COMPUTER MODELLING GROUP ANNOUNCES THIRD QUARTER RESULTS
CALGARY, ALBERTA–(Marketwire – Feb. 10, 2012) – Computer Modelling Group Ltd. (“CMG” or the “Company”) (TSX:CMG.TO – News) is really gratified to make known our third quarter results for the 3 and 9 months finished Dec 31, 2011.
THIRD QUARTER HIGHLIGHTS
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands, usually per share data)
—————————————————————————-
Annuity/maintenance module licenses 12,056 7,999 4,057 51%
Perpetual module licenses 2,321 2,335 (14) -1%
Total income 15,898 12,063 3,835 32%
Operating distinction 8,093 5,516 2,577 47%
Net income 5,790 3,563 2,227 63%
Earnings per share – simple 0.16 0.10 0.06 60%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands, usually per share data)
—————————————————————————-
Annuity/maintenance module licenses 30,361 24,178 6,183 26%
Perpetual module licenses 9,308 7,134 2,174 30%
Total income 43,819 37,449 6,370 17%
Operating distinction 22,411 18,145 4,266 24%
Net income 16,771 12,358 4,413 36%
Earnings per share – simple 0.46 0.34 0.12 35%
—————————————————————————-
MANAGEMENT’S DISCUSSION AND ANALYSIS
This Management’s Discussion and Analysis (“MD&A”) for Computer Modelling Group Ltd. (“CMG,” the “Company,” “we” or “our”), presented as at Feb 9, 2012, should be examination in and with the unaudited precipitated sum monetary statements and compared records of the Company for the 3 and 9 months finished Dec 31, 2011 and the audited sum monetary statements and MD&A for the years finished Mar 31, 2011 and 2010 contained in the 2011 Annual inform for CMG. Additional information relating to CMG, together with our Annual Information Form, can be found at www.sedar.com. The monetary interpretation contained herein have been rebuilt in suitability with International Financial Reporting Standards (“IFRS”) and, unless differently indicated, all amounts in this inform are voiced in Canadian dollars and dull to the nearest thousand.
Effective on the tighten of blurb operation on Jun 20, 2011, CMG’s Common Shares were apart on a two-for-one basis. Accordingly, all analogous number of shares and per share amounts have been retroactively practiced to simulate the two-for-one split.
FORWARD-LOOKING INFORMATION
Certain information enclosed in this MD&A is forward-looking. Forward-looking information includes statements that are not statements of chronological actuality and which address activities, events or developments that the Company expects or anticipates will or may occur in the future, together with such things as investment objectives and strategy, the enlargement skeleton and standing of the Company’s module enlargement projects, the Company’s intentions, formula of operations, levels of activity, destiny collateral and other expenditures (including the amount, inlet and sources of appropriation thereof), blurb operation prospects and opportunities, investigate and enlargement timetable, and destiny enlargement and performance. When used in this MD&A, statements to the effect that the Company or the management “believes”, “expects”, “expected”, “plans”, “may”, “will”, “projects”, “anticipates”, “estimates”, “would”, “could”, “should”, “endeavours”, “seeks”, “predicts” or “intends” or matching statements, together with “potential”, “opportunity”, “target” or other variations thereof that are not statements of chronological actuality should be construed as forward-looking information. These statements simulate management’s tide ideology with respect to destiny events and are based on information right away accessible to management of the Company. The Company believes that the expectations reflected in such forward-looking information are reasonable, though no declaration can be given that these expectations will infer to be scold and such forward-looking information should not be unduly relied upon.
With respect to forward-looking information contained in this MD&A, we have done assumptions regarding, in in in in in in in in in in in in in in between other things:
– Future module permit sales
– The a singular after an a single more financing by and appearance of the Company’s partners
in the DRMS devise and it being finished in a timely demeanour
– Ability to come in in to a singular more module permit agreements
– Ability to go on tide investigate and new product enlargement
– Ability to partisan and keep competent staff
Forward-looking information is not a pledge of destiny opening and involves a number of risks and uncertainties, usually a small of which are described herein. Many factors could means the Company’s tangible results, opening or achievements, or destiny events or developments, to talk about materially from those voiced or pragmatic by the forward-looking information including, though limitation, the following factors which are described in the MD&A of CMG’s 2011 Annual Report underneath the streamer “Business Risks”:
– Economic conditions in the oil and gas attention
– Reliance on pass clients
– Foreign sell
– Economic and done at home risks in countries where the Company currently
does or proposes to do blurb operation
– Increased foe
– Reliance on employees with specialized skills or believe
– Protection of exclusive rights
Should a singular or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements infer incorrect, tangible results, opening or feat may shift materially from those voiced or pragmatic by the forward-looking information contained in this MD&A. These factors should be delicately deliberate and readers are cautioned not to place unjustified faith on forward-looking information, which speaks usually as of the date of this MD&A. All unbroken forward-looking information attributable to the Company herein is privately competent in the whole by the cautionary statements contained in or referred to herein. The Company does not commence any requisite to recover publicly any revisions to forward-looking information contained in this MD&A to simulate events or resources that occur after the date of this MD&A or to simulate the feeling of amazing events, usually as may be compulsory underneath germane bonds laws.
NON-IFRS FINANCIAL MEASURES
This MD&A contains the conditions “direct worker costs” and “other corporate costs” which are not measures tangible by IFRS, do not have standardised definition prescribed by IFRS and should not be deliberate an pick to waste as energetic in suitability with IFRS. Direct worker costs and other corporate costs, as computed by CMG, may talk about from matching measures as reported by other issuers. These non-IFRS measures are presented in this MD&A given management considers them to be critical in highlighting the quantitative stroke of price management as it relates to corporate and people-related costs. The apparatus forming direct worker costs are summarized in the list underneath the “Expenses” heading.
CORPORATE PROFILE
CMG is a resource module technology association apportionment the oil and gas industry. The Company is a heading retailer of modernized processes fountainhead modelling module with a blue thinly slice patron base of ubiquitous oil companies and technology centers in we estimate 50 countries. The Company also provides veteran services consisting of rarely specialized support, consulting, training, and stipulate investigate activities. CMG has sales and technical await services based in Calgary, Houston, London, Caracas and Dubai. CMG’s Common Shares are listed on the Toronto Stock Exchange (“TSX”) and traffic underneath the pitch “CMG”.
QUARTERLY PERFORMANCE
Fiscal 2010(1) Fiscal 2011(2)
($ thousands, unless
otherwise stated) Q4 Q1 Q2 Q3 Q4
—————————————————————————-
Annuity/maintenance licenses 7,653 8,325 7,855 7,999 8,531
Perpetual licenses 4,982 1,824 2,975 2,335 3,911
—————————————————————————-
Software licenses 12,635 10,149 10,830 10,333 12,442
Professional services 1,657 1,905 2,502 1,730 1,936
—————————————————————————-
Total income 14,292 12,054 13,332 12,063 14,378
Operating distinction 7,844 5,933 6,695 5,516 7,523
Operating distinction % 55 49 50 46 52
Profit prior to to to income and
other taxes 7,710 6,178 6,565 5,278 7,413
Income and other taxes 2,350 1,949 1,999 1,715 2,605
Net income for the duration 5,360 4,229 4,565 3,563 4,808
Cash dividends spoken and
paid 3,209 6,274 3,430 3,623 3,643
—————————————————————————-
Per share amounts – ($/share)
Earnings per share – simple 0.15 0.12 0.13 0.10 0.13
Earnings per share – at large separated 0.15 0.12 0.13 0.10 0.13
Cash dividends spoken and
paid 0.09 0.175 0.095 0.10 0.10
—————————————————————————-
Fiscal 2012(3)
($ thousands, unless
otherwise stated) Q1 Q2 Q3
—————————————————————————-
Annuity/maintenance licenses 8,997 9,308 12,056
Perpetual licenses 5,391 1,596 2,321
—————————————————————————-
Software licenses 14,388 10,904 14,377
Professional services 1,551 1,078 1,521
—————————————————————————-
Total income 15,939 11,982 15,898
Operating distinction 9,092 5,226 8,093
Operating distinction % 57 44 51
Profit prior to to to income and
other taxes 9,240 6,096 8,184
Income and other taxes 2,577 1,778 2,394
Net income for the duration 6,663 4,318 5,790
Cash dividends spoken and
paid 7,519 4,053 4,079
—————————————————————————-
Per share amounts – ($/share)
Earnings per share – simple 0.18 0.12 0.16
Earnings per share – at large separated 0.18 0.11 0.15
Cash dividends spoken and
paid 0.205 0.11 0.11
—————————————————————————-
1. Q4 of mercantile 2010 includes $0.4 million in income that pertains to
usage of CMG’s products in prior to to quarters.
2. Q1, Q2, Q3 and Q4 of mercantile 2011 include $1.1 million, $0.2 million,
$0.3 million and $0.1 million, respectively, in income that pertains to
usage of CMG’s products in prior to to quarters.
3. Q1, Q2, and Q3 of mercantile 2012 include $0.3 million, $0.04 million and
$2.6 million, respectively, in income that pertains to use of CMG’s
products in prior to to quarters.
Note: all quarterly interpretation contained in the on top of list has been rebuilt in suitability with IFRS.
Highlights
During the 9 months finished Dec 31, 2011, as compared to the same duration of prior to to mercantile year, CMG:
– Increased annuity/maintenance income by 26%;
– Increased incessant sales by 30%;
– Increased net income by 36%;
– Increased sum spending on investigate and enlargement by 12%;
– Realized good per share of $0.46, representing a 35% increase.
Revenue
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Software licenses 14,377 10,333 4,044 39%
Professional services 1,521 1,730 (209) -12%
—————————————————————————-
Total income 15,898 12,063 3,835 32%
—————————————————————————-
Software permit income – % of sum
revenue 90% 86%
Professional services – % of sum
revenue 10% 14%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Software licenses 39,669 31,312 8,357 27%
Professional services 4,150 6,137 (1,987) -32%
—————————————————————————-
Total income 43,819 37,449 6,370 17%
—————————————————————————-
Software permit income – % of sum
revenue 91% 84%
Professional services – % of sum
revenue 9% 16%
—————————————————————————-
CMG’s income is comprised of module permit sales, which produce the infancy of the Company’s revenue, and fees for veteran services.
Total income increasing by 32% and 17% for the 3 and 9 months finished Dec 31, 2011, respectively, due to increases in both our annuity/maintenance and incessant permit income streams. The increases in module licenses income were to a small border homogeneous by the decreases in fees warranted from veteran services.
SOFTWARE LICENSE REVENUE
Software permit income is done up of annuity/maintenance permit fees charged for the use of the Company’s module products which is in all for a tenure of a singular year or reduction and incessant module permit sales, whereby the patron purchases the-then-current chronicle of the module and has the right to use that chronicle in perpetuity. Annuity/maintenance permit fees have historically had a tall renovation rate and, accordingly, produce a arguable income tide whilst incessant permit sales are more non-static and indeterminate in inlet as the squeeze preference and the timing vacillate with the customers’ needs and budgets. CMG has found that the infancy of the blurb operation who have acquired incessant module licenses subsequently squeeze upkeep licenses to safeguard they have access to tide versions of CMG’s software.
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Annuity/maintenance licenses 12,056 7,999 4,057 51%
Perpetual licenses 2,321 2,335 (14) -1%
—————————————————————————-
Total module permit income 14,377 10,333 4,044 39%
—————————————————————————-
Annuity/maintenance as a % of sum
software permit income 84% 77%
Perpetual as a % of sum module
license income 16% 23%
—————————————————————————-
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Annuity/maintenance licenses 30,361 24,178 6,183 26%
Perpetual licenses 9,308 7,134 2,174 30%
—————————————————————————-
Total module permit income 39,669 31,312 8,357 27%
—————————————————————————-
Annuity/maintenance as a % of sum
software permit income 77% 77%
Perpetual as a % of sum module
license income 23% 23%
—————————————————————————-
Total module permit income increasing by 39% and 27% during the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of the prior to to mercantile year. The enlarge in our quarterly sum module permit income was driven by the enlarge in annuity/maintenance permit sales. Our year-to-date enlarge in sum module permit income was upheld by enlargement in both annuity/maintenance and incessant permit sales.
CMG’s annuity/maintenance permit income increasing by 51% and 26% during the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of final year. While we have seen clever enlargement in these permit sales via the year, the poignant writer to the enlarge in the quarterly revenue, which also had a certain stroke on the year-to-date income growth, is a remuneration received from a singular of our vast blurb operation for whom income capitulation criteria are over usually at the time of the taking of funds. The remuneration was received for the licenses and services supposing in past durations (see the contention about income warranted in the tide duration that pertains to use of products in prior to to buliding on top of the “Quarterly Software License Revenue” graph). Payments from this patron have at times been irregular, with the final remuneration carrying been received in Q1 2011, which is reflected in our year-to-date analogous numbers. The remuneration received in the tide entertain represents the primary remuneration for a multi-year agreement with this long-standing client. We pattern to go on to receive payments underneath this arrangement, however, the volume and timing is capricious and, accordingly, may deliver a small variability in our quarterly income results.
If we were to regulate our quarterly and year-to-date annuity/maintenance licenses revenue, by stealing income from this a singular patron for the tide and prior to to mercantile year, we would see that the annuity/maintenance permit sales have grown by 19% and 20% in the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of the prior to to mercantile year. These increases were driven by sales to new and existent clients as well as the enlarge in upkeep income scored equally to our clever incessant sales generated in the prior to to quarters. Our annuity/maintenance permit revenue, representing a repeated income stream, continues experiencing plain enlargement entertain over entertain as evidenced by uninterrupted quarterly increases in this income tide over the past multiform mercantile years.
The enlarge in annuity/maintenance income as totalled in Canadian dollars has been negatively influenced by the strengthening of the Canadian dollar relations to the US dollar in the tide mercantile year. The list next illustrates income generated in US dollars and the rates at which it was converted in to Canadian dollars to uncover the movement in US dollar denominated income though the stroke of the unfamiliar exchange. Had the sell rate in in in in in in in in in in in in in in between the US and Canadian dollars remained unchanging in in in in in in in in in in in in in in between the 3 and 9 months finished Dec 31, 2011 and 2010, our third entertain annuity/maintenance income would have increasing by 56% (instead of 51%) and our year-to-date annuity/maintenance income would have increasing by 30% (instead of 26%).
Our incessant permit sales for the 3 months finished Dec 31, 2011, were probably unvaried from the same duration of the prior to to mercantile year, whereas, they increasing by 30% for the 9 months finished Dec 31, 2011, compared to the same duration of the prior to to mercantile year. The year-to-date enlarge is driven by a multi-million incessant stipulate sealed in the primary entertain of the tide mercantile year. Software chartering underneath incessant sales is a poignant part of CMG’s business, though may vacillate significantly in in in in in in in in in in in in in in between durations due to the doubt compared with the timing and the place where sales are generated. For this reason, we pattern to imitate fluctuations in the quarterly incessant income amounts via the mercantile year.
We can imitate from the list next that our year-to-date incessant sales in US dollars were negatively influenced by the unfamiliar sell movement in in in in in in in in in in in in in in between the US and Canadian dollars as a outcome of the strengthening Canadian dollar in the tide mercantile year. Had the sell rate in in in in in in in in in in in in in in between the US and Canadian dollars remained unchanging in in in in in in in in in in in in in in between the 9 months finished Dec 31, 2011 and 2010, our year-to-date incessant permit income would have increasing by 39% (instead of 30%). The unfamiliar sell rates had a smallest stroke on our quarterly incessant sales.
The following list summarizes the US dollar denominated income and the weighted normal sell rates at which it was converted to Canadian dollars:
For the 3 months finished
December 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
US dollar annuity/maintenance
license sales US$ 8,711 US$ 5,161 3,550 69%
Weighted normal acclimatisation rate 0.992 1.044
—————————————————————————-
Canadian dollar homogeneous CDN$ 8,643 CDN$ 5,389 3,254 60%
—————————————————————————-
US dollar incessant permit sales US$ 1,866 US$ 1,883 (17) -1%
Weighted normal acclimatisation rate 1.019 1.025
—————————————————————————-
Canadian dollar homogeneous CDN$ 1,902 CDN$ 1,930 (28) -1%
—————————————————————————-
—————————————————————————-
For the 9 months finished
December 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
US dollar annuity/maintenance
license sales US$ 20,160 US$ 15,907 4,253 27%
Weighted normal acclimatisation
rate 0.993 1.049
—————————————————————————-
Canadian dollar homogeneous CDN$ 20,020 CDN$ 16,683 3,337 20%
—————————————————————————-
US dollar incessant permit
sales US$ 9,144 US$ 4,618 4,526 98%
Weighted normal acclimatisation
rate 0.969 1.036
—————————————————————————-
Canadian dollar homogeneous CDN$ 8,857 CDN$ 4,784 4,073 85%
—————————————————————————-
REVENUE BY GEOGRAPHIC SEGMENT
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Annuity/maintenance income
Canada 4,007 2,859 1,148 40%
United States 2,139 1,779 360 20%
Other 5,910 3,361 2,549 76%
—————————————————————————-
12,056 7,999 4,057 51%
—————————————————————————-
Perpetual income
Canada 420 405 fifteen 4%
United States 390 248 142 57%
Other 1,511 1,682 (171) -10%
—————————————————————————-
2,321 2,335 (14) -1%
—————————————————————————-
Total module permit income
Canada 4,427 3,264 1,163 36%
United States 2,529 2,026 503 25%
Other 7,421 5,043 2,378 47%
—————————————————————————-
14,377 10,333 4,044 39%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Annuity/maintenance income
Canada 11,648 8,013 3,635 45%
United States 6,191 5,184 1,007 19%
Other 12,522 10,981 1,541 14%
—————————————————————————-
30,361 24,178 6,183 26%
—————————————————————————-
Perpetual income
Canada 452 2,350 (1,898) -81%
United States 992 1,262 (270) -21%
Other 7,864 3,522 4,342 123%
—————————————————————————-
9,308 7,134 2,174 30%
—————————————————————————-
Total module permit income
Canada 12,100 10,363 1,737 17%
United States 7,183 6,446 737 11%
Other 20,386 14,503 5,883 41%
—————————————————————————-
39,669 31,312 8,357 27%
—————————————————————————-
On a geographic basis, sum module permit sales increasing opposite all regions with Canada and the United States experiencing increases of 17% and 11%, respectively, for the 9 months finished Dec 31, 2011 compared to the same durations of prior to to mercantile year. This enlargement has been led by the increases in annuity/maintenance income stream. Our other markets grew sum module permit income by 41% in the 9 months finished Dec 31, 2011 compared to the same duration of prior to to mercantile year, driven especially by the enlarge in incessant sales.
The Canadian marketplace gifted clever enlargement in the repeated annuity/maintenance income tide as evidenced by the increases of 40% and 45% for the 3 and 9 months finished Dec 31, 2011 compared to the same durations of the prior to to mercantile year. The increases in the payments income tide were upheld by the enlarge in sales to both existent and new clients. In addition, clever incessant permit sales generated in the past have enabled the Canadian marketplace to say increasing income levels from the upkeep contracts scored equally to those incessant licenses. On the other hand, incessant sales during the tide mercantile year did not strech the same levels of the incessant sales done during the prior to to mercantile year, offsetting the enlarge in year-to-date annuity/maintenance revenue.
Similar to the Canadian market, the US marketplace also gifted enlargement in annuity/maintenance income with the increases of 20% and 19% accessible for the 3 and 9 months finished Dec 31, 2011 compared to the same durations of the prior to to mercantile year. While incessant income grew by $0.1 million in the 3 months finished Dec 31, 2011, it decreased by $0.3 million for the 9 months finished Dec 31, 2011 offsetting the enlargement in year-to-date annuity/maintenance revenue.
Other markets gifted increases of 76% and 14% in annuity/maintenance income tide for the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of the prior to to mercantile year. The enlargement in quarterly annuity/maintenance income occurred usually due to inclusion of the remuneration for the stipulate for which income is famous on a money basement (see more detailed contention underneath “Software License Revenue”). On a year-to-date basis, the effect of the inclusion of this poignant volume during the tide entertain is rsther than mitigated by the matching inclusion of a poignant volume on the same stipulate in Q1 of the prior to to mercantile year.
While the incessant sales in other markets decreased usually somewhat during 3 months finished Dec 31, 2011, they increasing by 123% on a year-to-date basement driven usually by the vast incessant sale done during the primary entertain of the tide mercantile year. In serve to shutting a singular poignant contract, we have seen a ubiquitous enlarge in the number of incessant permit sales done to other markets.
The movements in incessant sales opposite the regions are demonstrative of the indeterminate inlet of the timing and place of incessant permit sales. Overall, our repeated annuity/maintenance income base continues to be clever and flourishing opposite all regions.
The increases in US-dollar generated income from the US and other markets have been negatively influenced by the strengthening Canadian dollar compared to the US dollar during the 9 months finished Dec 31, 2011.
As footnoted in the Quarterly Performance table, in the normal march of blurb operation CMG may finish the traffic of certain annuity/maintenance contracts and/or perform income capitulation mandate inside of a tide entertain that includes use of CMG’s products in prior to to quarters. This incident quite affects contracts negotiated with countries that face increasing mercantile and done at home risks heading to income capitulation criteria being assured usually at the time of the taking of cash. The dollar bulk of such contracts may be poignant to the quarterly comparatives of our annuity/maintenance income tide and, to produce a normalized comparison, we privately brand the income member where income capitulation is assured in the tide duration for products supposing in prior to to quarters.
DEFERRED REVENUE
2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Deferred income at:
March 31 16,755 13,843 2,912 21%
June thirty 15,326 12,496 2,830 23%
September thirty 14,600 12,658 1,942 15%
December 31 14,746 11,892 2,854 24%
—————————————————————————-
CMG’s paid in instalments income consists radically of amounts for pre-sold licenses. Our annuity/maintenance income is paid in instalments and famous on a straight-line basement over the reason up of the compared permit period, which is in all a singular year or less. Amounts are paid in instalments for licenses that have been supposing and income capitulation reflects the thoroughfare of time.
The enlarge in paid in instalments income year over year as at Dec 31, Sep 30, Jun thirty and Mar 31 is contemplative of the enlargement in annuity/maintenance permit sales. The movement inside of a year is due to the timing of renewals of payments and upkeep contracts that are lopsided to the commencement of the monthly monthly calendar year which explains the ubiquitous trend of disappearing paid in instalments income shift from Mar 31 to Dec 31. Deferred income at Dec 31, 2011 increasing compared to the same duration of prior to to mercantile year due to both renovation of the existent and signing of the new module licenses and upkeep contracts in the quarter. Our paid in instalments income shift continues to grow at a plain gait as demonstrated in the list on top of by the uninterrupted quarterly double-digit enlargement gifted during the tide mercantile year.
PROFESSIONAL SERVICES REVENUE
CMG accessible veteran services income of $1.5 million and $4.2 million for the 3 and 9 months finished Dec 31, 2011, respectively, representing decreases of $0.2 million and $2.0 million from the amounts accessible for the same durations of prior to to mercantile year. CMG had been intent in a couple of vast projects in the prior to to mercantile year, which are possibly finish or go on on a not as big scale in the tide mercantile year, causing the infancy of the diminution in the quarterly and year-to-date veteran services revenue. Additionally, the appropriation joining for the DRMS devise received from the CMG Reservoir Simulation Foundation (“Foundation CMG”) was over in the primary entertain of the tide mercantile year serve contributing to the diminution in the veteran services revenue. Refer to the contention underneath “Commitments, Off Balance Sheet Items and Transactions with Related Parties.”
Professional services income consists of specialized consulting, training, and stipulate investigate activities. CMG performs consulting and stipulate investigate activities on an ongoing basement though such activities are not deliberate to be a core part of our blurb operation and are radically undertaken to enlarge our believe base and as a outcome enhance the technological abilities of our simulators in a saved manner, sum with servicing our customers’ needs. In addition, these activities are undertaken to marketplace the capabilities of our apartment of module products with the idealisation pattern to enlarge module permit sales. Our knowledge is that consulting activities are non-static in inlet as both the timing and dollar bulk of work are fortuitous on activities and budgets inside of patron companies.
At Dec 31, 2011, we estimate $0.08 million (2010 – $0.5 million) is enclosed in paid in instalments income relating to veteran services.
