Annual Report 2012/13

Integrity & Mutual Respect

Sustainability

Continuous Learning

Accountability

Safety

CSA Group Annual Report 2012 | 2013 1

Table of Contents

Global 2

Sustainability 3

Innovation 4

Chair & CEO Message 5

Board of Directors 8

Executive Operations Committee 9

Financials 10

Independent Auditor’s Report 11

Consolidated Statements of Financial Position 13

Consolidated Statements of Changes in Net Assets 14

Consolidated Statements of Income 15

Consolidated Statements of Comprehensive Income 16

Consolidated Statements of Cash Flows 17

Notes to Consolidated Financial Statements 18
CSA Group Annual Report 2012 | 2013 2

Global

New European lab boosts global services for customers.

European manufacturers supplying global and North American markets can now turn to CSA Group’s 

convenient and sophisticated environmental test facility in Strasskirchen, Germany. It provides localized 

testing and international compliance management services for automotive, e-vehicles, Electromagnetic 

Compatibility (EMC), power tools, IT, safety and environmental, home appliances and other product 

categories. We are working on a new lab in Frankfurt to provide additional service offerings to our 

customers.

Investments in China improve customer service

A new wire and cable laboratory in Guangzhou, the first in the southern region of China, provides 

localized testing and certification to Canadian, U.S. and other international standards. In Kunshan, the 

centre of electronic and photovoltaic (PV) manufacturers of China, we are building a new laboratory 

to increase capacity for PV modules, grid-connected inverters and components that must meet North 

American and IEC standards.

Framework strengthens global training and development

To better serve global clients with their training and development needs, CSA Group has adopted 

standards of practice for workplace learning and development professionals. The competencies, created 

by the Canadian Society for Training and Development, are a model and benchmark against which our 

staff can better assess their performance, identify opportunities for skills improvement and ensure 

quality service to clients. 

Next door or around the world, CSA Group is there to serve...

to help advance safety and performance
CSA Group Annual Report 2012 | 2013 3

Sustainability

Standards take aim at climate change impacts

Drought, hurricanes, melting permafrost... CSA Group has been exploring the effects of climate change 

on infrastructure. In 2012, we were selected to develop new standards for Canada’s far northern cities, 

towns and aboriginal communities under the Northern Infrastructure Standardization Initiative, led by 

the Standards Council of Canada. The standards pertain to foundations of new buildings, permafrost 

degradation on existing buildings, changing snow loads in the North, and community drainage systems.

Certification to sustainability standard helps mobilize change

To help manufacturers support their environmental claims, CSA Group offers testing and certification to 

sustainability standards for the appliance industry. In 2012, LG Electronics became the first company 

to have its refrigerators certified to CSA SPE-7001-12 Sustainability standard for household refrigeration 

appliances. The associated sustainability mark is a visible indicator to retailers, regulators and 

consumers that a product has met the standard’s environmental performance requirements.

New program focuses on disclosure of environmental performance

As a Product Category Rules (PCR) Program Operator, CSA Group now offers additional services 

to organizations and industries concerned about sustainability, transparency and credibility in 

environmental performance claims. Manufacturers use PCRs to create Type III Environmental Product 

Declarations that disclose the environmental performance of products over their life cycle - including 

measurement of carbon footprint and energy consumption.

Acquisition enhances services for energy efficient lighting

Our acquisition of Orb Optronix, near Seattle, presents our growing roster of lighting clients with new 

state-of-the-art, LED and lighting metrology testing capabilities. This adds to our established presence 

in Atlanta for testing LED and lighting products to more than 75 standards as well as third-party ENERGY 

STAR® and other requirements; in Cleveland and Toronto for energy efficiency verification (EEV) services; 

and in China for LED lighting testing and certification. 

For a greener, cleaner world... CSA Group nurtures

 sustainable products and practices
CSA Group Annual Report 2012 | 2013 4

Innovative

Announcing the first bi-national carbon capture and storage standard

In a turning point for carbon capture and storage (CCS), a practice that scientists estimate could reduce 

emissions from industrial plants by 85 to 95 per cent (Intergovernmental Panel on Climate Change), 

CSA Group has released a bi-national Canada-USA consensus standard. CSA Z741 Geological storage of 

carbon dioxide was developed with a technical committee of more than 30 professionals representing 

industry, regulators, researchers and NGOs from both sides of the border. Its goal is to help promote 

environmentally safe and long-term carbon dioxide containment in a way that minimizes risks to the 

environment and human health.

Landmark standard addresses mental health in the workplace

A study commissioned by the Mental Health Commission of Canada (MHCC) shows that the economic 

cost from mental health problems and illnesses is at least $50 billion per year, representing 2.8% of the 

country’s 2011 gross domestic product. Lauded by business, labour and government, a new voluntary 

national standard developed by CSA Group and the Bureau de normalisation du Québec (BNQ), 

CAN/CSA-Z1003-12/BNQ 9700-803/2012, Psychological Health and Safety in the Workplace, provides 

a systematic approach to help develop and sustain a psychologically healthy and safe workplace.

CSA standard becomes first on nanotechnologies in Canada

Nanotechnology, which uses unique material properties in near-limitless applications, presents novel 

challenges with respect to safety. CSA Z12885, Nanotechnologies - Exposure control program for 

engineered nanomaterials in occupational settings provides guidance for safe use in the workplace. 

Canada has been providing vital input to the International Organization for Standardization (ISO), and 

this standard marks the first to be adopted in Canada. 

Anticipating new issues and corners... CSA Group

 ushers in ground-breaking solutions
CSA Group Annual Report 2012 | 2013 5

Chair & CEO Message

Serving our stakeholders through expansion and growth

With a vision of a better, safer, more sustainable world where standards work for people and business, 

CSA Group thrives by serving the needs of: customers around the world who want access to markets for 

their products, members who expect value from their association, regulators and consumers who need 

credible proof of safer and sustainable products and practices.

In 2012/2013, we served the interests of these stakeholders through expanded global service offerings, 

solutions for sustainability, and resources that help advance innovation. We opened 6 new laboratories, 

hired new talent across the globe and will continue to do so. We solidified our single global brand. 

And, with a global outlook and scope, we invested in critical service initiatives that will strengthen 

our competitiveness.

Business results

Revenues during this fiscal year totalled $ 256 million, an increase of 8% against the previous year. This 

increase includes satisfactory contributions from our acquisitions in Europe. We are proud to say again 

that all regions, business units and corporate functions achieved their business objectives over the 

past year.

Global service expansion

Accelerating investment in our laboratories, service offerings and employees is at the core of our global 

corporate strategy and key to serving our customers’ needs and expectations. In 2012/13 we made major 

strides on this front.

The opening of a new laboratory in Strasskirchen, Germany added to the aggressive expansion we have 

undertaken in recent years on behalf of our European clients. In Asia, our new wire and cable lab in 

Guangzhou, photovoltaic lab in Kunshan, and additional U.S. Energy Star services boosted our capacity 

for manufacturers there. In North America, expanded service offerings in Cleveland and the acquisition of 

Orb Optronix enhanced LED service to customers.

During 2012/13, we continued to invest in solutions that drive sustainability. We are especially proud 

of our work on new standards that will help manage the effects of climate change on Northern 

infrastructure as well as solutions that will help bring about greater transparency and credibility in 

environmental claims.
CSA Group Annual Report 2012 | 2013 6

Improving value and engagement

In the past year, we undertook major initiatives to improve services and enhance stakeholder value.

Our Standards group introduced an innovative new Web-based platform for engaging with members. 

The online Communities of Interest allow for an unprecedented level of collaboration and communication 

among members, stakeholders and other standards users. The first four Communities – for the Electrical, 

Fuel-burning Equipment, Nuclear and Occupational Health and Safety (OHS) sectors – went live in 

February. In the weeks and months ahead, we will add new Communities and roll out additional features 

and functionality.

In 2012/13, we also worked to enhance our role and influence in consumer product safety. We were 

pleased to lend official support to the Federal Government of Canada’s introduction of the new 

Combating Counterfeit Products Act, which proposes changes to the Trade-marks Act and the Copyright 

Act to prohibit the import and export of counterfeit trademark goods.

We have been pursuing a robust strategy for public outreach and government relations. Last fall, a 

Standards education day in Ottawa drew considerable interest in CSA’s role in public safety, occupational 

health and safety, nanotechnology and emerging technologies such as electric vehicles and fuel cells.

We also invested in employee engagement and education and training initiatives. This year, we 

introduced talent management and total reward programs that consistently recognize employee 

contributions across regions and business lines; as well as leadership development and renewal 

programs that promote career progression, personal growth and organizational sustainability. New 

compensation systems have enhanced our overall global competitive position.

Our commitment to social responsibility was reflected through our donations this past year to several 

worthy causes including Habitat for Humanity, the United Way, the Salvation Army, Dragon Boat teams, 

breast cancer research and others. And through our corporate asset redeployment, we have lessened 

our impact on landfills and found deserving homes for used equipment and furniture.

Realizing our vision and the path forward

CSA Group has always been about seeing a need, making things better, breaking new ground and 

imagining workable solutions. We proudly added to that legacy in 2012/13.

A notable example was the introduction of a voluntary national Standard on psychological health and 

safety in the workplace. This was a collaborative effort with the Bureau de normalisation du Québec 

(BNQ) and the Mental Health Commission of Canada (MHCC), which estimates that in any given year one 

in five people in Canada experiences a mental health problem or illness, with a cost to the economy of 

more than $50 billion annually.
CSA Group Annual Report 2012 | 2013 7

As we move forward from this year of achievements and successes on all fronts, we plan to 

concentrate on key priorities while continuing to invest in our core businesses, growth strategies 

and customer service.

We have a rich history in standards and service offerings for the resources industry and we intend to 

leverage our experience in oil, mining and other natural resources – while enhancing our contributions 

to renewable energy and related technologies, health and safety, infrastructure, carbon management 

and other leading concerns of government, industry and consumers. We will continue to grow our 

membership, develop smart standards and interactive products and increase market breadth.

As a knowledge-based service business, we can never over-estimate the value of people. The past year’s 

exceptional achievements are due to the support and contribution of outstanding employees, valued 

customers, dedicated members, and the wise counsel of our senior leadership team and our Board 

of Directors.

We are exceptionally grateful for their support and commitment, and are confident that together we will 

continue to make excellent progress and deliver on our vision and aspirations.

Robert Cook Ash Sahi

Chair of the Board President and CEO

CSA Group CSA Group
CSA Group Annual Report 2012 | 2013 8

Board of Directors

From left to right:

– 1st row –

1. Sondra E. Bruni Director | St. Catharines, ON

2. Robert J. (“RJ”) Falconi Corporate Secretary, CSA Group | Bradford, ON

3. Bob Cook Chair, CSA Group | Bedford, NS

4. Ash Sahi President and CEO, CSA Group | Caledon, ON

5. Dr. H. Roland Hosein Vice-Chair, CSA Group; Vice President, Environmental Health & Safety, GE Canada | Unionville, ON

6. Dr. Malcolm E. O’Hagan Director | Chevy Chase, MD0 

7. Nathalie Pilon President, Thomas & Betts Canada | St-Jean Richelieu, QC

8. Kim A. Dunphy Assistant Deputy Minister, OH&S Branch, Government of Newfoundland & Labrador | St. John’s, NL

– 2nd row –

9. David T. Fung Chair, HR/Compensation Committee, CSA Group; Chairman & CEO, ACDEG Group | Vancouver, BC

10. David Warner Director | Mississauga, ON

11. Greg B. Weeres President and CEO, Pacific Northern Gas Ltd. | Vancouver, BC

12. David C. MacKinnon Audit, Finance & Risk Committee, CSA Group | Wellington, ON

13. Gregory M. Thomas Executive Director, Alliance International LLG | Fort Wayne, IN

Absent from photo:

 France Pégeot

Senior Assistant Deputy Minister, 

Strategic Policy Fisheries and Oceans Canada | Ottawa, ON

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2

3

4

5

6

7

8

9

10 11 12

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CSA Group Annual Report 2012 | 2013 9

Executive Operations Committee

1. Ash Sahi President and CEO | CSA Group

2. Nashir Jiwani Regional Vice President, Canada | CSA Group

3. Suzanne Kiraly Executive Vice President, Global Business Strategy | CSA Group

4. Bonnie Rose President, Standards | CSA Group

5. Magali Depras Regional Vice President, Europe | CSA Group

6. Robert J. “RJ” Falconi Corporate Secretary | CSA Group

7. Hans Pan Regional Vice President, Asia | CSA Group

8. Paul Keane Executive Vice President, Human Resources | CSA Group

9. Murray Johnston Executive Vice President, Finance & Administration | CSA Group

10. Hélène Vaillancourt Executive Vice President, Science & Engineering | CSA Group

11. Rich Weiser Regional Vice President, U.S. & Mexico | CSA Group

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CSA Group Annual Report 2012 | 2013 10

Financials

Management’s Statement of Responsibility

The accompanying consolidated financial statements of the Canadian Standards Association (the 

Association) have been prepared by management in accordance with International Financial Reporting 

Standards (IFRS).

