weighted average risk-free interest rate
Weighted average expected life of options
Weighted average value of the subordinate voting share at grant date
Weighted average expected dividend rate
2022
2021
35%
0.86% - 1.82%
5 years
6.92$ - 7.69$
3.90% - 4.34%
35%
0.52%
5 years
$4.63
6.26%
The weighted average volatility used is calculated based on the Corporation’s historical volatility.
Total share-based compensation costs recognized under this stock option plan amount to $635 for the year ended
March 31, 2022 (2021 — $717).
The weighted average share price at the date of exercise for share options exercised during the year ended March 31, 2022
was $6.98 (2021 — $6.65).
EMPLOYEE SHARE PURCHASE PLAN
The Corporation has an employee share purchase plan (“ESPP”) to attract and retain employees. Under this plan, eligible
employees, including certain key management personnel, are permitted to contribute up to a maximum of 6% of their
eligible earnings to purchase the Corporation’s subordinate voting shares and variable subordinate voting shares. Subject
to certain conditions, the Corporation will match a percentage of the employee’s contributions up to a maximum of 2% of
the employee’s eligible earnings and the shares purchased with the Corporation’s contributions become vested on
January 31 of the following year. All contributions are used by the plan’s trustee to purchase subordinate voting shares
and variable subordinate voting shares in the open market, on behalf of employees.
Annual Report 2022 | Stingray Group Inc. | 97
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
The following summarizes the changes in the plan’s position for the years ended March 31, 2022 and 2021:
Unvested contributions, beginning of year
Contributions
Dividends credited
Vested
Unvested contributions, end of year
2022
Number of
units
7,112 $
39,464
5,028
(39,828)
11,776 $
Amount
114
325
36
(330)
145
2021
Number of
units
18,694 $
46,988
4,616
(63,186)
7,112 $
Amount
130
305
28
(349)
114
The weighted average fair value of the shares contributed during the year ended March 31, 2022 was $7.23
(2021 — $6.11).
Total share-based compensation costs recognized under the ESPP amount to $163 for the year ended March 31, 2022
(2021 — $134).
PERFORMANCE SHARE UNIT PLAN
The Corporation has a performance unit plan (“PSU”) that can be granted to directors, officers, executives and employees
as part of their long-term compensation package, which is expected to be settled in cash after a three year vesting period.
The value of the payout is determined by multiplying the number of PSU vested at the payout date by the volume weighted
average price of the Corporation’s shares on the last five trading days immediately preceding the vesting date. The fair
value of the payout is determined at each reporting date based on the fair value of the Corporation’s shares at the reporting
date. The fair value is amortized over the vesting period, being three years.
During the year ended March 31, 2022, 417,783 PSU (2021 — 563,837) were granted at a range of $6.71 to $7.26
(2021 — $4.38 to $7.05) per unit to executives and employees and no outstanding PSU were vested. As at March 31, 2022,
the fair value per unit was $7.32 (2021 — $7.17) for a total amount of $7,208 (2021 — $5,705) and was presented in
accrued liabilities on the consolidated statements of financial position.
The following summarizes the changes in the plan’s position for the years ended March 31, 2022 and 2021:
Balance, beginning of year
Granted
Expense and revision of estimates
Liabilities settled
Forfeited
Balance, end of year
Balance, vested
2022
Number of
units
1,510,513 $
417,783
—
(448,061)
(7,448)
1,472,787 $
—
Amount
5,705
—
4,860
(3,342)
(15)
7,208
—
2021
Number of
units
1,186,269 $
563,837
—
(163,850)
(75,743)
1,510,513 $
—
Amount
2,894
—
3,669
(663)
(195)
5,705
—
Total share-based compensation costs recognized under
the PSU plan amount
to $4,825
for
the year
ended March 31, 2022 (2021 — $3,528).
Annual Report 2022 | Stingray Group Inc. | 98
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
DEFERRED SHARE UNIT PLAN
The Corporation has a deferred share unit plan (“DSU”) that can be granted to directors, officers and employees as part
of their compensation package, which is expected to be settled in cash. The value of the payout is determined by
multiplying the number of DSU vested at the payout date by the fair value of the Corporation’s shares on the volume
weighted average price of the Corporation’s shares on the last three trading days immediately preceding the payout date.
The fair value of the payout is determined at each reporting date based on the fair value of the Corporation’s shares at the
reporting date.
During the year ended March 31, 2022, 266,535 DSU (2021 — 214,369) were granted at a range of $6.58 to $7.61 per
unit to directors (2021 — $4.40 to $7.73) and 924,260 DSU were vested. The total expense related to DSU plans amounted
to $954 in 2022 (2021 — $2,908). As at March 31, 2022, the fair value per unit ranged from $7.26 to $7.43 (2021 — $7.12
to $7.20) for a total amount, including fringes, of $7,084 (2021 — $5,063) presented in accrued liabilities on the statements
of financial position.
The following summarizes the changes in the plan’s position for the years ended March 31, 2022 and 2021:
Balance, beginning of year
Granted and vested
Settlement
Revision of estimates
Balance, end of year
Balance, vested
27. COMMITMENTS
2022
Number of
units
672,827 $
266,535
(15,102)
—
924,260 $
924,260 $
Amount
5,063
1,859
(91)
253
7,084
7,084
2021
Number of
units
458,458 $
214,369
—
—
672,827 $
672,827 $
Amount
1,948
1,193
—
1,922
5,063
5,063
The following table is a summary of the Corporation’s operating obligations as at March 31, 2022 that are due in each of
the next six years and thereafter.
2023
2024
2025
2026
2027
2028 and thereafter
OPERATING OBLIGATIONS
Operating
obligations
$
$
1,991
807
592
325
325
974
5,014
The Corporation’s significant operating obligations are for licensing and other long-term contracts that do not meet the
definition of a lease under IFRS 16. The Corporation must also pay royalties for the use of music for the majority of its
music services. Through copyright collective societies, the Corporation pays royalties to two sets of rights holders: rights
holders in music works, which are the music and the lyrics; and, rights holders in artists’ performances and sounds
recordings, which are the actual performances and recordings of the musical works.
Annual Report 2022 | Stingray Group Inc. | 99
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
BROADCAST LICENCES
A condition of the broadcast licences owned by the Corporation is to commit to fund Canadian Content Development
(“CCD”) over the initial term of the licences, which is usually seven years.
28. USE OF ESTIMATES AND JUDGMENTS
The preparation of these consolidated financial statements in conformity with International Financial Reporting Standards
(“IFRS”) requires management to make judgments, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates.
This note provides an overview of the areas that involved a higher degree of judgment or complexity, and of items which
are more likely to be materially adjusted due to estimates and assumptions differing from actual outcomes. Detailed
information about each of these estimates and judgments is included in notes 3 to 27 together with information about the
basis of calculation for each affected line item in the consolidated financial statements.
