UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 40-F
o REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 2016
Commission File Number: 000-29970
THE DESCARTES SYSTEMS GROUP INC.
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English (if applicable))
Canada
(Province or other jurisdiction of incorporation or organization)
N/A
(Primary Standard Industrial Classification Code Number (if applicable))
N/A
(I.R.S. Employer Identification Number (if applicable))
120 Randall Drive, Waterloo, Ontario, Canada N2V 1C6
Tel: (519) 746-8110
(Address and telephone number of Registrant’s principal executive offices)
Descartes Systems (USA) LLC
Powers Ferry Business Park
2030 Powers Ferry Road SE
Suite 350
Atlanta, GA 30339-5066
Tel: (678)247-0400
(Name, address (including zip code) and telephone number
(including area code) of agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
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Title of each class: |
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Name of each exchange on which registered: |
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Common Shares, no par value |
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Nasdaq |
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Rights to purchase Common Shares, no par value |
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Nasdaq |
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
N/A
(Title of Class)
For annual reports, indicate by check mark the information filed with this Form:
x Annual information form x Audited annual financial statements
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
75,761,184 as of January 31, 2016
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o
Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).
Yes x No o
CERTIFICATIONS
See Exhibits 99.5, 99.6 and 99.7 to this Annual Report on Form 40-F.
CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
The Registrant, under the supervision and with the participation of the Registrant’s management, including the Registrant’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), evaluated the effectiveness of the Registrant’s disclosure controls and procedures as of January 31, 2016 (the “Evaluation Date”), pursuant to Rule 13a-15(b) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, the Registrant’s Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, the Registrant’s disclosure controls and procedures were effective.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Management’s Report on Financial Statements and Internal Control Over Financial Reporting
Management’s Report on Financial Statements and Internal Control Over Financial Reporting is contained in the Registrant’s 2016 Annual Report filed herewith as Exhibit 99.2 and incorporated herein by reference.
Report of Independent Registered Public Accounting Firm
The report of KPMG LLP with respect to the effectiveness of the Registrant’s internal control over financial reporting is contained in the Registrant’s 2016 Annual Report filed herewith as Exhibit 99.2 and incorporated herein by reference.
Changes in Internal Control Over Financial Reporting
During the period covered by this Annual Report on Form 40-F, there have been no changes in the Registrant’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
NOTICES PURSUANT TO RULE 104 OF REGULATION BTR
None.
AUDIT COMMITTEE FINANCIAL EXPERT
The Registrant’s Audit Committee of the Board of Directors currently consists of three members. The Registrant’s Board of Directors has determined that John J. Walker and Eric Demirian are “audit committee financial experts” (as defined in paragraph 8(b) of General Instruction B to Form 40-F). All members of the Audit Committee are independent within the meaning of the Nasdaq Stock Market’s (“Nasdaq”) director independence standards.
CODE OF ETHICS
The Registrant has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the Code of Ethics is posted on the Registrant’s corporate website at www.descartes.com and is also available at www.sedar.com. The Registrant intends to disclose through its website any waivers or amendments to its Code of Ethics that apply to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES
The aggregate fees billed in respect of the fiscal years ended January 31, 2016 and January 31, 2015 for professional services rendered by KPMG LLP and Deloitte LLP, the Registrant’s Independent Registered Public Accounting Firms for 2016 and 2015, respectively, are as follows (all amounts in table are in US dollars — amounts that were billed in Canadian dollars are converted to US dollars at the applicable exchange rate on the last day of the applicable fiscal period):
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Fiscal |
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Fiscal |
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Audit Fees |
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$ |
669,918 |
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$ |
556,912 |
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Audit-Related Fees |
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$ |
50,108 |
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$ |
113,970 |
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Tax Fees |
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$ |
0 |
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$ |
0 |
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All Other Fees |
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$ |
0 |
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$ |
78,007 |
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AUDIT FEES— Audit fees consist of fees for professional services rendered for the audit of the Registrant’s annual consolidated financial statements and services provided in connection with statutory audits and regulatory filings or engagements including fees for statutory audit of the Company’s foreign subsidiaries.
AUDIT-RELATED FEES— Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of the Registrant’s consolidated financial statements and are not reported as “Audit Fees”. These services included accounting research concerning financial accounting and reporting standards.
TAX FEES—Tax fees consist of fees for professional services rendered for tax advice and tax planning.
ALL OTHER FEES—All other fees consist of fees for non-audit-related advisory services.