Expenses
For the 3 months finished Dec 31, 2011 2010 $ shift % change
($ thousands)
—————————————————————————-
Sales, selling and veteran services 3,536 2,836 700 25%
Research and enlargement 2,747 2,408 339 14%
General and executive 1,522 1,303 219 17%
—————————————————————————-
Total handling waste 7,805 6,547 1,258 19%
—————————————————————————-
Direct worker costs(i) 6,063 5,022 1,041 21%
Other corporate costs 1,742 1,525 217 14%
—————————————————————————-
7,805 6,547 1,258 19%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Sales, selling and veteran
services 9,703 8,704 999 11%
Research and enlargement 7,635 6,941 694 10%
General and executive 4,070 3,659 411 11%
—————————————————————————-
Total handling waste 21,408 19,304 2,104 11%
—————————————————————————-
Direct worker costs(i) 17,028 14,845 2,183 15%
Other corporate costs 4,380 4,459 (79) -2%
—————————————————————————-
21,408 19,304 2,104 11%
—————————————————————————-
(i)Includes salaries, bonuses, stock-based compensation, benefits and commissions.
CMG’s sum handling waste increasing by 19% and 11% for the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of prior to to mercantile year especially as a outcome of an enlarge in direct worker costs. While other corporate costs increasing during the quarter, they remained comparatively unchanging on a year-to-date basis.
DIRECT EMPLOYEE COSTS
As a technology company, CMG’s largest area of output is for the people. Approximately 80% of the sum handling waste in the 9 months finished Dec 31, 2011 compared to staff costs compared to 77% accessible in the analogous duration of final year. Staffing levels for the primary 9 months of the tide mercantile year grew in more aged to the same duration of prior to to mercantile year to await our a singular after an a single more growth. At Dec 31, 2011, CMG’s staff component was 148 employees, up from 131 employees as at Dec 31, 2010. Direct worker costs increasing during the 3 and 9 months finished Dec 31, 2011 compared to the same duration of prior to to mercantile year, due to staff additions, increasing levels of compensation, commissions and compared benefits.
OTHER CORPORATE COSTS
Other corporate costs increasing by 14% for the 3 months finished Dec 31, 2011 compared to the same duration of prior to to mercantile year, due to incurring promotional, selling and other waste compared with the Society of Petroleum Engineers’ Annual Technical Conference and Exhibition which took place in the third entertain of the tide mercantile year and the second entertain of the prior to to mercantile year, and due to inclusion of the costs compared with the enlargement of our bureau space at the end of monthly monthly calendar 2011.
Other corporate costs decreased somewhat for the 9 months finished Dec 31, 2011 compared to the same duration of prior to to mercantile year especially as a outcome of the inclusion of the waste compared with CMG’s biennial technical conference in the second entertain of the prior to to mercantile year which is homogeneous by the enlarge in the costs compared with the stretched bureau space.
RESEARCH AND DEVELOPMENT
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Research and enlargement (gross) 3,104 2,658 446 17%
SR&ED credits (357) (250) (107) 43%
—————————————————————————-
Research and enlargement 2,747 2,408 339 14%
—————————————————————————-
Research and enlargement as a % of sum
revenue 17% 20%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Research and enlargement (gross) 8,656 7,709 947 12%
SR&ED credits (1,021) (768) (253) 33%
—————————————————————————-
Research and enlargement 7,635 6,941 694 10%
—————————————————————————-
Research and enlargement as a % of sum
revenue 17% 19%
—————————————————————————-
CMG maintains the idea that the devise of flourishing long-term worth for shareholders can usually be finished through a singular after an a single more investment in investigate and development. CMG works closely with the blurb operation to produce solutions to formidable problems compared to proven and new modernized liberation processes.
The on top of investigate and enlargement includes CMG’s proportional share of corner investigate and enlargement costs on the DRMS complement enlargement of $0.6 million and $2.0 million for the 3 and 9 months finished Dec 31, 2011, respectively, (2010 – $0.6 million and $2.0 million). See contention underneath “Commitments, Off Balance Sheet Items and Transactions with Related Parties.”
The increases of 17% and 12% in our sum spending on investigate and enlargement for the 3 and 9 months finished Dec 31, 2011, respectively, denote our a singular after an a single more joining to enrichment of our technology. Research and enlargement costs, net of investigate and primary enlargement (“SR&ED”) credits, increasing by 14% and 10% during the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of prior to to mercantile year especially due to increasing employee-related costs. At the same time, we had an enlarge in SR&ED credits driven by the increases in our direct worker costs as well as the enlarge in the eligibility of our waste for SR&ED credits as a direct outcome of the execution of the accede to received from Foundation CMG which had been netted opposite our investigate and enlargement waste for purposes of operative out SR&ED credits. The appropriation joining compared with this accede to was over in the primary entertain of the tide mercantile year. Refer to the contention underneath “Commitments, Off Balance Sheet Items and Transactions with Related Parties.”
DEPRECIATION AND AMORTIZATION
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Depreciation of skill and equipment,
allocated to:
Sales, selling and veteran services 118 76 42 55%
Research and enlargement 145 131 fourteen 11%
General and executive 58 66 (8) -12%
—————————————————————————-
Total debasement and amortization 321 273 48 18%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Depreciation of skill and equipment,
allocated to:
Sales, selling and veteran services 305 220 85 39%
Research and enlargement 383 344 39 11%
General and executive 189 187 2 1%
—————————————————————————-
Total debasement and amortization 877 751 126 17%
—————————————————————————-
The quarterly and year-to-date increases in debasement and amortization simulate the enlarge in our object base, especially as a outcome of increasing spending on computing resources and enlargement of the bureau space at the end of Q3 2012.
FINANCE INCOME AND COSTS
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Interest income 123 91 32 35%
Foreign sell good – – – –
—————————————————————————-
Finance income 123 91 32 35%
—————————————————————————-
Finance costs (represented by unfamiliar
exchange loss) (32) (329) 297 -90%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Interest income 341 179 162 91%
Foreign sell good 768 – 768 –
—————————————————————————-
Finance income 1,109 179 930 520%
—————————————————————————-
Finance costs (represented by unfamiliar
exchange loss) – (303) 303 –
—————————————————————————-
Interest income increasing in the 3 and 9 months finished Dec 31, 2011, compared to the same durations of the prior to to mercantile year, due to slight alleviation in seductiveness rates and investing incomparable money balances.
CMG is impacted by the movement of the US dollar opposite the Canadian dollar as we estimate 72% (2010 – 67%) of CMG’s income for the 9 months finished Dec 31, 2011 is denominated in US dollars, given usually we estimate 23% (2010 – 24%) of CMG’s sum costs are denominated in US dollars.
Nine month
CDN$ to US$ At Jun thirty At Sep thirty At Dec 31 trailing average
—————————————————————————-
—————————————————————————-
2009 0.8602 0.9327 0.9555 0.9108
2010 0.9429 0.9711 1.0054 0.9697
2011 1.0370 0.9626 0.9833 1.0132
—————————————————————————-
—————————————————————————-
CMG accessible a unfamiliar sell detriment of $0.03 million and a unfamiliar sell good of $0.8 million for the 3 and 9 months finished Dec 31, 2011, respectively, compared to a $0.3 million unfamiliar sell detriment accessible in the 3 and 9 months finished Dec 31, 2010.
The weakening of the Canadian dollar in the tide quarter, along with a poignant oscillation in the sell rates in in in in in in in in in in in in in in between the Canadian and the US dollars during the primary 9 months of the tide mercantile year, have contributed definitely to the gratefulness of our US-denominated operative capital, hence, contributing to the unfamiliar sell good in the tide mercantile year-to-date.
INCOME AND OTHER TAXES
CMG’s effective taxation rate for the 9 months finished Dec 31, 2011 is reflected as 28.69% (2010 – 31.42%), given the prevalent Canadian orthodox taxation rate is right away 26.13%. This is radically due to a multiple of the non-tax deductibility of stock-based remuneration responsibility and the good of unfamiliar self-denial taxes being satisfied usually as a taxation reduction as opposite to a taxation credit.
The good accessible in CMG’s books on the SR&ED investment taxation credit module impacts paid in instalments income taxes. The investment taxation credit warranted in the tide mercantile year is employed by CMG to revoke income taxes differently on credit for the tide mercantile year and the sovereign apportionment of this good bears an fundamental taxation guilt as the volume of the credit is enclosed in the unbroken year’s taxable income for both sovereign and provincial purposes. The fundamental taxation guilt on these investment taxation credits is reflected in the year the credit is warranted as a non-current paid in instalments taxation guilt and then, in the following mercantile year, is separated to income taxes payable.
Operating Profit and Net Income
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands, usually per share amounts)
—————————————————————————-
Total income 15,898 12,063 3,835 32%
Operating waste (7,805) (6,547) (1,258) 19%
—————————————————————————-
Operating distinction 8,093 5,516 2,577 47%
Operating distinction as a % of sum income 51% 46%
—————————————————————————-
Net income for the duration 5,790 3,563 2,227 63%
Net income for the duration as a % of
total income 36% 30%
—————————————————————————-
Earnings per share ($/share) 0.16 0.10 0.06 60%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands, usually per share amounts)
—————————————————————————-
Total income 43,819 37,449 6,370 17%
Operating waste (21,408) (19,304) (2,104) 11%
—————————————————————————-
Operating distinction 22,411 18,145 4,266 24%
Operating distinction as a % of sum
revenue 51% 48%
—————————————————————————-
Net income for the duration 16,771 12,358 4,413 36%
Net income for the duration as a % of
total income 38% 33%
—————————————————————————-
Earnings per share ($/share) 0.46 0.34 0.12 35%
—————————————————————————-
Operating distinction as a commission of sum income increasing to 51% for the 3 and 9 months finished Dec 31, 2011, compared to 46% and 48% accessible in the same durations of the prior to to mercantile year, as a outcome of the enlarge in our sum income driven by the increases in our module licenses revenue, and effective management of our corporate costs.
Net income for the duration as a commission of income increasing to 36% and 38% for the 3 and 9 months finished Dec 31, 2011, respectively, compared to 30% and 33% accessible in the same durations of prior to to mercantile year especially as a outcome of the certain effect of the changes in unfamiliar sell rates accessible in the tide mercantile year compared to the prior to to mercantile year and incurring reduction taxation waste as a outcome of reduce self-denial taxes and reduce orthodox taxation rate.
Liquidity and Capital Resources
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Cash, commencement of duration 43,310 32,565 10,745 33%
Cash upsurge from (used in)
Operating activities 7,511 8,378 (867) -10%
Financing activities (2,404) (2,669) 265 -10%
Investing activities (802) (262) (540) 206%
—————————————————————————-
Cash, end of duration 47,615 38,012 9,603 25%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Cash, commencement of duration 41,753 28,826 12,927 45%
Cash upsurge from (used in)
Operating activities 18,673 20,465 (1,792) -9%
Financing activities (11,745) (10,344) (1,401) 14%
Investing activities (1,066) (935) (131) 14%
—————————————————————————-
Cash, end of duration 47,615 38,012 9,603 25%
—————————————————————————-
OPERATING ACTIVITIES
Cash upsurge generated from handling activities decreased by $0.9 million and $1.8 million in the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of final year, due to the timing differences when the sales are done and when the ensuing receivables are collected, net stroke of changes in income taxes payable, traffic payables and paid in instalments income balance.
FINANCING ACTIVITIES
Cash used in financing activities during the 3 months finished Dec 31, 2011 decreased by $0.3 million compared to the same duration of final year, as a outcome of recording more money deduction from options being exercised. Cash used in financing activities during the 9 months finished Dec 31, 2011, increasing by $1.4 million compared to the same duration of final year, as a outcome of arising incomparable dividends and shopping behind usual shares.
During the 9 months finished Dec 31, 2011, CMG employees and directors exercised options to squeeze 698,000 Common Shares, which resulted in money deduction of $4.3 million.
In the 9 months finished Dec 31, 2011, CMG paid $15.7 million in dividends, representing quarterly dividends of $0.105, $0.11 and $0.11 per share and a special division of $0.10 per share. On Feb 9, 2012, CMG voiced the remuneration of a quarterly division of $0.13 per share on CMG’s Common Shares. The division will be paid on Mar 15, 2012 to shareholders of record at the tighten of blurb operation on Mar 8, 2012.
On Apr 6, 2011, the Company voiced a Normal Course Issuer Bid (“NCIB”) commencing on Apr 7, 2011 to squeeze for stop up to 1,636,000 of the Common Shares. During the 9 months finished Dec 31, 2011, 33,000 Common Shares were purchased at marketplace price for a sum price of $438,000.
INVESTING ACTIVITIES
CMG’s tide needs for collateral object investment describe to resource apparatus and bureau infrastructure costs, all of which will be saved internally. During the 9 months finished Dec 31, 2011, CMG depleted $1.1 million on skill and apparatus additions, radically stoical of computing equipment, and right away has a collateral bill of $2.4 million for mercantile 2012.
LIQUIDITY AND CAPITAL RESOURCES
At Dec 31, 2011, CMG has $47.6 million in cash, no debt and has access to usually over $0.8 million underneath a line of credit with the principal banker.
During the 9 months finished Dec 31, 2011, 6,472,000 shares of CMG’s open boyant were traded on the TSX. As at Dec 31, 2011, CMG’s marketplace capitalization based on the Dec 31, 2011 shutting price of $15.35 was $569.4 million.
Commitments, Off Balance Sheet Items and Transactions with Related Parties
In May, 2006, CMG voiced that it had committed we estimate $10.6 million to the five-year DRMS investigate and enlargement devise with the attention partners Shell International Exploration and Production BV (“Shell”) and Petroleo Brasileiro S.A. (“Petrobras”) to climb the newest era of energetic fountainhead modelling system. While the strange appropriation joining has been over during the primary entertain of the tide mercantile year, CMG and the partners are committed to go on appropriation the devise over the essentially estimated five-year duration with CMG’s share of the devise costs estimated at $3.0 million per year. We right away pattern to recover a beta chronicle of the new fountainhead modelling complement to our partners by the end of mercantile 2012, with the primary blurb recover approaching to take place by the end of the third entertain of mercantile 2013.
In and with entering in to this project, Foundation CMG agreed, theme to certain stop rights, to produce up to a limit of $5.2 million in investigate accede to appropriation to cover we estimate 50% of the Company’s estimated share of devise costs over the primary 5 years of the project. For the 9 months finished Dec 31, 2011, the Company has reflected $366,000 (2010 – $1.0 million) in investigate grants from Foundation CMG in veteran services income with respect to this project. Foundation CMG’s $5.2 million appropriation joining was finished in the primary entertain of the tide mercantile year.
CMG skeleton to go on appropriation the share of the devise costs compared with the enlargement of the newest era fountainhead make-believe module complement from internally generated money flows.
CMG has really small in the proceed of other ongoing component contractual obligations other than for pre-sold licenses which are reflected as paid in instalments income on the matter of monetary position, and contractual obligations for bureau leases which are estimated as follows: 2012 – $0.5 million; 2013 and 2014 – $1.8 million per year; 2015 – $1.4 million; and 2016 – $0.6 million.
Business Risks and Critical Accounting Estimates
These sojourn unvaried from the factors detailed in CMG’s 2011 Annual Report.
Changes in Accounting Policies
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The CICA Accounting Standards Board requires all Canadian publicly listed entities to adopt IFRS for halt and annual monetary stating purposes for mercantile years commencement on or after Jan 1, 2011. Accordingly, this is the third entertain in which we have supposing unaudited precipitated sum monetary statements which are in correspondence with the halt stating mandate found in IAS 34, Interim Financial Reporting, as well as IFRS 1, First-time Adoption of IFRS. In suitability with IFRS 1, we have practical IFRS retrospectively as of Apr 1, 2010, our passing from a singular to an a single more date, as if IFRS had continually been in effect, theme to certain imperative exceptions and discretionary exemptions. Our sum monetary statements for the year finished Mar 31, 2012, will be our primary annual monetary statements that imitate with IFRS.
An reason of how the passing from a singular to an a single more to IFRS has influenced the reported monetary position, monetary opening and money flows of the Company is supposing in note sixteen to the Condensed Consolidated Financial Statements for the 3 and 9 months finished Dec 31, 2011.
The passing from a singular to an a single more to IFRS did not have a component stroke on defended earnings, net income or money flows. The usually adjustments were reclassifications on the Statement of Financial Position, Statement of Operations and Comprehensive Income, and the Statement of Cash Flows as follows:
Statement of Financial Position
Deferred taxes are personal as non-current underneath IFRS. Under prior to to Canadian GAAP, paid in instalments taxes were personal as tide and non-current based on the sequence of the underlying resources or liabilities to which they describe or based on the approaching annulment of the proxy differences.
Transition manners resulted in reclassification of paid in instalments taxation guilt compared with SR&ED credits from tide to non-current. In addition, the paid in instalments taxation object compared with skill and apparatus was homogeneous opposite paid in instalments taxation guilt as both describe to income taxes levied by the same taxation management for the same taxable entity.
Statement of Operations and Comprehensive Income
– Expense sequence – the Company has inaugurated to benefaction the expenses
in the sum statements of operations and extensive income
prepared underneath IFRS according to their function. As a result,
depreciation and amortization, which was reported as a apart line
item underneath prior to to Canadian GAAP, was allocated to the respective
functions.
– Finance income and costs – underneath Canadian GAAP, seductiveness income and
foreign sell gains and waste were personal as apart line items
in the sum matter of earnings. Under IFRS, seductiveness income
and unfamiliar sell gains are presented as monetary income, and foreign
exchange waste are presented as monetary costs. Finance income and costs
are presented on a sum basement as compulsory by IFRS.
Statement of Cash Flows
– Interest received and income taxes paid have been changed in to the physique of
the matter of money flows underneath handling activities, given they
were formerly disclosed as supplemental information.
Accounting Standards and Interpretations Issued But Not Yet Effective
The following standards and interpretations have not been adopted by the Company as they apply to destiny periods:
Standard/Interpretation Nature of imminent shift Impact on CMG’s
in accounting policy monetary statements
—————————————————————————-
—————————————————————————-
IFRS 9 Financial IFRS 9 (2009) replaces the IFRS 9 (2010)
Instruments superintendence in IAS 39 supersedes IFRS 9
Financial Instruments: (2009) and is
In Nov 2009 the Recognition and effective for annual
IASB released IFRS 9 Measurement, on the durations commencement on
Financial Instruments sequence and or after Jan 1,
(IFRS 9 (2009)), and in dimensions of monetary 2015, with early
October 2010 the IASB assets. The Standard embracing a cause permitted.
published amendments to eliminates the existent IAS For annual durations
IFRS 9 (IFRS 9 (2010)). 39 categories of reason to commencement prior to to to
In Dec 2011, the maturity, available-for- Jan 1, 2015,
IASB released an sale and loans and possibly IFRS 9 (2009)
amendment to IFRS 9 to receivable. or IFRS 9 (2010) may
defer the imperative be applied.
effective date to Financial resources will be
annual durations personal in to a singular of two The Company intends to
beginning on or after categories on primary adopt IFRS 9 (2010) in
January 1, 2015. recognition: the monetary
statements for the
- monetary resources totalled annual duration
at amortized cost; or commencement on Apr 1,
- monetary resources totalled 2015. The Company does
at satisfactory value. not pattern IFRS 9
(2010) to have a
Gains and waste on component stroke on the
remeasurement of monetary monetary statements.
assets totalled at satisfactory The sequence and
value will be famous in dimensions of the
profit or loss, usually that Company’s monetary
for an investment in an resources and liabilities
equity instrument which is is not approaching to
not held-for-trading, IFRS shift underneath IFRS 9
9 provides, on primary (2010) given of the
recognition, an incorrigible inlet of the
election to benefaction all Company’s operations
fair worth changes from the and the types of
investment in other monetary resources that
comprehensive income (OCI). it holds.
The choosing is accessible
on an individual share-by-
share basis. Amounts
presented in OCI will not
be reclassified to distinction
or detriment at a after date.
IFRS 9 (2010) sum
guidance to IFRS 9 (2009)
on the sequence and
measurement of monetary
liabilities, and this
guidance is unchanging with
the superintendence in IAS 39
expect as described below.
Under IFRS 9 (2010), for
financial liabilities
measured at satisfactory worth
under the satisfactory worth
option, changes in satisfactory
value attributable to
changes in credit risk will
be famous in OCI, with
the residue of the shift
recognized in distinction or
loss. However, if this
requirement creates or
enlarges an accounting
mismatch in distinction or loss,
the finish shift in satisfactory
value will be famous in
profit or loss. Amounts
presented in OCI will not
be reclassified to distinction
or detriment at a after date.
IFRS 9 (2010) also requires
derivative liabilities that
are linked to and contingency be
settled by smoothness of an
unquoted equity instrument
to be totalled at satisfactory
value, given such
derivative liabilities are
measured at price underneath IAS
39.
IFRS 9 (2010) also sum
the mandate of IAS 39
for the derecognition of
financial resources and
liabilities to IFRS 9
without change.
The IASB has paid in instalments the
mandatory effective date of
the existent chapters of
IFRS 9 Financial
Instruments (2009) and IFRS
9 (2010) to annual durations
beginning on or after
January 1, 2015. The early
adoption of possibly customary
continues to be permitted.
—————————————————————————-
—————————————————————————-
Amendments to IFRS 7 The amendments to IFRS 7 The Company does not
Disclosures – Transfers require avowal of pattern the amendments
of Financial Assets information that enables to have a component
users of monetary stroke on the
In Oct 2010 the statements: monetary statements,
IASB released Amendments given of the inlet
to IFRS 7 Disclosures – – to assimilate the of the Company’s
Transfers of Financial attribute in in in in in in in in in in in in in in between operations and the
Assets, which is separated monetary types of monetary
effective for annual resources that are not resources that it holds.
periods commencement on or derecognized in their
after Jan 1, 2012. whole and the compared
liabilities; and
- to weigh the inlet
of, and risks compared
with, the entity’s
continuing impasse in
derecognized monetary
assets.
The amendments conclude
“continuing involvement”
for the purposes of
applying the avowal
requirements.
—————————————————————————-
—————————————————————————-
IFRS 10 Consolidated IFRS 10 replaces the The Company intends to
Financial Statements superintendence in IAS twenty-seven adopt IFRS 10 in the
Consolidated and Separate monetary statements
In May 2011, the IASB Financial Statements and for the annual duration
issued IFRS 10 SIC-12 Consolidation – commencement on Apr 1,
Consolidated Financial Special Purpose Entities. 2013. The Company
Statements, which is IAS twenty-seven (2008) survives as does not pattern IFRS
effective for annual IAS twenty-seven (2011) Separate 10 to have a component
periods commencement on or Financial Statements, usually stroke on the
after Jan 1, 2013, to lift brazen the monetary statements.
with early embracing a cause existent accounting
permitted. If an mandate for apart
entity relates this monetary statements.
Standard earlier, it
shall also apply IFRS IFRS 10 provides a singular
11, IFRS 12, IAS twenty-seven indication to be practical in the
(2011) and IAS twenty-eight control investigate for all
(2011) at the same investees, together with
time. entities that right away are
SPEs in the operation of SIC-
12. In addition, the
consolidation procedures
are carried brazen
substantially unmodified
from IAS twenty-seven (2008).
—————————————————————————-
—————————————————————————-
IFRS eleven Joint IFRS eleven replaces the The Company intends to
Arrangements superintendence in IAS 31 adopt IFRS eleven in the
Interests in Joint monetary statements
In May 2011, the IASB Ventures. for the annual duration
issued IFRS eleven Joint commencement on Apr 1,
Arrangements, which is Under IFRS 11, corner 2013. The Company
effective for annual arrangements are personal does not pattern IFRS
periods commencement on or as possibly corner operations eleven to have a component
after Jan 1, 2013, or corner ventures. IFRS eleven stroke on the
with early embracing a cause radically carves out of monetary statements.
permitted. If an entity prior to to mutually tranquil
applies this Standard entities, those
earlier, it shall also arrangements which nonetheless
apply IFRS 10, IFRS 12, structured through a
IAS twenty-seven (2011) and IAS apart vehicle, such
28 (2011) at the same subdivision is ineffectual
time. and the parties to the
arrangement have rights to
the resources and obligations
for the liabilities and are
accounted for as corner
operations in a conform
consistent with mutually
controlled
assets/operations underneath IAS
31. In addition, underneath
IFRS eleven corner ventures are
stripped of the free preference
of equity accounting or
proportionate
consolidation; these
entities contingency right away use the
equity method.
Upon focus of IFRS
11, entities which had
previously accounted for
joint ventures regulating
proportionate converging
shall tumble the
proportionately
consolidated net object
value (including any
allocation of goodwill)
into a singular investment
balance at the commencement of
the commencement duration
presented. The
investment’s opening
balance is tested for
impairment in suitability
with IAS twenty-eight (2011) and IAS
36 Impairment of Assets.
Any spoil waste are
recognized as an composition
to opening defended
earnings at the commencement
of the commencement duration
presented.