SIGNIFICANT ESTIMATES
The areas involving significant estimates are:
Estimation of current income tax payable and current income tax expense — Note 10
Recognition of deferred tax assets for tax losses available for carryforward — Note 10
Estimation of cost of defined benefit pension plans and present value of the net pension obligation — Note 23
Estimated value in use and/or fair value less costs to sell of CGUs used in goodwill and broadcasting licences
impairment testing — Note 16
Estimation of fair value of identified assets, liabilities and contingent consideration recorded in business
acquisitions — Notes 3 and 22
Estimation of lease term of contracts with renewal options — Notes 14 and 21
Estimates are based on management’s best knowledge of current events and actions that the Corporation may undertake
in the future. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting
estimates are recognized in the year in which the estimates are revised and in any future years affected by these revisions.
Annual Report 2022 | Stingray Group Inc. | 100
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
CRITICAL JUDGMENTS
Critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the
consolidated financial statements include the following:
Impairment of non-current assets
For the purpose of impairment testing of property and equipment, intangible assets, broadcast licences and
goodwill, management must use its judgment to identify the smallest group of assets that generates cash inflows
that are largely independent of those from other assets (“cash generating unit” or ”CGU”).
The amounts used for impairment calculations are based on estimates of future cash flows of the Corporation,
including estimates of future revenues, operating costs, discount rates and market prices. By their nature, these
estimates and assumptions are subject to measurement uncertainty and, consequently, actual results could differ
from estimates used. The impact of COVID-19 on the Corporation was also considered in calculating the future
cash flows. Depending on the measures taken by the federal and provincial authorities to slow or stop the spread
of COVID-19, such as the closure of non-essential businesses and social distancing, actual results could differ
materially from estimates used.
Useful lives of broadcast licences
The Corporation has concluded that broadcast licences are indefinite life intangible assets because they are
renewed every seven years without significant cost and there is a low likelihood of the renewal being denied.
Identifying a business acquisition
Management must use its judgment in determining whether a transaction is a business combination or a purchase
of assets in accordance with the criteria established in IFRS 3 Business combinations. The acquisition of an asset
or a group of assets that constitute a business is accounted for as a business combination and may give rise to
goodwill, whereas an asset purchase does not, thereby impacting subsequent amortization expense and/or
impairment testing results.
Recognition of internally developed intangible assets
Management must use its judgment in determining whether an internally developed intangible asset qualifies for
recognition, such as, but not limited to, assessing the technological feasibility of a project and determining the
appropriate internal costs to be capitalized. This exercise requires management to distinguish between the costs
necessary to generate an intangible asset from the costs necessary to maintain it. Recognition of an internally
developed intangible asset would lead to an increase of amortization expense as the opposite would lead to an
increase in research and development costs.
Judgment is also involved in determining the estimated useful life of an internally developed intangible asset.
Increasing an asset’s estimated useful life would result in a decrease of the annual amortization expense.
Lease term of contracts with renewal options
The Corporation determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an
option to terminate the lease, if it is reasonably certain not to be exercised. After the commencement date, the
Corporation reassesses the lease term for whether significant event or change in circumstances that is within its
control and affects its ability to exercise (or not to exercise) the option to renew (e.g., a change in business
strategy) has occurred.
Annual Report 2022 | Stingray Group Inc. | 101
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
29. FINANCIAL INSTRUMENTS
FAIR VALUES
The Corporation has determined that the carrying amount of cash and cash equivalents, trade and other receivables,
accounts payable and accrued liabilities and current portion of other liabilities excluding the contingent consideration is a
reasonable approximation of their fair value due to the short-term maturity of those instruments. As such, information on
their fair values is not presented below. The fair value of the credit facilities approximates its carrying value as it bears
interest at prime or banker’s acceptance rates plus a credit spread, which approximate current rates that could be obtained
for debts with similar terms and credit risk. The fair value of derivative financial instruments is determined using an
evaluation of the estimated market value, adjusted for the credit quality of the counterparty. The carrying amount of CRTC
tangible benefits and balance payable on business acquisitions is a reasonable approximation of their fair value as they are
discounted using the effective interest rate, which approximate current rates that could be obtained with similar terms and
credit risk. The tables below summarize the carrying and fair value of financial assets and liabilities, including their level in
the fair value hierarchy, as at March 31, 2022 and 2021. The Corporation uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation techniques:
Level 1:
quoted price (unadjusted) in active markets for identical assets or liabilities;
Level 2:
other techniques for which all inputs that have a significant effect in the
recorded value are observable, either directly or indirectly; and
Level 3:
techniques which uses inputs that have a significant effect on the recorded
fair value that are not based on observable market data.
As at March 31, 2022
Carrying value
Fair value
Level 1
Level 2
Level 3
Financial assets measured at amortized cost
Cash and cash equivalents
Trade and other receivables
Financial assets measured at fair value
Investments
Financial liabilities measured at
amortized cost
Credit facilities
Subordinated debt
Accounts payable and accrued liabilities
CRTC tangible benefits
Accrued pension benefit liability
Performance share unit payable
Balance payable on business acquisitions
Financial liabilities measured at fair value
Contingent consideration
Derivative financial instruments
$
$
$
14,563
62,410
1,615
$
1,615 $
— $
— $
1,615
358,203
25,442
62,768
28,240
2,837
5,046
2,559
$
19,204
1,464
$
19,204 $
1,464
— $
—
— $ 19,204
—
1,464
Annual Report 2022 | Stingray Group Inc. | 102
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
As at March 31, 2021
Carrying value
Fair value
Level 1
Level 2
Level 3
Financial assets measured at amortized cost
Cash and cash equivalents
Trade and other receivables
Financial assets measured at fair value
Investments
Financial liabilities measured at
amortized cost
Credit facilities
Subordinated debt
Accounts payable and accrued liabilities
CRTC tangible benefits
Accrued pension benefit liability
Performance share unit payable
Balance payable on business acquisitions
Financial liabilities measured at fair value
Contingent consideration
Derivative financial instruments
Fair value measurement (Level 3):
$
$
$
9,040
57,891
900
$
900 $
— $
— $
900
303,704
31,741
49,398
27,970
6,112
4,478
100
$
14,456
5,370
$
14,456 $
5,370
— $
—
— $ 14,456
—
5,370
Balance as at March 31, 2020
Change in fair value, including foreign exchange differences
Addition through business acquisition
Settlements
Balance as at March 31, 2021
Change in fair value, including foreign exchange differences
Additions
Additions through business acquisitions
Settlements
Balance as at March 31, 2022
INVESTMENTS
Investments
Contingent
consideration
$
$
$
23,548 $
(3,787)
—
(18,861)
900 $
12
703
—
—
1,615 $
17,831
110
2,197
(5,682)
14,456
(7,598)
—
15,807
(3,461)
19,204
For the years ended March 31, 2022 and 2021, the equity instruments in a private entity were classified as a financial
assets at fair value through profit and loss. A change of 5% in the liquidity discount would have increased / decreased the
fair value of the investments by approximately $81 and $45 during the years ended March 31, 2022 and 2021 respectively.