Financial statements are not precise, since they include certain amounts based on estimates and 

judgments. When alternative methods exist, management has chosen those which it deems most 

appropriate in the circumstances in order to ensure that the consolidated financial statements are 

presented fairly, in all material respects, in accordance with IFRS.

Management maintains adequate systems of internal accounting and administrative controls consistent 

with reasonable cost. Such systems are designated to provide reasonable assurance that the financial 

information is relevant and reliable, and that the Association’s assets are appropriately accounted for 

and adequately safeguarded. The Board of Directors ensures that management fulfils its responsibilities 

for financial reporting and internal control through an audit, finance and risk committee. This committee 

meets periodically with management and the external auditors to discuss internal controls, auditing 

matters, and financial reporting issues, and to satisfy itself that each party is properly discharging its 

responsibilities. The committee reviews the consolidated financial statements, and reports to the Board 

of Directors. The external auditors have full and direct access to the audit committee.

Signed,

Ash Sahi Murray Johnston

President and Chief Executive Officer Executive Vice-President, Finance and Admin.

The Canadian Standards Association The Canadian Standards Association
CSA Group Annual Report 2012 | 2013 11

PricewaterhouseCoopers LLP

North American Centre, 5700 Yonge Street, Suite 1900, North York, Ontario, Canada M2M 4K7

T: +1 416 218 1500, F: +1 416 218 1499

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

May 17, 2013

Independent Auditor’s Report

To the Members of

Canadian Standards Association

We have audited the accompanying consolidated financial statements of the Canadian Standards

Association and its subsidiaries, which comprise the consolidated statements of financial position as at

March 31, 2013 and March 31, 2012 and the consolidated statements of income, comprehensive income,

changes in net assets and cash flows for the years ended March 31, 2013 and March 31, 2012 and the

related notes, which comprise a summary of significant accounting policies and other explanatory

information.

Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial

statements in accordance with International Financial Reporting Standards, and for such internal control

as management determines is necessary to enable the preparation of consolidated financial statements

that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards. Those

standards require that we comply with ethical requirements and plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the consolidated financial statements. The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of the consolidated financial statements,

whether due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order

to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a

basis for our audit opinion.
CSA Group Annual Report 2012 | 2013 12

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of Canadian Standards Association and its subsidiaries as at March 31, 2013 and March 31, 2012

and their financial performance and their cash flows for the years ended March 31, 2013 and March 31,

2012 in accordance with International Financial Reporting Standards.

Comparative information

Without modifying our opinion, we draw attention to note 2 to the consolidated financial statements,

which describes that Canadian Standards Association adopted International Financial Reporting

Standards on April 1, 2012, with a transition date of April 1, 2011. These standards were applied

retrospectively by management to the comparative information in these financial statements, including

the consolidated statements of financial position as at March 31, 2012 and April 1, 2011, and the

consolidated statements of income, comprehensive income, changes in net assets and cash flows for the

year ended March 31, 2012 and related disclosures. We were not engaged to report on the restated

comparative information as at April 1, 2011 and as such, it is unaudited.

Chartered Accountants, Licensed Public Accountants
CSA Group Annual Report 2012 | 2013 13

Canadian Standards Association

Consolidated Statements of Financial Position

(in thousands of Canadian dollars)

Approved by the Board of Directors

___________________________________ Director ________________________________ Director

The accompanying notes are an integral part of these consolidated consolidated financial statements.

March 31,

2013

$

March 31,

2012

$

April 1,

2011

$

(Unaudited)

Assets

Current assets

Cash and cash equivalents 14,191 15,806 14,205

Trade and other receivables (note 6) 54,238 51,985 45,778

Inventories (note 7) 561 573 657

Prepaid expenses 7,119 5,657 4,489

Short-term investments (note 5) 132,495 128,556 114,006

208,604 202,577 179,135

Non-current assets

Property, plant and equipment - net (note 8) 74,479 69,179 60,154

Accrued pension benefit asset (note 18) 3,639 4,311 5,263

Investment in associate (note 10) 1,056 1,422 1,035

Intangible assets (note 9) 23,937 22,781 11,468

Goodwill (note 9) 15,603 12,434 4,188

327,318 312,704 261,243

Liabilities

Current liabilities

Trade and other payables (note 16) 43,348 40,104 33,389

Deferred revenue 38,078 35,225 30,901

Customer deposits 13,293 12,627 12,009

Provisions 1,832 1,966 2,106

Finance leases 158 142 -

Bank loan (note 12) 2,605 2,998 -

99,314 93,062 78,405

Non-current liabilities

Employee future benefits (note 18) 53,182 43,752 35,494

Finance leases 450 547 -

Deferred lease inducement 121 146 172

Bank loan (note 12) 15,175 17,960 -

168,242 155,467 114,071

Net Assets

Invested in property, plant and equipment 74,479 69,179 60,154

Internally reserved for specific purposes 83,401 88,156 70,444

Unreserved 18,470 4,672 14,094

176,350 162,007 144,692

Non-controlling interest 3,201 2,752 2,123

Accumulated other comprehensive income (loss) (20,475) (7,522) 357

159,076 157,237 147,172

327,318 312,704 261,243

Contingencies, commitments and guarantees (note 21)
CSA Group Annual Report 2012 | 2013 14

Canadian Standards Association

Consolidated Statements of Changes in Net Assets

For the years ended March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

The accompanying notes are an integral part of these consolidated financial statements.

2013

Unreserved

$

Internally

reserved

$

Invested in

property,

plant and

equipment

$

Accumulated

other

comprehensive

income

$

Total

attributable

to the

Association

$

Noncontrolling

interest

$

Total

$

Balance - Beginning of year 4,672 88,156 69,179 (7,522) 154,485 2,752 157,237

Net income for the year 26,300 (4,755) (7,202) - 14,343 449 14,792

Investment in property, plant and equipment - net (12,502) - 12,502 - - - -

Other comprehensive income - - - (12,953) (12,953) - (12,953)

Balance - End of year 18,470 83,401 74,479 (20,475) 155,875 3,201 159,076

2012

Unreserved

$

Internally

reserved

$

Invested in

property,

plant and

equipment

$

Accumulated

other

comprehensive

income

$

Total

attributable

to the

Association

$

Noncontrolling

interest

$

Total

$

Balance - Beginning of year 14,094 70,444 60,154 357 145,049 2,123 147,172

Net income for the year 45,131 (22,288) (5,528) - 17,315 629 17,944

Investment in property, plant and equipment - net (14,553) - 14,553 - - - -

Transfers for future expenditures - net (40,000) 40,000 - - - - -

Other comprehensive income - - - (7,879) (7,879) - (7,879)

Balance - End of year 4,672 88,156 69,179 (7,522) 154,485 2,752 157,237
CSA Group Annual Report 2012 | 2013 15

Canadian Standards Association

Consolidated Statements of Income

For the years ended March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

The accompanying notes are an integral part of these consolidated financial statements.

2013

$

2012

$

Revenue 255,613 238,533

Operating expenses

Salaries and benefits 151,520 134,011

Professional, agency and consulting 26,866 27,459

Travel 16,467 15,682

Property related costs 11,997 10,667

Sales, marketing and communication 7,060 6,846

Depreciation 7,202 5,528

Office, laboratory and computer 5,998 4,970

Material costs 6,205 4,187

Amortization of intangible assets 1,385 1,267

Other operating expenses 13,580 11,452

248,280 222,069

Income from operations 7,333 16,464

Non-operating income (expense)

Finance income (note 13) 9,234 3,141

Finance costs (note 14) (463) (292)

Share of loss in associate (366) (328)

Foreign income taxes (946) (1,041)

Net income for the year 14,792 17,944

Net income attributable to

The Association 14,343 17,315

Non-controlling interest 449 629

14,792 17,944
CSA Group Annual Report 2012 | 2013 16

Canadian Standards Association

Consolidated Statements of Comprehensive Income

For the years ended March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

The accompanying notes are an integral part of these consolidated financial statements.

2013

$

2012

$

Net income for the year 14,792 17,944

Other comprehensive income (loss)

Exchange differences on translation of net assets of foreign operations (48) 96

Gains and losses on derivatives designated in cash flow hedges in

prior years - (357)

Actuarial loss on employee future benefits (12,905) (7,618)

(12,953) (7,879)

Total comprehensive income for the year 1,839 10,065

Comprehensive income attributable to

The Association 1,390 9,436

Non-controlling interest 449 629

1,839 10,065
CSA Group Annual Report 2012 | 2013 17

Canadian Standards Association

Consolidated Statements of Cash Flows

For the years ended March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

The accompanying notes are an integral part of these consolidated financial statements.

2013

$

2012

$

Cash provided by (used in)

Operating activities

Net income for the year 14,792 17,944

Add (deduct): Items not involving cash

Share of loss in associate 366 328

Depreciation 7,202 5,528

Amortization of intangible assets 1,385 1,267

Loss on disposal of property, plant and equipment 71 51

Realized and unrealized gain (loss) on short-term investments 8,438 (1,394)

Pension and employee future benefit expense 11,162 9,972

Amortization of lease inducement (25) (26)

43,391 33,670

Net change in non-cash working capital balances related to operations

(note 17) 3,751 4,086

Pension plan contributions (12,738) (7,165)

Employee future benefit payments (1,227) (1,215)

Cash provided by operating activities 33,177 29,376

Investing activities

Purchase of property, plant and equipment (12,338) (10,806)

Purchase of intangible assets (1,552) (2,287)

Proceeds on disposal of property, plant and equipment - 15

Purchase of short-term investments (43,877) (54,675)

Proceeds on sale of short-term investments 31,500 41,161

Investment in associate company - (714)

Acquisition of subsidiaries (note 11) (5,540) (23,729)

Cash used in investing activities (31,807) (51,035)

Financing activities

Proceeds from finance leases 108 786

Proceeds (repayment) of bank loan (note 12) (3,093) 22,474

Cash (used in) provided by financing activities (2,985) 23,260

Net (decrease) increase in cash and cash equivalents during

the year (1,615) 1,601

Cash and cash equivalents - Beginning of year 15,806 14,205

Cash and cash equivalents - End of year 14,191 15,806
CSA Group Annual Report 2012 | 2013 18

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(1)

1 General information

The consolidated financial statements of the Canadian Standards Association (or, the Association) and its

subsidiaries (together, CSA Group) for the year ended March 31, 2013 were approved in accordance with a

resolution of the Board of Directors dated May 17, 2013. The Association is domiciled in Canada. The registered

head office is located at 178 Rexdale Blvd., Toronto, Ontario, Canada, M9W 1R3.