—————————————————————————-
—————————————————————————-
IFRS twelve Disclosure of IFRS twelve contains the The Company intends to
Interests in Other avowal mandate for adopt IFRS twelve in the
Entities entities that have monetary statements
interests in subsidiaries, for the annual duration
In May 2011, the IASB corner arrangements (i.e. commencement on Apr 1,
issued IFRS twelve corner operations or corner 2013. The Company
Disclosure of Interests ventures), associates does not pattern the
in Other Entities, and/or unconsolidated amendments to have a
which is effective for structured entities. component stroke on the
annual durations Interests are at large monetary statements,
beginning on or after tangible as contractual and given of the inlet
January 1, 2013, with non-contractual impasse of the Company’s
early embracing a cause that exposes an entity to interests in other
permitted. If an entity variability of benefit from entities.
applies this Standard the opening of the
earlier, it needs not other entity. The compulsory
to apply IFRS 10, IFRS disclosures target to produce
11, IAS twenty-seven (2011) and information in sequence to
IAS twenty-eight (2011) at the enable users to weigh
same time. the inlet of, and the
risks compared with, an
entity’s seductiveness in other
entities, and the goods
of those interests on the
entity’s monetary
position, monetary
performance and money flows.
—————————————————————————-
—————————————————————————-
IFRS thirteen Fair Value IFRS thirteen replaces the satisfactory The Company intends to
Measurement worth dimensions superintendence adopt IFRS thirteen
contained in individual prospectively in the
In May 2011, the IASB IFRSs with a singular source monetary statements
published IFRS thirteen Fair of satisfactory worth dimensions for the annual duration
Value Measurement, guidance. It defines satisfactory commencement on Apr 1,
which is effective worth as the price that 2013. The border of
prospectively for would be received to sell the stroke of adoption
annual durations an object or paid to of IFRS thirteen has not yet
beginning on or after send a guilt in an been determined.
January 1, 2013. The nurse stipulate in in in in in in in in in in in in in in between
disclosure mandate marketplace participants at the
of IFRS thirteen need not be dimensions date, i.e. an
applied in analogous exit price. The customary
information for durations also establishes a
before primary horizon for measuring
application. satisfactory worth and sets out
disclosure mandate for
fair worth measurements to
provide information that
enables monetary matter
users to consider the methods
and inputs used to climb
fair worth measurements
and, for repeated satisfactory
value measurements that use
significant unobservable
inputs (Level 3), the
effect of the measurements
on distinction or detriment or other
comprehensive income. IFRS
13 explains ‘how’ to
measure satisfactory worth when it
is compulsory or accessible by
other IFRSs. IFRS thirteen does
not deliver new
requirements to measure
assets or liabilities at
fair value, nor does it
eliminate the
practicability exceptions
to satisfactory worth measurements
that right away exist in
certain standards.
—————————————————————————-
—————————————————————————-
Amendments to IAS 1 The amendments require that The Company intends to
Presentation of an entity benefaction adopt the amendments
Financial Statements alone the apparatus of OCI in the monetary
that may be reclassified to statements for the
In Jun 2011, the IASB distinction or detriment in the annual duration
published amendments to destiny from those that commencement on Apr 1,
IAS 1 Presentation of would never be reclassified 2013. As the
Financial Statements: to distinction or loss. amendments usually
Presentation of Items Consequently an entity that require changes in the
of Other Comprehensive presents apparatus of OCI display of apparatus
Income, which are prior to to to compared taxation goods in other comprehensive
effective for annual will also have to allot income, the Company
periods commencement on or the many-sided taxation volume does not pattern the
after Jul 1, 2012 and in in in in in in in in in in in in in in between these categories. amendments to IAS 1 to
are to be practical have a component impact
retrospectively. Early The existent option to on the monetary
adoption is permitted. benefaction the distinction or detriment statements.
and other extensive
income in two statements
has remained unchanged.
—————————————————————————-
—————————————————————————-
Amendments to IAS 32 The amendments to IAS 32 The Company intends to
and IFRS 7, Offsetting explain that an entity adopt the amendments
Financial Assets and right away has a legally to IFRS 7 in the
Liabilities enforceable right to set- monetary statements
off if that right is: for the annual duration
In Dec 2011, the commencement on Apr 1,
IASB published – not fortuitous on a 2013, and the
Offsetting Financial destiny event; and amendments to IAS 32
Assets and Financial – enforceable both in the in the monetary
Liabilities and released normal march of blurb operation statements for the
new avowal and in the eventuality of annual duration
requirements in IFRS 7 default, penury or commencement Apr 1,
Financial Instruments: failure of the entity 2014. The Company does
Disclosures. and all counterparties. not pattern the
amendments to IAS nineteen
The effective date for The amendments to IAS 32 to have a component
the amendments to IAS also explain when a stroke on the
32 is annual durations allotment resource monetary statements.
beginning on or after provides for net allotment
January 1, 2014. The or sum allotment that is
effective date for the homogeneous to net
amendments to IFRS 7 is settlement.
annual durations
beginning on or after The amendments to IFRS 7
January 1, 2013. These enclose new avowal
amendments are to be mandate for monetary
applied resources and liabilities that
retrospectively. are:
- homogeneous in the matter
of monetary position; or
- theme to master concealment
arrangements or matching
arrangements.
—————————————————————————-
—————————————————————————-
Outstanding Share Data
The following list represents the number of Common Shares and options outstanding:
As at Feb 9, 2012
(thousands)
—————————————————————————-
Common Shares 37,123
Options 3,112
—————————————————————————-
On Jul 13, 2005, CMG adopted a rolling batch option devise which allows the Company to accede to options to the employees and directors to take Common Shares of up to 10% of the superb Common Shares at the date of grant. Based on this calculation, at Feb 9, 2012, CMG could accede to up to 3,712,000 batch options.
Disclosure Controls and Procedures and Internal Control over Financial Reporting
Management is obliged for substantiating and progressing avowal controls and procedures (“DC&P”) and inner control over monetary stating (“ICFR”) as tangible underneath National Instrument 52-109. These controls and procedures were reviewed and the effectiveness of their pattern and operation was evaluated in mercantile 2011 in suitability with the COSO control framework. The analysis reliable the effectiveness of DC&P and ICFR at Mar 31, 2011. During our mercantile year 2012, we go on to guard and examination our controls and procedures.
During the 9 months finished Dec 31, 2011, there have been no poignant changes to the Company’s ICFR that have materially affected, or are pretty approaching to materially affect, the company’s ICFR.
Outlook
As in the past multiform years, CMG stays committed to focusing all the resources on the development, encouragement and deployment of make-believe module collection applicable to the hurdles and opportunities confronting the different patron base. While oil prices go on to fluctuate, they sojourn at levels that should concede our blurb operation to move brazen on projects involving assorted types of radical pot and modernized liberation processes. The larger hurdles have been with healthy gas prices, which have not fared as well, and inorganic substance producers are faced with doubt compared to the fears of an a single more worldwide mercantile recession, done at home disturbance in multiform inorganic substance producing countries and environmental issues that have in jeopardy to enlarge the costs of enlargement and production.
With diversification of our geographic profile, we devise to make firm our on all sides in the tellurian marketplace which should also assistance to lessen the goods of mercantile retrogression and instability gifted in any sold geographic region.
Over 70% of our annual module permit income is subsequent from our payments and upkeep contracts which in all paint a repeated source of revenue. We have a singular after an a single more to see unbroken increases in this income base over the past multiform years and with a clever renovation rate, we pattern this trend to continue.
CMG’s corner devise to climb the newest era of energetic fountainhead modelling systems (“DRMS Project”) continues to make swell in mercantile 2012. We right away pattern to recover a beta chronicle to our partners by the end of mercantile 2012, with the primary blurb recover by the end of the third entertain of mercantile 2013. CMG and the partners sojourn committed to appropriation the ongoing enlargement and to the destiny success of the project.
The Company stays assured that the worth that CMG technology provides to the blurb operation is larger than ever and thus we go on to be confident that our module permit income will sojourn solid. With our clever operative collateral position, we are well positioned to go on to deposit in all aspects of our blurb operation to go on to grow and variegate our income base and to in conclusion lapse worth to our shareholders in the form of unchanging quarterly division payments and enlargement in share value.
Kenneth M. Dedeluk
President and Chief Executive Officer
February 9, 2012
COMPUTER MODELLING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
UNAUDITED (thousands of
Canadian $) Dec 31, 2011 Mar 31, 2011 Apr 1, 2010
—————————————————————————-
Assets
Current assets:
Cash 47,615 41,753 28,826
Trade and other
receivables 11,733 13,318 16,072
Prepaid waste 1,238 1,064 1,141
Prepaid income taxes – – 1,433
—————————————————————————-
60,586 56,135 47,472
Property and apparatus 2,743 2,554 2,401
—————————————————————————-
Total resources 63,329 58,689 49,873
—————————————————————————-
Liabilities and
Shareholders’ Equity
Current liabilities:
Trade payables and
accrued liabilities 4,526 4,543 5,398
Income taxes on credit 1,541 1,237 -
Deferred income 14,746 16,755 13,843
—————————————————————————-
20,813 22,535 19,241
Deferred taxation guilt
(note 6) 287 384 189
—————————————————————————-
Total liabilities 21,100 22,919 19,430
—————————————————————————-
Shareholders’ equity:
Share collateral 29,932 24,801 20,390
Contributed over-abundance 3,276 2,655 1,816
Retained good 9,021 8,314 8,237
—————————————————————————-
Total shareholders’
equity 42,229 35,770 30,443
—————————————————————————-
Total liabilities and
shareholders’ equity 63,329 58,689 49,873
—————————————————————————-
See concomitant records to precipitated sum monetary statements.
COMPUTER MODELLING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Three months finished Nine months finished
December 31 Dec 31
UNAUDITED (thousands of Canadian
$ usually per share amounts) 2011 2010 2011 2010
—————————————————————————-
Revenue (note 
15,898 12,063 43,819 37,449
—————————————————————————-
Operating waste
Sales, selling and
professional services 3,536 2,836 9,703 8,704
Research and enlargement (note
4) 2,747 2,408 7,635 6,941
General and executive 1,522 1,303 4,070 3,659
—————————————————————————-
7,805 6,547 21,408 19,304
—————————————————————————-
Operating distinction 8,093 5,516 22,411 18,145
Finance income (note 5) 123 91 1,109 179
Finance costs (note 5) (32) (329) – (303)
—————————————————————————-
Profit prior to to to income and other
taxes 8,184 5,278 23,520 18,021
Income and other taxes (note 6) 2,394 1,715 6,749 5,663
—————————————————————————-
Net and extensive income 5,790 3,563 16,771 12,358
—————————————————————————-
Earnings Per Share
Basic (note 7(e)) 0.16 0.10 0.46 0.34
Diluted (note 7(e)) 0.15 0.10 0.44 0.34
—————————————————————————-
See concomitant records to precipitated sum monetary statements.
COMPUTER MODELLING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Capital
———————-
UNAUDITED
(thousands of Contributed Retained Total
Canadian $) Common Non-voting Surplus Earnings Equity
—————————————————————————-
Balance, Apr 1,
2010 20,244 146 1,816 8,237 30,443
Total
comprehensive
income for the
period – – – 12,358 12,358
Dividends paid – – – (13,328) (13,328)
Shares released for
cash on practice
of batch options
(note 7(b)) 2,984 – – – 2,984
Converted in to
common shares
(note 7(b)) 146 (146) – – –
Stock-based
compensation:
Current duration
expense – – 1,134 – 1,134
Stock options
exercised 576 – (576) – –
—————————————————————————-
Balance, Dec
31, 2010 23,950 – 2,374 7,267 33,591
—————————————————————————-
Balance, Apr 1,
2011 24,801 – 2,655 8,314 35,770
Total
comprehensive
income for the
period – – – 16,771 16,771
Dividends paid – – – (15,651) (15,651)
Shares released for
cash on practice
of batch options
(note 7(b)) 4,344 – – – 4,344
Common shares buy-
back (note 7(b)) (25) (413) (438)
Stock-based
compensation:
Current duration
expense – – 1,433 – 1,433
Stock options
exercised 812 – (812) – –
—————————————————————————-
Balance, Dec
31, 2011 29,932 – 3,276 9,021 42,229
—————————————————————————-
See concomitant records to precipitated sum monetary statements.
COMPUTER MODELLING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months finished Nine months finished
December 31 Dec 31
UNAUDITED (thousands of Canadian
$) 2011 2010 2011 2010
—————————————————————————-
Cash flows from handling
activities
Net income 5,790 3,563 16,771 12,358
Adjustments for:
Depreciation and amortization 321 273 877 751
Income and other taxes (note 6) 2,394 1,715 6,749 5,663
Stock-based remuneration (note
7(d)) 566 428 1,433 1,134
Interest income (note 5) (123) (91) (341) (179)
—————————————————————————-
8,948 5,888 25,489 19,727
Changes in non-cash operative
capital:
Trade and other receivables (1,151) 2,444 1,594 6,725
Trade payables and accrued
liabilities 1,306 739 (17) (1,031)
Prepaid waste 102 107 (174) 170
Deferred income 146 (767) (2,009) (1,952)
—————————————————————————-
Cash generated from handling
activities 9,351 8,411 24,883 23,639
Interest received 120 83 332 164
Income taxes paid (1,960) (116) (6,542) (3,338)
—————————————————————————-
Net money from handling
activities 7,511 8,378 18,673 20,465
—————————————————————————-
Cash flows from financing
activities
Proceeds from emanate of usual
shares 1,675 954 4,344 2,984
Dividends paid (4,079) (3,623) (15,651) (13,328)
Common shares buy-back – – (438) –
—————————————————————————-
Net money used in financing
activities (2,404) (2,669) (11,745) (10,344)
—————————————————————————-
Cash flows used in investing
activities
Property and apparatus additions (802) (262) (1,066) (935)
—————————————————————————-
Increase (decrease) in money 4,305 5,447 5,862 9,186
Cash, commencement of duration 43,310 32,565 41,753 28,826
—————————————————————————-
Cash, end of duration 47,615 38,012 47,615 38,012
—————————————————————————-
See concomitant records to precipitated sum monetary statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the 3 and 9 months finished Dec 31, 2011 and 2010 (unaudited).
1. Reporting Entity:
Computer Modelling Group Ltd. (“CMG”) is a association domiciled in Alberta, Canada and is incorporated pursuant to the Alberta Business Corporations Act, with the Common Shares listed on the Toronto Stock Exchange underneath the pitch “CMG”. The address of CMG’s purebred bureau is Suite 200, 1824 Crowchild Trail N.W., Calgary, Alberta, Canada, T2M 3Y7. The precipitated sum monetary statements as at and for the 3 and 9 months finished Dec 31, 2011 enclose CMG and the subsidiaries (together referred to as the “Company”). The Company is a resource module technology association intent in the enlargement and chartering of fountainhead make-believe software. The Company also provides veteran services consisting of rarely specialized support, consulting, training, and stipulate investigate activities.
2. Basis of Preparation:
(A) STATEMENT OF COMPLIANCE:
These precipitated sum monetary statements have been rebuilt on a starting regard basement in suitability with International Accounting Standard (“IAS”) 34, Interim Financial Reporting as released by the International Accounting Standards Board (“IASB”), and regulating the accounting policies the Company expects to adopt in the sum monetary statements as at and for the year finale Mar 31, 2012. These accounting policies are disclosed in note 3 of the Company’s precipitated sum monetary statements for the 3 months finished Jun 30, 2011.
The credentials of these precipitated sum monetary statements resulted in changes to accounting policies as compared with the many new annual sum monetary statements rebuilt in suitability with Canadian Generally Accepted Accounting Principles (“GAAP”). The Company’s accounting policies have been practical consistently to all durations presented in these precipitated sum monetary statements with the disproportion of certain IFRS 1, First-time Adoption of IFRS, exemptions the Company practical in the passing from a singular to an a single more from prior to to GAAP to International Financial Reporting Standards (“IFRS”) at Apr 1, 2010, the Company’s passing from a singular to an a single more date.
The precipitated sum monetary statements do not include all of the information compulsory for full annual monetary statements, therefore, these precipitated sum monetary statements should be examination in and with the Company’s annual audited sum monetary statements for the year finished Mar 31, 2011, the Company’s precipitated sum monetary statements for the 3 months finished Jun 30, 2011, and in care of the IFRS passing from a singular to an a single more disclosures presented in note sixteen to these monetary statements.
The unaudited precipitated sum monetary statements as at and for the 3 and 9 months finished Dec 31, 2011 were certified for distribution by the Board of Directors on Feb 9, 2012.
(B) BASIS OF MEASUREMENT:
The precipitated sum monetary statements have been rebuilt on the chronological price basis, which is based on the satisfactory worth of the care at the time of the transaction.
(C) FUNCTIONAL AND PRESENTATION CURRENCY:
The precipitated sum monetary statements are presented in Canadian dollars, which is the organic banking of CMG and the subsidiaries. All monetary information presented in Canadian dollars has been dull to the nearest thousand.
(D) USE OF ESTIMATES, JUDGMENTS AND ASSUMPTIONS:
The credentials of monetary statements in consent with IFRS requires management to make judgments, estimates and assumptions that start the focus of accounting policies, the reported amounts of resources and liabilities and the avowal of fortuitous resources and liabilities at the date of the monetary statements and the reported amounts of revenue, costs and waste for the period. Estimates and underlying assumptions are based on chronological knowledge and other assumptions that are deliberate in accord with in the resources and are reviewed on an persisting basis. Actual formula may talk about from such estimates and it is illusive that the differences could be material. Revisions to accounting estimates are famous in the duration in which the estimates are revised and in any destiny durations affected. In scheming these precipitated sum monetary statements, the poignant judgments done by management in requesting the Company’s accounting policies and the pass sources of determination doubt are approaching to be the same as those practical in the primary annual IFRS monetary statements.
The pass judgments done in requesting accounting policies that have the many poignant effect on the amounts famous in these precipitated sum monetary statements are as follows:
Research and enlargement – assumptions are done in respect to the eligibility of certain investigate and enlargement projects in the calculation of systematic investigate and primary enlargement (“SR&ED”) investment taxation credits which are netted opposite the investigate and enlargement costs in the matter of operations. SR&ED claims are theme to audits by applicable taxation authorities and the tangible volume may shift depending on the outcome of such audits (note 4).
Revenue capitulation – certain module permit agreements enclose multiple-element arrangements as they may also include upkeep fees. Judgment is used in last a satisfactory worth of any component of a contract. Professional services income warranted from certain consulting contracts is famous by the theatre of execution of the stipulate energetic regulating the percentage-of-completion method. Judgment is used in last swell of any stipulate at duration end. In assessing income recognition, visualisation is also used in last the capability to collect the analogous comment receivable (note 8).
Property and apparatus – estimates are used in last utilitarian mercantile lives of skill and apparatus for the purposes of operative out depreciation.
Stock-based remuneration – assumptions and estimates are used in last the inputs used in the Black-Scholes option pricing model, together with assumptions per volatility, division yield, risk-free seductiveness rates, damage estimates and approaching option lives (note 7(d)).
Deferred income taxes – assumptions and estimates are done per the volume and timing of fulfilment and/or allotment of the proxy differences in in in in in in in in in in in in in in between the accounting carrying worth of the Company’s resources contra the taxation basement of those assets, and the taxation rates at which the differences will be recovered or staid in the destiny (note 6).
3. Significant Accounting Policies:
The poignant accounting policies used in scheming these Condensed Consolidated Financial Statements are unvaried from those disclosed in the Company’s Condensed Consolidated Financial Statements for the 3 months finished Jun 30, 2011.
4. Research and Development Costs:
For the 3 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Research and enlargement 3,104 2,658
SR&ED investment taxation credits (357) (250)
—————————————————————————-
2,747 2,408
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Research and enlargement 8,656 7,709
SR&ED investment taxation credits (1,021) (768)
—————————————————————————-
7,635 6,941
—————————————————————————-
5. Finance Income and Costs:
For the 3 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Interest income 123 91
Foreign sell good – –
—————————————————————————-
Finance income 123 91
—————————————————————————-
Foreign sell detriment (32) (329)
—————————————————————————-
Finance costs (32) (329)
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Interest income 341 179
Foreign sell good 768 –
—————————————————————————-
Finance income 1,109 179
—————————————————————————-
Foreign sell detriment – (303)
—————————————————————————-
Finance costs – (303)
—————————————————————————-
6. Income and Other Taxes:
The sustenance for income and other taxes reported differs from the volume computed by requesting the sum Canadian Federal and Provincial orthodox rate to the distinction prior to to to income and other taxes. The reasons for this disproportion and the compared taxation goods are as follows:
For the 9 months finished Dec 31, 2011 2010
(thousands of $, unless differently stated)
—————————————————————————-
Statutory taxation rate 26.13% 27.63%
—————————————————————————-
Expected income taxation 6,147 4,979
Non-deductible costs 396 336
Change in unrecognized proxy differences – (87)
Withholding taxes 188 517
Other eighteen (82)
—————————————————————————-
6,749 5,663
—————————————————————————-
Represented by:
Current income taxes 6,580 4,819
Deferred taxation responsibility (97) 120
Foreign self-denial and other taxes 266 724
—————————————————————————-
6,749 5,663
—————————————————————————-
The components of the Company’s net paid in instalments income taxation guilt are as follows:
December 31, Mar 31, Apr 1,
(thousands of $) 2011 2011 2010
—————————————————————————-
Tax guilt on investment taxation
credits (167) (181) (222)
Tax (liability) object on skill
and apparatus (120) (203) 33
—————————————————————————-
Deferred taxation liability, net (287) (384) (189)
—————————————————————————-
7. Share Capital:
(A) AUTHORIZED:
An sum number of Common Shares, an sum number of Non-Voting Shares, and an sum number of Preferred Shares, issuable in series.
Effective Jun 20, 2011, the Common Shares were apart on a two-for-one basis. Accordingly, the analogous number of shares and per share amounts have been retroactively practiced to simulate the two-for-one adjustment.
(B) ISSUED:
(thousands of shares) Non-Voting
Common Shares Shares
—————————————————————————-
Balance, Apr 1, 2010 31,117 4,543
Issued for money on practice of batch options 636 –
Converted in to usual shares 4,543 (4,543)
—————————————————————————-
Balance, Dec 31, 2010 36,296 –
—————————————————————————-
Balance, Apr 1, 2011 36,427 –
Issued for money on practice of batch options 698 –
Common shares buy-back (33)
—————————————————————————-
Balance, Dec 31, 2011 37,092 –
—————————————————————————-
The Non-Voting Shares were automobile in to an homogeneous number of Common Shares at any time at the option of the holder.
Subsequent to Dec 31, 2011, 32,000 batch options were exercised for money deduction of $ 226,000.
On May 18, 2006, the Board of Directors adopted a shareholder rights devise (the “Original Rights Plan”), whereby the Company released a singular right in respect of any share superb at the tighten of blurb operation on May 18, 2006 and for any a singular more share released by the Company thereafter. The distribution of the rights was not dilutive and will not start reported good per share until the rights apart from the underlying shares and turn exercisable or until the practice of the rights. The Original Rights Plan was authorized by the Company’s shareholders on Jul 13, 2006.
On May 21, 2009, the Board of Directors reviewed the Original Rights Plan and energetic that it was in the most suitable seductiveness of the Company to go on to have a shareholder rights devise in place. The Company, therefore, adopted a new shareholder rights devise (the “Rights Plan”) which is matching in all respects to the Original Rights Plan, with the disproportion of certain teenager amendments which have been done to produce for renovation or capitulation of the Rights Plan any 3 years (rather than usually a singular three-year duration as was set out in the Original Rights Plan) and to refurbish references to orthodox supplies right away out of date. The Rights Plan was authorized by the Company’s shareholders on Jul 9, 2009.
(C) COMMON SHARES BUY-BACK:
On Mar 22, 2010, the Company voiced a Normal Course Issuer Bid (“NCIB”) commencing on Mar 23, 2010 to squeeze for stop up to 1,315,000 of the Common Shares. This NCIB finished on Mar 22, 2011 and a sum of 10,000 shares were purchased at marketplace price for a sum price of $126,000.
On Apr 6, 2011, the Company voiced a NCIB commencing on Apr 7, 2011 to squeeze for stop up to 1,636,000 of the Common Shares. During the 9 months finished Dec 31, 2011, 33,000 Common Shares were purchased at marketplace price for a sum price of $438,000.