For the year ended March 31, 2021, the Corporation disposed of its investment in AppDirect for a cash consideration of
USD14,612 ($18,861) and recognized a loss on disposal of $3,787 in change in fair value of investments in the consolidated
statements of comprehensive income.
Annual Report 2022 | Stingray Group Inc. | 103
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
CONTINGENT CONSIDERATION
The contingent consideration related to business combinations is payable based on the achievement of targets for growth
in revenues for a period from the date of the acquisition and upon renewal of client contracts. The fair value measurement
of the contingent consideration is determined using unobservable (Level 3) inputs. These inputs include (i) the estimated
amount and timing of projected cash flows; and (ii) the risk-adjusted discount rate used to present value the cash flows
which is based on the risk associated with the revenue targets being met. If projected cash flows were 10% higher, the fair
value would have increased by $2,496 and if projected cash flows were 10% lower, the fair value would have decreased
by $2,619. Discount rates ranging from 12% to 36% have been applied and consider the time value of money. A change
in the discount rate by 100 basis points would have increased / decreased the fair value by $187.
The contingent consideration is classified as a financial liability and is included in other liabilities (note 22). The change in
fair value is recognized in net finance expense (income) (Note 8).
CREDIT RISK
Credit risk is the risk of an unexpected financial loss to the Corporation if a customer or counterparty to a financial
instrument fails to meet contractual obligations, and it arises primarily from the Corporation's trade and other receivables.
The Corporation’s credit risk is principally attributable to its trade receivables. The amounts presented in the consolidated
statements of financial position are net of an allowance for expected credit risk, estimated by the Corporation’s
management and based, in part, on the age of the specific receivable balance and the current and expected collection
trends. The Corporation's exposure to credit risk is mainly influenced by the characteristics of each customer. Generally,
the Corporation does not require collateral or other security from customers for trade receivables; however, credit is
extended following an evaluation of creditworthiness. In addition, the Corporation performs ongoing credit reviews of its
customers.
An allowance for expected credit losses is maintained to reflect an impairment risk for trade accounts receivable based on
an expected credit loss model. Bad debts are also provided for based on collection history and specific risks identified on
a customer-by-customer basis.
The aging of trade receivable balances and the allowance for doubtful accounts as at March 31, 2022 and March 31, 2021
were as follows:
Current
Past due 0-30 days
Past due 31-60 days
Past due 61-90 days
Past due more than 90 days
Total trade receivables
Less : allowance for expected credit losses
2022
25,867
12,252
7,363
4,171
7,067
56,720
(5,929)
50,791
$
$
2021
20,125
9,652
6,767
5,134
6,901
48,579
(3,198)
45,381
$
$
Annual Report 2022 | Stingray Group Inc. | 104
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
The movement in the allowance for expected credit losses in respect of trade receivables was as follows:
Balance, beginning of year
Bad debt expense
Write-off against reserve
Balance, end of year
2022
3,198
88
2,643
5,929
$
$
2021
2,401
1,488
(691)
3,198
$
$
The Corporation also has credit risk relating to cash and cash equivalents and other receivables. The Corporation manages
its risk by transacting only with sound financial institutions.
The carrying amounts of financial assets in the consolidated statements of financial position represent the Corporation's
maximum credit exposure.
LIQUIDITY RISK
Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they become due. The
Corporation manages liquidity risk by continuously monitoring actual and budgeted cash flows under both normal and
stressed conditions. The Board of Directors also reviews and approves the Corporation’s operating and capital budgets,
as well as any material transactions out of the ordinary course of business, including proposals on mergers, acquisitions
or other major investments or divestitures.
The following are the contractual maturities of financial liabilities including estimated interest payments as at
March 31, 2022:
Credit facilities
Subordinated debt
Accounts payables and
accrued liabilities
Lease liabilities
Other liabilities
MARKET RISK
Total carrying
amount
Contractual
cash flows
Less than 1
year
1 to 5 years
More than 5
years
$
358,203
25,442
$ 359,336
25,600
$
7,500
—
$ 351,836
25,600
$
—
—
67,016
28,318
60,997
67,016
36,918
66,556
67,016
1,439
23,421
—
19,171
40,884
—
16,308
2,251
Market risk is the risk that the changes in market prices, such as foreign exchange rates, interest rates and equity prices,
will affect the Corporation's earnings or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposure within acceptable parameters, while optimizing the return on
risk.
CURRENCY RISK
The Corporation is exposed to currency risk on sales and expenses that are denominated in currencies other than the
functional currency of the Corporation’s subsidiaries, primarily the US dollar (“USD”) and the euro (“EURO”). Also,
additional earnings variability arises from the translation of monetary assets and liabilities denominated in currencies other
than the functional currency of the Corporation’s subsidiaries at the rate of exchange at each balance sheet date, the
impact of which is reported as a foreign exchange gain or loss in the consolidated statements of comprehensive income.
Annual Report 2022 | Stingray Group Inc. | 105
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
The Corporation's objective in managing its foreign currency risk is to minimize its net exposure to foreign currency cash
flows, by transacting with third parties in the above currencies to the maximum extent possible and practical, given that
this will act as natural economic hedges for each of these currencies.
The Corporation's exposure to currency risk on its consolidated financial statements was as follows:
Cash and cash equivalents
Trade receivables
Investments
Credit facilities
Accounts payable and accrued liabilities
Contingent consideration and
balance payable on business acquisitions
Net balance exposure
Equivalent in Canadian dollars
March 31, 2022
USD
EURO
March 31, 2021
USD
EURO
5,666
17,846
2,850
(7,800)
(2,272)
(14,093)
2,197
2,745
1,464
2,562
—
(3,800)
(2,484)
—
(2,258)
(3,128)
877
10,438
—
(10,421)
(280)
—
614
772
1,925
3,753
—
(6,000)
(1,770)
—
(2,092)
(3,088)
The following exchange rates are those applicable to the following periods and dates:
USD per CAD
EURO per CAD
1.2535
1.4573
1.2496
1.3853
1.3221
1.5406
1.2575
1.4759
2022
2021
Average
Reporting
Average
Reporting
Based on the Corporation’s foreign currency exposures noted above, varying the above foreign exchange rates to reflect
a 5% strengthening of the US dollar and EURO would have the following impacts on net income, assuming that all other
variables remained constant:
Increase (decrease) in net income
138
(156)
39
(154)
March 31, 2022
USD
EURO
March 31, 2021
USD
EURO
An assumed 5% weakening of the foreign currency would have had an equal but opposite effect on the basis that all other
variables remained constant.