The Association was originally incorporated by Letters Patent dated January 21, 1919 under the federal laws of

Canada and was continued under the Canada Not-for-profit Corporations Act (the Act) pursuant to a Certificate

of Continuance issued on August 17, 2012. The Association is an independent membership-based corporation

without share capital, shareholders or other owners that is governed by the Act.

CSA Group is engaged in the development of consensus-based standards in the areas of safety, quality and

performance as well as the testing and certification of conformance to various standards that serve business,

industry, government and consumers. Testing and certification services extend worldwide to medical, electrical,

mechanical, plumbing, gas and a variety of other products. Similarly, consumer product evaluation, inspection

and advisory services are provided for retailers and manufacturers.

CSA Group’s Vision and Purpose is “a better, safer, more sustainable world where standards work for people

and business.”

2 Summary of significant accounting policies

Basis of preparation

The Association prepared its consolidated financial statements in accordance with Canadian generally accepted

accounting principles (GAAP) as defined in the Handbook of The Canadian Institute of Chartered Accountants

(CICA Handbook). In 2010, the CICA Handbook was revised to incorporate International Financial Reporting

Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and to allow private sector

not-for-profit organizations to apply these standards effective for years beginning on or after January 1, 2012.

Accordingly, these are the Association’s first annual consolidated financial statements prepared in accordance

with IFRS as issued by the IASB. In these financial statements, the term Canadian GAAP refers to Canadian

GAAP before the adoption of IFRS.

The consolidated financial statements have been prepared in compliance with IFRS. Subject to certain

transition exemptions and exceptions disclosed in note 22, the Association has consistently applied the

accounting policies used in the preparation of its opening IFRS consolidated statement of financial position at

April 1, 2011 and throughout all periods presented, as if these policies had always been in effect. Note 22

discloses the impact of the transition to IFRS on the Association’s reported financial position and financial

performance, including the nature and effect of significant changes in accounting policies from those used in

the Association’s consolidated financial statements for the year ended March 31, 2012 prepared under Canadian

GAAP.

The consolidated financial statements have been prepared on a historical cost basis, except for derivative

financial instruments and short-term investments, which are measured at fair value.
CSA Group Annual Report 2012 | 2013 19

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(2)

The Association’s year-end occurs on the last Friday of March. For the current year, the actual year-end date is

March 29, 2013. For the prior year, the year-end date was March 30, 2012. For the purposes of these

consolidated financial statements, March 31 will refer to the actual dates mentioned above.

Basis of consolidation

The consolidated financial statements comprise the financial statements of the Association and its subsidiaries.

Subsidiaries are those entities the Association controls by having the power to govern the financial and

operating policies. Subsidiaries are fully consolidated from the date on which control is obtained by the

Association and de-consolidated from the date that control ceases. Intercompany transactions, balances,

income and expenses, and profits and losses are eliminated.

Non-controlling interests represent equity interests in subsidiaries owned by outside parties. The share of net

assets of subsidiaries attributable to non-controlling interests is presented as a component of net assets. Their

share of net income and comprehensive income is recognized directly in net assets. Changes in the parent

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

transactions.

Foreign currency translation

The Association’s consolidated financial statements are presented in Canadian dollars (presentation currency),

which is also the Association’s functional currency.

The financial statements of entities that have a functional currency different from that of the Association are

translated into Canadian dollars as follows: assets and liabilities - at the closing rate at the date of the

consolidated statements of financial position; and income and expenses - at the average rate of the period (as

this is considered a reasonable approximation of the actual rates prevailing at the transaction dates). All

resulting foreign exchange gains and losses on translation are recognized in other comprehensive income as

cumulative translation adjustments.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at

the dates of the transactions. Monetary assets and liabilities are translated at the exchange rate prevailing as at

the consolidated statements of financial position dates. Foreign exchange gains and losses resulting from the

settlement of foreign currency transactions and from the translation of monetary assets and liabilities

denominated in currencies other than the entities’ functional currency are recognized in the consolidated

statements of income.

Business combinations

CSA Group follows the acquisition accounting method in accounting for acquisitions. The cost of an acquisition

is measured as the fair value of the assets given and liabilities incurred or assumed at the date of exchange.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are

initially measured at fair value at the acquisition date. The excess of the cost of acquisition over the fair value of

the Association’s share of the identifiable net assets acquired, if any, is recorded as goodwill. If the cost of

acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized
CSA Group Annual Report 2012 | 2013 20

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(3)

directly in the consolidated statements of income. Transaction costs are expensed as they are incurred and are

included in other operating expenses within the consolidated statements of income.

Cash and cash equivalents

Cash and cash equivalents in the consolidated statements of financial position comprise cash at banks and on

hand, money market securities, and short-term deposits with an original maturity of three months or less.

Inventories

Inventories are stated at the lower of cost, determined on a first-in, first-out basis, and net realizable value. Net

realizable value is the estimated selling price less estimated selling expenses incurred in the ordinary course of

business.

Financial instruments

Financial assets and liabilities are recognized when CSA Group becomes a party to the contractual provisions of

the financial instrument. Financial assets are derecognized when the rights to receive cash flows from the assets

have expired or have been transferred and CSA Group has transferred substantially all risks and rewards of

ownership. Financial liabilities are derecognized when the obligation specified in the contract is discharged,

cancelled or expires.

CSA Group’s financial assets include cash and cash equivalents, short-term investments, trade and other

accounts receivable and derivative financial instruments.

CSA Group’s financial liabilities include trade and other payables, bank loans, customer deposits, finance leases

and derivative financial instruments.

At initial recognition, CSA Group classifies its financial instruments in the following categories:

a) Financial assets and liabilities at fair value through profit or loss: A financial asset or liability is classified

in this category if acquired principally for the purpose of selling or repurchasing in the short-term. This

category includes forward foreign exchange contracts entered into by CSA Group that are not designated as

hedging instruments in hedge relationships and are classified as held-for-trading. CSA Group has

designated its short-term investments at fair value through profit or loss with the changes charged to the

consolidated statements of income.

Financial instruments in this category are recognized initially and subsequently at fair value. Transaction

costs are expensed in the consolidated statements of income. Gains and losses arising from changes in fair

value are presented in the consolidated statements of income in the period in which they arise. Nonderivative financial assets and liabilities recognized at fair value through profit or loss are classified as

current except for the portion expected to be realized or paid beyond 12 months of the consolidated

statement of financial position date, which are classified as long-term.
CSA Group Annual Report 2012 | 2013 21

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(4)

b) Loans and receivables: Loans and receivables are non-derivative financial assets with fixed or

determinable payments that are not quoted in an active market. CSA Group’s loans and receivables

comprise trade and other accounts receivable and cash and cash equivalents, and are included in current

assets and liabilities due to their short-term nature. Loans and receivables are initially recognized at the

amount expected to be received, less, when material, a discount to reduce the loans and receivables to fair

value. Subsequently, loans and receivables are measured at amortized cost using the effective interest

method less a provision for impairment.

c) Financial liabilities at amortized cost: Trade and other payables, bank loans and customer deposits are

initially recognized at the amount required to be paid, less, when material, a discount to reduce the

financial liabilities at amortized cost to fair value. Subsequently, financial liabilities at amortized cost are

measured at amortized cost using the effective interest method. Bank loans are recognized initially at fair

value, net of any transaction costs incurred, and subsequently at amortized cost using the effective interest

method. These are classified as current liabilities if payment is due within 12 months. Otherwise, they are

presented as non-current liabilities.

Impairment of financial assets at amortized cost

At each reporting date, CSA Group assesses whether there is objective evidence that a financial asset is

impaired.

The criteria used to determine objective evidence of an impairment loss include:

i) significant financial difficulty of the obligor;

ii) delinquencies in interest or principal payments; and

iii) the probability the borrower will enter bankruptcy or other financial reorganization.

If such evidence exists, CSA Group recognizes an impairment loss as the difference between the amortized cost

of the loan or receivable and the present value of the estimated future cash flows, discounted using the

instrument’s original effective interest rate. The carrying amount of the asset is reduced by this amount either

directly or indirectly through the use of an allowance account. Impairment losses on financial assets carried at

amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be

related objectively to an event occurring after the impairment was recognized.

Impairment of non-financial assets

CSA Group assesses at each reporting date whether there is an indication that a non-financial asset may be

impaired. If any indication exists, or when annual impairment testing for a non-financial asset is required, CSA

Group estimates the asset’s recoverable amount. For the purpose of measuring recoverable amounts, assets are

grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units or

CGUs). An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use. Where

the carrying amount of a non-financial asset exceeds its recoverable amount, the non-financial asset is

considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated
CSA Group Annual Report 2012 | 2013 22

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(5)

future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to

sell, a discounted cash flow model is used. Impairment losses are recognized in the consolidated statements of

income in those expense categories consistent with the function and nature of the impaired asset.

Investments in associates

Associates are entities over which the Association has significant influence, but not control. The Association

accounts for its investment in associates using the equity method. The Association’s share of profits or losses,

and of other comprehensive income (loss) of associates is recognized in income from operations and in other

comprehensive income, respectively.

Unrealized gains on transactions between the Association and an associate are eliminated to the extent of the

Association’s interest in the associate. Unrealized losses are also eliminated unless the transaction provides

evidence of an impairment of the asset transferred. Dilution gains and losses arising from changes in interests

in investments in associates are recognized in the consolidated statements of income.

Property, plant, and equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated

impairment losses, if any. Cost includes expenditures that are directly attributable to the acquisition of the

asset. When significant parts of property, plant and equipment are required to be replaced in intervals, CSA

Group derecognizes and recognizes such parts as individual assets with specific useful lives and depreciation,

respectively. All repair and maintenance costs are recognized in the consolidated statements of income as

incurred.

Depreciation is calculated over the estimated useful life of the asset as follows:

Buildings components 5 to 50 years, straight-line

Leasehold improvements straight-line over expected lease term

Equipment 10% to 30 % declining balance,

5 to 10 years straight-line

Computer equipment 3 to 8 years straight-line

An item of property, plant and equipment is derecognized on disposal or when no future economic benefits are

expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the

difference between the net disposal proceeds and the carrying amount of the asset) is included in the

consolidated statements of income when the asset is derecognized.

The assets’ residual values, useful lives, and methods of depreciation are reviewed at each financial year-end

and adjusted prospectively, if appropriate.

Leases

Finance leases, which transfer to CSA Group substantially all of the risks and benefits incidental to ownership of

the leased item, are capitalized at the commencement of the lease at the fair value of the leased property or, if
CSA Group Annual Report 2012 | 2013 23

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(6)

lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance

charges and reduction of lease liability so as to achieve a constant rate of interest on the remaining balance of

the liability. Finance charges are recognized in the consolidated statements of income.

Leased assets are depreciated over the shorter of the useful life of the asset and the lease term.

Operating lease payments are recognized as an expense in the consolidated statements of income on a straightline basis over the lease term.

Lease inducements

Lease inducements represent leasehold improvements received from a landlord and the value of rent-free

periods. Lease inducements are amortized on a straight-line basis over the estimated term of the lease and the

amortization is recorded as a reduction of rent expense.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which

are assets that take a substantial period of time to get ready for their intended use, are added to the cost of those

assets, until such time as the assets are substantially ready for their intended use. All other borrowing costs are

recognized in the consolidated statements of income in the period in which they are incurred.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,

intangible assets are carried at cost less accumulated amortization and accumulated impairment losses.

Internally generated intangible assets are capitalized if certain criteria including technical feasibility,

availability for use, and probable future economic benefit, are met. Accreditation agreements are subject to

regular compliance inspections and audits and requalification audits. Accreditations can be revoked in

instances of unaddressed non-conformances, which have a very low probability of occurring. Hence, these

assets are considered to have an indefinite life.