(D) STOCK-BASED COMPENSATION PLAN:
The Company adopted a rolling batch option devise as of Jul 13, 2005, which was validated by the Company’s shareholders on Jul 10, 2008, which allows it to accede to options to take Common Shares of up to 10% of the sum superb Common and Non-Voting Shares at the date of grant. Based on this calculation, at Dec 31, 2011, the Company could accede to up to 3,709,000 batch options. Pursuant to the batch option plan, the limit tenure of an option postulated cannot surpass 5 years from the date of grant. The superb batch options vest as to 50% after the primary year anniversary, from date of grant, and afterwards vest as to 25% of the sum options postulated after any of the second and third year anniversary dates.
The following list outlines changes in options:
For the 9 months finished For the year finished
—————————————————————————-
(thousands
except per
share amounts) Dec 31, 2011 Mar 31, 2011
—————————————————————————-
Weighted Weighted
Average Average
Options Exercise Price Options Exercise Price
Granted ($/share) Granted ($/share)
—————————————————————————-
Outstanding at
beginning of
period 2,825 7.41 2,572 5.90
Granted 1,065 13.41 1,094 9.07
Exercised (698) 6.22 (777) 4.76
Forfeited/cancel
led (45) 10.04 (64) 7.08
—————————————————————————-
Outstanding at
end of duration 3,147 9.67 2,825 7.41
—————————————————————————-
Options
exercisable at
end of duration 1,330 7.29 969 5.91
—————————————————————————-
The operation of practice prices of options superb and exercisable at Dec 31, 2011 is as follows:
Outstanding Exercisable
—————————————————————————-
Weighted Weighted Weighted
Average Average Average
Number of Remaining Exercise Number of Exercise
Exercise Price Options Contractual Price Options Price
($/option) (thousands) Life (years) ($/option) (thousands) ($/option)
—————————————————————————-
3.62 – 3.70 60 0.6 3.70 60 3.70
3.71 – 5.63 423 1.6 5.47 418 5.48
5.64 – 7.80 667 2.6 7.80 433 7.80
7.81 – 9.07 944 3.6 9.07 419 9.07
9.08 – 14.24 1,053 4.7 13.41 – –
—————————————————————————-
3,147 3.4 9.67 1,330 7.29
—————————————————————————-
The satisfactory worth of batch options postulated was estimated regulating the Black-Scholes option pricing indication underneath the following assumptions:
For the 9
months finished For the year ended
December 31, 2011 Mar 31, 2011
—————————————————————————-
Fair worth at accede to date ($/option) 1.23 to 3.04 1.56 to 1.78
Share price at accede to date ($/share) 13.00 to 14.24 9.07
Risk-free seductiveness rate (%) 0.99 to 2.06 1.37 to 2.17
Estimated reason duration prior to to to
exercise (years) 2 to 4 2 to 5
Volatility in the price of usual
shares (%) twenty-four to 37 35 to 39
Dividend produce per usual share (%) 3.20 to 4.94 5.12
—————————————————————————-
The Company famous sum stock-based remuneration responsibility for the 3 and 9 months finished Dec 31, 2011 of $566,000 and $1,433,000 respectively (three and 9 months finished Dec 31, 2010 – $428,000 and $1,134,000 respectively).
(E) EARNINGS PER SHARE:
The following list summarizes the good and weighted normal number of Common and Non-Voting Shares used in operative out simple and at large separated good per share:
For the 3 months finished Dec 31,
(thousands usually per share amounts) 2011
—————————————————————————-
Weighted Earnings
Average Shares Per Share
Earnings ($) Outstanding ($/share)
—————————————————————————-
Basic 5,790 36,976 0.16
Dilutive effect of batch
options 990
—————————————————————————-
Diluted 5,790 37,966 0.15
—————————————————————————-
For the 3 months finished
December 31,
(thousands usually per share
amounts) 2010
—————————————————————————
Weighted Earnings
Average Shares Per Share
Earnings ($) Outstanding ($/share)
—————————————————————————
Basic 3,563 36,176 0.10
Dilutive effect of batch
options 983
—————————————————————————
Diluted 3,563 37,159 0.10
—————————————————————————
For the 9 months finished Dec 31,
(thousands usually per share amounts) 2011
—————————————————————————-
Weighted Earnings
Average Shares Per Share
Earnings ($) Outstanding ($/share)
—————————————————————————-
Basic 16,771 36,757 0.46
Dilutive effect of batch
options 1,056
—————————————————————————-
Diluted 16,771 37,813 0.44
—————————————————————————-
For the 9 months finished
December 31,
(thousands usually per share
amounts) 2010
—————————————————————————
Weighted Earnings
Average Shares Per Share
Earnings ($) Outstanding ($/share)
—————————————————————————
Basic 12,358 35,966 0.34
Dilutive effect of batch
options 785
—————————————————————————
Diluted 12,358 36,751 0.34
—————————————————————————
During the 3 and 9 months finished Dec 31, 2011, 88,000 and 155,000 options respectively (three and 9 months finished Dec 31, 2010 – Nil and 120,000 respectively) were released from the mathematics of the weighted-average number of at large separated shares superb given their effect was not dilutive.
8. Revenue:
For the 3 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Software licenses 14,377 10,333
Professional services 1,521 1,730
—————————————————————————-
15,898 12,063
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Software licenses 39,669 31,312
Professional services 4,150 6,137
—————————————————————————-
43,819 37,449
—————————————————————————-
9. Capital Management:
The Company’s objectives in handling collateral are to safeguard enough liquidity to aspire to the devise of organic enlargement sum with vital acquisitions and to show off the lapse to the shareholders. The collateral make up of the Company consists of cash, credit comforts and shareholders’ equity. The Company does not have any outwardly imposed collateral mandate and does not right away implement any quantitative measures to guard the capital.
The Company’s policy is to compensate quarterly dividends based on the Company’s altogether monetary opening and money upsurge generation. In addition, given May 2005, the Company has spoken a special division after examination of the execution of the rught away prior to to mercantile year results. Decisions on division payments are done on a quarterly basement by the Board of Directors. There can be no declaration as to the volume or remuneration of such dividends in the future.
Since Nov 2002, the Company embarked on a array of normal march issuer bids to buy behind the shares. The ultimate normal march issuer bid is effective from Apr 7, 2011 to Apr 6, 2012. Reference is done to note 7(c).
The Company makes adjustments to the collateral make up in light of ubiquitous mercantile conditions and the Company’s operative collateral requirements. In sequence to say or regulate the collateral structure, the Company, on capitulation from the Board of Directors, may compensate dividends, buy behind shares or commence other activities as deemed suitable underneath the specific circumstances. The Board of Directors reviews and approves any component sell not in the typical march of business.
There were no changes in the Company’s proceed to collateral management during the period.
10. Financial Instruments and Risk Management:
(i) Classification of monetary instruments
Classification Measurement
—————————————————————————-
Cash Held for traffic Fair value
Trade and other receivables Loans and receivables Amortized cost
Trade payables and accrued
liabilities Other monetary liabilities Amortized cost
—————————————————————————-
(ii) Fair values of monetary instruments
The carrying values of cash, traffic and other receivables, traffic payables and accrued liabilities estimate their satisfactory values due to the short-term inlet of these instruments.
OVERVIEW:
The Company is unprotected to risks of varying degrees of stress which could start the capability to grasp the vital objectives for growth. The categorical objectives of the Company’s risk management routine are to safeguard that risks are scrupulously identified and that the collateral base is competent in propinquity to those risks. The principal monetary risks to which the Company is unprotected are described below:
(A) CREDIT RISK:
Credit risk is the risk of an astonishing detriment if a patron or third party to a monetary instrument fails to encounter the contractual requisite and arises predominantly from the Company’s money and traffic and other receivables. The amounts reported in the statements of monetary on all sides for traffic receivables are net of allowances for bad debts, estimated by the Company’s management based on prior to to knowledge and their comment of the tide mercantile environment.
The Company’s traffic receivables include radically of balances from blurb operation handling in the oil and gas industry, both domestically and internationally, as the Company sells the products and services in over 50 countries worldwide. Some of these countries have larger mercantile and done at home risk than gifted in North America and as a outcome there may be larger risk compared with sales in those jurisdictions. The Company manages this risk by invoicing for the full permit tenure in allege for the infancy of module permit sales and by invoicing as often as the stipulate allows for consulting and stipulate investigate services on a percentage-of-completion basis. In cases where collectability is not deemed probable, income is famous on taking of cash, presumption all other criteria have been met. Historically, the Company has not gifted any poignant waste compared to individual blurb operation or groups of blurb operation in any sold geographic area; therefore, no stipend for puzzled accounts has been determined at Dec 31, 2011.
As at Dec 31, 2011, the Company has a thoroughness of credit risk with 9 done at home and ubiquitous blurb operation who paint 62% of traffic receivables. In addition, $2.2 million of traffic receivables are over 90 days. The Company assesses the creditworthiness of the blurb operation on an ongoing basement and it continually monitors the volume and age of balances outstanding. Payment conditions with blurb operation are thirty days from check date; however, attention practice can magnify these terms. Accordingly, the Company views the credit risks on these amounts as normal for the industry.
The Company minimizes the credit risk of money by depositing usually with a creditable monetary establishment in rarely glass interest-bearing money accounts.
(B) MARKET RISK:
Market risk is the risk that changes in marketplace prices of the Company’s unfamiliar sell rates and seductiveness rates will start the Company’s income or the worth of the monetary instruments.
(i) Foreign Exchange Risk
The Company operates internationally and radically prices the products in possibly the Canadian or US dollar. This gives climb to bearing to marketplace risks from changes in the unfamiliar sell rates in in in in in in in in in in in in in in between the Canadian and US dollar. Approximately 72% of the Company’s revenues for the 9 months finished Dec 31, 2011 were denominated in US dollars and at Dec 31, 2011, the Company had we estimate $10.4 million of the operative collateral denominated in US dollars. The Company right away does not use derivative instruments to sidestep the bearing to those risks though as we estimate 23% of the Company’s sum costs are also denominated in US dollars they produce a prejudiced mercantile sidestep opposite the oscillation in this banking exchange. In addition, the Company manages levels of unfamiliar banking reason by converting additional US dollars in to Canadian dollars at mark rates.
Canadian operations are unprotected to banking risk on US denominated monetary resources and liabilities with fluctuations in the rate famous as unfamiliar sell gains or waste in the Consolidated Statements of Operations and Comprehensive Income. It is estimated that a a singular cent shift in the US dollar would outcome in a net shift of we estimate $76,000 on net income for the 9 months finished Dec 31, 2011. A weaker US dollar with respect to the Canadian dollar will outcome in a disastrous stroke whilst the retreat would outcome from a stronger US dollar.
(ii) Interest Rate Risk
The Company has poignant money balances and no interest-bearing debt. The Company’s tide policy is to deposit additional money in interest-bearing deposits and/or on trial investment certificates released by the principal banker. The Company is unprotected to seductiveness money upsurge risk from changes in seductiveness rates on the money balances. Based on the Dec 31, 2011 money balance, any 1% shift in the seductiveness rate on the Company’s money shift would shift net income for the 9 months finished Dec 31, 2011 by we estimate $352,000.
(C) LIQUIDITY RISK:
Liquidity risk is the risk that the Company is not able to encounter the monetary obligations as they tumble due or can do so usually at extreme cost. The Company manages liquidity risk through the management of the collateral make up as summarized in note 9. The Company’s enlargement is financed through a multiple of the money flows from operations and the money balances on hand. Given the Company’s accessible glass resources as compared to the timing of the payments of the liabilities, management assesses the Company’s liquidity risk to be low. The Company monitors the expenditures by scheming annual budgets which are updated periodically. At Dec 31, 2011, the Company has poignant money balances in additional of the obligations and over $800,000 of the line of credit (note 12) accessible for the use.
11. Commitments:
(A) RESEARCH COMMITMENTS:
The DRMS investigate and enlargement project, a collaborative bid with our partners Shell International Exploration and Production BV (“Shell”) and Petroleo Brasileiro S.A. (“Petrobras”) to mutually climb the newest era of fountainhead make-believe software, which commenced in 2006 and was creatively estimated to take 5 years to complete, is right away approaching to go on over the primary five-year time frame; however, the Company and the partners are committed to go on appropriation the devise with the Company’s share of the devise costs estimated at $3.0 million per year.
In and with entering in to this project, CMG Reservoir Simulation Foundation (“Foundation CMG”) agreed, theme to certain stop rights, to produce up to a limit of $5.2 million in investigate accede to appropriation to cover we estimate 50% of the Company’s estimated share of costs over the primary 5 years of the project. For the 9 months finished Dec 31, 2011, the Company has reflected $366,000 (2010 – $990,000) in investigate grants from Foundation CMG in income with respect to this project. Foundation CMG’s $5.2 million appropriation joining was finished in the primary entertain of the tide mercantile year.
(B) LEASE COMMITMENTS:
The Company has handling lease commitments relating to the bureau premises with the smallest annual lease payments as follows:
(thousands of $)
—————————————————————————-
2012 475
2013 1,777
2014 1,791
2015 1,356
2016 609
—————————————————————————-
12. Line Of Credit:
The Company has organised for a $1.0 million line of credit with the principal banker, which can be drawn down by proceed of a direct handling credit trickery or may be used to await letters of credit. As at Dec 31, 2011, US $165,000 (2010 – US $165,000) had been indifferent on this line of credit for the minute of credit ancillary a opening bond.
13. Segmented Information:
The Company is orderly in to a singular handling shred represented by the enlargement and chartering of fountainhead make-believe software. The Company provides veteran services, consisting of support, training, consulting and stipulate investigate activities, to foster the use and enlargement of the software; however, these activities are not evaluated as a apart blurb operation segment.
Revenues and skill and apparatus of the Company movement in the following geographic regions:
(thousands of $) Revenue Property and equipment
—————————————————————————-
For the 9 months
ended Dec 31, As at Dec 31,
2011 2010 2011 2010
—————————————————————————-
Canada 14,059 12,930 2,548 2,378
United States 7,439 6,673 83 116
Other Foreign 22,321 17,846 112 91
—————————————————————————-
43,819 37,449 2,743 2,585
—————————————————————————-
In the 9 months finished Dec 31, 2011, the Company subsequent 9.5% (2010 – 9.6%) of the income from a singular customer.
14. Subsidiaries:
CMG is the profitable owners of the finish released share collateral and controls all the votes of the subsidiaries. The principal activities of all the subsidiaries are the sale and await for the use of CMG’s module licenses. Transactions in in in in in in in in in in in in in in between subsidiaries are separated on consolidation. The following is the list of CMG’s subsidiaries:
Subsidiary Country of Incorporation
—————————————————————————-
Computer Modelling Group Inc. United States
CMG Venezuela Venezuela
CMG Middle East FZ LLC Dubai, UAE
—————————————————————————-
15. Subsequent Events:
On Feb 9, 2012, the Board of Directors spoken a money division of $ 0.13 per share on the Common Shares, on credit on Mar 15, 2012, to all shareholders of record at the tighten of blurb operation on Mar 8, 2012.
16. Transition to IFRS:
As staid in note 2(a), these precipitated sum monetary statements have been rebuilt in suitability with IAS 34. The accounting policies described in note 3 to the precipitated sum monetary statements for the 3 months finished Jun 30, 2011 have been practical in scheming the precipitated sum monetary statements for the 3 and 9 months finished Dec 31, 2011, the analogous information for the 3 and 9 months finished Dec 31, 2010, and in credentials of an opening IFRS matter of monetary on all sides at Apr 1, 2010, the Company’s date of passing from a singular to an a single more to IFRS, and statements of monetary on all sides as at Dec 31, 2011 and Mar 31, 2011.
This passing from a singular to an a single more note explains the effect of the passing from a singular to an a single more from prior to to Canadian GAAP to IFRS on the Company’s monetary position, monetary opening and money flows.
16.1 ELECTED EXEMPTIONS FROM FULL RETROSPECTIVE APPLICATION:
In scheming these precipitated sum monetary statements in suitability with IFRS 1, we practical the following discretionary exemptions from full retrospective focus of IFRS:
IFRS 3 – Business Combinations
IFRS 1 allows the Company to apply IFRS 3, Business Combinations, retrospectively or prospectively from the date of transition. The retrospective focus would require rendering of all blurb operation combinations that occurred prior to to to the passing from a singular to an a single more date, Apr 1, 2010. The Company inaugurated not to retrospectively apply IFRS 3 to blurb operation combinations that occurred prior to to to the passing from a singular to an a single more date and such blurb operation combinations have not been restated.
IFRS 2 – Share-based Payments
IFRS 1 provides the grant from retrospective focus of IFRS 2, Share-based Payments, to options postulated on or prior to to to Nov 7, 2002 and options postulated after Nov 7, 2002 that vested prior to to to Apr 1, 2010. The Company adopted the grant in IFRS 1 and practical IFRS 2 to worker options postulated after Nov 7, 2002 that had not vested by Apr 1, 2010. While teenager differences occurred on the passing from a singular to an a single more from Canadian GAAP to IFRS, these differences were not material, and hence, no adjustments have been done to the sum monetary statements.
16.2 MANDATORY EXCEPTIONS TO RETROSPECTIVE APPLICATION:
In scheming these precipitated sum monetary statements in suitability with IFRS 1, the Company practical the following imperative exception:
Estimates
IFRS 1 disallows hindsight to be used in formulating or reworking estimates. Estimates done in suitability with IFRSs at the date of passing from a singular to an a single more are unchanging with estimates done underneath Canadian GAAP usually where the rider was compulsory to simulate any disproportion in accounting policies. In creation estimates underneath IFRSs not compulsory underneath Canadian GAAP, the estimates simulate conditions that existed at the applicable stating date and/or passing from a singular to an a single more date.
16.3 RECONCILIATION OF FINANCIAL POSITION AND SHAREHOLDERS’ EQUITY:
(thousands of $) Mar 31, 2011 Dec 31, 2010
—————————————————————————-
Canadian IFRS Canadian IFRS
GAAP Adj. IFRS GAAP Adj. IFRS
—————————————————————————-
Assets
Current assets:
Cash 41,753 41,753 38,012 38,012
Trade and other
receivables 13,318 13,318 9,362 9,362
Prepaid waste 1,064 1,064 972 972
Prepaid income
taxes – – – -
—————————————————————————-
56,135 56,135 48,346 48,346
Property and
equipment 2,554 2,554 2,585 2,585
Deferred taxation object
(note 16.5(A)) – – – -
—————————————————————————-
Total resources 58,689 58,689 50,931 50,931
—————————————————————————-
Liabilities and
Shareholders’
Equity
Current liabilities:
Trade payables and
accrued
liabilities 4,543 4,543 4,367 4,367
Income taxes
payable 1,237 1,237 772 772
Deferred income 16,755 16,755 11,892 11,892
Deferred taxation
liability (note
16.5(A)) 181 (181) – 129 (129) -
—————————————————————————-
22,716 (181) 22,535 17,160 (129) 17,031
Deferred taxation
liability (note
16.5(A)) 203 181 384 180 129 309
—————————————————————————-
Total liabilities 22,919 – 22,919 17,340 – 17,340
—————————————————————————-
Shareholders’
equity:
Share collateral 24,801 24,801 23,950 23,950
Contributed
surplus 2,655 2,655 2,374 2,374
Retained good 8,314 8,314 7,267 7,267
—————————————————————————-
Total shareholders’
equity 35,770 35,770 33,591 33,591
—————————————————————————-
Total liabilities
and shareholders’
equity 58,689 58,689 50,931 50,931
—————————————————————————-
(thousands of $) Apr 1, 2010
—————————————————————————-
IFRS
Canadian GAAP Adj. IFRS
—————————————————————————-
Assets
Current assets:
Cash 28,826 28,826
Trade and other
receivables 16,072 16,072
Prepaid waste 1,141 1,141
Prepaid income
taxes 1,433 1,433
—————————————————————————-
47,472 47,472
Property and
equipment 2,401 2,401
Deferred taxation object
(note 16.5(A)) 33 (33) -
—————————————————————————-
Total resources 49,906 (33) 49,873
—————————————————————————-
Liabilities and
Shareholders’
Equity
Current liabilities:
Trade payables and
accrued
liabilities 5,398 5,398
Income taxes
payable – -
Deferred income 13,843 13,843
Deferred taxation
liability (note
16.5(A)) 222 (222) -
—————————————————————————-
19,463 (222) 19,241
Deferred taxation
liability (note
16.5(A)) – 189 189
—————————————————————————-
Total liabilities 19,463 (33) 19,430
—————————————————————————-
Shareholders’
equity:
Share collateral 20,390 20,390
Contributed
surplus 1,816 1,816
Retained good 8,237 8,237
—————————————————————————-
Total shareholders’
equity 30,443 30,443
—————————————————————————-
Total liabilities
and shareholders’
equity 49,906 (33) 49,873
—————————————————————————-
16.4 RECONCILIATION OF NET AND COMPREHENSIVE INCOME:
For the 3 months finished Dec 31, Canadian IFRS
2010(thousands of $) GAAP Adjustments IFRS
—————————————————————————-
—————————————————————————-
Revenue 12,063 – 12,063
—————————————————————————-
Operating waste
Sales, selling and veteran
services (note 16.5(B)) 2,760 76 2,836
Research and enlargement 2,408 – 2,408
General and executive (note
16.5(B)) 1,237 66 1,303
Depreciation and amortization (note
16.5(B)) 142 (142) –
Foreign sell detriment (note 16.5(C)) 329 (329) –
Interest and other income (note
16.5(C)) (91) 91 –
—————————————————————————-
6,785 (238) 6,547
—————————————————————————-
Operating distinction 5,278 238 5,516
Finance income (note 16.5(C)) – 91 91
Finance costs (note 16.5(C)) – (329) (329)
—————————————————————————-
Profit prior to to to income and other taxes 5,278 – 5,278
Income and other taxes 1,715 – 1,715
—————————————————————————-
Net and extensive income 3,563 – 3,563
—————————————————————————-
—————————————————————————-
For the 9 months finished Dec 31, Canadian IFRS
2010(thousands of $) GAAP Adjustments IFRS
—————————————————————————-
—————————————————————————-
Revenue 37,449 – 37,449
—————————————————————————-
Operating waste
Sales, selling and veteran
services (note 16.5(B)) 8,484 220 8,704
Research and enlargement 6,941 – 6,941
General and executive (note
16.5(B)) 3,472 187 3,659
Depreciation and amortization (note
16.5(B)) 407 (407) –
Foreign sell detriment (note 16.5(C)) 303 (303) –
Interest and other income (note
16.5(C)) (179) 179 –
—————————————————————————-
19,428 (124) 19,304
—————————————————————————-
Operating distinction 18,021 124 18,145
Finance income (note 16.5(C)) – 179 179
Finance costs (note 16.5(C)) – (303) (303)
—————————————————————————-
Profit prior to to to income and other taxes 18,021 – 18,021
Income and other taxes 5,663 – 5,663
—————————————————————————-
Net and extensive income 12,358 – 12,358
—————————————————————————-
—————————————————————————-
16.5 EXPLANATION OF PRESENTATION RECLASSIFICATIONS:
(A) Deferred taxes – paid in instalments taxes are personal as non-current underneath IFRS. Under prior to to Canadian GAAP, paid in instalments taxes were personal as tide and non-current based on the sequence of the underlying resources or liabilities to which they describe or based on the approaching annulment of the proxy differences.
Transition manners resulted in reclassification of paid in instalments taxation guilt compared with SR&ED credits from tide to non-current. In addition, paid in instalments taxation object compared with skill and apparatus was homogeneous opposite paid in instalments taxation guilt as both describe to income taxes levied by the same taxation management for the same taxable entity.
(B) Expense sequence – the Company has inaugurated to benefaction the waste in the sum statements of operations and extensive income rebuilt underneath IFRS according to their function. As a result, debasement and amortization, which was reported as a apart line object underneath prior to to Canadian GAAP, was allocated to the respective functions.
(C) Finance income and costs – underneath Canadian GAAP, seductiveness income and unfamiliar sell gains and waste were personal as apart line apparatus in the sum matter of earnings. Under IFRS, seductiveness income and unfamiliar sell gains are presented as monetary income, and unfamiliar sell waste are presented as monetary costs. Finance income and costs are presented on a sum basement as compulsory by IFRS.
16.6 ADJUSTMENTS TO THE STATEMENTS OF CASH FLOWS:
Interest received and income taxes paid have been changed in to the physique of the matter of money flows underneath handling activities, given they were formerly disclosed as supplemental information. There are no other component differences in in in in in in in in in in in in in in between the matter of money flows presented underneath IFRS and the matter of money flows formerly presented underneath Canadian GAAP.