Annual Report 2022 | Stingray Group Inc. | 106
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
INTEREST RATE RISK
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in
market interest rates. The Corporation holds the majority of its cash and cash equivalents balance in accounts bearing
interest at rates less than 1.25%. The Corporation is, therefore, not materially exposed to future cash flow fluctuations
coming from changes in market interest rates for its cash and cash equivalents. Cash equivalents consist of term deposits
with original maturities of less than three months and are, therefore, also exposed to interest rate risk on fair value. However,
fair value risk is not significant, considering the relatively short term to maturity of these instruments.
The credit facilities are variable interest rate instruments that is due in more than one year. This instrument is exposed to
changes in future interest rates that could result in future cash flow fluctuations. To manage its interest rate risk, the
Corporation entered into interest rate swap agreements.
The table below summarize the interest rate contracts effective as at March 31, 2022 and 2021:
Maturity
Currency
Fixed interest
rate (when
applicable)
Initial nominal
value
Mark-to-market
liabilities as at
March 31, 2022
Mark-to-market
liabilities as at
March 31, 2021
Swaps
October 25, 2024
October 25, 2024
October 25, 2021
October 25, 2024
Swaptions
October 25, 2024
October 25, 2024
CAD
CAD
CAD
CAD
CAD
CAD
0.81%
1.33%
2.19%
2.29%
—
—
$
50,000
50,000
50,000
50,000
200,000
100,000
100,000
$ 200,000
$ 400,000
$
$
$
—
—
—
—
—
604
860
1,464
1,464
$
$
$
945
403
494
1,938
3,780
642
948
1,590
5,370
During the year ended March 31, 2022, the Corporation unwound three interest rate swaps with maturity date of
October 25, 2024 and made payments totaling $600.
During the year ended March 31, 2021, the Corporation unwound two interest rate swaps with maturity dates
of August 29, 2029 and August 31, 2029 and received cash payments totaling $490.
Given that the Corporation did not elect to apply hedge accounting during the years ended March 31, 2022 and 2021,
mark-to-market gains of $3,397 and $13,818 were recorded in net finance expense (income), respectively.
Annual Report 2022 | Stingray Group Inc. | 107
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
30. CAPITAL MANAGEMENT
The Corporation’s objectives when managing capital are as follows:
Pursue its growth strategy through acquisitions and organic growth by maintaining financial flexibility; and
Provide the Corporation’s shareholders with an appropriate return on their investment.
For capital management, the Corporation has defined its capital as the combination of net debt and total equity.
Total managed capital is as follows:
Contingent consideration, including current portion
Balance payable on business acquisitions, including current portion
Credit facilities
Subordinated debt
Cash and cash equivalents
Net debt, including contingent consideration and
balance payable on business acquisition
Total equity
2022
19,204
2,559
358,203
25,442
(14,563)
390,845
273,529
664,374
$
$
2021
14,456
100
303,704
31,741
(9,040)
340,961
274,692
615,653
$
$
The Corporation’s financing strategy is to maintain a flexible structure, to respond adequately to the changes in economic
conditions and to allow growth through business acquisitions. The Corporation monitors its capital structure using the net
debt to adjusted EBITDA ratio. Refer to note 4 for more information about the EBITDA.
In order to maintain or adjust the capital structure, the Corporation may adjust the amount of dividends paid to shareholders
of the Corporation, issue or repay debt, issue shares or undertake any other activities as deemed appropriate under the
specific circumstances, on a quarterly basis.
31. TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL AND RELATED PARTIES
KEY MANAGEMENT PERSONNEL
The key management personnel of the Corporation are the Chief Executive Officer, Chief Financial Officer and other key
employees of the Corporation.
Key management personnel compensation and director’s fees are as follows:
Short-term employee benefits
Share-based compensation
Performance share units
Deferred share units
RELATED PARTIES
2022
5,074
525
2,533
954
9,086
$
$
2021
5,727
465
1,755
2,908
10,855
$
$
Related parties of the Corporation include Directors and key management personnel, their family members and companies
over which they have significant influence or control. The Corporation has transacted with related parties during the
reporting period. These transactions are measured at the exchange amount, which is the amount of consideration
established and agreed to by the related parties having normal trade terms.
Annual Report 2022 | Stingray Group Inc. | 108
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
During the year ended March 31, 2022, the Corporation recognized revenues amounted to $794 (2021 — $742) for
advertising sold to companies controlled by directors of the Corporation.
32. BASIS OF PREPARATION
A) STATEMENT OF COMPLIANCE
The consolidated financial statements of the Corporation have been prepared in accordance with IFRS as issued by
the International Accounting Standards Board (''IASB'').
The consolidated financial statements were authorized for issue by the Board of Directors on June 7, 2022.
B) BASIS OF MEASUREMENT
The consolidated financial statements have been prepared on the historical cost basis, except for the following:
Contingent consideration payable which is measured at fair value at each reporting period in accordance with
IFRS 3;
Investments measured at fair value at year-end in accordance with IFRS 9;
Cost of defined benefit pension plans and present value of the net pension obligation measured at fair value in
accordance with IAS 19;
Liabilities related to deferred share unit plan, performance share unit plan measured at fair value at year-end in
accordance with IFRS 2;
Equity stock options which are measured at fair value at date of grant pursuant to IFRS 2; and
Assets and liabilities acquired in business combinations are measured at fair value at acquisition date.
Derivative financial instruments are measured at fair value, determined by using an evaluation of the estimated
market value, adjusted for the credit quality of the counterparty in accordance with IFRS 9.
C) FOREIGN CURRENCY TRANSLATION
FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the financial statements of each of the subsidiaries are measured using the currency of the primary
economic environment in which the subsidiary operates (the ‘functional currency’). The consolidated financial
statements are presented in Canadian dollars, which is the Corporation’s functional and presentation currency. All
financial information presented in Canadian dollars has been rounded to the nearest thousand.
TRANSACTIONS AND BALANCES
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are
recognized in profit or loss. Translation differences on assets and liabilities carried at fair value are reported as part of
the fair value gain or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate at the date of the transaction. Foreign currency gains and losses are reported on
a net basis.
Annual Report 2022 | Stingray Group Inc. | 109
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
SUBSIDIARIES
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the presentation
currency as follows:
assets and liabilities for each financial position presented are translated at the closing rate at the date of that
financial position;
income and expenses for each statement of income and statement of comprehensive income are translated at
average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions); and
all resulting exchange differences are recognized in other comprehensive income (loss).