Definite-lived intangible assets

Customer relationships and lists straight-line over expected useful lives ranging from 15 to 22 years

Agency agreements straight-line over expected useful life of 5 years

Non-compete contracts straight-line over expected useful lives ranging from 2 to 5 years

Computer software straight-line over expected useful lives ranging from 3 to 10 years

Indefinite-lived intangible assets

Accreditation agreements indefinite life

Goodwill

Goodwill represents the excess of the cost of an acquired entity over the fair value of the identifiable assets

acquired and liabilities assumed less any subsequent writedowns for impairment. Goodwill is allocated to each

cash-generating unit or group of cash-generating units that are expected to benefit from the related business

combination. Goodwill is subject to an annual impairment test or whenever events or circumstances indicate

the carrying amount may not be recoverable. Goodwill impairment is assessed based on a comparison of the
CSA Group Annual Report 2012 | 2013 24

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(7)

recoverable amount (the higher of the fair value less cost to sell or value in use) of a cash-generating unit to the

underlying carrying value of the cash-generating unit’s net assets, including goodwill. When the carrying

amount of the cash-generating unit exceeds its recoverable amount, the recoverable amount of the cashgenerating unit’s goodwill is compared with its carrying amount to measure the amount of impairment, if any.

Provisions

Provisions are recognized when CSA Group: (i) has a present obligation, legal or constructive, as a result of a

past event; (ii) it is probable that an outflow of resources embodying economic benefits will be required to settle

the obligation; and (iii) a reliable estimate can be made of the amount of the obligation. Where CSA Group

expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but

only when the reimbursement is virtually certain. The provision is presented in the consolidated statements of

income net of any reimbursement. If the effect of the time value of money is material, provisions are discounted

using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting

is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous

contract is considered to exist where CSA Group has a contract under which the unavoidable costs of meeting

the obligations under the contract exceed the economic benefits expected to be received.

Foreign income taxes

The Association and its US subsidiary are not subject to income taxes, while other foreign subsidiaries are

subject to income tax in their respective jurisdictions.

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected

to be recovered from or paid to foreign taxation authorities. The tax rates and tax laws used to compute the

amount are those that are enacted or substantively enacted, by the reporting date, in foreign jurisdictions where

CSA Group operates and generates taxable income.

Current income tax relating to items recognized directly in net assets or other comprehensive income is

recognized in net assets or other comprehensive income and not in the consolidated statements of income.

Management periodically evaluates positions taken in the tax returns with respect to situations in which

applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

In general, deferred income tax is recognized in respect of temporary differences arising between the tax bases

of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred

income tax is not recognized if it arises from the initial recognition of goodwill or the initial recognition of an

asset or liability in a transaction other than a business combination that, at the time of the transaction, affects

neither the accounting nor taxable profit nor loss. Deferred income tax is provided on temporary differences

arising on investments in subsidiaries and associates, except, in the case of subsidiaries, where the timing of the

reversal of the temporary difference is controlled by CSA Group and it is probable the temporary difference will

not reverse in the foreseeable future.
CSA Group Annual Report 2012 | 2013 25

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(8)

Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted

or substantively enacted at the consolidated statements of financial position dates and are expected to apply

when the deferred tax asset is realized or liability is settled. Deferred tax assets are recognized to the extent that

it is probable the future taxable profit will be available against which the deductible temporary differences can

be utilized.

Revenue recognition

Revenue, which is principally from testing, certification, registration, and other services, is recorded when the

amount of revenue can be reliably measured, if it is probable that future economic benefits will flow to the

entity, or when specific criteria have been met for each of the activities as described below. Revenue from the

sale of goods is recognized when they are shipped. Annual fees are recorded as revenue in the period to which

they relate. Standards development and other revenues are recognized based on percentage of completion.

Amounts received and receivable for services not yet rendered, or annual fees relating to a future period, are

included in current liabilities as customer deposits or deferred revenue, respectively, and are recognized as

revenue when earned according to the Association’s revenue recognition policy.

CSA Group assesses its revenue arrangements against specific criteria in order to determine whether it is acting

as principal or agent. CSA Group has concluded it is acting as a principal in all of its revenue arrangements.

The following specific recognition criteria must also be met before revenue is recognized:

 CSA Group has transferred to the buyer the significant risks and rewards of ownership of the goods or

services;

 CSA Group retains neither continuing managerial involvement to the degree usually associated with

ownership nor effective control over the goods or services sold;

 the amount of revenue can be measured reliably;

 there is probability that the economic benefits associated with the transaction will flow to CSA Group; and

 the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Investment income, which consists of interest, dividends, and realized and unrealized gains and losses, is

recorded as finance income in the consolidated statements of income.

Interest income

Interest income is recognized as interest accrues using the effective interest rate method, which is the rate that

exactly discounts estimated future cash receipts through the expected life of the financial instrument to the net

carrying amount of the financial asset.
CSA Group Annual Report 2012 | 2013 26

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(9)

Dividend income

Dividend income is recognized when declared.

Pensions and employee future benefits

CSA Group operates defined benefit pension plans and defined contribution pension plans that require

contributions to be made to them. The cost of defined contribution pension plans is charged to the consolidated

statements of income as they are earned by the beneficiary. The cost of providing benefits under the defined

benefit plans is determined using the projected unit credit method. The related pension asset or liability

recognized in the consolidated statements of financial position is the present value of the defined benefit

obligation at the consolidated statements of financial position dates less the fair value of plan assets. The

present value of the defined benefit obligation is determined by discounting the estimated future cash outflows

using interest rates of high quality corporate bonds that have terms to maturity approximating the terms of the

related pension liability.

Actuarial gains and losses are recognized in full in the period in which they occur, in other comprehensive

income. Current service cost, past service costs, actual return on plan assets and interest expense arising on the

pension liability are included in the consolidated statements of income.

For funded plans, surpluses are recognized only to the extent that the surplus is considered recoverable.

Recoverability is primarily based on the extent to which CSA Group can unilaterally reduce future contributions

to the plan.

CSA Group has also agreed to provide post-employment health-care benefits to certain employees. These postemployment health-care benefits are unfunded.

Employee compensated balances, such as sick leave, that accumulate but do not vest are recognized in the

period in which employees have earned the related benefits in return for their service. The accumulated benefit

is discounted to determine its present value as at the consolidated statements of financial position dates.

Internally reserved net assets

Certain net assets are restricted by the Board of Directors for specific purposes relating to the development of

standards, research projects and new standards applications. Income generated from the internally reserved net

assets is included in unreserved net assets.

3 Significant accounting judgments, estimates and assumptions

The preparation of the Association’s consolidated financial statements requires management to make

judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and

liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty

about these assumptions and estimates could result in outcomes that require a material adjustment to the

carrying amount of the applicable asset or liability in future periods.
CSA Group Annual Report 2012 | 2013 27

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(10)

The key estimates and assumptions concerning the future and other key sources of estimation uncertainty at

the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets

and liabilities within the next financial year are discussed below.

Business combinations - allocation of purchase price

In business combinations, the Association acquires assets and liabilities of an acquired entity. The allocation of

the purchase price involves judgment in determining the fair value of identifiable assets acquired and liabilities

and contingent liabilities assumed, if any. The determination of these fair values involves a variety of estimates

and assumptions including revenue growth rates, expected operating margins, and discount rates. These

estimates and assumptions determine the amount allocated to other identifiable intangible assets and goodwill,

as well as the amortization period for identifiable intangible assets with finite lives.

Impairment of non-financial assets

CSA Group reviews goodwill and indefinite-lived intangible assets at least annually and other non-financial

assets when there is any indication that the asset might be impaired. CSA Group has estimated the value in use

for any non-financial asset or cash-generating unit to which goodwill is allocated or where there is an indication

of impairment. The value in use calculation is based on a discounted cash flow model, which requires

assumptions about future cash flows, margins and discount rates. Refer to note 9 for more details about

methods and assumptions used in these models.

Employee future benefits

The cost of defined benefit pension plans and other post-employment medical benefits and the present value of

pension obligations are determined using actuarial valuations. An actuarial valuation involves making various

assumptions. These include the determination of the discount rate, future salary increases, mortality rates,

medical cost trend rate, and future pension increases. Due to the complexity of the valuation, the underlying

assumptions, and its long-term nature, a defined benefit obligation is highly sensitive to changes in these

assumptions.

In determining the appropriate discount rate, management considers the interest rates of corporate bonds in

Canada with at least an AA rating, with extrapolated maturities corresponding to the expected duration of the

defined benefit obligation. The underlying bonds are further reviewed for quality, and those having excessive

credit spreads are removed from the population of bonds on which the discount rate is based, on the basis that

they do not represent high quality bonds.

The mortality rate is based on publicly available mortality tables for Canada. Future salary increases and

pension increases are based on expected future inflation rates for Canada and on management’s best estimates.

Refer to note 18 for more details on these assumptions.

Allowance for doubtful accounts

CSA Group must make an assessment of whether trade receivables and unbilled revenues are recoverable from

clients. The allowance estimate is based on management’s best assessment of the collectibility of the accounts
CSA Group Annual Report 2012 | 2013 28

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(11)

taking into consideration client creditworthiness, current economic trends and past experience. If future

collections differ from estimates, future earnings would be adjusted accordingly.

Revenue recognition

In determining the percentage of completion, management must estimate total contract costs to complete in

order to assess the progress of the project, the estimated outcome and whether a provision is necessary to

reflect anticipated contract losses. The estimates influence the timing of revenue recognition. The estimated

costs to complete are determined using management’s best estimates of the outcome of projects.

4 Accounting standards issued

Unless otherwise noted, the following revised standards and amendments are effective for annual periods

beginning on or after January 1, 2013 with earlier application permitted.

During the year, the Association early adopted the following amended standards:

a) IFRS 7, Financial Instruments - Disclosures. During the year ended March 31, 2013, the Association

adopted the amendments to IFRS 7, Financial Instruments - Disclosures. The amendment requires

additional disclosure in respect of risks arising from transferred financial assets. The adoption of the

amendment had no effect on the Association’s disclosures.

b) IAS 19 (REV 2011) Employee Benefits. During the year ended March 31, 2013, the Association early

adopted the amendments to IAS 19. Accordingly, the Association recognizes all actuarial gains and losses

and past service costs immediately, replaced interest costs and expected return on plan assets with a net

interest amount that is calculated by applying the discount rate to the net defined benefit liability (asset)

and added some disclosures not previously required under IAS 19.