CALGARY, ALBERTA–(Marketwire – Feb. 10, 2012) – Computer Modelling Group Ltd. (“CMG” or the “Company”) (TSX:CMG.TO – News) is really gratified to make known our third quarter results for the 3 and 9 months finished Dec 31, 2011.
THIRD QUARTER HIGHLIGHTS
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands, usually per share data)
—————————————————————————-
Annuity/maintenance module licenses 12,056 7,999 4,057 51%
Perpetual module licenses 2,321 2,335 (14) -1%
Total income 15,898 12,063 3,835 32%
Operating distinction 8,093 5,516 2,577 47%
Net income 5,790 3,563 2,227 63%
Earnings per share – simple 0.16 0.10 0.06 60%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands, usually per share data)
—————————————————————————-
Annuity/maintenance module licenses 30,361 24,178 6,183 26%
Perpetual module licenses 9,308 7,134 2,174 30%
Total income 43,819 37,449 6,370 17%
Operating distinction 22,411 18,145 4,266 24%
Net income 16,771 12,358 4,413 36%
Earnings per share – simple 0.46 0.34 0.12 35%
—————————————————————————-
MANAGEMENT’S DISCUSSION AND ANALYSIS
This Management’s Discussion and Analysis (“MD&A”) for Computer Modelling Group Ltd. (“CMG,” the “Company,” “we” or “our”), presented as at Feb 9, 2012, should be examination in and with the unaudited precipitated sum monetary statements and compared records of the Company for the 3 and 9 months finished Dec 31, 2011 and the audited sum monetary statements and MD&A for the years finished Mar 31, 2011 and 2010 contained in the 2011 Annual inform for CMG. Additional information relating to CMG, together with our Annual Information Form, can be found at www.sedar.com. The monetary interpretation contained herein have been rebuilt in suitability with International Financial Reporting Standards (“IFRS”) and, unless differently indicated, all amounts in this inform are voiced in Canadian dollars and dull to the nearest thousand.
Effective on the tighten of blurb operation on Jun 20, 2011, CMG’s Common Shares were apart on a two-for-one basis. Accordingly, all analogous number of shares and per share amounts have been retroactively practiced to simulate the two-for-one split.
FORWARD-LOOKING INFORMATION
Certain information enclosed in this MD&A is forward-looking. Forward-looking information includes statements that are not statements of chronological actuality and which address activities, events or developments that the Company expects or anticipates will or may occur in the future, together with such things as investment objectives and strategy, the enlargement skeleton and standing of the Company’s module enlargement projects, the Company’s intentions, formula of operations, levels of activity, destiny collateral and other expenditures (including the amount, inlet and sources of appropriation thereof), blurb operation prospects and opportunities, investigate and enlargement timetable, and destiny enlargement and performance. When used in this MD&A, statements to the effect that the Company or the management “believes”, “expects”, “expected”, “plans”, “may”, “will”, “projects”, “anticipates”, “estimates”, “would”, “could”, “should”, “endeavours”, “seeks”, “predicts” or “intends” or matching statements, together with “potential”, “opportunity”, “target” or other variations thereof that are not statements of chronological actuality should be construed as forward-looking information. These statements simulate management’s tide ideology with respect to destiny events and are based on information right away accessible to management of the Company. The Company believes that the expectations reflected in such forward-looking information are reasonable, though no declaration can be given that these expectations will infer to be scold and such forward-looking information should not be unduly relied upon.
With respect to forward-looking information contained in this MD&A, we have done assumptions regarding, in in in in in in in in in in in in in in between other things:
– Future module permit sales
– The a singular after an a single more financing by and appearance of the Company’s partners
in the DRMS devise and it being finished in a timely demeanour
– Ability to come in in to a singular more module permit agreements
– Ability to go on tide investigate and new product enlargement
– Ability to partisan and keep competent staff
Forward-looking information is not a pledge of destiny opening and involves a number of risks and uncertainties, usually a small of which are described herein. Many factors could means the Company’s tangible results, opening or achievements, or destiny events or developments, to talk about materially from those voiced or pragmatic by the forward-looking information including, though limitation, the following factors which are described in the MD&A of CMG’s 2011 Annual Report underneath the streamer “Business Risks”:
– Economic conditions in the oil and gas attention
– Reliance on pass clients
– Foreign sell
– Economic and done at home risks in countries where the Company currently
does or proposes to do blurb operation
– Increased foe
– Reliance on employees with specialized skills or believe
– Protection of exclusive rights
Should a singular or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements infer incorrect, tangible results, opening or feat may shift materially from those voiced or pragmatic by the forward-looking information contained in this MD&A. These factors should be delicately deliberate and readers are cautioned not to place unjustified faith on forward-looking information, which speaks usually as of the date of this MD&A. All unbroken forward-looking information attributable to the Company herein is privately competent in the whole by the cautionary statements contained in or referred to herein. The Company does not commence any requisite to recover publicly any revisions to forward-looking information contained in this MD&A to simulate events or resources that occur after the date of this MD&A or to simulate the feeling of amazing events, usually as may be compulsory underneath germane bonds laws.
NON-IFRS FINANCIAL MEASURES
This MD&A contains the conditions “direct worker costs” and “other corporate costs” which are not measures tangible by IFRS, do not have standardised definition prescribed by IFRS and should not be deliberate an pick to waste as energetic in suitability with IFRS. Direct worker costs and other corporate costs, as computed by CMG, may talk about from matching measures as reported by other issuers. These non-IFRS measures are presented in this MD&A given management considers them to be critical in highlighting the quantitative stroke of price management as it relates to corporate and people-related costs. The apparatus forming direct worker costs are summarized in the list underneath the “Expenses” heading.
CORPORATE PROFILE
CMG is a resource module technology association apportionment the oil and gas industry. The Company is a heading retailer of modernized processes fountainhead modelling module with a blue thinly slice patron base of ubiquitous oil companies and technology centers in we estimate 50 countries. The Company also provides veteran services consisting of rarely specialized support, consulting, training, and stipulate investigate activities. CMG has sales and technical await services based in Calgary, Houston, London, Caracas and Dubai. CMG’s Common Shares are listed on the Toronto Stock Exchange (“TSX”) and traffic underneath the pitch “CMG”.
QUARTERLY PERFORMANCE
Fiscal 2010(1) Fiscal 2011(2)
($ thousands, unless
otherwise stated) Q4 Q1 Q2 Q3 Q4
—————————————————————————-
Annuity/maintenance licenses 7,653 8,325 7,855 7,999 8,531
Perpetual licenses 4,982 1,824 2,975 2,335 3,911
—————————————————————————-
Software licenses 12,635 10,149 10,830 10,333 12,442
Professional services 1,657 1,905 2,502 1,730 1,936
—————————————————————————-
Total income 14,292 12,054 13,332 12,063 14,378
Operating distinction 7,844 5,933 6,695 5,516 7,523
Operating distinction % 55 49 50 46 52
Profit prior to to to income and
other taxes 7,710 6,178 6,565 5,278 7,413
Income and other taxes 2,350 1,949 1,999 1,715 2,605
Net income for the duration 5,360 4,229 4,565 3,563 4,808
Cash dividends spoken and
paid 3,209 6,274 3,430 3,623 3,643
—————————————————————————-
Per share amounts – ($/share)
Earnings per share – simple 0.15 0.12 0.13 0.10 0.13
Earnings per share – at large separated 0.15 0.12 0.13 0.10 0.13
Cash dividends spoken and
paid 0.09 0.175 0.095 0.10 0.10
—————————————————————————-
Fiscal 2012(3)
($ thousands, unless
otherwise stated) Q1 Q2 Q3
—————————————————————————-
Annuity/maintenance licenses 8,997 9,308 12,056
Perpetual licenses 5,391 1,596 2,321
—————————————————————————-
Software licenses 14,388 10,904 14,377
Professional services 1,551 1,078 1,521
—————————————————————————-
Total income 15,939 11,982 15,898
Operating distinction 9,092 5,226 8,093
Operating distinction % 57 44 51
Profit prior to to to income and
other taxes 9,240 6,096 8,184
Income and other taxes 2,577 1,778 2,394
Net income for the duration 6,663 4,318 5,790
Cash dividends spoken and
paid 7,519 4,053 4,079
—————————————————————————-
Per share amounts – ($/share)
Earnings per share – simple 0.18 0.12 0.16
Earnings per share – at large separated 0.18 0.11 0.15
Cash dividends spoken and
paid 0.205 0.11 0.11
—————————————————————————-
1. Q4 of mercantile 2010 includes $0.4 million in income that pertains to
usage of CMG’s products in prior to to quarters.
2. Q1, Q2, Q3 and Q4 of mercantile 2011 include $1.1 million, $0.2 million,
$0.3 million and $0.1 million, respectively, in income that pertains to
usage of CMG’s products in prior to to quarters.
3. Q1, Q2, and Q3 of mercantile 2012 include $0.3 million, $0.04 million and
$2.6 million, respectively, in income that pertains to use of CMG’s
products in prior to to quarters.
Note: all quarterly interpretation contained in the on top of list has been rebuilt in suitability with IFRS.
Highlights
During the 9 months finished Dec 31, 2011, as compared to the same duration of prior to to mercantile year, CMG:
– Increased annuity/maintenance income by 26%;
– Increased incessant sales by 30%;
– Increased net income by 36%;
– Increased sum spending on investigate and enlargement by 12%;
– Realized good per share of $0.46, representing a 35% increase.
Revenue
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Software licenses 14,377 10,333 4,044 39%
Professional services 1,521 1,730 (209) -12%
—————————————————————————-
Total income 15,898 12,063 3,835 32%
—————————————————————————-
Software permit income – % of sum
revenue 90% 86%
Professional services – % of sum
revenue 10% 14%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Software licenses 39,669 31,312 8,357 27%
Professional services 4,150 6,137 (1,987) -32%
—————————————————————————-
Total income 43,819 37,449 6,370 17%
—————————————————————————-
Software permit income – % of sum
revenue 91% 84%
Professional services – % of sum
revenue 9% 16%
—————————————————————————-
CMG’s income is comprised of module permit sales, which produce the infancy of the Company’s revenue, and fees for veteran services.
Total income increasing by 32% and 17% for the 3 and 9 months finished Dec 31, 2011, respectively, due to increases in both our annuity/maintenance and incessant permit income streams. The increases in module licenses income were to a small border homogeneous by the decreases in fees warranted from veteran services.
SOFTWARE LICENSE REVENUE
Software permit income is done up of annuity/maintenance permit fees charged for the use of the Company’s module products which is in all for a tenure of a singular year or reduction and incessant module permit sales, whereby the patron purchases the-then-current chronicle of the module and has the right to use that chronicle in perpetuity. Annuity/maintenance permit fees have historically had a tall renovation rate and, accordingly, produce a arguable income tide whilst incessant permit sales are more non-static and indeterminate in inlet as the squeeze preference and the timing vacillate with the customers’ needs and budgets. CMG has found that the infancy of the blurb operation who have acquired incessant module licenses subsequently squeeze upkeep licenses to safeguard they have access to tide versions of CMG’s software.
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Annuity/maintenance licenses 12,056 7,999 4,057 51%
Perpetual licenses 2,321 2,335 (14) -1%
—————————————————————————-
Total module permit income 14,377 10,333 4,044 39%
—————————————————————————-
Annuity/maintenance as a % of sum
software permit income 84% 77%
Perpetual as a % of sum module
license income 16% 23%
—————————————————————————-
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Annuity/maintenance licenses 30,361 24,178 6,183 26%
Perpetual licenses 9,308 7,134 2,174 30%
—————————————————————————-
Total module permit income 39,669 31,312 8,357 27%
—————————————————————————-
Annuity/maintenance as a % of sum
software permit income 77% 77%
Perpetual as a % of sum module
license income 23% 23%
—————————————————————————-
Total module permit income increasing by 39% and 27% during the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of the prior to to mercantile year. The enlarge in our quarterly sum module permit income was driven by the enlarge in annuity/maintenance permit sales. Our year-to-date enlarge in sum module permit income was upheld by enlargement in both annuity/maintenance and incessant permit sales.
CMG’s annuity/maintenance permit income increasing by 51% and 26% during the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of final year. While we have seen clever enlargement in these permit sales via the year, the poignant writer to the enlarge in the quarterly revenue, which also had a certain stroke on the year-to-date income growth, is a remuneration received from a singular of our vast blurb operation for whom income capitulation criteria are over usually at the time of the taking of funds. The remuneration was received for the licenses and services supposing in past durations (see the contention about income warranted in the tide duration that pertains to use of products in prior to to buliding on top of the “Quarterly Software License Revenue” graph). Payments from this patron have at times been irregular, with the final remuneration carrying been received in Q1 2011, which is reflected in our year-to-date analogous numbers. The remuneration received in the tide entertain represents the primary remuneration for a multi-year agreement with this long-standing client. We pattern to go on to receive payments underneath this arrangement, however, the volume and timing is capricious and, accordingly, may deliver a small variability in our quarterly income results.
If we were to regulate our quarterly and year-to-date annuity/maintenance licenses revenue, by stealing income from this a singular patron for the tide and prior to to mercantile year, we would see that the annuity/maintenance permit sales have grown by 19% and 20% in the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of the prior to to mercantile year. These increases were driven by sales to new and existent clients as well as the enlarge in upkeep income scored equally to our clever incessant sales generated in the prior to to quarters. Our annuity/maintenance permit revenue, representing a repeated income stream, continues experiencing plain enlargement entertain over entertain as evidenced by uninterrupted quarterly increases in this income tide over the past multiform mercantile years.
The enlarge in annuity/maintenance income as totalled in Canadian dollars has been negatively influenced by the strengthening of the Canadian dollar relations to the US dollar in the tide mercantile year. The list next illustrates income generated in US dollars and the rates at which it was converted in to Canadian dollars to uncover the movement in US dollar denominated income though the stroke of the unfamiliar exchange. Had the sell rate in in in in in in in in in in in in in in between the US and Canadian dollars remained unchanging in in in in in in in in in in in in in in between the 3 and 9 months finished Dec 31, 2011 and 2010, our third entertain annuity/maintenance income would have increasing by 56% (instead of 51%) and our year-to-date annuity/maintenance income would have increasing by 30% (instead of 26%).
Our incessant permit sales for the 3 months finished Dec 31, 2011, were probably unvaried from the same duration of the prior to to mercantile year, whereas, they increasing by 30% for the 9 months finished Dec 31, 2011, compared to the same duration of the prior to to mercantile year. The year-to-date enlarge is driven by a multi-million incessant stipulate sealed in the primary entertain of the tide mercantile year. Software chartering underneath incessant sales is a poignant part of CMG’s business, though may vacillate significantly in in in in in in in in in in in in in in between durations due to the doubt compared with the timing and the place where sales are generated. For this reason, we pattern to imitate fluctuations in the quarterly incessant income amounts via the mercantile year.
We can imitate from the list next that our year-to-date incessant sales in US dollars were negatively influenced by the unfamiliar sell movement in in in in in in in in in in in in in in between the US and Canadian dollars as a outcome of the strengthening Canadian dollar in the tide mercantile year. Had the sell rate in in in in in in in in in in in in in in between the US and Canadian dollars remained unchanging in in in in in in in in in in in in in in between the 9 months finished Dec 31, 2011 and 2010, our year-to-date incessant permit income would have increasing by 39% (instead of 30%). The unfamiliar sell rates had a smallest stroke on our quarterly incessant sales.
The following list summarizes the US dollar denominated income and the weighted normal sell rates at which it was converted to Canadian dollars:
For the 3 months finished
December 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
US dollar annuity/maintenance
license sales US$ 8,711 US$ 5,161 3,550 69%
Weighted normal acclimatisation rate 0.992 1.044
—————————————————————————-
Canadian dollar homogeneous CDN$ 8,643 CDN$ 5,389 3,254 60%
—————————————————————————-
US dollar incessant permit sales US$ 1,866 US$ 1,883 (17) -1%
Weighted normal acclimatisation rate 1.019 1.025
—————————————————————————-
Canadian dollar homogeneous CDN$ 1,902 CDN$ 1,930 (28) -1%
—————————————————————————-
—————————————————————————-
For the 9 months finished
December 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
US dollar annuity/maintenance
license sales US$ 20,160 US$ 15,907 4,253 27%
Weighted normal acclimatisation
rate 0.993 1.049
—————————————————————————-
Canadian dollar homogeneous CDN$ 20,020 CDN$ 16,683 3,337 20%
—————————————————————————-
US dollar incessant permit
sales US$ 9,144 US$ 4,618 4,526 98%
Weighted normal acclimatisation
rate 0.969 1.036
—————————————————————————-
Canadian dollar homogeneous CDN$ 8,857 CDN$ 4,784 4,073 85%
—————————————————————————-
REVENUE BY GEOGRAPHIC SEGMENT
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Annuity/maintenance income
Canada 4,007 2,859 1,148 40%
United States 2,139 1,779 360 20%
Other 5,910 3,361 2,549 76%
—————————————————————————-
12,056 7,999 4,057 51%
—————————————————————————-
Perpetual income
Canada 420 405 fifteen 4%
United States 390 248 142 57%
Other 1,511 1,682 (171) -10%
—————————————————————————-
2,321 2,335 (14) -1%
—————————————————————————-
Total module permit income
Canada 4,427 3,264 1,163 36%
United States 2,529 2,026 503 25%
Other 7,421 5,043 2,378 47%
—————————————————————————-
14,377 10,333 4,044 39%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Annuity/maintenance income
Canada 11,648 8,013 3,635 45%
United States 6,191 5,184 1,007 19%
Other 12,522 10,981 1,541 14%
—————————————————————————-
30,361 24,178 6,183 26%
—————————————————————————-
Perpetual income
Canada 452 2,350 (1,898) -81%
United States 992 1,262 (270) -21%
Other 7,864 3,522 4,342 123%
—————————————————————————-
9,308 7,134 2,174 30%
—————————————————————————-
Total module permit income
Canada 12,100 10,363 1,737 17%
United States 7,183 6,446 737 11%
Other 20,386 14,503 5,883 41%
—————————————————————————-
39,669 31,312 8,357 27%
—————————————————————————-
On a geographic basis, sum module permit sales increasing opposite all regions with Canada and the United States experiencing increases of 17% and 11%, respectively, for the 9 months finished Dec 31, 2011 compared to the same durations of prior to to mercantile year. This enlargement has been led by the increases in annuity/maintenance income stream. Our other markets grew sum module permit income by 41% in the 9 months finished Dec 31, 2011 compared to the same duration of prior to to mercantile year, driven especially by the enlarge in incessant sales.
The Canadian marketplace gifted clever enlargement in the repeated annuity/maintenance income tide as evidenced by the increases of 40% and 45% for the 3 and 9 months finished Dec 31, 2011 compared to the same durations of the prior to to mercantile year. The increases in the payments income tide were upheld by the enlarge in sales to both existent and new clients. In addition, clever incessant permit sales generated in the past have enabled the Canadian marketplace to say increasing income levels from the upkeep contracts scored equally to those incessant licenses. On the other hand, incessant sales during the tide mercantile year did not strech the same levels of the incessant sales done during the prior to to mercantile year, offsetting the enlarge in year-to-date annuity/maintenance revenue.
Similar to the Canadian market, the US marketplace also gifted enlargement in annuity/maintenance income with the increases of 20% and 19% accessible for the 3 and 9 months finished Dec 31, 2011 compared to the same durations of the prior to to mercantile year. While incessant income grew by $0.1 million in the 3 months finished Dec 31, 2011, it decreased by $0.3 million for the 9 months finished Dec 31, 2011 offsetting the enlargement in year-to-date annuity/maintenance revenue.
Other markets gifted increases of 76% and 14% in annuity/maintenance income tide for the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of the prior to to mercantile year. The enlargement in quarterly annuity/maintenance income occurred usually due to inclusion of the remuneration for the stipulate for which income is famous on a money basement (see more detailed contention underneath “Software License Revenue”). On a year-to-date basis, the effect of the inclusion of this poignant volume during the tide entertain is rsther than mitigated by the matching inclusion of a poignant volume on the same stipulate in Q1 of the prior to to mercantile year.
While the incessant sales in other markets decreased usually somewhat during 3 months finished Dec 31, 2011, they increasing by 123% on a year-to-date basement driven usually by the vast incessant sale done during the primary entertain of the tide mercantile year. In serve to shutting a singular poignant contract, we have seen a ubiquitous enlarge in the number of incessant permit sales done to other markets.
The movements in incessant sales opposite the regions are demonstrative of the indeterminate inlet of the timing and place of incessant permit sales. Overall, our repeated annuity/maintenance income base continues to be clever and flourishing opposite all regions.
The increases in US-dollar generated income from the US and other markets have been negatively influenced by the strengthening Canadian dollar compared to the US dollar during the 9 months finished Dec 31, 2011.
As footnoted in the Quarterly Performance table, in the normal march of blurb operation CMG may finish the traffic of certain annuity/maintenance contracts and/or perform income capitulation mandate inside of a tide entertain that includes use of CMG’s products in prior to to quarters. This incident quite affects contracts negotiated with countries that face increasing mercantile and done at home risks heading to income capitulation criteria being assured usually at the time of the taking of cash. The dollar bulk of such contracts may be poignant to the quarterly comparatives of our annuity/maintenance income tide and, to produce a normalized comparison, we privately brand the income member where income capitulation is assured in the tide duration for products supposing in prior to to quarters.
DEFERRED REVENUE
2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Deferred income at:
March 31 16,755 13,843 2,912 21%
June thirty 15,326 12,496 2,830 23%
September thirty 14,600 12,658 1,942 15%
December 31 14,746 11,892 2,854 24%
—————————————————————————-
CMG’s paid in instalments income consists radically of amounts for pre-sold licenses. Our annuity/maintenance income is paid in instalments and famous on a straight-line basement over the reason up of the compared permit period, which is in all a singular year or less. Amounts are paid in instalments for licenses that have been supposing and income capitulation reflects the thoroughfare of time.
The enlarge in paid in instalments income year over year as at Dec 31, Sep 30, Jun thirty and Mar 31 is contemplative of the enlargement in annuity/maintenance permit sales. The movement inside of a year is due to the timing of renewals of payments and upkeep contracts that are lopsided to the commencement of the monthly monthly calendar year which explains the ubiquitous trend of disappearing paid in instalments income shift from Mar 31 to Dec 31. Deferred income at Dec 31, 2011 increasing compared to the same duration of prior to to mercantile year due to both renovation of the existent and signing of the new module licenses and upkeep contracts in the quarter. Our paid in instalments income shift continues to grow at a plain gait as demonstrated in the list on top of by the uninterrupted quarterly double-digit enlargement gifted during the tide mercantile year.
PROFESSIONAL SERVICES REVENUE
CMG accessible veteran services income of $1.5 million and $4.2 million for the 3 and 9 months finished Dec 31, 2011, respectively, representing decreases of $0.2 million and $2.0 million from the amounts accessible for the same durations of prior to to mercantile year. CMG had been intent in a couple of vast projects in the prior to to mercantile year, which are possibly finish or go on on a not as big scale in the tide mercantile year, causing the infancy of the diminution in the quarterly and year-to-date veteran services revenue. Additionally, the appropriation joining for the DRMS devise received from the CMG Reservoir Simulation Foundation (“Foundation CMG”) was over in the primary entertain of the tide mercantile year serve contributing to the diminution in the veteran services revenue. Refer to the contention underneath “Commitments, Off Balance Sheet Items and Transactions with Related Parties.”
Professional services income consists of specialized consulting, training, and stipulate investigate activities. CMG performs consulting and stipulate investigate activities on an ongoing basement though such activities are not deliberate to be a core part of our blurb operation and are radically undertaken to enlarge our believe base and as a outcome enhance the technological abilities of our simulators in a saved manner, sum with servicing our customers’ needs. In addition, these activities are undertaken to marketplace the capabilities of our apartment of module products with the idealisation pattern to enlarge module permit sales. Our knowledge is that consulting activities are non-static in inlet as both the timing and dollar bulk of work are fortuitous on activities and budgets inside of patron companies.
At Dec 31, 2011, we estimate $0.08 million (2010 – $0.5 million) is enclosed in paid in instalments income relating to veteran services.