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and are translated at the closing rate.
33. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all years presented in these consolidated financial
statements and have been applied consistently by the Corporation’s subsidiaries.
(A) BASIS OF CONSOLIDATION
BUSINESS COMBINATIONS
The Corporation measures goodwill as the excess of the fair value of the consideration transferred which includes the
fair value of contingent consideration, over the net recognized amount (generally fair value) of the identifiable assets
acquired and liabilities assumed, all measured as of the acquisition date. When the excess is negative, a bargain
purchase gain is recognized immediately in profit or loss.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Corporation incurs
in connection with a business combination are expensed as incurred.
SUBSIDIARIES
Subsidiaries are entities controlled by the Corporation. The Corporation controls an entity when it is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements
from the date that control commences until the date that control ceases.
These consolidated financial statements include the accounts of the Corporation and its wholly-owned subsidiaries,
Stingray Music USA Inc. and its subsidiaries Pop Radio LLC, 2144286 Ontario Inc., 4445694 Canada Inc., Pay Audio
Services Limited Partnership, Music Choice Europe Limited, Stingray Digital International Ltd., Stingray Europe B.V.,
Transmedia Communications SA, SBA Music PTY Ltd., Stingray Music, S.A. de C.V., DJ Matic NV, Stingray Radio Inc.
and Calm Radio Corp. and all these entities’ wholly owned subsidiaries.
Annual Report 2022 | Stingray Group Inc. | 110
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
INVESTMENT IN ASSOCIATES
An associate is an entity over which the Corporation has significant influence. The Corporation has significant influence
when it has the power to participate in the financial and operating policy decisions of the investee but does not have
control or joint control. The Corporation accounts for its investment in an associate using the equity method. Under
the equity method, the investment is initially recognized at cost. Subsequent to initial recognition, the consolidated
financial statements include the Corporation’s share of the earnings and losses of the associate until the date
significant influence ceases. Distributions received from an associate reduce the carrying amount of the investment.
The consolidated statements of comprehensive income include the Corporations’ share of any amounts recognized
by its associate in other comprehensive income, if any. Intercompany balances between the Corporation and its
associate are not eliminated.
INTEREST IN JOINT VENTURE
A joint venture is an arrangement whereby the Corporation and other parties that have joint control of the arrangement
have rights to the net assets of the arrangement.
TRANSACTIONS ELIMINATED ON CONSOLIDATION
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
(B) FINANCIAL INSTRUMENTS
FINANCIAL ASSETS AND FINANCIAL LIABILITIES
The Corporation initially recognizes financial assets on the trade date at which the Corporation becomes a party to the
contractual provisions of the instrument.
On initial recognition, the Corporation classifies its financial assets as subsequently measured at either amortized cost
or fair value, depending on its business model for managing the financial assets and the contractual cash flow
characteristics of the financial assets. If the financial asset is not subsequently accounted for at fair value through profit
or loss, then the initial measurement includes transaction costs that are directly attributable to the asset’s acquisition
or origination.
Financial assets measured at amortized cost
A financial asset is measured at amortized cost if both of the following conditions are met and is not designated as at
fair value through profit and loss:
The asset is held within a business model whose objective is to hold the asset in order to collect contractual
cash flows.
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
The Corporation currently classifies its cash and cash equivalents and trade and other receivables as financial assets
measured at amortized cost.
Financial assets measured at fair value
All equity investments and other financial assets that do not meet the conditions to be classified as financial assets
measured at amortized cost are measured at fair value through profit and loss.
Changes therein, including any interest or dividend income, are recognized in profit or loss.
Annual Report 2022 | Stingray Group Inc. | 111
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
The Corporation’s investments are classified as financial assets measured at fair value through profit and loss.
The Corporation derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or
it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and
rewards of ownership of the financial asset are transferred, or it neither transfers not retains substantially all of the
risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such
derecognized financial assets that is created or retained by the Corporation is recognized as a separate asset or
liability.
Financial liabilities
The Corporation initially recognizes debt securities issued and subordinated liabilities on the date that they are
originated. All other financial liabilities are recognized initially on the trade date at which the Corporation becomes a
party to the contractual provisions of the instruments.
Financial liabilities are initially measured at fair value. If the financial liabilities are not subsequently accounted for at
fair value through profit or loss, then the initial measurement includes directly attributable transaction costs.
The Corporation classifies all financial liabilities at amortized cost using the effective interest method, except for
contingent consideration recorded at fair value through profit and loss and financial liabilities designated at fair value
through profit or loss when doing so results in more relevant information. Such liabilities shall be subsequently
measured at fair value.
The Corporation derecognizes a financial liability when its contractual obligations are discharged or cancelled or
expire.
Financial assets and liabilities are offset and the net amount presented in the consolidated statements of financial
position when, and only when, the Corporation has a legal right to offset the amounts and intends either to settle on a
net basis or to realize the asset and settle the liability simultaneously.
Derivative financial instruments
The Corporation use derivative financial instruments to manage its interest rate risk on its credit facilities and does not
use these instruments for speculative or trading purposes. The Corporation does not apply hedge accounting and
therefore mark-to-market gains or losses are recognized in net finance expense (income).
IMPAIRMENT OF FINANCIAL ASSETS
The Corporation recognizes loss allowances for expected credit losses (ECLs) on financial assets measured at
amortized cost. Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs. The
maximum period considered when estimating ECLs is the maximum contractual period over which the Corporation is
exposed to credit risk. ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the
present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the
contract and the cash flows that the Corporation expects to receive). ECLs are discounted at the effective interest rate
of the financial asset.
ECLs on trade and other receivables is assessed by portfolio based on factors that may include the Corporation's past
experience with debt recovery, an increased number of days exceeding payment terms in the portfolio, as well as a
change - internationally or nationally - in economic conditions correlating with default payments.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the
assets and is recognized in profit or loss.
Annual Report 2022 | Stingray Group Inc. | 112
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be related objectively to
an event occurring after the impairment was recognized (such as an improvement in the debtor's credit rating), the
previously recognized impairment loss is reversed. The reversal is recognized to the extent of the improvement without
exceeding what the amortized cost would have been had the impairment not been recognized at the date the
impairment is reversed. The amount of the reversal is recognized in profit or loss.
(C) REVENUE RECOGNITION
CONTRACTS WITH CUSTOMERS
The Corporation records revenues from contracts with customers in accordance with the five steps in IFRS 15
Contracts with customers as follows:
1)
2)
Identify the contract with a customer;
Identify the performance obligations in the contract;
3) Determine the transaction price, which is the total consideration provided by the customer;
4) Allocate the transaction price among the performance obligations in the contract based on their relative fair
values; and
5) Recognize revenues when the relevant criteria are met for each performance obligation.