The Association has not yet assessed the impact of the following standards and amendments:

a) IFRS 10, Consolidated Financial Statements, requires an entity to consolidate an investee when it has

power over the investee, the entity is exposed, or has rights, to variable return from its involvement with

the investee and has the ability to affect those returns through its power over the investee. Under existing

IFRS, consolidation is required when an entity has the power to govern the financial and operating policies

of an entity so as to obtain benefits from its activities. IFRS 10 replaces SIC-12, Consolidation - Special

Purposes Entities and parts of IAS 27, Consolidated and Separate Financial Statements.

b) IFRS 12, Disclosure of Interests in Other Entities, establishes disclosure requirements for interests in other

entities, such as subsidiaries, joint arrangements, associates, and unconsolidated structured entities. The

standard carries forward existing disclosures and also introduces significant additional disclosures that

address the nature of, and risks associated with, an entity’s interests in other entities.

c) IFRS 13, Fair Value Measurement, is a comprehensive standard for fair value measurement and disclosure

for use across all IFRS standards. The new standard clarifies that fair value is the price that would be

received to sell an asset, or paid to transfer a liability in an orderly transaction between market
CSA Group Annual Report 2012 | 2013 29

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(12)

participants, at the measurement date. Under existing IFRS, guidance on measuring and disclosing fair

value is dispersed among the specific standards requiring fair value measurements and does not always

reflect a clear measurement basis or consistent disclosure.

d) There have been amendments to existing standards, including IAS 27, Separate Financial Statements and

IAS 28, Investments in Associates and Joint Ventures. IAS 27 addresses accounting for subsidiaries, jointly

controlled entities and associates in non-consolidated financial statements. IAS 28 has been amended to

include joint ventures in its scope and to address the changes in IFRS 10 - 13.

e) IAS 1, Presentation of Financial Statements, has been amended to require entities to separate items

presented in other comprehensive income into two groups, based on whether or not items may be recycled

in the future. Entities that choose to present other comprehensive income items before tax will be required

to show the amount of tax related to the two groups separately. The amendment is effective for annual

periods beginning on or after July 1, 2012 with earlier application permitted.

f) IFRS 9, Financial Instruments, was issued in November 2009 and addresses classification and

measurement of financial assets. It replaces the multiple category and measurement models in IAS 39 for

debt instruments with a new mixed measurement model with only two categories: amortized cost and fair

value through profit or loss. IFRS 9 also replaces the models for measuring equity instruments. Such

instruments are either recognized at fair value through profit or loss or at fair value through other

comprehensive income. Where equity instruments are measured at fair value through other

comprehensive income, dividends are recognized in profit or loss to the extent they do not clearly

represent a return of investment; however, other gains and losses (including impairments) associated with

such instruments remain in accumulated comprehensive income indefinitely. This standard will be

effective for the Association’s year ending March 31, 2015.

Requirements of financial liabilities were added to IFRS 9 in October 2010 and they largely carried

forward existing requirements in IAS 39, Financial Instruments - Recognition and Measurement, except

that fair value changes due to credit risk for liabilities designated at fair value through profit and loss are

generally recorded in other comprehensive income.

5 Short-term investments

March 31,

2013

$

March 31,

2012

$

April 1,

2011

$

(Unaudited)

Bonds and guaranteed investment certificates 14,802 47,654 35,785

Pooled funds 117,693 56,646 55,462

Equities - 22,914 20,520

Cash and cash equivalents held by brokers - 1,342 2,239

132,495 128,556 114,006
CSA Group Annual Report 2012 | 2013 30

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(13)

6 Trade and other receivables

March 31,

2013

$

March 31,

2012

$

April 1,

2011

$

(Unaudited)

Trade and other receivables 45,883 44,064 39,848

Unbilled services 8,563 8,199 5,992

Other receivables 1,351 1,032 637

Foreign exchange option contracts (109) 224 681

Receivable from related party 102 - -

Allowance for doubtful accounts (1,552) (1,534) (1,380)

54,238 51,985 45,778

The roll forward for allowance for doubtful accounts is as follows:

2013

$

2012

$

Opening balance 1,534 1,380

Additions to provisions 912 1,420

Amount written off (894) (1,266)

1,552 1,534

The aging analysis of trade receivables past due but not impaired is as follows:

31 to

60 days

$

61 to

90 days

$

Over 90

days

$

Total

$

March 31, 2013 13,819 2,996 4,407 21,222

March 31, 2012 10,305 3,555 4,573 18,433

The aging analysis of the allowance for doubtful accounts is as follows:

31 to

60 days

$

61 to

90 days

$

Over 90

days

$

Total

$

March 31, 2013 100 300 1,152 1,552

March 31, 2012 80 300 1,154 1,534
CSA Group Annual Report 2012 | 2013 31

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(14)

7 Inventories

March 31,

2013

$

March 31,

2012

$

April 1,

2011

$

(Unaudited)

Finished goods for resale 561 573 657

The cost of inventories recognized as an expense and included in the consolidated statements of income was

$1,527 (March 31, 2012 - $1,697).

8 Property, plant, and equipment

Property, plant and equipment in the consolidated statements of financial position are as follows:

Land

$

Buildings

$

Leaseholds

$

Equipment

$

Computer

equipment

$

Total

$

At April 1, 2011 (Unaudited)

Deemed cost 9,153 27,863 1,948 20,757 1,603 61,324

Accumulated depreciation - - (52) (848) (270) (1,170)

Net book value 9,153 27,863 1,896 19,909 1,333 60,154

Year ended March 31, 2012

Opening net book value 9,153 27,863 1,896 19,909 1,333 60,154

Additions - 557 2,267 10,504 1,516 14,844

Disposals - - - (54) (100) (154)

Depreciation - (1,729) (431) (2,788) (580) (5,528)

Exchange differences - - 1 (141) 3 (137)

Closing net book value 9,153 26,691 3,733 27,430 2,172 69,179

At March 31, 2012

Cost or valuation 9,153 28,420 4,215 31,072 2,965 75,825

Accumulated depreciation - (1,729) (482) (3,642) (793) (6,646)

Net book value 9,153 26,691 3,733 27,430 2,172 69,179

Year ended March 31, 2013

Opening net book value 9,153 26,691 3,733 27,430 2,172 69,179

Additions - 1,402 343 9,880 1,006 12,631

Disposals - - - (44) - (44)

Depreciation - (1,923) (669) (3,912) (698) (7,202)

Exchange differences - - - (78) (7) (85)

Closing net book value 9,153 26,170 3,407 33,276 2,473 74,479

At March 31, 2013

Cost or valuation 9,153 29,686 4,558 40,599 3,953 87,949

Accumulated depreciation - (3,516) (1,151) (7,323) (1,480) (13,470)

Closing net book value 9,153 26,170 3,407 33,276 2,473 74,479
CSA Group Annual Report 2012 | 2013 32

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(15)

Included in equipment at March 31, 2013 was an amount of $4,024 (March 31, 2012 - $1,461; April 1, 2011 -

$207) relating to an expenditure for plant equipment in the course of construction. These assets under

construction relate to various projects for renovations, and building of new laboratory equipment. No

depreciation was provided on these assets since they were not available-for-use.

9 Intangible assets and goodwill

Intangible assets and goodwill in the consolidated statements of financial position were as follows:

Customer

lists

$

Computer

software

$

Other

$

Accreditation

agreements

$

Total

intangibles

$

Goodwill

$

At April 1, 2011 (Unaudited)

Opening net book value 1,368 2,162 1,766 7,045 12,341 4,188

Accumulated amortization (160) - (713) - (873) -

Net book value 1,208 2,162 1,053 7,045 11,468 4,188

Year ended March 31, 2012

Opening net book value 1,208 2,162 1,053 7,045 11,468 4,188

Additions 8,302 2,289 429 1,698 12,718 8,484

Amortization (274) (558) (435) - (1,267) -

Exchange differences (257) - 69 50 (138) (238)

Closing net book value 8,979 3,893 1,116 8,793 22,781 12,434

Year ended March 31, 2013

Opening net book value 8,979 3,893 1,116 8,793 22,781 12,434

Additions 1,290 1,621 139 - 3,050 3,481

Amortization (471) (500) (414) - (1,385) -

Exchange differences (213) - (26) (270) (509) (312)

Closing net book value 9,585 5,014 815 8,523 23,937 15,603

Included in intangible assets as at March 31, 2013 was an amount of $292 (March 31, 2012 - $457; April 1,

2011 - $856) relating to expenditure for computer software in the course of construction. These intangible

assets are not being amortized as they were not available-for-use.

Goodwill has been allocated to the following CGUs:

March 31,

2013

$

March 31,

2012

$

April 1,

2011

$

(Unaudited)

Sira group of companies 4,112 4,249 4,188

MTP/emitel group of companies 7,647 7,812 -

Other companies 3,844 373 -

15,603 12,434 4,188
CSA Group Annual Report 2012 | 2013 33

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(16)

In assessing the intangible assets and goodwill for impairment at March 31, 2013, March 31, 2012, and April 1,

2011, CSA Group compared the aggregate recoverable amount of the assets included in the above CGUs to their

respective carrying amounts. Recoverable amounts for CGUs tested have been determined based on the value in

the use of the CGUs using discounted cash flow projections approved by management. Key assumptions

included the following:

March 31,

2013

March 31,

2012

April 1,

2011

(Unaudited)

Sira

MTP/

emitel Sira Sira

Average growth rate -

< 5 years 8.3% 7.1% 8.5% 9.0%

Average growth rate -

> 5 years 2.0% 2.0% 2.0% 2.0%

Discount rate 7.5% 7.5% 7.5% 7.5%

The above impairment tests resulted in no impairment at March 31, 2013, March 31, 2012 and April 1, 2011.

10 Investment in associate

The following summarizes the Association’s 37.5% share of assets, liabilities, revenues and profit or loss of CFV

Solar Test Laboratory Inc., a US company:

March 31,

2013

$

March 31,

2012

$

April 1,

2011

$

(Unaudited)

Assets 1,124 1,481 1,078

Liabilities 68 59 43

Revenues 289 301 -

Loss (366) (328) -
CSA Group Annual Report 2012 | 2013 34

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(17)

11 Business combinations

On November 15, 2012, a subsidiary of the Association acquired 100% of the assets and liabilities of Orb

Optronix, Inc. (Orb) for $5,540 cash. Orb is a light emitting diode (LED) test, measurement and engineering

services company based in the State of Washington, with an LED test lab capability and a skilled work force. A

summary of the fair value of assets acquired and liabilities assumed at the date of acquisition is approximately

as follows:

$

Current assets and liabilities 53

Property, plant and equipment 508

Intangible assets

Customer relationships 1,290

Other 208

Goodwill 3,481

Total assets acquired - net 5,540

CSA Group incurred acquisition costs of $266, which have been expensed in the consolidated statements of

income. For the period from November 15, 2012 to March 31, 2013, the operations of Orb have been integrated

into the other US operations of CSA Group and therefore separate revenues and income cannot be determined.

An estimate of Orb’s revenue and income for the period from April 1, 2012 to November 15, 2012 cannot be

determined and is not considered significant to these consolidated financial statements.

On April 5, 2011, the Association through its subsidiary, CSA Certification UK Limited, acquired 100% of the

common shares of INTRATEST GmbH (subsequently renamed CSA Group Switzerland GmbH), based in

Switzerland, for cash consideration of $1,385. On October 21, 2011, the Association through its subsidiary, CSA

Europe GmbH, acquired 100% of the common shares of Mikes-Testing Partners GmbH (MTP) and emitel AG

(emitel) based in Strasskirchen, Germany, for cash consideration of $22,344. MTP holds 90% interests in two

subsidiaries: MTP Japan and International Certification Management GmbH (ICM). emitel holds a 95%

interest in emitel Turkey and a 51% interest in emitel Hong Kong. CSA Group incurred acquisition costs of

$874, which have been expensed in the consolidated statements of income. For the period from acquisition to

March 31, 2012, revenues of $7,681 and income of $868 was recorded by CSA Group. If the Association had

owned these companies for the period from April 1, 2011 to March 31, 2012, CSA Group’s revenues and net

income would have been $17,147 and $2,012 higher, respectively.
CSA Group Annual Report 2012 | 2013 35

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(18)

A summary of the fair value of assets acquired and liabilities assumed at the date of the acquisitions is as

follows:

$

Current assets and liabilities - net of cash acquired 2,125

Property, plant and equipment 3,182

Other assets and liabilities - net (492)

Intangible assets

Accreditation agreements 1,698

Customer relationships 8,302

Other 431

Goodwill 8,483

Total assets acquired - net 23,729

12 Bank loan

In 2011, the Association and its subsidiaries entered into a €16,000 non-revolving reducing term loan with its

principal banker to assist in the acquisition of strategic companies. Quarterly repayments of €500 are required

over the eight-year term of the loan. Interest is charged at the rate of Euribor plus an agreed margin. The loan is

secured by a general security agreement and a first charge on the Association’s head office building located in

Toronto, Canada. The Association is in compliance with all its loan covenants as at March 31, 2013 and

March 31, 2012. The main covenant with the lender is to maintain a fixed charge coverage of not less than

1.50:1. The fair value of the long-term debt equals its carrying amount, as the impact of discounting is not

significant.