Expenses
For the 3 months finished Dec 31, 2011 2010 $ shift % change
($ thousands)
—————————————————————————-
Sales, selling and veteran services 3,536 2,836 700 25%
Research and enlargement 2,747 2,408 339 14%
General and executive 1,522 1,303 219 17%
—————————————————————————-
Total handling waste 7,805 6,547 1,258 19%
—————————————————————————-
Direct worker costs(i) 6,063 5,022 1,041 21%
Other corporate costs 1,742 1,525 217 14%
—————————————————————————-
7,805 6,547 1,258 19%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Sales, selling and veteran
services 9,703 8,704 999 11%
Research and enlargement 7,635 6,941 694 10%
General and executive 4,070 3,659 411 11%
—————————————————————————-
Total handling waste 21,408 19,304 2,104 11%
—————————————————————————-
Direct worker costs(i) 17,028 14,845 2,183 15%
Other corporate costs 4,380 4,459 (79) -2%
—————————————————————————-
21,408 19,304 2,104 11%
—————————————————————————-
(i)Includes salaries, bonuses, stock-based compensation, benefits and commissions.
CMG’s sum handling waste increasing by 19% and 11% for the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of prior to to mercantile year especially as a outcome of an enlarge in direct worker costs. While other corporate costs increasing during the quarter, they remained comparatively unchanging on a year-to-date basis.
DIRECT EMPLOYEE COSTS
As a technology company, CMG’s largest area of output is for the people. Approximately 80% of the sum handling waste in the 9 months finished Dec 31, 2011 compared to staff costs compared to 77% accessible in the analogous duration of final year. Staffing levels for the primary 9 months of the tide mercantile year grew in more aged to the same duration of prior to to mercantile year to await our a singular after an a single more growth. At Dec 31, 2011, CMG’s staff component was 148 employees, up from 131 employees as at Dec 31, 2010. Direct worker costs increasing during the 3 and 9 months finished Dec 31, 2011 compared to the same duration of prior to to mercantile year, due to staff additions, increasing levels of compensation, commissions and compared benefits.
OTHER CORPORATE COSTS
Other corporate costs increasing by 14% for the 3 months finished Dec 31, 2011 compared to the same duration of prior to to mercantile year, due to incurring promotional, selling and other waste compared with the Society of Petroleum Engineers’ Annual Technical Conference and Exhibition which took place in the third entertain of the tide mercantile year and the second entertain of the prior to to mercantile year, and due to inclusion of the costs compared with the enlargement of our bureau space at the end of monthly monthly calendar 2011.
Other corporate costs decreased somewhat for the 9 months finished Dec 31, 2011 compared to the same duration of prior to to mercantile year especially as a outcome of the inclusion of the waste compared with CMG’s biennial technical conference in the second entertain of the prior to to mercantile year which is homogeneous by the enlarge in the costs compared with the stretched bureau space.
RESEARCH AND DEVELOPMENT
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Research and enlargement (gross) 3,104 2,658 446 17%
SR&ED credits (357) (250) (107) 43%
—————————————————————————-
Research and enlargement 2,747 2,408 339 14%
—————————————————————————-
Research and enlargement as a % of sum
revenue 17% 20%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Research and enlargement (gross) 8,656 7,709 947 12%
SR&ED credits (1,021) (768) (253) 33%
—————————————————————————-
Research and enlargement 7,635 6,941 694 10%
—————————————————————————-
Research and enlargement as a % of sum
revenue 17% 19%
—————————————————————————-
CMG maintains the idea that the devise of flourishing long-term worth for shareholders can usually be finished through a singular after an a single more investment in investigate and development. CMG works closely with the blurb operation to produce solutions to formidable problems compared to proven and new modernized liberation processes.
The on top of investigate and enlargement includes CMG’s proportional share of corner investigate and enlargement costs on the DRMS complement enlargement of $0.6 million and $2.0 million for the 3 and 9 months finished Dec 31, 2011, respectively, (2010 – $0.6 million and $2.0 million). See contention underneath “Commitments, Off Balance Sheet Items and Transactions with Related Parties.”
The increases of 17% and 12% in our sum spending on investigate and enlargement for the 3 and 9 months finished Dec 31, 2011, respectively, denote our a singular after an a single more joining to enrichment of our technology. Research and enlargement costs, net of investigate and primary enlargement (“SR&ED”) credits, increasing by 14% and 10% during the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of prior to to mercantile year especially due to increasing employee-related costs. At the same time, we had an enlarge in SR&ED credits driven by the increases in our direct worker costs as well as the enlarge in the eligibility of our waste for SR&ED credits as a direct outcome of the execution of the accede to received from Foundation CMG which had been netted opposite our investigate and enlargement waste for purposes of operative out SR&ED credits. The appropriation joining compared with this accede to was over in the primary entertain of the tide mercantile year. Refer to the contention underneath “Commitments, Off Balance Sheet Items and Transactions with Related Parties.”
DEPRECIATION AND AMORTIZATION
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Depreciation of skill and equipment,
allocated to:
Sales, selling and veteran services 118 76 42 55%
Research and enlargement 145 131 fourteen 11%
General and executive 58 66 (8) -12%
—————————————————————————-
Total debasement and amortization 321 273 48 18%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Depreciation of skill and equipment,
allocated to:
Sales, selling and veteran services 305 220 85 39%
Research and enlargement 383 344 39 11%
General and executive 189 187 2 1%
—————————————————————————-
Total debasement and amortization 877 751 126 17%
—————————————————————————-
The quarterly and year-to-date increases in debasement and amortization simulate the enlarge in our object base, especially as a outcome of increasing spending on computing resources and enlargement of the bureau space at the end of Q3 2012.
FINANCE INCOME AND COSTS
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Interest income 123 91 32 35%
Foreign sell good – – – –
—————————————————————————-
Finance income 123 91 32 35%
—————————————————————————-
Finance costs (represented by unfamiliar
exchange loss) (32) (329) 297 -90%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Interest income 341 179 162 91%
Foreign sell good 768 – 768 –
—————————————————————————-
Finance income 1,109 179 930 520%
—————————————————————————-
Finance costs (represented by unfamiliar
exchange loss) – (303) 303 –
—————————————————————————-
Interest income increasing in the 3 and 9 months finished Dec 31, 2011, compared to the same durations of the prior to to mercantile year, due to slight alleviation in seductiveness rates and investing incomparable money balances.
CMG is impacted by the movement of the US dollar opposite the Canadian dollar as we estimate 72% (2010 – 67%) of CMG’s income for the 9 months finished Dec 31, 2011 is denominated in US dollars, given usually we estimate 23% (2010 – 24%) of CMG’s sum costs are denominated in US dollars.
Nine month
CDN$ to US$ At Jun thirty At Sep thirty At Dec 31 trailing average
—————————————————————————-
—————————————————————————-
2009 0.8602 0.9327 0.9555 0.9108
2010 0.9429 0.9711 1.0054 0.9697
2011 1.0370 0.9626 0.9833 1.0132
—————————————————————————-
—————————————————————————-
CMG accessible a unfamiliar sell detriment of $0.03 million and a unfamiliar sell good of $0.8 million for the 3 and 9 months finished Dec 31, 2011, respectively, compared to a $0.3 million unfamiliar sell detriment accessible in the 3 and 9 months finished Dec 31, 2010.
The weakening of the Canadian dollar in the tide quarter, along with a poignant oscillation in the sell rates in in in in in in in in in in in in in in between the Canadian and the US dollars during the primary 9 months of the tide mercantile year, have contributed definitely to the gratefulness of our US-denominated operative capital, hence, contributing to the unfamiliar sell good in the tide mercantile year-to-date.
INCOME AND OTHER TAXES
CMG’s effective taxation rate for the 9 months finished Dec 31, 2011 is reflected as 28.69% (2010 – 31.42%), given the prevalent Canadian orthodox taxation rate is right away 26.13%. This is radically due to a multiple of the non-tax deductibility of stock-based remuneration responsibility and the good of unfamiliar self-denial taxes being satisfied usually as a taxation reduction as opposite to a taxation credit.
The good accessible in CMG’s books on the SR&ED investment taxation credit module impacts paid in instalments income taxes. The investment taxation credit warranted in the tide mercantile year is employed by CMG to revoke income taxes differently on credit for the tide mercantile year and the sovereign apportionment of this good bears an fundamental taxation guilt as the volume of the credit is enclosed in the unbroken year’s taxable income for both sovereign and provincial purposes. The fundamental taxation guilt on these investment taxation credits is reflected in the year the credit is warranted as a non-current paid in instalments taxation guilt and then, in the following mercantile year, is separated to income taxes payable.
Operating Profit and Net Income
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands, usually per share amounts)
—————————————————————————-
Total income 15,898 12,063 3,835 32%
Operating waste (7,805) (6,547) (1,258) 19%
—————————————————————————-
Operating distinction 8,093 5,516 2,577 47%
Operating distinction as a % of sum income 51% 46%
—————————————————————————-
Net income for the duration 5,790 3,563 2,227 63%
Net income for the duration as a % of
total income 36% 30%
—————————————————————————-
Earnings per share ($/share) 0.16 0.10 0.06 60%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands, usually per share amounts)
—————————————————————————-
Total income 43,819 37,449 6,370 17%
Operating waste (21,408) (19,304) (2,104) 11%
—————————————————————————-
Operating distinction 22,411 18,145 4,266 24%
Operating distinction as a % of sum
revenue 51% 48%
—————————————————————————-
Net income for the duration 16,771 12,358 4,413 36%
Net income for the duration as a % of
total income 38% 33%
—————————————————————————-
Earnings per share ($/share) 0.46 0.34 0.12 35%
—————————————————————————-
Operating distinction as a commission of sum income increasing to 51% for the 3 and 9 months finished Dec 31, 2011, compared to 46% and 48% accessible in the same durations of the prior to to mercantile year, as a outcome of the enlarge in our sum income driven by the increases in our module licenses revenue, and effective management of our corporate costs.
Net income for the duration as a commission of income increasing to 36% and 38% for the 3 and 9 months finished Dec 31, 2011, respectively, compared to 30% and 33% accessible in the same durations of prior to to mercantile year especially as a outcome of the certain effect of the changes in unfamiliar sell rates accessible in the tide mercantile year compared to the prior to to mercantile year and incurring reduction taxation waste as a outcome of reduce self-denial taxes and reduce orthodox taxation rate.
Liquidity and Capital Resources
For the 3 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Cash, commencement of duration 43,310 32,565 10,745 33%
Cash upsurge from (used in)
Operating activities 7,511 8,378 (867) -10%
Financing activities (2,404) (2,669) 265 -10%
Investing activities (802) (262) (540) 206%
—————————————————————————-
Cash, end of duration 47,615 38,012 9,603 25%
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010 $ shift % shift
($ thousands)
—————————————————————————-
Cash, commencement of duration 41,753 28,826 12,927 45%
Cash upsurge from (used in)
Operating activities 18,673 20,465 (1,792) -9%
Financing activities (11,745) (10,344) (1,401) 14%
Investing activities (1,066) (935) (131) 14%
—————————————————————————-
Cash, end of duration 47,615 38,012 9,603 25%
—————————————————————————-
OPERATING ACTIVITIES
Cash upsurge generated from handling activities decreased by $0.9 million and $1.8 million in the 3 and 9 months finished Dec 31, 2011, respectively, compared to the same durations of final year, due to the timing differences when the sales are done and when the ensuing receivables are collected, net stroke of changes in income taxes payable, traffic payables and paid in instalments income balance.
FINANCING ACTIVITIES
Cash used in financing activities during the 3 months finished Dec 31, 2011 decreased by $0.3 million compared to the same duration of final year, as a outcome of recording more money deduction from options being exercised. Cash used in financing activities during the 9 months finished Dec 31, 2011, increasing by $1.4 million compared to the same duration of final year, as a outcome of arising incomparable dividends and shopping behind usual shares.
During the 9 months finished Dec 31, 2011, CMG employees and directors exercised options to squeeze 698,000 Common Shares, which resulted in money deduction of $4.3 million.
In the 9 months finished Dec 31, 2011, CMG paid $15.7 million in dividends, representing quarterly dividends of $0.105, $0.11 and $0.11 per share and a special division of $0.10 per share. On Feb 9, 2012, CMG voiced the remuneration of a quarterly division of $0.13 per share on CMG’s Common Shares. The division will be paid on Mar 15, 2012 to shareholders of record at the tighten of blurb operation on Mar 8, 2012.
On Apr 6, 2011, the Company voiced a Normal Course Issuer Bid (“NCIB”) commencing on Apr 7, 2011 to squeeze for stop up to 1,636,000 of the Common Shares. During the 9 months finished Dec 31, 2011, 33,000 Common Shares were purchased at marketplace price for a sum price of $438,000.
INVESTING ACTIVITIES
CMG’s tide needs for collateral object investment describe to resource apparatus and bureau infrastructure costs, all of which will be saved internally. During the 9 months finished Dec 31, 2011, CMG depleted $1.1 million on skill and apparatus additions, radically stoical of computing equipment, and right away has a collateral bill of $2.4 million for mercantile 2012.
LIQUIDITY AND CAPITAL RESOURCES
At Dec 31, 2011, CMG has $47.6 million in cash, no debt and has access to usually over $0.8 million underneath a line of credit with the principal banker.
During the 9 months finished Dec 31, 2011, 6,472,000 shares of CMG’s open boyant were traded on the TSX. As at Dec 31, 2011, CMG’s marketplace capitalization based on the Dec 31, 2011 shutting price of $15.35 was $569.4 million.
Commitments, Off Balance Sheet Items and Transactions with Related Parties
In May, 2006, CMG voiced that it had committed we estimate $10.6 million to the five-year DRMS investigate and enlargement devise with the attention partners Shell International Exploration and Production BV (“Shell”) and Petroleo Brasileiro S.A. (“Petrobras”) to climb the newest era of energetic fountainhead modelling system. While the strange appropriation joining has been over during the primary entertain of the tide mercantile year, CMG and the partners are committed to go on appropriation the devise over the essentially estimated five-year duration with CMG’s share of the devise costs estimated at $3.0 million per year. We right away pattern to recover a beta chronicle of the new fountainhead modelling complement to our partners by the end of mercantile 2012, with the primary blurb recover approaching to take place by the end of the third entertain of mercantile 2013.
In and with entering in to this project, Foundation CMG agreed, theme to certain stop rights, to produce up to a limit of $5.2 million in investigate accede to appropriation to cover we estimate 50% of the Company’s estimated share of devise costs over the primary 5 years of the project. For the 9 months finished Dec 31, 2011, the Company has reflected $366,000 (2010 – $1.0 million) in investigate grants from Foundation CMG in veteran services income with respect to this project. Foundation CMG’s $5.2 million appropriation joining was finished in the primary entertain of the tide mercantile year.
CMG skeleton to go on appropriation the share of the devise costs compared with the enlargement of the newest era fountainhead make-believe module complement from internally generated money flows.
CMG has really small in the proceed of other ongoing component contractual obligations other than for pre-sold licenses which are reflected as paid in instalments income on the matter of monetary position, and contractual obligations for bureau leases which are estimated as follows: 2012 – $0.5 million; 2013 and 2014 – $1.8 million per year; 2015 – $1.4 million; and 2016 – $0.6 million.
Business Risks and Critical Accounting Estimates
These sojourn unvaried from the factors detailed in CMG’s 2011 Annual Report.
Changes in Accounting Policies
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The CICA Accounting Standards Board requires all Canadian publicly listed entities to adopt IFRS for halt and annual monetary stating purposes for mercantile years commencement on or after Jan 1, 2011. Accordingly, this is the third entertain in which we have supposing unaudited precipitated sum monetary statements which are in correspondence with the halt stating mandate found in IAS 34, Interim Financial Reporting, as well as IFRS 1, First-time Adoption of IFRS. In suitability with IFRS 1, we have practical IFRS retrospectively as of Apr 1, 2010, our passing from a singular to an a single more date, as if IFRS had continually been in effect, theme to certain imperative exceptions and discretionary exemptions. Our sum monetary statements for the year finished Mar 31, 2012, will be our primary annual monetary statements that imitate with IFRS.
An reason of how the passing from a singular to an a single more to IFRS has influenced the reported monetary position, monetary opening and money flows of the Company is supposing in note sixteen to the Condensed Consolidated Financial Statements for the 3 and 9 months finished Dec 31, 2011.
The passing from a singular to an a single more to IFRS did not have a component stroke on defended earnings, net income or money flows. The usually adjustments were reclassifications on the Statement of Financial Position, Statement of Operations and Comprehensive Income, and the Statement of Cash Flows as follows:
Statement of Financial Position
Deferred taxes are personal as non-current underneath IFRS. Under prior to to Canadian GAAP, paid in instalments taxes were personal as tide and non-current based on the sequence of the underlying resources or liabilities to which they describe or based on the approaching annulment of the proxy differences.
Transition manners resulted in reclassification of paid in instalments taxation guilt compared with SR&ED credits from tide to non-current. In addition, the paid in instalments taxation object compared with skill and apparatus was homogeneous opposite paid in instalments taxation guilt as both describe to income taxes levied by the same taxation management for the same taxable entity.
Statement of Operations and Comprehensive Income
– Expense sequence – the Company has inaugurated to benefaction the expenses
in the sum statements of operations and extensive income
prepared underneath IFRS according to their function. As a result,
depreciation and amortization, which was reported as a apart line
item underneath prior to to Canadian GAAP, was allocated to the respective
functions.
– Finance income and costs – underneath Canadian GAAP, seductiveness income and
foreign sell gains and waste were personal as apart line items
in the sum matter of earnings. Under IFRS, seductiveness income
and unfamiliar sell gains are presented as monetary income, and foreign
exchange waste are presented as monetary costs. Finance income and costs
are presented on a sum basement as compulsory by IFRS.
Statement of Cash Flows
– Interest received and income taxes paid have been changed in to the physique of
the matter of money flows underneath handling activities, given they
were formerly disclosed as supplemental information.
Accounting Standards and Interpretations Issued But Not Yet Effective
The following standards and interpretations have not been adopted by the Company as they apply to destiny periods:
Standard/Interpretation Nature of imminent shift Impact on CMG’s
in accounting policy monetary statements
—————————————————————————-
—————————————————————————-
IFRS 9 Financial IFRS 9 (2009) replaces the IFRS 9 (2010)
Instruments superintendence in IAS 39 supersedes IFRS 9
Financial Instruments: (2009) and is
In Nov 2009 the Recognition and effective for annual
IASB released IFRS 9 Measurement, on the durations commencement on
Financial Instruments sequence and or after Jan 1,
(IFRS 9 (2009)), and in dimensions of monetary 2015, with early
October 2010 the IASB assets. The Standard embracing a cause permitted.
published amendments to eliminates the existent IAS For annual durations
IFRS 9 (IFRS 9 (2010)). 39 categories of reason to commencement prior to to to
In Dec 2011, the maturity, available-for- Jan 1, 2015,
IASB released an sale and loans and possibly IFRS 9 (2009)
amendment to IFRS 9 to receivable. or IFRS 9 (2010) may
defer the imperative be applied.
effective date to Financial resources will be
annual durations personal in to a singular of two The Company intends to
beginning on or after categories on primary adopt IFRS 9 (2010) in
January 1, 2015. recognition: the monetary
statements for the
- monetary resources totalled annual duration
at amortized cost; or commencement on Apr 1,
- monetary resources totalled 2015. The Company does
at satisfactory value. not pattern IFRS 9
(2010) to have a
Gains and waste on component stroke on the
remeasurement of monetary monetary statements.
assets totalled at satisfactory The sequence and
value will be famous in dimensions of the
profit or loss, usually that Company’s monetary
for an investment in an resources and liabilities
equity instrument which is is not approaching to
not held-for-trading, IFRS shift underneath IFRS 9
9 provides, on primary (2010) given of the
recognition, an incorrigible inlet of the
election to benefaction all Company’s operations
fair worth changes from the and the types of
investment in other monetary resources that
comprehensive income (OCI). it holds.
The choosing is accessible
on an individual share-by-
share basis. Amounts
presented in OCI will not
be reclassified to distinction
or detriment at a after date.
IFRS 9 (2010) sum
guidance to IFRS 9 (2009)
on the sequence and
measurement of monetary
liabilities, and this
guidance is unchanging with
the superintendence in IAS 39
expect as described below.
Under IFRS 9 (2010), for
financial liabilities
measured at satisfactory worth
under the satisfactory worth
option, changes in satisfactory
value attributable to
changes in credit risk will
be famous in OCI, with
the residue of the shift
recognized in distinction or
loss. However, if this
requirement creates or
enlarges an accounting
mismatch in distinction or loss,
the finish shift in satisfactory
value will be famous in
profit or loss. Amounts
presented in OCI will not
be reclassified to distinction
or detriment at a after date.
IFRS 9 (2010) also requires
derivative liabilities that
are linked to and contingency be
settled by smoothness of an
unquoted equity instrument
to be totalled at satisfactory
value, given such
derivative liabilities are
measured at price underneath IAS
39.
IFRS 9 (2010) also sum
the mandate of IAS 39
for the derecognition of
financial resources and
liabilities to IFRS 9
without change.
The IASB has paid in instalments the
mandatory effective date of
the existent chapters of
IFRS 9 Financial
Instruments (2009) and IFRS
9 (2010) to annual durations
beginning on or after
January 1, 2015. The early
adoption of possibly customary
continues to be permitted.
—————————————————————————-
—————————————————————————-
Amendments to IFRS 7 The amendments to IFRS 7 The Company does not
Disclosures – Transfers require avowal of pattern the amendments
of Financial Assets information that enables to have a component
users of monetary stroke on the
In Oct 2010 the statements: monetary statements,
IASB released Amendments given of the inlet
to IFRS 7 Disclosures – – to assimilate the of the Company’s
Transfers of Financial attribute in in in in in in in in in in in in in in between operations and the
Assets, which is separated monetary types of monetary
effective for annual resources that are not resources that it holds.
periods commencement on or derecognized in their
after Jan 1, 2012. whole and the compared
liabilities; and
- to weigh the inlet
of, and risks compared
with, the entity’s
continuing impasse in
derecognized monetary
assets.
The amendments conclude
“continuing involvement”
for the purposes of
applying the avowal
requirements.
—————————————————————————-
—————————————————————————-
IFRS 10 Consolidated IFRS 10 replaces the The Company intends to
Financial Statements superintendence in IAS twenty-seven adopt IFRS 10 in the
Consolidated and Separate monetary statements
In May 2011, the IASB Financial Statements and for the annual duration
issued IFRS 10 SIC-12 Consolidation – commencement on Apr 1,
Consolidated Financial Special Purpose Entities. 2013. The Company
Statements, which is IAS twenty-seven (2008) survives as does not pattern IFRS
effective for annual IAS twenty-seven (2011) Separate 10 to have a component
periods commencement on or Financial Statements, usually stroke on the
after Jan 1, 2013, to lift brazen the monetary statements.
with early embracing a cause existent accounting
permitted. If an mandate for apart
entity relates this monetary statements.
Standard earlier, it
shall also apply IFRS IFRS 10 provides a singular
11, IFRS 12, IAS twenty-seven indication to be practical in the
(2011) and IAS twenty-eight control investigate for all
(2011) at the same investees, together with
time. entities that right away are
SPEs in the operation of SIC-
12. In addition, the
consolidation procedures
are carried brazen
substantially unmodified
from IAS twenty-seven (2008).
—————————————————————————-
—————————————————————————-
IFRS eleven Joint IFRS eleven replaces the The Company intends to
Arrangements superintendence in IAS 31 adopt IFRS eleven in the
Interests in Joint monetary statements
In May 2011, the IASB Ventures. for the annual duration
issued IFRS eleven Joint commencement on Apr 1,
Arrangements, which is Under IFRS 11, corner 2013. The Company
effective for annual arrangements are personal does not pattern IFRS
periods commencement on or as possibly corner operations eleven to have a component
after Jan 1, 2013, or corner ventures. IFRS eleven stroke on the
with early embracing a cause radically carves out of monetary statements.
permitted. If an entity prior to to mutually tranquil
applies this Standard entities, those
earlier, it shall also arrangements which nonetheless
apply IFRS 10, IFRS 12, structured through a
IAS twenty-seven (2011) and IAS apart vehicle, such
28 (2011) at the same subdivision is ineffectual
time. and the parties to the
arrangement have rights to
the resources and obligations
for the liabilities and are
accounted for as corner
operations in a conform
consistent with mutually
controlled
assets/operations underneath IAS
31. In addition, underneath
IFRS eleven corner ventures are
stripped of the free preference
of equity accounting or
proportionate
consolidation; these
entities contingency right away use the
equity method.
Upon focus of IFRS
11, entities which had
previously accounted for
joint ventures regulating
proportionate converging
shall tumble the
proportionately
consolidated net object
value (including any
allocation of goodwill)
into a singular investment
balance at the commencement of
the commencement duration
presented. The
investment’s opening
balance is tested for
impairment in suitability
with IAS twenty-eight (2011) and IAS
36 Impairment of Assets.
Any spoil waste are
recognized as an composition
to opening defended
earnings at the commencement
of the commencement duration
presented.