Revenues are measured based on the value of the expected consideration in a contract with a customer and are
recognized when control of a product or service is transferred to a customer.
A contract asset is recognized in the consolidated statement of financial position when revenues are earned without
having been invoiced. Contract assets are presented in “Other current assets”. A contract liability is recognized when
the Corporation has received consideration in advance of the transfer of products or services to a customer.
Broadcasting and commercial music segment
The Broadcasting and commercial music segment specializes in the broadcast of music and videos on multiple
platforms and digital signage experiences and generates revenues from subscriptions or contracts.
Subscriptions
The Corporation recognize revenues related to continuous music and video distribution over time, as the customer
receives and consumes the benefits of the music supply at the same time it is broadcasted. On-demand products,
primarily music and concerts services, are also recognized over time as the customer receives and consumes the
benefits of the on-demand product at the same time it is broadcasted. The Corporation records contract liabilities
when customers pay their subscription fees in advance.
Equipment and labor
For equipment and labor projects, mainly bundled arrangements, the Corporation accounts for individual products
and services when they are separately identifiable, and the customer can benefit from the product or service on its
own or with other readily available resources. The total arrangement consideration is allocated to each product or
service on its own or with other readily available resources based on its stand-alone selling price.
The Corporation generally determines stand-alone selling prices based on the observable prices for products sold
separately without a service contract, adjusted for market conditions and other factors, as appropriate. When similar
products and services are not sold separately, the Corporation uses the expected cost plus margin approach to
determine stand-alone selling prices. The Corporation recognizes revenues for each individual product or service,
when the related performance obligations are satisfied, which is usually at a point in time for sale of equipment and
over time for music related services.
Annual Report 2022 | Stingray Group Inc. | 113
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
Advertising
The Corporation recognize revenues related to advertising generally at a point in time, when the advertising airs in the
network. Advertising reaches the customers by Retail media, Streaming media and Broadcast media. Retail media
includes in-store licensed music, music video, digital signage and consumer insights, Streaming media includes music
and soundscapes across web and mobile and FAST channels and Broadcast media includes concerts, shows, music
videos and TV audio channels.
Radio segment
The radio segment operates radio stations across Canada and generates revenues from advertising. Advertising
revenues are recognized at a point in time when the advertising airs on the Corporation’s radio stations. Revenues are
recorded net of any agency commissions as these charges are paid directly to the agency by the advertiser.
(D) RESEARCH AND DEVELOPMENT
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognized in profit or loss as incurred.
Development costs, net of tax credits, are recognized in profit or loss as incurred, unless the costs can be measured
reliably, the product or process is technically feasible, future economic benefits are probable and the Corporation
intends to and has sufficient resources to complete the development and to use or sell the asset. In such a case, costs
are recognized as internally developed intangible assets (see (m) intangible assets).
(E) GOVERNMENT ASSISTANCE
Government assistance is recognized when there is reasonable assurance that the Corporation will comply with the
requirements of the approved grant or subsidy program and the Corporation, based on management's judgment, is
reasonably certain that the government assistance will be received. Government assistance related to operating
expenses, including salary subsidy such as the Canada Emergency Wage Subsidy, is recorded as a reduction of such
expenses. Investment tax credits are accounted for as a reduction of the research and development costs during the
year in which the costs are incurred.
The investment tax credits must be reviewed and approved by the tax authorities and it is possible that the amounts
granted will differ from the amounts recorded.
(F) LEASES AND PAYMENTS
Operating leases are not recognized in the Corporation’s consolidated statements of financial position. Payments
made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. Lease
incentives received are recognized as an integral part of the total lease expense, over the term of the lease. Contingent
lease payments are accounted for in the year in which they are incurred.
(G) FINANCE INCOME AND FINANCE COSTS
Finance income comprises interest income on funds invested, change in fair value of contingent consideration. Interest
income is recognized as it accrues in profit or loss, using the effective interest method.
Finance costs comprise interest expense on credit facilities, unwinding of the discount on provisions, change in fair
value of derivatives and contingent consideration, amortization of deferred financing costs, foreign exchange (gain)
loss and impairment losses recognized on financial assets.
Annual Report 2022 | Stingray Group Inc. | 114
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
The Corporation recognizes finance income and finance costs as a component of operating activities in the
consolidated statements of cash flows.
(H) INCOME TAXES
Income tax expense comprises current and deferred taxes. Current and deferred taxes are recognized in profit or loss
except to the extent that they relate to a business combination, or items recognized directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted
or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for the following temporary differences:
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
temporary differences relating to investments in subsidiaries, associates and joint arrangements to the extent that
the Corporation is able to control the timing of the reversal of the temporary difference and it is probable that they
will not reverse in the foreseeable future; and
taxable temporary differences arising on the initial recognition of goodwill.
A deferred tax asset is recognized for unused tax losses, unused tax credits and deductible temporary differences to
the extent that it is probable that future taxable profit will be available against which they can be used. Deferred tax
assets are measured at the end of each reporting year and their carrying amount is reduced to the extent that it is no
longer probable that a taxable profit will be realized.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
based on the laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be
realized simultaneously.
(I) EARNINGS PER SHARE
Basic earnings per share are computed by dividing net earnings by the weighted average number of subordinate
voting shares, variable subordinated voting shares and multiple voting shares outstanding during the year. Diluted
earnings per share are computed using the weighted average number of common shares, subordinate voting shares,
variable subordinated voting shares and multiple voting shares outstanding during the year adjusted to include the
dilutive impact of stock options, performance share units and deferred share units. The number of additional shares
is calculated by assuming that all instruments with a dilutive effect are exercised and that the proceeds from such
exercises, as well as the amount of unrecognized share-based compensation which is considered to be assumed
proceeds, are used to repurchase subordinate voting shares, variable subordinated voting shares and multiple voting
shares at the average share price for the year. For performance share units, only the unrecognized share-based
compensation is considered assumed proceeds since there is no exercise price paid by the holder.
Annual Report 2022 | Stingray Group Inc. | 115
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
(J) CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and balances with banks.
(K) INVENTORIES
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the first-in,
first-out cost method.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated selling
expenses.
(L) PROPERTY AND EQUIPMENT
RECOGNITION AND MEASUREMENT
Items of property and equipment are recognized at cost less accumulated depreciation and accumulated impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the asset and the costs of dismantling
and removing the item and restoring the site on which it is located, if any.
When parts of an item of property and equipment have different useful lives, they are accounted for as separate items
(major components).
Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds from
disposal with the carrying amount, and are recognized in profit or loss.