13 Finance income

2013

$

2012

$

Interest income 561 1,063

Net foreign exchange gains 235 852

Fair value gain on financial assets and liabilities 8,438 1,226

9,234 3,141

14 Finance costs

2013

$

2012

$

Interest on borrowings 437 276

Interest on finance leases 26 16

463 292
CSA Group Annual Report 2012 | 2013 36

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(19)

15 Fair values

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be

exchanged in a current transaction between willing parties, based on point-in-time estimates that may change

in subsequent reporting periods due to market conditions or other factors. Because of short-term maturities

and variable interest rates, the fair value of the financial assets and liabilities (except those measured at fair

value) approximates carrying value.

Fair value hierarchy

The Association uses the following hierarchy for determining and disclosing the fair value of financial

instruments by valuation technique:

 Level 1 - quoted (unadjusted) prices in active markets for identical assets or liabilities;

 Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or

liability, either directly (that is, as prices) or indirectly (that is, derived from prices); and

 Level 3 - inputs for the asset or liability that are not based on observable market data (that is, unobservable

inputs).

March 31,

2013

Level 1

$

Level 2

$

Level 3

$

Total

$

Short-term investments 14,802 117,693 - 132,495

Foreign exchange option contracts - 107 - 107

14,802 117,800 - 132,602

March 31,

2012

Level 1

$

Level 2

$

Level 3

$

Total

$

Short-term investments 71,910 56,646 - 128,556

Foreign exchange option contracts - 224 - 224

71,910 56,870 - 128,780
CSA Group Annual Report 2012 | 2013 37

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(20)

April 1,

2011

Level 1

$

Level 2

$

Level 3

$

Total

$

(Unaudited)

Short-term investments 58,544 55,462 - 114,006

Foreign exchange option contracts - 1,038 - 1,038

58,544 56,500 - 115,044

16 Trade and other payables

March 31,

2013

$

March 31,

2012

$

April 1,

2011

$

(Unaudited)

Trade payables 15,427 16,244 9,786

Accrued expenses 27,921 23,860 23,603

43,348 40,104 33,389

17 Net change in non-cash working capital balances

2013

$

2012

$

Trade and other receivables (1,717) (3,984)

Inventories 83 893

Prepaid expenses (1,462) (915)

Trade and other payables 3,462 3,313

Deferred revenue 2,853 4,324

Customer deposits 666 595

Provisions (134) (140)

3,751 4,086

Supplemental cash flow information

Income taxes paid 1,046 865

(Decrease) increase in derivative assets included in accounts

receivable 333 (814)

18 Employee future benefits

The Association sponsors various post-employment benefit plans as follows: defined contribution pension

plans, defined benefit pension plans, and plans that provide extended health-care coverage to employees.

Defined benefit pension benefits are based on length of service and final average earnings. Pension payments

for all defined benefit plans, except one, are partially indexed to cost of living increases after retirement.
CSA Group Annual Report 2012 | 2013 38

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(21)

During the year, the Association elected to fund all pension plans. This required an initial contribution of

$6,324 for the one plan that was not funded previously.

The amounts recognized in the consolidated statements of financial position and consolidated statements of

income are as follows:

March 31,

2013

$

March 31,

2012

$

April 1,

2011

$

(Unaudited)

Consolidated statements of financial position

Accrued pension benefit asset 3,639 4,311 5,263

Future employee benefit liability 53,182 43,752 35,494

Consolidated statements of income and

comprehensive income

Defined benefit pension plans 13,410 8,117 -

Defined contribution pension plans 1,003 843 -

Future employee benefit plans 10,657 9,473 -

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

March 31,

2013

March 31,

2012

April 1,

2011

(Unaudited)

Defined

benefit

pension

plans

$

Other

benefit

plans

$

Defined

benefit

pension

plans

$

Other

benefit

plans

$

Defined

benefit

pension

plans

$

Other

benefit

plans

$

Present value of obligations (275,385) (53,182) (238,602) (43,752) (203,853) (35,494)

Fair value of plan assets 286,377 - 258,959 - 260,076 -

Effect of pension asset limit (7,353) - (16,046) - (50,960) -

3,639 (53,182) 4,311 (43,752) 5,263 (35,494)
CSA Group Annual Report 2012 | 2013 39

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(22)

The movement in the accrued pension benefit asset (employee future benefits liability) over the year is as

follows:

2013 2012

Defined

benefit

pension plans

$

Other

benefit

plans

$

Defined

benefit

pension plans

$

Other

benefit

plans

$

As at April 1 4,311 (43,752) 5,263 (35,494)

Current service cost (6,620) (2,803) (6,235) (2,239)

Interest cost 418 (2,157) 585 (2,026)

Employee contributions 12,738 - 7,164 -

Remeasurements

Return on plan assets

(excluding interest

income) 11,225 - (16,416) -

Effect of changes

In financial

assumptions (26,999) (5,692) (23,847) (5,058)

From experience

adjustments (926) (5) - (150)

Benefits paid - 1,227 - 1,215

Past-service costs - - (56) -

Effect of pension asset limit

(excluding interest) 9,492 - 37,853 -

As at March 31 3,639 (53,182) 4,311 (43,752)

The movement in the fair value of the plan assets over the year is as follows:

Defined benefit pension plans

2013

$

2012

$

As at April 1 258,959 260,076

Interest income 12,762 15,056

Remeasurements

Return on plan assets (excluding interest income) 11,561 (16,416)

Employer contributions 12,738 7,164

Employee contributions 1,927 2,125

Benefits paid (10,664) (8,205)

Administration expenses (906) (841)

As at March 31 286,377 258,959
CSA Group Annual Report 2012 | 2013 40

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(23)

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

2013 2012

Defined

benefit

pension plans

$

Other

benefit

plans

$

Defined

benefit

pension plans

$

Other

benefit

plans

$

Current service cost 6,620 2,803 6,236 2,239

Interest cost (418) 2,157 (585) 2,026

Past-service cost - - 56 -

As at March 31 6,202 4,960 5,707 4,265

The amounts recognized in the consolidated statements of comprehensive income are as follows:

2013 2012

Defined

benefit

pension plans

$

Other

benefit

plans

$

Defined

benefit

pension plans

$

Other

benefit

plans

$

Actuarial loss 16,700 5,697 40,263 5,208

Limit on pension asset (9,492) - (37,853) -

7,208 5,697 2,410 5,208

The principal actuarial assumptions used were as follows:

2013 2012

Defined

benefit

pension plans

%

Other

benefit

plans

%

Defined

benefit

pension plans

%

Other

benefit

plans

%

Discount rate 4.29 4.30 4.99 5.00

Inflation rate 2.20 n/a 2.20 n/a

Future salary increases 3.50 3.50 3.50 3.50

Initial health-care cost trend

rate - 4.50 - 4.50

Mortality table used: UP94

generational
CSA Group Annual Report 2012 | 2013 41

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(24)

Defined benefit plan assets comprise the following:

March 31,

2013

%

March 31,

2012

%

April 1,

2011

%

(Unaudited)

Equity instruments 68.0 66.0 69.0

Debt instruments 29.0 30.0 28.0

Cash and cash equivalents 3.0 4.0 3.0

100.0 100.0 100.0

The Association’s risk management program seeks to minimize adverse effects of risk on the defined benefit

plan assets. Defined benefit plan assets are well diversified, such that the failure of any single investment would

not have a material impact on the overall value of assets.

Expected employer contributions for the year ending March 31, 2014 are $6,394 for the defined benefit pension

plans and $1,320 for the other benefit plans.

The effect of a 1% change in the health-care cost trend rate on the employee future benefit liability is as follows:

Increase

$

Decrease

$

Effect on the aggregate of the current service cost and interest cost 1,161 (900)

Effect on the defined benefit obligation 10,517 (8,363)

The effect of a 0.25% change in the composite discount rate for all pension plans would increase or decrease the

defined benefit obligation by $10,167 or $(9,622), respectively.

The effect of a 0.20% increase in the pension growth rate for all pension plans would increase the defined

benefit obligation by $1,937.

Next actuarial

valuation date

Last actuarial

valuation date

Defined benefit pension plans

Salaried employees December 31, 2013 December 31, 2010

Members of Local 967 of the Canadian Union of

Public Employees December 31, 2013 December 31, 2010

Members of Local 4559 of the Canadian Union

of Public Employees December 31, 2013 December 31, 2010

Designated executive employees December 31, 2013 December 31, 2010
CSA Group Annual Report 2012 | 2013 42

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(25)

19 Related party disclosures

There are no related party transactions except for a US$100 secured loan to an associated company.

The consolidated financial statements include the financial statements of the Association, its subsidiaries and

an associate company. The major operating entities are:

% Ownership

Incorporation

country

Functional

currency

March 31,

2013

%

March 31,

2012

%

April 1,

2011

%

(Unaudited)

Canadian Standards Association Canada CAD

CSA America, Inc. United States CAD 100.0 100.0 100.0

OnSpeX, Inc. United States CAD 100.0 100.0 100.0

CFV Solar Test Laboratory, Inc. United States USD 37.5 37.5 37.5

Canadian Standards Association de

Mexico S.A. de C.V. Mexico CAD 100.0 100.0 100.0

CSA Servicios, S.A. de C.V. Mexico CAD 100.0 100.0 100.0

CSA India Private Limited India CAD 100.0 100.0 100.0

Canadian Standards Association

(Far East Operations) Ltd. Hong Kong CAD 100.0 100.0 100.0

OnSpeX Shanghai Co., Ltd. China CAD 100.0 100.0 100.0

CCIC-CSA International Certification

Co., Ltd. China CAD 67.5 67.5 67.5

CSA Certification UK Ltd. United Kingdom British pound 100.0 100.0 100.0

Sira Consulting Limited United Kingdom British pound 100.0 100.0 100.0

Sira Test and Certification Limited United Kingdom British pound 100.0 100.0 100.0

Sira Environmental Limited United Kingdom British pound 100.0 100.0 100.0

Sira Certification Service United Kingdom British pound 100.0 100.0 100.0

CSA Group Capital UK Limited United Kingdom British pound 100.0 100.0 100.0

CSA Group Switzerland GmbH Switzerland Swiss franc 100.0 100.0 n/a

CSA Group Europe GmbH Germany euro 100.0 100.0 n/a

CSA Group Italy S.r.l. Germany euro 100.0 n/a n/a

mikes-testing partners GmbH Germany euro 100.0 100.0 n/a

emitel GmbH Germany euro 100.0 100.0 n/a

Executive management compensation

Aggregate compensation paid to executives of CSA Group who have the authority and responsibility for

planning, directing and controlling the activities of CSA Group was $4,500 (2012 -$4,700).

20 Financial risk management objectives and policies

CSA Group’s activities are exposed to a variety of financial risks: market risk (including interest rate risk,

foreign currency risk and other price risk), credit risk and liquidity risk. The Association’s overall risk

management program seeks to minimize potential adverse effects of risk on CSA Group’s financial

performance.
CSA Group Annual Report 2012 | 2013 43

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(26)

Market risk

Market risk is the risk the fair value of future cash flows of a financial instrument will fluctuate due to changes

in market conditions. The market is comprised of several types of risk: interest rate risk, foreign currency risk

and other price risk.

 Interest rate risk

Interest rate risk refers to the effect on the fair value or future cash flows of an investment due to

fluctuations in interest rates. CSA Group’s variable interest bank loan is exposed to interest rate risk. CSA

Group is not exposed to significant interest rate risk on its other monetary current assets and current

liabilities due to their short-term maturities. During the year ended March 31, 2013, all short-term

investments in bonds were converted into pooled funds, thereby reducing interest rate risk.