—————————————————————————-
—————————————————————————-
IFRS twelve Disclosure of IFRS twelve contains the The Company intends to
Interests in Other avowal mandate for adopt IFRS twelve in the
Entities entities that have monetary statements
interests in subsidiaries, for the annual duration
In May 2011, the IASB corner arrangements (i.e. commencement on Apr 1,
issued IFRS twelve corner operations or corner 2013. The Company
Disclosure of Interests ventures), associates does not pattern the
in Other Entities, and/or unconsolidated amendments to have a
which is effective for structured entities. component stroke on the
annual durations Interests are at large monetary statements,
beginning on or after tangible as contractual and given of the inlet
January 1, 2013, with non-contractual impasse of the Company’s
early embracing a cause that exposes an entity to interests in other
permitted. If an entity variability of benefit from entities.
applies this Standard the opening of the
earlier, it needs not other entity. The compulsory
to apply IFRS 10, IFRS disclosures target to produce
11, IAS twenty-seven (2011) and information in sequence to
IAS twenty-eight (2011) at the enable users to weigh
same time. the inlet of, and the
risks compared with, an
entity’s seductiveness in other
entities, and the goods
of those interests on the
entity’s monetary
position, monetary
performance and money flows.
—————————————————————————-
—————————————————————————-
IFRS thirteen Fair Value IFRS thirteen replaces the satisfactory The Company intends to
Measurement worth dimensions superintendence adopt IFRS thirteen
contained in individual prospectively in the
In May 2011, the IASB IFRSs with a singular source monetary statements
published IFRS thirteen Fair of satisfactory worth dimensions for the annual duration
Value Measurement, guidance. It defines satisfactory commencement on Apr 1,
which is effective worth as the price that 2013. The border of
prospectively for would be received to sell the stroke of adoption
annual durations an object or paid to of IFRS thirteen has not yet
beginning on or after send a guilt in an been determined.
January 1, 2013. The nurse stipulate in in in in in in in in in in in in in in between
disclosure mandate marketplace participants at the
of IFRS thirteen need not be dimensions date, i.e. an
applied in analogous exit price. The customary
information for durations also establishes a
before primary horizon for measuring
application. satisfactory worth and sets out
disclosure mandate for
fair worth measurements to
provide information that
enables monetary matter
users to consider the methods
and inputs used to climb
fair worth measurements
and, for repeated satisfactory
value measurements that use
significant unobservable
inputs (Level 3), the
effect of the measurements
on distinction or detriment or other
comprehensive income. IFRS
13 explains ‘how’ to
measure satisfactory worth when it
is compulsory or accessible by
other IFRSs. IFRS thirteen does
not deliver new
requirements to measure
assets or liabilities at
fair value, nor does it
eliminate the
practicability exceptions
to satisfactory worth measurements
that right away exist in
certain standards.
—————————————————————————-
—————————————————————————-
Amendments to IAS 1 The amendments require that The Company intends to
Presentation of an entity benefaction adopt the amendments
Financial Statements alone the apparatus of OCI in the monetary
that may be reclassified to statements for the
In Jun 2011, the IASB distinction or detriment in the annual duration
published amendments to destiny from those that commencement on Apr 1,
IAS 1 Presentation of would never be reclassified 2013. As the
Financial Statements: to distinction or loss. amendments usually
Presentation of Items Consequently an entity that require changes in the
of Other Comprehensive presents apparatus of OCI display of apparatus
Income, which are prior to to to compared taxation goods in other comprehensive
effective for annual will also have to allot income, the Company
periods commencement on or the many-sided taxation volume does not pattern the
after Jul 1, 2012 and in in in in in in in in in in in in in in between these categories. amendments to IAS 1 to
are to be practical have a component impact
retrospectively. Early The existent option to on the monetary
adoption is permitted. benefaction the distinction or detriment statements.
and other extensive
income in two statements
has remained unchanged.
—————————————————————————-
—————————————————————————-
Amendments to IAS 32 The amendments to IAS 32 The Company intends to
and IFRS 7, Offsetting explain that an entity adopt the amendments
Financial Assets and right away has a legally to IFRS 7 in the
Liabilities enforceable right to set- monetary statements
off if that right is: for the annual duration
In Dec 2011, the commencement on Apr 1,
IASB published – not fortuitous on a 2013, and the
Offsetting Financial destiny event; and amendments to IAS 32
Assets and Financial – enforceable both in the in the monetary
Liabilities and released normal march of blurb operation statements for the
new avowal and in the eventuality of annual duration
requirements in IFRS 7 default, penury or commencement Apr 1,
Financial Instruments: failure of the entity 2014. The Company does
Disclosures. and all counterparties. not pattern the
amendments to IAS nineteen
The effective date for The amendments to IAS 32 to have a component
the amendments to IAS also explain when a stroke on the
32 is annual durations allotment resource monetary statements.
beginning on or after provides for net allotment
January 1, 2014. The or sum allotment that is
effective date for the homogeneous to net
amendments to IFRS 7 is settlement.
annual durations
beginning on or after The amendments to IFRS 7
January 1, 2013. These enclose new avowal
amendments are to be mandate for monetary
applied resources and liabilities that
retrospectively. are:
- homogeneous in the matter
of monetary position; or
- theme to master concealment
arrangements or matching
arrangements.
—————————————————————————-
—————————————————————————-
Outstanding Share Data
The following list represents the number of Common Shares and options outstanding:
As at Feb 9, 2012
(thousands)
—————————————————————————-
Common Shares 37,123
Options 3,112
—————————————————————————-
On Jul 13, 2005, CMG adopted a rolling batch option devise which allows the Company to accede to options to the employees and directors to take Common Shares of up to 10% of the superb Common Shares at the date of grant. Based on this calculation, at Feb 9, 2012, CMG could accede to up to 3,712,000 batch options.
Disclosure Controls and Procedures and Internal Control over Financial Reporting
Management is obliged for substantiating and progressing avowal controls and procedures (“DC&P”) and inner control over monetary stating (“ICFR”) as tangible underneath National Instrument 52-109. These controls and procedures were reviewed and the effectiveness of their pattern and operation was evaluated in mercantile 2011 in suitability with the COSO control framework. The analysis reliable the effectiveness of DC&P and ICFR at Mar 31, 2011. During our mercantile year 2012, we go on to guard and examination our controls and procedures.
During the 9 months finished Dec 31, 2011, there have been no poignant changes to the Company’s ICFR that have materially affected, or are pretty approaching to materially affect, the company’s ICFR.
Outlook
As in the past multiform years, CMG stays committed to focusing all the resources on the development, encouragement and deployment of make-believe module collection applicable to the hurdles and opportunities confronting the different patron base. While oil prices go on to fluctuate, they sojourn at levels that should concede our blurb operation to move brazen on projects involving assorted types of radical pot and modernized liberation processes. The larger hurdles have been with healthy gas prices, which have not fared as well, and inorganic substance producers are faced with doubt compared to the fears of an a single more worldwide mercantile recession, done at home disturbance in multiform inorganic substance producing countries and environmental issues that have in jeopardy to enlarge the costs of enlargement and production.
With diversification of our geographic profile, we devise to make firm our on all sides in the tellurian marketplace which should also assistance to lessen the goods of mercantile retrogression and instability gifted in any sold geographic region.
Over 70% of our annual module permit income is subsequent from our payments and upkeep contracts which in all paint a repeated source of revenue. We have a singular after an a single more to see unbroken increases in this income base over the past multiform years and with a clever renovation rate, we pattern this trend to continue.
CMG’s corner devise to climb the newest era of energetic fountainhead modelling systems (“DRMS Project”) continues to make swell in mercantile 2012. We right away pattern to recover a beta chronicle to our partners by the end of mercantile 2012, with the primary blurb recover by the end of the third entertain of mercantile 2013. CMG and the partners sojourn committed to appropriation the ongoing enlargement and to the destiny success of the project.
The Company stays assured that the worth that CMG technology provides to the blurb operation is larger than ever and thus we go on to be confident that our module permit income will sojourn solid. With our clever operative collateral position, we are well positioned to go on to deposit in all aspects of our blurb operation to go on to grow and variegate our income base and to in conclusion lapse worth to our shareholders in the form of unchanging quarterly division payments and enlargement in share value.
Kenneth M. Dedeluk
President and Chief Executive Officer
February 9, 2012
COMPUTER MODELLING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
UNAUDITED (thousands of
Canadian $) Dec 31, 2011 Mar 31, 2011 Apr 1, 2010
—————————————————————————-
Assets
Current assets:
Cash 47,615 41,753 28,826
Trade and other
receivables 11,733 13,318 16,072
Prepaid waste 1,238 1,064 1,141
Prepaid income taxes – – 1,433
—————————————————————————-
60,586 56,135 47,472
Property and apparatus 2,743 2,554 2,401
—————————————————————————-
Total resources 63,329 58,689 49,873
—————————————————————————-
Liabilities and
Shareholders’ Equity
Current liabilities:
Trade payables and
accrued liabilities 4,526 4,543 5,398
Income taxes on credit 1,541 1,237 -
Deferred income 14,746 16,755 13,843
—————————————————————————-
20,813 22,535 19,241
Deferred taxation guilt
(note 6) 287 384 189
—————————————————————————-
Total liabilities 21,100 22,919 19,430
—————————————————————————-
Shareholders’ equity:
Share collateral 29,932 24,801 20,390
Contributed over-abundance 3,276 2,655 1,816
Retained good 9,021 8,314 8,237
—————————————————————————-
Total shareholders’
equity 42,229 35,770 30,443
—————————————————————————-
Total liabilities and
shareholders’ equity 63,329 58,689 49,873
—————————————————————————-
See concomitant records to precipitated sum monetary statements.
COMPUTER MODELLING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Three months finished Nine months finished
December 31 Dec 31
UNAUDITED (thousands of Canadian
$ usually per share amounts) 2011 2010 2011 2010
—————————————————————————-
Revenue (note 15,898 12,063 43,819 37,449
—————————————————————————-
Operating waste
Sales, selling and
professional services 3,536 2,836 9,703 8,704
Research and enlargement (note
4) 2,747 2,408 7,635 6,941
General and executive 1,522 1,303 4,070 3,659
—————————————————————————-
7,805 6,547 21,408 19,304
—————————————————————————-
Operating distinction 8,093 5,516 22,411 18,145
Finance income (note 5) 123 91 1,109 179
Finance costs (note 5) (32) (329) – (303)
—————————————————————————-
Profit prior to to to income and other
taxes 8,184 5,278 23,520 18,021
Income and other taxes (note 6) 2,394 1,715 6,749 5,663
—————————————————————————-
Net and extensive income 5,790 3,563 16,771 12,358
—————————————————————————-
Earnings Per Share
Basic (note 7(e)) 0.16 0.10 0.46 0.34
Diluted (note 7(e)) 0.15 0.10 0.44 0.34
—————————————————————————-
See concomitant records to precipitated sum monetary statements.
COMPUTER MODELLING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Share Capital
———————-
UNAUDITED
(thousands of Contributed Retained Total
Canadian $) Common Non-voting Surplus Earnings Equity
—————————————————————————-
Balance, Apr 1,
2010 20,244 146 1,816 8,237 30,443
Total
comprehensive
income for the
period – – – 12,358 12,358
Dividends paid – – – (13,328) (13,328)
Shares released for
cash on practice
of batch options
(note 7(b)) 2,984 – – – 2,984
Converted in to
common shares
(note 7(b)) 146 (146) – – –
Stock-based
compensation:
Current duration
expense – – 1,134 – 1,134
Stock options
exercised 576 – (576) – –
—————————————————————————-
Balance, Dec
31, 2010 23,950 – 2,374 7,267 33,591
—————————————————————————-
Balance, Apr 1,
2011 24,801 – 2,655 8,314 35,770
Total
comprehensive
income for the
period – – – 16,771 16,771
Dividends paid – – – (15,651) (15,651)
Shares released for
cash on practice
of batch options
(note 7(b)) 4,344 – – – 4,344
Common shares buy-
back (note 7(b)) (25) (413) (438)
Stock-based
compensation:
Current duration
expense – – 1,433 – 1,433
Stock options
exercised 812 – (812) – –
—————————————————————————-
Balance, Dec
31, 2011 29,932 – 3,276 9,021 42,229
—————————————————————————-
See concomitant records to precipitated sum monetary statements.
COMPUTER MODELLING GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months finished Nine months finished
December 31 Dec 31
UNAUDITED (thousands of Canadian
$) 2011 2010 2011 2010
—————————————————————————-
Cash flows from handling
activities
Net income 5,790 3,563 16,771 12,358
Adjustments for:
Depreciation and amortization 321 273 877 751
Income and other taxes (note 6) 2,394 1,715 6,749 5,663
Stock-based remuneration (note
7(d)) 566 428 1,433 1,134
Interest income (note 5) (123) (91) (341) (179)
—————————————————————————-
8,948 5,888 25,489 19,727
Changes in non-cash operative
capital:
Trade and other receivables (1,151) 2,444 1,594 6,725
Trade payables and accrued
liabilities 1,306 739 (17) (1,031)
Prepaid waste 102 107 (174) 170
Deferred income 146 (767) (2,009) (1,952)
—————————————————————————-
Cash generated from handling
activities 9,351 8,411 24,883 23,639
Interest received 120 83 332 164
Income taxes paid (1,960) (116) (6,542) (3,338)
—————————————————————————-
Net money from handling
activities 7,511 8,378 18,673 20,465
—————————————————————————-
Cash flows from financing
activities
Proceeds from emanate of usual
shares 1,675 954 4,344 2,984
Dividends paid (4,079) (3,623) (15,651) (13,328)
Common shares buy-back – – (438) –
—————————————————————————-
Net money used in financing
activities (2,404) (2,669) (11,745) (10,344)
—————————————————————————-
Cash flows used in investing
activities
Property and apparatus additions (802) (262) (1,066) (935)
—————————————————————————-
Increase (decrease) in money 4,305 5,447 5,862 9,186
Cash, commencement of duration 43,310 32,565 41,753 28,826
—————————————————————————-
Cash, end of duration 47,615 38,012 47,615 38,012
—————————————————————————-
See concomitant records to precipitated sum monetary statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the 3 and 9 months finished Dec 31, 2011 and 2010 (unaudited).
1. Reporting Entity:
Computer Modelling Group Ltd. (“CMG”) is a association domiciled in Alberta, Canada and is incorporated pursuant to the Alberta Business Corporations Act, with the Common Shares listed on the Toronto Stock Exchange underneath the pitch “CMG”. The address of CMG’s purebred bureau is Suite 200, 1824 Crowchild Trail N.W., Calgary, Alberta, Canada, T2M 3Y7. The precipitated sum monetary statements as at and for the 3 and 9 months finished Dec 31, 2011 enclose CMG and the subsidiaries (together referred to as the “Company”). The Company is a resource module technology association intent in the enlargement and chartering of fountainhead make-believe software. The Company also provides veteran services consisting of rarely specialized support, consulting, training, and stipulate investigate activities.
2. Basis of Preparation:
(A) STATEMENT OF COMPLIANCE:
These precipitated sum monetary statements have been rebuilt on a starting regard basement in suitability with International Accounting Standard (“IAS”) 34, Interim Financial Reporting as released by the International Accounting Standards Board (“IASB”), and regulating the accounting policies the Company expects to adopt in the sum monetary statements as at and for the year finale Mar 31, 2012. These accounting policies are disclosed in note 3 of the Company’s precipitated sum monetary statements for the 3 months finished Jun 30, 2011.
The credentials of these precipitated sum monetary statements resulted in changes to accounting policies as compared with the many new annual sum monetary statements rebuilt in suitability with Canadian Generally Accepted Accounting Principles (“GAAP”). The Company’s accounting policies have been practical consistently to all durations presented in these precipitated sum monetary statements with the disproportion of certain IFRS 1, First-time Adoption of IFRS, exemptions the Company practical in the passing from a singular to an a single more from prior to to GAAP to International Financial Reporting Standards (“IFRS”) at Apr 1, 2010, the Company’s passing from a singular to an a single more date.
The precipitated sum monetary statements do not include all of the information compulsory for full annual monetary statements, therefore, these precipitated sum monetary statements should be examination in and with the Company’s annual audited sum monetary statements for the year finished Mar 31, 2011, the Company’s precipitated sum monetary statements for the 3 months finished Jun 30, 2011, and in care of the IFRS passing from a singular to an a single more disclosures presented in note sixteen to these monetary statements.
The unaudited precipitated sum monetary statements as at and for the 3 and 9 months finished Dec 31, 2011 were certified for distribution by the Board of Directors on Feb 9, 2012.
(B) BASIS OF MEASUREMENT:
The precipitated sum monetary statements have been rebuilt on the chronological price basis, which is based on the satisfactory worth of the care at the time of the transaction.
(C) FUNCTIONAL AND PRESENTATION CURRENCY:
The precipitated sum monetary statements are presented in Canadian dollars, which is the organic banking of CMG and the subsidiaries. All monetary information presented in Canadian dollars has been dull to the nearest thousand.
(D) USE OF ESTIMATES, JUDGMENTS AND ASSUMPTIONS:
The credentials of monetary statements in consent with IFRS requires management to make judgments, estimates and assumptions that start the focus of accounting policies, the reported amounts of resources and liabilities and the avowal of fortuitous resources and liabilities at the date of the monetary statements and the reported amounts of revenue, costs and waste for the period. Estimates and underlying assumptions are based on chronological knowledge and other assumptions that are deliberate in accord with in the resources and are reviewed on an persisting basis. Actual formula may talk about from such estimates and it is illusive that the differences could be material. Revisions to accounting estimates are famous in the duration in which the estimates are revised and in any destiny durations affected. In scheming these precipitated sum monetary statements, the poignant judgments done by management in requesting the Company’s accounting policies and the pass sources of determination doubt are approaching to be the same as those practical in the primary annual IFRS monetary statements.
The pass judgments done in requesting accounting policies that have the many poignant effect on the amounts famous in these precipitated sum monetary statements are as follows:
Research and enlargement – assumptions are done in respect to the eligibility of certain investigate and enlargement projects in the calculation of systematic investigate and primary enlargement (“SR&ED”) investment taxation credits which are netted opposite the investigate and enlargement costs in the matter of operations. SR&ED claims are theme to audits by applicable taxation authorities and the tangible volume may shift depending on the outcome of such audits (note 4).
Revenue capitulation – certain module permit agreements enclose multiple-element arrangements as they may also include upkeep fees. Judgment is used in last a satisfactory worth of any component of a contract. Professional services income warranted from certain consulting contracts is famous by the theatre of execution of the stipulate energetic regulating the percentage-of-completion method. Judgment is used in last swell of any stipulate at duration end. In assessing income recognition, visualisation is also used in last the capability to collect the analogous comment receivable (note 8).
Property and apparatus – estimates are used in last utilitarian mercantile lives of skill and apparatus for the purposes of operative out depreciation.
Stock-based remuneration – assumptions and estimates are used in last the inputs used in the Black-Scholes option pricing model, together with assumptions per volatility, division yield, risk-free seductiveness rates, damage estimates and approaching option lives (note 7(d)).
Deferred income taxes – assumptions and estimates are done per the volume and timing of fulfilment and/or allotment of the proxy differences in in in in in in in in in in in in in in between the accounting carrying worth of the Company’s resources contra the taxation basement of those assets, and the taxation rates at which the differences will be recovered or staid in the destiny (note 6).
3. Significant Accounting Policies:
The poignant accounting policies used in scheming these Condensed Consolidated Financial Statements are unvaried from those disclosed in the Company’s Condensed Consolidated Financial Statements for the 3 months finished Jun 30, 2011.
4. Research and Development Costs:
For the 3 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Research and enlargement 3,104 2,658
SR&ED investment taxation credits (357) (250)
—————————————————————————-
2,747 2,408
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Research and enlargement 8,656 7,709
SR&ED investment taxation credits (1,021) (768)
—————————————————————————-
7,635 6,941
—————————————————————————-
5. Finance Income and Costs:
For the 3 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Interest income 123 91
Foreign sell good – –
—————————————————————————-
Finance income 123 91
—————————————————————————-
Foreign sell detriment (32) (329)
—————————————————————————-
Finance costs (32) (329)
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Interest income 341 179
Foreign sell good 768 –
—————————————————————————-
Finance income 1,109 179
—————————————————————————-
Foreign sell detriment – (303)
—————————————————————————-
Finance costs – (303)
—————————————————————————-
6. Income and Other Taxes:
The sustenance for income and other taxes reported differs from the volume computed by requesting the sum Canadian Federal and Provincial orthodox rate to the distinction prior to to to income and other taxes. The reasons for this disproportion and the compared taxation goods are as follows:
For the 9 months finished Dec 31, 2011 2010
(thousands of $, unless differently stated)
—————————————————————————-
Statutory taxation rate 26.13% 27.63%
—————————————————————————-
Expected income taxation 6,147 4,979
Non-deductible costs 396 336
Change in unrecognized proxy differences – (87)
Withholding taxes 188 517
Other eighteen (82)
—————————————————————————-
6,749 5,663
—————————————————————————-
Represented by:
Current income taxes 6,580 4,819
Deferred taxation responsibility (97) 120
Foreign self-denial and other taxes 266 724
—————————————————————————-
6,749 5,663
—————————————————————————-
The components of the Company’s net paid in instalments income taxation guilt are as follows:
December 31, Mar 31, Apr 1,
(thousands of $) 2011 2011 2010
—————————————————————————-
Tax guilt on investment taxation
credits (167) (181) (222)
Tax (liability) object on skill
and apparatus (120) (203) 33
—————————————————————————-
Deferred taxation liability, net (287) (384) (189)
—————————————————————————-
7. Share Capital:
(A) AUTHORIZED:
An sum number of Common Shares, an sum number of Non-Voting Shares, and an sum number of Preferred Shares, issuable in series.
Effective Jun 20, 2011, the Common Shares were apart on a two-for-one basis. Accordingly, the analogous number of shares and per share amounts have been retroactively practiced to simulate the two-for-one adjustment.
(B) ISSUED:
(thousands of shares) Non-Voting
Common Shares Shares
—————————————————————————-
Balance, Apr 1, 2010 31,117 4,543
Issued for money on practice of batch options 636 –
Converted in to usual shares 4,543 (4,543)
—————————————————————————-
Balance, Dec 31, 2010 36,296 –
—————————————————————————-
Balance, Apr 1, 2011 36,427 –
Issued for money on practice of batch options 698 –
Common shares buy-back (33)
—————————————————————————-
Balance, Dec 31, 2011 37,092 –
—————————————————————————-
The Non-Voting Shares were automobile in to an homogeneous number of Common Shares at any time at the option of the holder.
Subsequent to Dec 31, 2011, 32,000 batch options were exercised for money deduction of $ 226,000.
On May 18, 2006, the Board of Directors adopted a shareholder rights devise (the “Original Rights Plan”), whereby the Company released a singular right in respect of any share superb at the tighten of blurb operation on May 18, 2006 and for any a singular more share released by the Company thereafter. The distribution of the rights was not dilutive and will not start reported good per share until the rights apart from the underlying shares and turn exercisable or until the practice of the rights. The Original Rights Plan was authorized by the Company’s shareholders on Jul 13, 2006.
On May 21, 2009, the Board of Directors reviewed the Original Rights Plan and energetic that it was in the most suitable seductiveness of the Company to go on to have a shareholder rights devise in place. The Company, therefore, adopted a new shareholder rights devise (the “Rights Plan”) which is matching in all respects to the Original Rights Plan, with the disproportion of certain teenager amendments which have been done to produce for renovation or capitulation of the Rights Plan any 3 years (rather than usually a singular three-year duration as was set out in the Original Rights Plan) and to refurbish references to orthodox supplies right away out of date. The Rights Plan was authorized by the Company’s shareholders on Jul 9, 2009.
(C) COMMON SHARES BUY-BACK:
On Mar 22, 2010, the Company voiced a Normal Course Issuer Bid (“NCIB”) commencing on Mar 23, 2010 to squeeze for stop up to 1,315,000 of the Common Shares. This NCIB finished on Mar 22, 2011 and a sum of 10,000 shares were purchased at marketplace price for a sum price of $126,000.
On Apr 6, 2011, the Company voiced a NCIB commencing on Apr 7, 2011 to squeeze for stop up to 1,636,000 of the Common Shares. During the 9 months finished Dec 31, 2011, 33,000 Common Shares were purchased at marketplace price for a sum price of $438,000.