SUBSEQUENT COSTS
The cost of replacing a part of an item of property and equipment is recognized in the carrying amount of the item if
it is probable that the future economic benefits embodied within the part will flow to the Corporation, and its cost can
be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing
of property and equipment are recognized in profit or loss as incurred.
DEPRECIATION
Depreciation is calculated over the cost of the asset less its residual value and is recognized in profit or loss on a
straight-line basis over the estimated useful lives of each part of an item of property and equipment, since this most
closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased
assets are depreciated over the shorter of the lease term and their useful lives, unless it is reasonably certain that the
Corporation will obtain ownership by the end of the lease term.
The estimated useful lives for the current and comparative years are as follows:
Property and equipment
Building
Broadcasting infrastructure
Furniture, fixtures and equipment
Computer hardware
Leasehold improvements
Period
20-60 years
8 to 25 years
3 to 10 years
4 to 6 years
Lease term
Estimates for depreciation methods, useful lives and residual values are reviewed at each reporting year-end and
adjusted if appropriate prospectively.
Annual Report 2022 | Stingray Group Inc. | 116
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
(M) INTANGIBLE ASSETS, EXCLUDING BROADCAST LICENCES
Intangible assets that are acquired by the Corporation and have finite useful lives are measured at cost less
accumulated amortization and any accumulated impairment losses.
The fair value of non-compete agreements acquired in a business combination are based on the discounted estimated
revenues losses that have been avoided as a result of the non-compete being signed. The fair value of clients list and
relationships acquired in a business combination is determined using the multi-period excess earnings method,
whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related
cash flows. The fair value of music catalogs acquired in a business combination is determined using the estimated
costs for creating such music catalogs. The fair value of trademarks acquired in a business combination is based on
the discounted estimated future royalty payments that have been avoided.
Amounts capitalized as internally developed intangible assets include the total cost of any external products or services
and labor costs directly attributable to development.
AMORTIZATION
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of the definite life
intangible assets.
Internally developed intangible assets, net of related tax credits, are amortized starting from the date the products and
services are commercialized.
The estimated useful lives for the current and comparative years are as follows:
Intangible assets
Internally developed software and apps
Music catalog
Client list and relationships
Trademarks
Licences, website applications and computer software
Non-compete agreements
Period
2 to 5 years
5 to15 years
3 to 15 years
2 to 20 years
2 to 25 years
2 to 11 years
Estimates for amortization methods, useful lives and residual values are reviewed at each reporting year-end and
adjusted if appropriate prospectively.
(N) LEASES
At inception of a contract, the Corporation assesses whether a contract is, or contains, a lease based on whether the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Corporation allocates the consideration in the contract to each lease and non-lease component on the basis of
their relative stand-alone prices. However, for leases of properties for which it is a lessee, the Corporation has elected
not to separate non-lease components and will instead account for the lease and non-lease components as a single
lease component. The right-of-use asset and a lease liability are recognized at the lease commencement date.
RIGHT-OF-USE ASSETS ON LEASES
The right-of-use asset is measured at cost. The cost is based on the initial amount of the lease liability plus initial direct
costs incurred, less lease incentives received, if any.
The cost of right-of-use assets is periodically reduced by amortization expenses and impairment losses, if any, and
adjusted for certain remeasurements of the lease liability. Right-of-use assets are amortized to reflect the expected
pattern of consumption of the future economic benefits which is based on the lesser of the useful life of the asset or
Annual Report 2022 | Stingray Group Inc. | 117
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
the lease term using the straight-line method. The lease term includes the renewal option only if it is reasonably certain
to be exercised. The lease terms range from 1 to 50 years for buildings and towers, from 10 to 99 years for land and
from 1 to 5 years for vehicles.
The Corporation elected not to recognize a right-of-use asset and liability for leases where the total lease term is less
than or equal to twelve months and for leases of low value assets; such as but not limited to, office equipment. The
lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease
term.
LEASE LIABILITIES
At the commencement date of the lease, the Corporation recognizes lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Corporation and payments of penalties for terminating a lease, if the lease term reflects the
Corporation exercising the option to terminate. The variable lease payments that do not depend on an index or a rate
are recognized as expense in the period in which the event or condition that triggered the payment has occurred.
In calculating the present value of lease payments, the Corporation uses the incremental borrowing rate as at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date,
the amount of the lease liability is increased to reflect the accretion of interest and reduced to reflect the lease
payments made. In addition, the carrying amount of the lease liability is remeasured if there has been a modification,
a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to
purchase the underlying asset.
(O) BUSINESS COMBINATION, GOODWILL AND BROADCAST LICENCES
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, measured at the acquisition date fair value. Acquisition costs incurred are
expensed and included in acquisition, legal, restructuring and other expenses. The cost of a business combination is
allocated to the fair value of the related net identifiable tangible and intangible assets. The excess of the cost of the
acquired businesses over the fair value of the related net identifiable tangible and intangible assets acquired is
allocated to goodwill. If the consideration is lower than the fair value of the net assets acquired, the difference is
recognized in the consolidated statements of comprehensive income (loss).
To receive approval to launch a new broadcast licence pursuant to applications made by the Corporation to the CRTC,
the CRTC may require the Corporation to commit to fund Canadian Content Development (“CCD”) during the initial
term of the licence over and above the prescribed annual requirements. These obligations are considered to be part
of the costs related to the award of new broadcast licences and are recognized as a liability upon the launch of the
new broadcast licence. Any other direct costs related to the award and launch of new broadcast licences are also
capitalized as broadcast licences. CCD that arises from a business acquisition is considered a transaction cost and is
expensed in the consolidated statements of comprehensive income (loss).
After initial recognition, goodwill and broadcast licences are recorded at cost less any accumulated impairment losses.
Both goodwill and broadcast licences have indefinite useful lives and are not amortized, but they are subject to an
impairment evaluation. Broadcast licences are deemed indefinite life assets since they are renewed every seven years
without significant cost, with the unlikely chance that the renewal will be denied; therefore, there is no foreseeable
limit to the period over which broadcast licences are expected to generate net cash flows for the Corporation.
Annual Report 2022 | Stingray Group Inc. | 118
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
(P) IMPAIRMENT OF NON-FINANCIAL ASSETS
The Corporation reviews the carrying amount of its non-financial assets, which include intangible assets with a finite
useful life and property and equipment on each reporting date in order to determine if specific events or changes in
circumstances indicate that their carrying amounts may not be recoverable. The recoverable amount of goodwill and
broadcast licences are tested for impairment each year at the same date, or more frequently if indications of
impairment exist.
For impairment testing purposes, assets that cannot be tested individually are grouped in CGUs. Goodwill is allocated
to the CGU or CGU group that is expected to benefit from the synergies resulting from the business combination.