CSA Group invests surplus cash in bank deposits and short-term money market securities which, due to

their short-term nature, do not expose the Association to significant interest rate risks.

 Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on

the bank loan. With all other variables held constant, the Association’s consolidated statements of

income are affected through the impact on bank interest as follows.

Increase/

decrease

%

Effect on

net income

and

net assets

$

March 31, 2013

Variable interest rate +1 (178)

Variable interest rate -1 178

March 31, 2012

Variable interest rate +1 (96)

Variable interest rate -1 96

The assumed movement in basis points for interest rate sensitivity analysis is based on the currently

observable market environment.

 Foreign currency risk

Foreign currency risk is the risk the fair value or future cash flows of a financial instrument will fluctuate

because of changes in foreign exchange rates. Exposure to the risk of changes in foreign exchange rates

relates primarily to CSA Group’s operating activities, when revenue or expenses are denominated in a

different currency from the Association’s functional currency. CSA Group operates globally with significant

revenue and expenses denominated mainly in US dollars. This gives rise to the risk that some of its

revenue and cash flows may be impacted by fluctuations in foreign exchange rates between the US dollar

and the Canadian dollar. CSA Group uses derivative financial instruments as part of its overall risk
CSA Group Annual Report 2012 | 2013 44

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(27)

management policy to manage exposures to foreign exchange risk that result from operations. As at

March 31, 2013, the consolidated statement of financial position includes amounts denominated in US

currency, which represents 12% (2012 - 20%) of current assets and 14% (2012 - 14%) of current liabilities.

As at March 31, 2013, the Association had outstanding forward foreign exchange contracts for a notional

amount of US$31,500 (2012 - US$41,100) that effectively converts US$31,500 (2012 - US$41,100) of its

anticipated US dollar revenue over the next nine months into Canadian dollars within fixed ranges of

conversion rates from $0.98 to $1.06 (2012 - $0.96 to $1.08), thus reducing the impact of exchange rate

fluctuations on future US dollar denominated cash inflows.

The fair value of these forward foreign exchange contracts amounts to an unrealized loss of $109 as at

March 31, 2013 and an unrealized gain of $224 as at March 31, 2012.

 Foreign currency sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in the foreign

exchange rates of the US dollar, with all other variables held constant, of CSA Group’s net income

(due to changes in the fair value of monetary assets and liabilities including non-designated foreign

currency derivatives) and the Association’s net assets. CSA Group’s exposure to other foreign

currencies is not material.

Increase/

decrease

%

Effect on

net income

and

net assets

$

March 31, 2013

Change in US dollar exchange rate +5 615

Change in US dollar exchange rate -5 (615)

March 31, 2012

Change in US dollar exchange rate +5 1,401

Change in US dollar exchange rate -5 (1,401)

The movement in the effect on income and net assets is a result of a change in the fair value of

derivative financial instruments and monetary assets and liabilities denominated in foreign

currencies.

 Other price risk

CSA Group has exposure to price risk from short-term investments that are invested in pooled funds. Price

risk is the risk the fair value of future cash flows of a financial instrument will fluctuate because of changes

in market prices (other than those arising from interest rate risk or currency risk), whether those changes

are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all

similar financial instruments traded in the market. During the year ended March 31, 2013, all short-term

investments in equities were sold and the proceeds reinvested in pooled funds, thereby eliminating price

risk related to individual investments owned by the Association.
CSA Group Annual Report 2012 | 2013 45

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(28)

Price risk exposure relates to pooled funds and equities whose unit values will fluctuate as a result of

changes in market prices, principally investment securities.

Increase/

decrease

in market

prices

%

Effect on

net income

and

net assets

$

March 31, 2013

Change in unit price +5 5,884

Change in unit price -5 (5,884)

March 31, 2012

Change in unit price +5 2,832

Change in unit price -5 (2,832)

Credit risk

Credit risk on financial instruments is the risk of financial loss occurring as a result of default or insolvency of a

customer or counterparty on its obligations to CSA Group. For CSA Group, credit risk arises from cash and cash

equivalents on deposit with banks, short-term investments with investment management companies and credit

exposure to customers. Credit risk from balances with banks and financial institutions is managed in

accordance with the Association’s policy. Derivative transactions are executed only with approved banks. Credit

risk for short-term investments is managed by dealing only with counterparties that have a minimum

investment rating of A as determined by a recognized rating agency and by regular monitoring. CSA Group

monitors and manages its concentration of counterparty risk on an ongoing basis. Counterparty credit limits

are reviewed by the Association’s Board of Directors on an annual basis, and may be updated throughout the

year subject to the approval of the Association’s Finance, Audit and Risk Committee. The limits are set to

minimize the concentration of risks and therefore mitigate financial loss through potential counterparty failure.

The carrying values of these instruments represent the maximum credit risk exposure at the consolidated

financial statements date. Trade receivable credit risk is mitigated through established credit monitoring

activities. These include conducting financial and other assessments to establish and monitor a customer’s

creditworthiness, setting customer limits, monitoring exposure against these limits, and in some instances

moving the customer to cash-in-advance terms. The requirement for an impairment is analyzed throughout the

year on an individual basis for major clients. The calculation is based on actually incurred historical data.

Liquidity risk

Liquidity risk is the risk of being unable to settle or meet commitments as they come due. Liquidity risk is

managed firstly by keeping operational funds separate from investment funds in accordance with the

Association’s Statement of Investment Policies and Procedures. Secondly, liquidity risk is further managed by

ensuring CSA Group invests in high quality investments easily disposed of in an active market.
CSA Group Annual Report 2012 | 2013 46

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(29)

The following table summarizes the amount of contractual undiscounted future cash flow requirements for

financial instruments as at March 31, 2013:

March 31,

2013

Less than

3 months

$

3 months

to 1 year

$

1 year

to 5 years

$

Total

$

Contractual obligations

Bank loan 651 1,954 15,175 17,780

Finance leases 52 156 400 608

Trade and other payables 46,119 - - 46,119

Provisions 35 105 525 665

46,857 2,215 16,100 65,172

March 31,

2012

Less than

3 months

$

3 months

to 1 year

$

1 year

to 5 years

$

Total

$

Contractual obligations

Bank loan 665 1,996 18,297 20,958

Finance leases 42 129 518 689

Trade and other payables 40,104 - - 40,104

Provisions 35 105 560 700

40,846 2,230 19,375 62,451

Capital management

The Association’s objectives when managing capital are to safeguard CSA Group’s mission of providing a better,

safer and more sustainable environment where standards work for people and business. The capital resources

are managed to seek growth through development and expansion of existing assets and programs and to ensure

the financial covenants related to its bank loan are met. The Association considers net assets and debt as its

capital structure and through the Board of Directors has developed several internal requirements to review and

monitor this metric. The overall objectives for managing capital are unchanged from the previous year.
CSA Group Annual Report 2012 | 2013 47

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(30)

21 Contingencies, commitments and guarantees

Operating lease commitments

The Association has entered into operating leases, as the lessee, requiring rental payments as follows:

2013

$

2012

$

Within one year 6,318 5,889

After one year but not more than five years 24,264 22,138

More than five years 10,716 12,623

41,298 40,650

Capital commitments

CSA Group has capital commitments requiring payments as follows:

2013

$

2012

$

Within one year 3,000 2,000

After one year but not more than five years - -

More than five years - -

3,000 2,000

At March 31, 2013, CSA Group had commitments of $3,000 (2012 - $2,000) relating to the purchase and

installation of laboratory and test equipment and building improvements.

Litigation and contingent liabilities

CSA Group has been named in a number of legal actions in the normal course of operations. In the opinion of

management and legal counsel, the outcome of these actions cannot be determined with a reasonable degree of

assurance at this time. CSA Group carries insurance for such actions, and any loss, to the extent that it is not

fully covered by these insurance policies, is charged to operations in the period in which the liability is

determined.

Guarantees

In accordance with the terms of a lease agreement, the Association has guaranteed the future lease commitment

to a lessor with respect to a lease assigned to the purchaser of the QMI division. The lease commitment at

March 31, 2013 amounts to $2,942 (March 31, 2012 - $3,312; April 1, 2011 - $3,440) and expires in 2020. The

fair value of the guarantee is not determinable.
CSA Group Annual Report 2012 | 2013 48

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(31)

22 Reconciliation of Canadian GAAP to IFRS

The Association’s consolidated financial statements for the year ended March 31, 2013 are the first consolidated

financial statements to be prepared in accordance with IFRS. The Association applied IFRS 1, First-time

Adoption of International Financial Reporting Standards, in preparation of these consolidated financial

statements. The consolidated financial statements have been prepared as described in note 2. The Association’s

date of transition to IFRS is April 1, 2011. The Association prepared its opening IFRS consolidated statement of

financial position at that date. The date of IFRS adoption by the Association is April 1, 2012.

The Association has applied the following optional exemptions to full retrospective application of IFRS 1.

Business combinations

The Association has elected to apply the exemption under IFRS 1 and to not apply IFRS 3 retrospectively to all

business combinations that occurred prior to the date of transition to IFRS. The application of this exemption

did not have any impact on the consolidated financial statements.

Leases

The Association has elected to apply the exemption under IFRS 1 to assess whether an arrangement existing at

the date of transition to IFRS contains a lease on the basis of facts and circumstances existing at that date of

conversion, rather than retrospectively assessing each agreement as at the date of its inception. The application

of this exemption did not have any impact on the consolidated financial statements.

Post-employment benefit obligations (note 22(c))

CSA Group has elected to recognize all cumulative actuarial gains and losses as at April 1, 2011 within the

opening net assets for CSA Group’s employee benefit plans.

Property, plant and equipment (note 22(b))

The Association has elected to apply the exemption under IFRS 1 to fair value substantially all items of

property, plant and equipment and use the fair value as the deemed cost of the items of property, plant and

equipment as at April 1, 2011.

Cumulative translation adjustment

The Association has elected to reset the cumulative translation adjustment account, which includes gains and

losses arising from the translation of foreign operations, to zero at the date of transition to IFRS (note 22(e)).
CSA Group Annual Report 2012 | 2013 49

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(32)

The Association has applied the following mandatory exemptions to the full retrospective application of IFRS:

Estimates

Estimates under IFRS are consistent with those made under Canadian GAAP. Hindsight was not used to create

or revise estimates.

Hedge accounting

CSA has elected to apply the exemption under IFRS 1 to redesignate the foreign exchange option contracts as at

fair value through the consolidated statement of income. Hedge accounting can only be applied prospectively

from the transition date to transactions that satisfy the hedge accounting criteria under IAS 39, Financial

Instruments - Recognition and Measurement. Hedging relationships cannot be designated retrospectively and

the supporting documentation cannot be recreated retrospectively. The Association applied hedge accounting

under Canadian GAAP but has elected not to apply hedge accounting under IFRS.

Reconciliation between IFRS and Canadian GAAP

The following reconciliations demonstrate the impact of the transition to IFRS:

 reconciliation of net assets as previously reported under Canadian GAAP to IFRS; and

 reconciliation of consolidated statements of income as previously reported under Canadian GAAP to IFRS.