(D) STOCK-BASED COMPENSATION PLAN:
The Company adopted a rolling batch option devise as of Jul 13, 2005, which was validated by the Company’s shareholders on Jul 10, 2008, which allows it to accede to options to take Common Shares of up to 10% of the sum superb Common and Non-Voting Shares at the date of grant. Based on this calculation, at Dec 31, 2011, the Company could accede to up to 3,709,000 batch options. Pursuant to the batch option plan, the limit tenure of an option postulated cannot surpass 5 years from the date of grant. The superb batch options vest as to 50% after the primary year anniversary, from date of grant, and afterwards vest as to 25% of the sum options postulated after any of the second and third year anniversary dates.
The following list outlines changes in options:
For the 9 months finished For the year finished
—————————————————————————-
(thousands
except per
share amounts) Dec 31, 2011 Mar 31, 2011
—————————————————————————-
Weighted Weighted
Average Average
Options Exercise Price Options Exercise Price
Granted ($/share) Granted ($/share)
—————————————————————————-
Outstanding at
beginning of
period 2,825 7.41 2,572 5.90
Granted 1,065 13.41 1,094 9.07
Exercised (698) 6.22 (777) 4.76
Forfeited/cancel
led (45) 10.04 (64) 7.08
—————————————————————————-
Outstanding at
end of duration 3,147 9.67 2,825 7.41
—————————————————————————-
Options
exercisable at
end of duration 1,330 7.29 969 5.91
—————————————————————————-
The operation of practice prices of options superb and exercisable at Dec 31, 2011 is as follows:
Outstanding Exercisable
—————————————————————————-
Weighted Weighted Weighted
Average Average Average
Number of Remaining Exercise Number of Exercise
Exercise Price Options Contractual Price Options Price
($/option) (thousands) Life (years) ($/option) (thousands) ($/option)
—————————————————————————-
3.62 – 3.70 60 0.6 3.70 60 3.70
3.71 – 5.63 423 1.6 5.47 418 5.48
5.64 – 7.80 667 2.6 7.80 433 7.80
7.81 – 9.07 944 3.6 9.07 419 9.07
9.08 – 14.24 1,053 4.7 13.41 – –
—————————————————————————-
3,147 3.4 9.67 1,330 7.29
—————————————————————————-
The satisfactory worth of batch options postulated was estimated regulating the Black-Scholes option pricing indication underneath the following assumptions:
For the 9
months finished For the year ended
December 31, 2011 Mar 31, 2011
—————————————————————————-
Fair worth at accede to date ($/option) 1.23 to 3.04 1.56 to 1.78
Share price at accede to date ($/share) 13.00 to 14.24 9.07
Risk-free seductiveness rate (%) 0.99 to 2.06 1.37 to 2.17
Estimated reason duration prior to to to
exercise (years) 2 to 4 2 to 5
Volatility in the price of usual
shares (%) twenty-four to 37 35 to 39
Dividend produce per usual share (%) 3.20 to 4.94 5.12
—————————————————————————-
The Company famous sum stock-based remuneration responsibility for the 3 and 9 months finished Dec 31, 2011 of $566,000 and $1,433,000 respectively (three and 9 months finished Dec 31, 2010 – $428,000 and $1,134,000 respectively).
(E) EARNINGS PER SHARE:
The following list summarizes the good and weighted normal number of Common and Non-Voting Shares used in operative out simple and at large separated good per share:
For the 3 months finished Dec 31,
(thousands usually per share amounts) 2011
—————————————————————————-
Weighted Earnings
Average Shares Per Share
Earnings ($) Outstanding ($/share)
—————————————————————————-
Basic 5,790 36,976 0.16
Dilutive effect of batch
options 990
—————————————————————————-
Diluted 5,790 37,966 0.15
—————————————————————————-
For the 3 months finished
December 31,
(thousands usually per share
amounts) 2010
—————————————————————————
Weighted Earnings
Average Shares Per Share
Earnings ($) Outstanding ($/share)
—————————————————————————
Basic 3,563 36,176 0.10
Dilutive effect of batch
options 983
—————————————————————————
Diluted 3,563 37,159 0.10
—————————————————————————
For the 9 months finished Dec 31,
(thousands usually per share amounts) 2011
—————————————————————————-
Weighted Earnings
Average Shares Per Share
Earnings ($) Outstanding ($/share)
—————————————————————————-
Basic 16,771 36,757 0.46
Dilutive effect of batch
options 1,056
—————————————————————————-
Diluted 16,771 37,813 0.44
—————————————————————————-
For the 9 months finished
December 31,
(thousands usually per share
amounts) 2010
—————————————————————————
Weighted Earnings
Average Shares Per Share
Earnings ($) Outstanding ($/share)
—————————————————————————
Basic 12,358 35,966 0.34
Dilutive effect of batch
options 785
—————————————————————————
Diluted 12,358 36,751 0.34
—————————————————————————
During the 3 and 9 months finished Dec 31, 2011, 88,000 and 155,000 options respectively (three and 9 months finished Dec 31, 2010 – Nil and 120,000 respectively) were released from the mathematics of the weighted-average number of at large separated shares superb given their effect was not dilutive.
8. Revenue:
For the 3 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Software licenses 14,377 10,333
Professional services 1,521 1,730
—————————————————————————-
15,898 12,063
—————————————————————————-
For the 9 months finished Dec 31, 2011 2010
(thousands of $)
—————————————————————————-
Software licenses 39,669 31,312
Professional services 4,150 6,137
—————————————————————————-
43,819 37,449
—————————————————————————-
9. Capital Management:
The Company’s objectives in handling collateral are to safeguard enough liquidity to aspire to the devise of organic enlargement sum with vital acquisitions and to show off the lapse to the shareholders. The collateral make up of the Company consists of cash, credit comforts and shareholders’ equity. The Company does not have any outwardly imposed collateral mandate and does not right away implement any quantitative measures to guard the capital.
The Company’s policy is to compensate quarterly dividends based on the Company’s altogether monetary opening and money upsurge generation. In addition, given May 2005, the Company has spoken a special division after examination of the execution of the rught away prior to to mercantile year results. Decisions on division payments are done on a quarterly basement by the Board of Directors. There can be no declaration as to the volume or remuneration of such dividends in the future.
Since Nov 2002, the Company embarked on a array of normal march issuer bids to buy behind the shares. The ultimate normal march issuer bid is effective from Apr 7, 2011 to Apr 6, 2012. Reference is done to note 7(c).
The Company makes adjustments to the collateral make up in light of ubiquitous mercantile conditions and the Company’s operative collateral requirements. In sequence to say or regulate the collateral structure, the Company, on capitulation from the Board of Directors, may compensate dividends, buy behind shares or commence other activities as deemed suitable underneath the specific circumstances. The Board of Directors reviews and approves any component sell not in the typical march of business.
There were no changes in the Company’s proceed to collateral management during the period.
10. Financial Instruments and Risk Management:
(i) Classification of monetary instruments
Classification Measurement
—————————————————————————-
Cash Held for traffic Fair value
Trade and other receivables Loans and receivables Amortized cost
Trade payables and accrued
liabilities Other monetary liabilities Amortized cost
—————————————————————————-
(ii) Fair values of monetary instruments
The carrying values of cash, traffic and other receivables, traffic payables and accrued liabilities estimate their satisfactory values due to the short-term inlet of these instruments.
OVERVIEW:
The Company is unprotected to risks of varying degrees of stress which could start the capability to grasp the vital objectives for growth. The categorical objectives of the Company’s risk management routine are to safeguard that risks are scrupulously identified and that the collateral base is competent in propinquity to those risks. The principal monetary risks to which the Company is unprotected are described below:
(A) CREDIT RISK:
Credit risk is the risk of an astonishing detriment if a patron or third party to a monetary instrument fails to encounter the contractual requisite and arises predominantly from the Company’s money and traffic and other receivables. The amounts reported in the statements of monetary on all sides for traffic receivables are net of allowances for bad debts, estimated by the Company’s management based on prior to to knowledge and their comment of the tide mercantile environment.
The Company’s traffic receivables include radically of balances from blurb operation handling in the oil and gas industry, both domestically and internationally, as the Company sells the products and services in over 50 countries worldwide. Some of these countries have larger mercantile and done at home risk than gifted in North America and as a outcome there may be larger risk compared with sales in those jurisdictions. The Company manages this risk by invoicing for the full permit tenure in allege for the infancy of module permit sales and by invoicing as often as the stipulate allows for consulting and stipulate investigate services on a percentage-of-completion basis. In cases where collectability is not deemed probable, income is famous on taking of cash, presumption all other criteria have been met. Historically, the Company has not gifted any poignant waste compared to individual blurb operation or groups of blurb operation in any sold geographic area; therefore, no stipend for puzzled accounts has been determined at Dec 31, 2011.
As at Dec 31, 2011, the Company has a thoroughness of credit risk with 9 done at home and ubiquitous blurb operation who paint 62% of traffic receivables. In addition, $2.2 million of traffic receivables are over 90 days. The Company assesses the creditworthiness of the blurb operation on an ongoing basement and it continually monitors the volume and age of balances outstanding. Payment conditions with blurb operation are thirty days from check date; however, attention practice can magnify these terms. Accordingly, the Company views the credit risks on these amounts as normal for the industry.
The Company minimizes the credit risk of money by depositing usually with a creditable monetary establishment in rarely glass interest-bearing money accounts.
(B) MARKET RISK:
Market risk is the risk that changes in marketplace prices of the Company’s unfamiliar sell rates and seductiveness rates will start the Company’s income or the worth of the monetary instruments.
(i) Foreign Exchange Risk
The Company operates internationally and radically prices the products in possibly the Canadian or US dollar. This gives climb to bearing to marketplace risks from changes in the unfamiliar sell rates in in in in in in in in in in in in in in between the Canadian and US dollar. Approximately 72% of the Company’s revenues for the 9 months finished Dec 31, 2011 were denominated in US dollars and at Dec 31, 2011, the Company had we estimate $10.4 million of the operative collateral denominated in US dollars. The Company right away does not use derivative instruments to sidestep the bearing to those risks though as we estimate 23% of the Company’s sum costs are also denominated in US dollars they produce a prejudiced mercantile sidestep opposite the oscillation in this banking exchange. In addition, the Company manages levels of unfamiliar banking reason by converting additional US dollars in to Canadian dollars at mark rates.
Canadian operations are unprotected to banking risk on US denominated monetary resources and liabilities with fluctuations in the rate famous as unfamiliar sell gains or waste in the Consolidated Statements of Operations and Comprehensive Income. It is estimated that a a singular cent shift in the US dollar would outcome in a net shift of we estimate $76,000 on net income for the 9 months finished Dec 31, 2011. A weaker US dollar with respect to the Canadian dollar will outcome in a disastrous stroke whilst the retreat would outcome from a stronger US dollar.
(ii) Interest Rate Risk
The Company has poignant money balances and no interest-bearing debt. The Company’s tide policy is to deposit additional money in interest-bearing deposits and/or on trial investment certificates released by the principal banker. The Company is unprotected to seductiveness money upsurge risk from changes in seductiveness rates on the money balances. Based on the Dec 31, 2011 money balance, any 1% shift in the seductiveness rate on the Company’s money shift would shift net income for the 9 months finished Dec 31, 2011 by we estimate $352,000.
(C) LIQUIDITY RISK:
Liquidity risk is the risk that the Company is not able to encounter the monetary obligations as they tumble due or can do so usually at extreme cost. The Company manages liquidity risk through the management of the collateral make up as summarized in note 9. The Company’s enlargement is financed through a multiple of the money flows from operations and the money balances on hand. Given the Company’s accessible glass resources as compared to the timing of the payments of the liabilities, management assesses the Company’s liquidity risk to be low. The Company monitors the expenditures by scheming annual budgets which are updated periodically. At Dec 31, 2011, the Company has poignant money balances in additional of the obligations and over $800,000 of the line of credit (note 12) accessible for the use.
11. Commitments:
(A) RESEARCH COMMITMENTS:
The DRMS investigate and enlargement project, a collaborative bid with our partners Shell International Exploration and Production BV (“Shell”) and Petroleo Brasileiro S.A. (“Petrobras”) to mutually climb the newest era of fountainhead make-believe software, which commenced in 2006 and was creatively estimated to take 5 years to complete, is right away approaching to go on over the primary five-year time frame; however, the Company and the partners are committed to go on appropriation the devise with the Company’s share of the devise costs estimated at $3.0 million per year.
In and with entering in to this project, CMG Reservoir Simulation Foundation (“Foundation CMG”) agreed, theme to certain stop rights, to produce up to a limit of $5.2 million in investigate accede to appropriation to cover we estimate 50% of the Company’s estimated share of costs over the primary 5 years of the project. For the 9 months finished Dec 31, 2011, the Company has reflected $366,000 (2010 – $990,000) in investigate grants from Foundation CMG in income with respect to this project. Foundation CMG’s $5.2 million appropriation joining was finished in the primary entertain of the tide mercantile year.
(B) LEASE COMMITMENTS:
The Company has handling lease commitments relating to the bureau premises with the smallest annual lease payments as follows:
(thousands of $)
—————————————————————————-
2012 475
2013 1,777
2014 1,791
2015 1,356
2016 609
—————————————————————————-
12. Line Of Credit:
The Company has organised for a $1.0 million line of credit with the principal banker, which can be drawn down by proceed of a direct handling credit trickery or may be used to await letters of credit. As at Dec 31, 2011, US $165,000 (2010 – US $165,000) had been indifferent on this line of credit for the minute of credit ancillary a opening bond.
13. Segmented Information:
The Company is orderly in to a singular handling shred represented by the enlargement and chartering of fountainhead make-believe software. The Company provides veteran services, consisting of support, training, consulting and stipulate investigate activities, to foster the use and enlargement of the software; however, these activities are not evaluated as a apart blurb operation segment.
Revenues and skill and apparatus of the Company movement in the following geographic regions:
(thousands of $) Revenue Property and equipment
—————————————————————————-
For the 9 months
ended Dec 31, As at Dec 31,
2011 2010 2011 2010
—————————————————————————-
Canada 14,059 12,930 2,548 2,378
United States 7,439 6,673 83 116
Other Foreign 22,321 17,846 112 91
—————————————————————————-
43,819 37,449 2,743 2,585
—————————————————————————-
In the 9 months finished Dec 31, 2011, the Company subsequent 9.5% (2010 – 9.6%) of the income from a singular customer.
14. Subsidiaries:
CMG is the profitable owners of the finish released share collateral and controls all the votes of the subsidiaries. The principal activities of all the subsidiaries are the sale and await for the use of CMG’s module licenses. Transactions in in in in in in in in in in in in in in between subsidiaries are separated on consolidation. The following is the list of CMG’s subsidiaries:
Subsidiary Country of Incorporation
—————————————————————————-
Computer Modelling Group Inc. United States
CMG Venezuela Venezuela
CMG Middle East FZ LLC Dubai, UAE
—————————————————————————-
15. Subsequent Events:
On Feb 9, 2012, the Board of Directors spoken a money division of $ 0.13 per share on the Common Shares, on credit on Mar 15, 2012, to all shareholders of record at the tighten of blurb operation on Mar 8, 2012.
16. Transition to IFRS:
As staid in note 2(a), these precipitated sum monetary statements have been rebuilt in suitability with IAS 34. The accounting policies described in note 3 to the precipitated sum monetary statements for the 3 months finished Jun 30, 2011 have been practical in scheming the precipitated sum monetary statements for the 3 and 9 months finished Dec 31, 2011, the analogous information for the 3 and 9 months finished Dec 31, 2010, and in credentials of an opening IFRS matter of monetary on all sides at Apr 1, 2010, the Company’s date of passing from a singular to an a single more to IFRS, and statements of monetary on all sides as at Dec 31, 2011 and Mar 31, 2011.
This passing from a singular to an a single more note explains the effect of the passing from a singular to an a single more from prior to to Canadian GAAP to IFRS on the Company’s monetary position, monetary opening and money flows.
16.1 ELECTED EXEMPTIONS FROM FULL RETROSPECTIVE APPLICATION:
In scheming these precipitated sum monetary statements in suitability with IFRS 1, we practical the following discretionary exemptions from full retrospective focus of IFRS:
IFRS 3 – Business Combinations
IFRS 1 allows the Company to apply IFRS 3, Business Combinations, retrospectively or prospectively from the date of transition. The retrospective focus would require rendering of all blurb operation combinations that occurred prior to to to the passing from a singular to an a single more date, Apr 1, 2010. The Company inaugurated not to retrospectively apply IFRS 3 to blurb operation combinations that occurred prior to to to the passing from a singular to an a single more date and such blurb operation combinations have not been restated.
IFRS 2 – Share-based Payments
IFRS 1 provides the grant from retrospective focus of IFRS 2, Share-based Payments, to options postulated on or prior to to to Nov 7, 2002 and options postulated after Nov 7, 2002 that vested prior to to to Apr 1, 2010. The Company adopted the grant in IFRS 1 and practical IFRS 2 to worker options postulated after Nov 7, 2002 that had not vested by Apr 1, 2010. While teenager differences occurred on the passing from a singular to an a single more from Canadian GAAP to IFRS, these differences were not material, and hence, no adjustments have been done to the sum monetary statements.
16.2 MANDATORY EXCEPTIONS TO RETROSPECTIVE APPLICATION:
In scheming these precipitated sum monetary statements in suitability with IFRS 1, the Company practical the following imperative exception:
Estimates
IFRS 1 disallows hindsight to be used in formulating or reworking estimates. Estimates done in suitability with IFRSs at the date of passing from a singular to an a single more are unchanging with estimates done underneath Canadian GAAP usually where the rider was compulsory to simulate any disproportion in accounting policies. In creation estimates underneath IFRSs not compulsory underneath Canadian GAAP, the estimates simulate conditions that existed at the applicable stating date and/or passing from a singular to an a single more date.
16.3 RECONCILIATION OF FINANCIAL POSITION AND SHAREHOLDERS’ EQUITY:
(thousands of $) Mar 31, 2011 Dec 31, 2010
—————————————————————————-
Canadian IFRS Canadian IFRS
GAAP Adj. IFRS GAAP Adj. IFRS
—————————————————————————-
Assets
Current assets:
Cash 41,753 41,753 38,012 38,012
Trade and other
receivables 13,318 13,318 9,362 9,362
Prepaid waste 1,064 1,064 972 972
Prepaid income
taxes – – – -
—————————————————————————-
56,135 56,135 48,346 48,346
Property and
equipment 2,554 2,554 2,585 2,585
Deferred taxation object
(note 16.5(A)) – – – -
—————————————————————————-
Total resources 58,689 58,689 50,931 50,931
—————————————————————————-
Liabilities and
Shareholders’
Equity
Current liabilities:
Trade payables and
accrued
liabilities 4,543 4,543 4,367 4,367
Income taxes
payable 1,237 1,237 772 772
Deferred income 16,755 16,755 11,892 11,892
Deferred taxation
liability (note
16.5(A)) 181 (181) – 129 (129) -
—————————————————————————-
22,716 (181) 22,535 17,160 (129) 17,031
Deferred taxation
liability (note
16.5(A)) 203 181 384 180 129 309
—————————————————————————-
Total liabilities 22,919 – 22,919 17,340 – 17,340
—————————————————————————-
Shareholders’
equity:
Share collateral 24,801 24,801 23,950 23,950
Contributed
surplus 2,655 2,655 2,374 2,374
Retained good 8,314 8,314 7,267 7,267
—————————————————————————-
Total shareholders’
equity 35,770 35,770 33,591 33,591
—————————————————————————-
Total liabilities
and shareholders’
equity 58,689 58,689 50,931 50,931
—————————————————————————-
(thousands of $) Apr 1, 2010
—————————————————————————-
IFRS
Canadian GAAP Adj. IFRS
—————————————————————————-
Assets
Current assets:
Cash 28,826 28,826
Trade and other
receivables 16,072 16,072
Prepaid waste 1,141 1,141
Prepaid income
taxes 1,433 1,433
—————————————————————————-
47,472 47,472
Property and
equipment 2,401 2,401
Deferred taxation object
(note 16.5(A)) 33 (33) -
—————————————————————————-
Total resources 49,906 (33) 49,873
—————————————————————————-
Liabilities and
Shareholders’
Equity
Current liabilities:
Trade payables and
accrued
liabilities 5,398 5,398
Income taxes
payable – -
Deferred income 13,843 13,843
Deferred taxation
liability (note
16.5(A)) 222 (222) -
—————————————————————————-
19,463 (222) 19,241
Deferred taxation
liability (note
16.5(A)) – 189 189
—————————————————————————-
Total liabilities 19,463 (33) 19,430
—————————————————————————-
Shareholders’
equity:
Share collateral 20,390 20,390
Contributed
surplus 1,816 1,816
Retained good 8,237 8,237
—————————————————————————-
Total shareholders’
equity 30,443 30,443
—————————————————————————-
Total liabilities
and shareholders’
equity 49,906 (33) 49,873
—————————————————————————-
16.4 RECONCILIATION OF NET AND COMPREHENSIVE INCOME:
For the 3 months finished Dec 31, Canadian IFRS
2010(thousands of $) GAAP Adjustments IFRS
—————————————————————————-
—————————————————————————-
Revenue 12,063 – 12,063
—————————————————————————-
Operating waste
Sales, selling and veteran
services (note 16.5(B)) 2,760 76 2,836
Research and enlargement 2,408 – 2,408
General and executive (note
16.5(B)) 1,237 66 1,303
Depreciation and amortization (note
16.5(B)) 142 (142) –
Foreign sell detriment (note 16.5(C)) 329 (329) –
Interest and other income (note
16.5(C)) (91) 91 –
—————————————————————————-
6,785 (238) 6,547
—————————————————————————-
Operating distinction 5,278 238 5,516
Finance income (note 16.5(C)) – 91 91
Finance costs (note 16.5(C)) – (329) (329)
—————————————————————————-
Profit prior to to to income and other taxes 5,278 – 5,278
Income and other taxes 1,715 – 1,715
—————————————————————————-
Net and extensive income 3,563 – 3,563
—————————————————————————-
—————————————————————————-
For the 9 months finished Dec 31, Canadian IFRS
2010(thousands of $) GAAP Adjustments IFRS
—————————————————————————-
—————————————————————————-
Revenue 37,449 – 37,449
—————————————————————————-
Operating waste
Sales, selling and veteran
services (note 16.5(B)) 8,484 220 8,704
Research and enlargement 6,941 – 6,941
General and executive (note
16.5(B)) 3,472 187 3,659
Depreciation and amortization (note
16.5(B)) 407 (407) –
Foreign sell detriment (note 16.5(C)) 303 (303) –
Interest and other income (note
16.5(C)) (179) 179 –
—————————————————————————-
19,428 (124) 19,304
—————————————————————————-
Operating distinction 18,021 124 18,145
Finance income (note 16.5(C)) – 179 179
Finance costs (note 16.5(C)) – (303) (303)
—————————————————————————-
Profit prior to to to income and other taxes 18,021 – 18,021
Income and other taxes 5,663 – 5,663
—————————————————————————-
Net and extensive income 12,358 – 12,358
—————————————————————————-
—————————————————————————-
16.5 EXPLANATION OF PRESENTATION RECLASSIFICATIONS:
(A) Deferred taxes – paid in instalments taxes are personal as non-current underneath IFRS. Under prior to to Canadian GAAP, paid in instalments taxes were personal as tide and non-current based on the sequence of the underlying resources or liabilities to which they describe or based on the approaching annulment of the proxy differences.
Transition manners resulted in reclassification of paid in instalments taxation guilt compared with SR&ED credits from tide to non-current. In addition, paid in instalments taxation object compared with skill and apparatus was homogeneous opposite paid in instalments taxation guilt as both describe to income taxes levied by the same taxation management for the same taxable entity.
(B) Expense sequence – the Company has inaugurated to benefaction the waste in the sum statements of operations and extensive income rebuilt underneath IFRS according to their function. As a result, debasement and amortization, which was reported as a apart line object underneath prior to to Canadian GAAP, was allocated to the respective functions.
(C) Finance income and costs – underneath Canadian GAAP, seductiveness income and unfamiliar sell gains and waste were personal as apart line apparatus in the sum matter of earnings. Under IFRS, seductiveness income and unfamiliar sell gains are presented as monetary income, and unfamiliar sell waste are presented as monetary costs. Finance income and costs are presented on a sum basement as compulsory by IFRS.
16.6 ADJUSTMENTS TO THE STATEMENTS OF CASH FLOWS:
Interest received and income taxes paid have been changed in to the physique of the matter of money flows underneath handling activities, given they were formerly disclosed as supplemental information. There are no other component differences in in in in in in in in in in in in in in between the matter of money flows presented underneath IFRS and the matter of money flows formerly presented underneath Canadian GAAP.