PRE-APPROVAL POLICIES AND PROCEDURES
The Registrant’s audit committee is responsible for overseeing the work of the independent registered public accounting firms and has adopted a policy requiring its pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. The Registrant’s Pre-Approval Policy and Procedure for Engagements of the Independent Auditor is filed as Appendix B to the Registrant’s Annual Information Form dated April 7, 2016 filed as Exhibit 99.1 hereto and incorporated by reference herein.
OFF-BALANCE SHEET ARRANGEMENTS
The Registrant does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Registrant’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
The following table presents, as of January 31, 2016, the Registrant’s known contractual obligations in respect of operating and capital lease obligations (in millions of U.S. dollars):
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Less than |
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1-3 years |
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4-5 years |
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More than |
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Total |
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Operating lease obligations |
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4.2 |
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4.7 |
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0.9 |
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— |
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9.8 |
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Capital lease obligations |
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0.1 |
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0.1 |
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— |
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— |
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0.2 |
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Total |
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4.3 |
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4.8 |
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0.9 |
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— |
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10.0 |
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Lease Obligations
The Registrant is committed under non-cancelable leases for business premises, computer equipment and vehicles with terms expiring at various dates through 2021. The Registrant also is committed under non-cancelable capital leases for computer equipment expiring at various dates through 2018. The future minimum amounts payable under these lease agreements are outlined in the table above.
Other Obligations
Deferred Share Unit and Cash-Settled Restricted Share Unit Plans
As described in Note 2 to the Registrant’s consolidated financial statements, the Registrant maintains Deferred Share Unit (“DSU”) and Cash-Settled Restricted Share Units (“CRSU”) plans for its directors and employees. Any payments made pursuant to these plans are settled in cash. For DSUs and CRSUs, the units vest over time and the liability recognized at any given consolidated balance sheet date reflects only those units vested at that date that have not yet been settled in cash. As such, the Registrant had an unrecognized aggregate amount for unvested CRSUs of $1.0 million at January 31, 2016. As at January 31, 2016 there were no unvested DSUs. The ultimate liability for any payment of DSUs and CRSUs is dependent on the trading price of the Registrant’s common shares.
IDENTIFICATION OF THE AUDIT COMMITTEE
The Registrant has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the audit committee as of the date of the filing of this 40-F are: Mr. John J. Walker (Chair), Ms. Deborah Close and Mr. Eric Demirian.
MINE SAFETY DISCLOSURE
Not applicable.
DISCLOSURE PURSUANT TO THE REQUIREMENTS OF NASDAQ
The Registrant was granted an exemption from Nasdaq Stock Market Rules requiring each issuer to provide for a quorum at any meeting of the holders of common stock of no less than 331/3% of the outstanding shares of the issuer’s common voting stock. This exemption was granted because Nasdaq’s requirements regarding the quorum required for meetings of the holders of common stock are contrary to generally accepted business practices in Canada. In particular, Section 139(1) of the Canada Business Corporations Act provides that a company’s by-laws may set the quorum requirements for a meeting of shareholders. The relevant provisions of the Registrant’s by-laws state that “Subject to the Act in respect of a majority shareholder, a quorum for the transaction of business at any meeting of shareholders shall be persons not being less than two in number and holding or representing by proxy not less than 20 percent of the issued and outstanding shares of the Corporation for the time being enjoying voting rights at such meeting. If a quorum is present at the opening of any meeting of shareholders, the shareholders present or represented may proceed with the business of the meeting notwithstanding that a quorum is not present throughout the meeting. If a quorum is not present at the opening of any meeting of shareholders, the shareholders present or represented may adjourn the meeting to a fixed time and place but may not transact any other business.”
UNDERTAKING
Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.
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THE DESCARTES SYSTEMS GROUP INC. | |
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By: |
/s/ Michael Verhoeve |
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Name: |
Michael Verhoeve |
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Title: |
EVP Legal, General Counsel and Corporate |
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Date: |
April 7, 2016 |
EXHIBIT INDEX
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Exhibit |
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Description |
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99.1 |
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Annual Information Form for the fiscal year ended January 31, 2016 |
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99.2 |
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2016 Annual Report (incorporated by reference to Exhibit 99.1 to the Registrant’s Form 6-K furnished with the SEC on March 7, 2016) |
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99.3 |
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Consent of Deloitte LLP |
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99.4 |
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Consent of KPMG LLP |
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99.5 |
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Certification of the Chief Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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99.6 |
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Certification of the Chief Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
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99.7 |
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Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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101 |
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XBRL Financial Statements |