Note

GAAP

2011

$

April 1,

2011

adjustments

$

IFRS

2011

$

(Unaudited)

Assets

Current assets

Cash and cash equivalents 14,205 - 14,205

Trade and other receivables a 40,660 5,118 45,778

Inventories a 2,902 (2,245) 657

Prepaid expenses 4,489 - 4,489

Short-term investments 114,006 - 114,006

176,262 2,873 179,135

Non-current assets

Property, plant and equipment - net b 50,492 9,662 60,154

Accrued pension benefit asset c 67,629 (62,366) 5,263

Other investment 1,035 - 1,035

Intangible assets d, e 11,176 292 11,468

Goodwill e 5,080 (892) 4,188

311,674 (50,431) 261,243
CSA Group Annual Report 2012 | 2013 50

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(33)

Note

GAAP

2011

$

April 1,

2011

adjustments

$

IFRS

2011

$

(Unaudited)

Liabilities

Current liabilities

Trade and other payables 32,671 718 33,389

Deferred revenue 30,901 - 30,901

Customer deposits 12,009 - 12,009

Provisions f - 2,106 2,106

75,581 2,824 78,405

Non-current liabilities

Accrued other retirement and post-employment

benefits c 34,076 1,418 35,494

Deferred gain on disposal of building g 5,261 (5,261) -

Lease inducement obligation 172 - 172

115,090 (1,019) 114,071

Net Assets

Invested in property, plant and equipment b 50,492 9,662 60,154

Internally reserved for specific purposes c, d, e, g, h 129,567 (59,123) 70,444

Unreserved a, f 14,402 (308) 14,094

194,461 (49,769) 144,692

Non-controlling interest 2,123 - 2,123

Other comprehensive income h - 357 357

196,584 (49,412) 147,172

311,674 (50,431) 261,243

Note

GAAP

2012

$

March 31, 2012

adjustments

$

IFRS

2012

$

Assets

Current assets

Cash and cash equivalents 15,806 - 15,806

Trade and other receivables a 44,689 7,296 51,985

Inventories a 4,062 (3,489) 573

Prepaid expenses 5,657 - 5,657

Short-term investments 128,556 - 128,556

198,770 3,807 202,577

Non-current assets

Property, plant and equipment - net b 57,176 12,003 69,179

Accrued pension benefit asset c 78,127 (73,816) 4,311

Other investment 1,422 - 1,422

Intangible assets d, e 23,703 (922) 22,781

Goodwill e 13,564 (1,130) 12,434

372,762 (60,058) 312,704
CSA Group Annual Report 2012 | 2013 51

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(34)

Note

GAAP

2012

$

March 31, 2012

adjustments

$

IFRS

2012

$

Liabilities

Current liabilities

Trade and other payables 40,104 - 40,104

Deferred revenue 35,225 - 35,225

Customer deposits 12,627 - 12,627

Provisions f - 1,966 1,966

Finance leases - 142 142

Bank loan 2,998 - 2,998

90,954 2,108 93,062

Non-current liabilities

Accrued other retirement and post-employment

benefits c 38,212 5,540 43,752

Deferred gain on disposal of building g 4,552 (4,552) -

Finance leases - 547 547

Lease inducement obligation 146 - 146

Bank loan 17,960 - 17,960

151,824 3,643 155,467

Net Assets

Invested in property, plant and equipment b 57,176 12,003 69,179

Internally reserved for specific purposes c, d, e, g, h 147,279 (59,123) 88,156

Unreserved a, f 13,731 (9,059) 4,672

218,186 (56,179) 162,007

Non-controlling interest 2,752 - 2,752

Other comprehensive income c, h - (7,522) (7,522)

220,938 (63,701) 157,237

372,762 (60,058) 312,704
CSA Group Annual Report 2012 | 2013 52

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(35)

Reconciliation of consolidated statements of income as previously reported under Canadian GAAP to IFRS

GAAP accounts

Notes

GAAP

2012

$

IFRS

reclassifications

$

IFRS

adjustments

$

IFRS

2012

$ IFRS accounts

Revenue a, h 237,771 - 762 238,533 Revenue

Expenses Operating expenses

Direct 102,449 (102,449) - -

Selling, general and administrative 104,153 (104,153) - -

Depreciation b 7,243 - (1,715) 5,528 Depreciation

Amortization of intangible assets d, e 1,001 - 266 1,267 Amortization of intangible assets

a, c - 125,178 8,833 134,011 Salaries and benefits

- 27,459 - 27,459 Professional, agency and consulting fees

- 15,682 - 15,682 Travel

f - 10,807 (140) 10,667 Property related costs

- 6,846 - 6,846 Sales, marketing and communication

- 4,970 - 4,970 Office, laboratory and computer

- 4,187 - 4,187 Material costs

- 11,473 (21) 11,452 Other operating expenses

214,846 - 7,223 222,069

Income from operations 22,925 - (6,461) 16,464 Income from operations

Non-operating income (expense) Non-operating income (expense)

Investment income h 1,910 941 290 3,141 Finance income

Foreign exchange gain (loss) 941 (941) - -

Equity income (loss) - - (328) (328) Share of loss in associates

Foreign income taxes (1,041) - - (1,041) Foreign income taxes

Bank interest (276) - (16) (292) Finance costs

Amortization of gain on sale of building 709 - (709) -

Excess of revenue over expenses for the year 25,168 - (7,224) 17,944 Net income for the year

Attributable to Net income attributable to

The Association 24,539 17,315 The Association

Non-controlling interest 629 629 Non-controlling interest

25,168 17,944
CSA Group Annual Report 2012 | 2013 53

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(36)

GAAP accounts

Notes

GAAP

2012

$

IFRS

reclassifications

$

IFRS

adjustments

$

IFRS

2012

$ IFRS accounts

Comprehensive income

e 96 96

Exchange differences on translation of net

assets of foreign operations

h (357) (357)

Gains and losses on derivatives designated as

cash flow hedges in prior years

c (7,618) (7,618) Actuarial loss on employee future benefits

(7,879) (7,879)

10,065 Total comprehensive income for the year

a) Revenue recognition

Canadian GAAP allowed revenue to be recorded on a percentage of completion or a completed contract basis. IFRS does not allow the completed

contract method utilized under Canadian GAAP. Under IFRS, revenue is now recognized using the percentage of completion method. As a result, workin-progress was eliminated and trade and other receivables were increased for unbilled revenue as at April 1, 2011 and as at March 31, 2012 by $2,245

and $5,118 and by $3,489 and $7,296, respectively, with an offsetting adjustment to net assets as at April 1, 2011 and to revenue and salaries and

benefits in the consolidated statement of income for the year ended March 31, 2012.

b) Property, plant and equipment

As a result of the fair value option exemption mentioned earlier, the net book value under IFRS increased as compared to Canadian GAAP. Accordingly,

the Association incurred a one-time adjustment of $9,662, primarily to property, with an offsetting adjustment to net assets as at April 1, 2011.

To reflect the difference in the depreciation of these assets, an adjustment to reduce depreciation by $1,715 was required for the year ended March 31,

2012.
CSA Group Annual Report 2012 | 2013 54

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(37)

c) Employee benefits

The Association elected to recognize all cumulative unamortized actuarial gains and losses on transition in

its opening net assets on April 1, 2011, resulting in an opening adjustment of ($11,403). Previously under

Canadian GAAP, the corridor method was used and these items were amortized into the consolidated

statements of income over time. IFRS also contains specific guidance over when an asset relating to a

pension plan can be recognized, including the entity’s legal ability to access the surplus. As a result, the

previously established surplus under Canadian GAAP was revised to amounts calculated in accordance

with applicable IFRS standards. This resulted in an adjustment of ($49,927) to opening net assets. As a

result of timing differences in measuring the funded status of benefits, the Association recorded an

additional adjustment of ($2,454) to opening net assets. These adjustments reduced the accrued pension

benefit asset and increased the accrued other retirement and post-employment benefit liability by $62,366

and $1,418, respectively.

Due to different discount rates caused by changing the measurement date from December 31 to March 31

and the different treatment of plan asset returns and pension asset limits, the Association recorded an

additional expense of $15,572 in the consolidated statements of comprehensive income as previously

calculated and recorded under Canadian GAAP for the year ended March 31, 2012.

d) Intangible assets

Under Canadian GAAP and not-for profit accounting, the Association was not required to capitalize certain

internally developed intangible assets. Under IFRS, the Association can capitalize internally developed

intangible assets if they meet the requirements under IAS 38. As a result, the Association has capitalized

an additional $2,162 of computer software costs as at April 1, 2011 with a corresponding adjustment to net

assets.

For the year ended March 31, 2012, additional amortization of intangible assets of $266 was recorded.

e) Change in functional currency of subsidiaries

IFRS requires that assets and liabilities of entities that have a different functional currency to the

Association be translated at the closing rate of the consolidated statement of financial position. Under

Canadian GAAP, all foreign operations were considered integrated and translated using the temporal

method. Under IFRS this method is not permitted and the Association has determined that the functional

currency of certain foreign subsidiaries is not the Canadian dollar. For those subsidiaries, foreign exchange

gains and losses on consolidation are now recognized in accumulated other comprehensive income. As

such, the Association has adjusted the translated amount of its intangibles, accumulated amortization and

goodwill by ($2,272), $402 and ($892), respectively, with a corresponding offset to net assets.
CSA Group Annual Report 2012 | 2013 55

Canadian Standards Association

Notes to Consolidated Financial Statements

March 31, 2013 and March 31, 2012

(in thousands of Canadian dollars)

(38)

f) Provisions

IFRS requires provisions to be disclosed separately on the face of the consolidated financial statements.

The Association identified an onerous rental contract as at April 1, 2011 and accordingly recorded a

provision of $968. Under IFRS, the Association is required to record a provision for its accumulating sick

leave programs, which was not specifically required under Canadian GAAP. The Association has

recalculated the provision and accordingly recorded a liability of $1,138 as at April 1, 2011.

For the year ended March 31, 2012, the liability for the onerous contract was reduced by $140 with a

corresponding decrease in property related costs in the consolidated statements of income. There was no

change necessary in the provision for sick leave for the year ended March 31, 2012.

g) Sale and lease-back

In 2008, the Association disposed of land and buildings in Richmond, British Columbia and leased back

63% of the premises through a ten-year operating lease. In accordance with accounting for sale and

leaseback transactions under Canadian GAAP, $5,166 of the total gain was recognized in the consolidated

statements of income and $7,329 was deferred and was being amortized over the remaining term of the

lease. Unlike Canadian GAAP, which defers the gain, under IFRS, since the transaction was conducted at

fair value, the gain on the sale and lease-back is not deferred but is recognized in the consolidated

statements of income on the date of the transaction. This resulted in the elimination of the deferred gain of

$5,261 as at April 1, 2011 with an offsetting adjustment to net assets.

h) Hedge accounting

The Association applied hedge accounting under Canadian GAAP and the balance of unrealized forward

foreign exchange contract gains from previous years of $357 was reclassified from unrestricted net assets

to accumulate other comprehensive income in the opening net assets as at April 1, 2011. All of these

contracts were settled in the following year. The balance of unrealized gains was recognized in the

consolidated statements of income and eliminated from accumulated other comprehensive income in the

consolidated statements of changes in net assets.

As the Association has elected not to use hedge accounting under IFRS, the unrealized net fair value loss of

$814 was recognized directly in the consolidated statement of income for the year ended March 31, 2012.

In addition, the foreign exchange option contract gains, relating to contracts settled in fiscal 2012, of

$1,050 under Canadian GAAP were reclassified from revenue to finance income in the consolidated

statement of income for the year ended March 31, 2012.

i) Net assets

There is currently no guidance for the treatment of net assets of non-profit oriented entities under IFRS.

As a result, net assets are presented with segregating balances into externally and internally reserved funds

as previously disclosed under Canadian GAAP.
CSA Group Annual Report 2012 | 2013 56

CSA Group - Head Office

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Toronto, Ontario

Canada M9W 1R3

Tel: 416-747-4000
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CSA Group is an independent, not-for-profit membership association dedicated to safety, social good and 

sustainability. Its knowledge and expertise encompass standards development; training and advisory 

solutions; global testing and certification services across key business areas including hazardous 

locations and industrial, plumbing and construction, medical, safety and technology, appliances and gas, 

alternative energy, lighting and sustainability; as well as consumer product evaluation services. The CSA 

certification mark appears on billions of products worldwide.

We are dedicated to making standards work for people and business.