Each unit or group of units to which goodwill is allocated shall not be larger than an operating segment and represents
the lowest level at which goodwill is monitored for internal management purposes.
An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. Impairment losses are
recognized in profit or loss. Impairment losses are first allocated to reduce the carrying amount of goodwill allocated
to the CGU, and then to reduce the carrying amount of the other assets of the CGU on a pro rata basis.
(Q) PROVISIONS
A provision is recognized if, as a result of a past event, the Corporation has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. The unwinding of the
discount is recognized as finance cost.
CONTINGENT LIABILITY
A contingent liability is a possible obligation that arises from past events and of which the existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not within the control of the
Corporation; or a present obligation that arises from past events (and therefore exists), but is not recognized because
it is not probable that a transfer or use of assets, provision of services or any other transfer of economic benefits will
be required to settle the obligation, or the amount of the obligation cannot be estimated reliably.
(R) EMPLOYEE BENEFITS
SHORT-TERM EMPLOYEE BENEFITS
Short-term employee benefits are expensed as the related service is provided.
A liability is recognized for the amount expected to be paid if the Corporation has a present legal or constructive
obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated
reliably.
Stock option plan
The fair value at the grant-date of equity settled share-based payment awards granted to management and key
employees of the Corporation is recognized as an employee benefit expense, with a corresponding increase in equity,
over the vesting period of the awards. The amount expensed is adjusted to reflect the number of awards for which it
is expected that the service conditions will be met, so that the amount ultimately expensed will depend on the number
of awards that meet the service conditions at the vesting date.
Annual Report 2022 | Stingray Group Inc. | 119
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
Performance share units and deferred share units plans
Performance unit plan and deferred share units expected to be settled in cash are accounted for as cash settled
awards, with the recognized compensation cost included in accounts payable and accrued liabilities. Compensation
cost is initially measured at fair value at the grant date and is recognized in net income over the vesting year. The
liability is remeasured based on the fair value price of the Corporation’s shares, at each reporting date.
Remeasurements during the vesting year are recognized immediately to net income to the extent that they relate to
past services and amortized over the remaining vesting year to the extent that they relate to future services. The
cumulative compensation cost that will ultimately be recognized is the fair value of the Corporation’s shares at the
settlement date.
Employee share purchase plan
The Corporation’s contributions, used to purchase shares on the open market on behalf of employees, are recognized
when incurred as an employee benefit expense, with a corresponding increase in contributed surplus. The amount
expensed is adjusted to reflect the number of awards for which it is expected that the vesting conditions will be met,
so that the amount ultimately expensed will depend on the number of awards that meet the vesting conditions at the
vesting date.
Unvested shares held in trust on behalf of employees are treasury shares and therefore deducted from equity until
they become vested.
PENSION BENEFITS
The Corporation maintains a defined contribution pension plan and defined benefit pension plans. The Corporation
does not provide any non-pension post-retirement benefits to employees.
Defined contribution pension plan
The Corporation matches employee contributions under the defined contribution pension plan. Under this plan,
contributions are funded to a separate entity and the Corporation has no legal or constructive obligation to pay further
amounts. The Corporation’s portion is recorded as compensation expense as contributions are made, which coincides
with the periods during which services are rendered by employees.
Defined benefit pension plans
The cost of providing benefits under the defined benefit pension plans is determined on an annual basis by
independent actuaries separately for each plan using the projected unit credit costing method. Actuarial gains and
losses for both defined benefit plans are recognized immediately in full in the period in which they occur in OCI.
Actuarial gains and losses are not reclassified to the consolidated statements of income in subsequent periods.
Past service costs are recognized in profit or loss on the earlier of: (i) the date of the plan amendment or curtailment,
and (ii) the date that the Corporation recognizes restructuring-related costs.
The discount rate is applied to the net defined benefit asset or liability to determine net interest expense or income.
The Corporation recognizes the following changes in the net defined benefit obligation under operating expenses in
the consolidated statements of income: (i) service costs comprising current service costs, past service costs, gains
and losses on curtailments and settlements, and (ii) net interest expense or income.
The value of any defined benefit asset recognized is restricted to the present value of any economic benefits available
in the form of refunds from the plan or reductions in the future contributions to the plan.
Annual Report 2022 | Stingray Group Inc. | 120
Notes to Consolidated Financial Statements
Years ended March 31, 2022 and 2021
(In thousands of Canadian dollars, unless otherwise stated)
(S) SHARE CAPITAL
Subordinate voting shares, variable voting shares and multiple voting shares are classified as equity. Incremental costs
that are directly attributable to their issuance are recognized in reduction of equity, net of tax effects.
Annual Report 2022 | Stingray Group Inc. | 121
Annual General Meeting
of Shareholders
The Annual General Meeting will be held virtually by videoconference on August 3, 2022.
Provisional calendar of results
First quarter
of 2023
August 2, 2022
Second quarter
of 2023
November 8, 2022
Third quarter
of 2023
February 7, 2023
Fourth quarter
of 2023
June 6, 2023
Stock exchange
TSX : RAY.A and RAY.B
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Video On Demand (VOD): A system in
which viewers choose their own filmed enter-
tainment, by means of a PC or interactive TV
system, from a wide selection.
Satellite TV: Television broadcasting using
a satellite to relay signals to appropriately
equipped customers in a particular area.
Subscription Video On Demand
(SVOD): Refers to a service that gives users
unlimited access to a wide range of programs
for a monthly flat rate. The users have full
control over the subscription and can decide
when to start the program.
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Television (FAST): FAST channels are a
new category of IPTV content which consists
of subscription-free linear programming
supported by advertising (requires an inter-
net subscription).
Over the top (OTT): Refers to film and
television content provided via a high-speed
Internet connection rather than a cable or
satellite provider.
Artificial Intelligence (AI): Sometimes
called machine intelligence, is, generally
speaking, algorithms designed to make
human-like decisions, often using real-time
data.
4K UHD: Ultra-high-definition (UHD) tele-
vision, also abbreviated UHDTV, is a digital
television display format in which the horizon-
tal screen resolution is on the order of 4000
pixels (4K UHD).
Pay TV: Television broadcasting in which
viewers pay by subscription to watch a
particular channel.
Digital Out-of-Home (DOOH): refers to a
media network of digital display advertising
in commercial spaces and public places.
Audio Out-of-Home (AOOH): Similarly
to DOOH, Audio Out-of-Home is a new cate-
gory of Out-of-Home (OOH) advertising
developed by Stingray where custom audio
ads are inserted in music channels broad-
casting inside commercial establishments.
IPTV: Internet Protocol television (IPTV) is the
process of transmitting and broadcasting
television programs through the Internet
using Internet Protocol (IP).
Connected TV: Is a device that connects
to — or is embedded in — a television to
support video content streaming.
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