Descartes Systems Group - 40-F annual report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 40-F

 

 

OR

 

 

 

Commission File Number: 000-29970

 

________________________

 

THE DESCARTES SYSTEMS GROUP INC.

(Exact name of Registrant as specified in its charter)

 

N/A

(Translation of Registrant’s name into English (if applicable))

 

Canada

(Province or other jurisdiction of incorporation or organization)

 

N/A

(Primary Standard Industrial Classification Code Number (if applicable))

 

N/A

(I.R.S. Employer Identification Number (if applicable))

 

120 Randall Drive, Waterloo, Ontario, Canada N2V 1C6

Tel: (519) 746-8110

(Address and telephone number of Registrant’s principal executive offices)

 

Descartes Systems (USA) LLC

Powers Ferry Business Park

2030 Powers Ferry Road SE

Suite 350

Atlanta, GA 30339-5066

Tel: (678)  247-0400

(Name, address (including zip code) and telephone number

(including area code) of agent for service in the United States)

 

 

 

None

(Title of Class)

 

 

N/A

(Title of Class)

 

For annual reports, indicate by check mark the information filed with this Form:

 

x  Annual information form     x  Audited annual financial statements

 

 

 

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

 

61,410,877 as of January 31, 2010

 

 

Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the “Exchange Act”).  If “Yes” is marked, indicate the file number assigned to the Registrant in connection with such Rule.

 

 

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

 

Yes   x    No   o

 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted on its pursuant to Rule 405 of Regulation S-T (Sec. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

 

 

Yes   o    No o

 

 

CERTIFICATIONS

 

See Exhibits 99.4, 99.5 and 99.6 to this Annual Report on Form 40-F.

 

CONTROLS AND PROCEDURES

 

DISCLOSURE CONTROLS AND PROCEDURES.

 

The Registrant, under the supervision and with the participation of the Registrant’s management, including the Registrant’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), evaluated the effectiveness of the Registrant’s disclosure controls and procedures as of January 31, 2010 (the “Evaluation Date”), pursuant to Rule 13a-15(b) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, the Registrant’s Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation D ate, the Registrant’s disclosure controls and procedures were effective in ensuring that material information required to be disclosed by the Registrant in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such material information is accumulated and communicated to the Registrant’s management, including the Registrant’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

INTERNAL CONTROL OVER FINANCIAL REPORTING

 

Management’s Report on Financial Statements and Internal Control Over Financial Reporting

 

Management’s Report on Financial Statements and Internal Control Over Financial Reporting is contained in the Registrant’s 2010 Annual Report filed herewith as Exhibit 99.2 and incorporated herein by reference.

 

Report of Independent Registered Chartered Accountants

 

The report of Deloitte & Touche LLP with respect to the Registrant’s internal control over financial reporting is contained in the Registrant’s 2010 Annual Report filed herewith as Exhibit 99.2 and incorporated herein by reference.

Changes in Internal Control Over Financial Reporting

 

      During the period covered by this report, there have been no changes in the Registrant’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

NOTICES PURSUANT TO RULE 104 OF REGULATION BTR

 

AUDIT COMMITTEE FINANCIAL EXPERT

 

The Registrant’s Audit Committee of the Board of Directors currently consists of three members. The Registrant’s Board of Directors has determined that J. Ian Giffen is an “audit committee financial expert” (as defined in paragraph 8(b) of General Instruction B to Form 40-F). All members of the Audit Committee are independent within the meaning of the Nasdaq Stock Market’s (“Nasdaq”) director independence standards.

 

CODE OF ETHICS

 

The Registrant has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the Code of Ethics is posted on the Registrant’s corporate website at www.descartes.com and is also available at www.sedar.com. The Registrant intends to disclose through its website any waivers or amendments to its Code of Ethics that apply to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons perform ing similar functions.

 

 

 

INDEPENDENT REGISTERED CHARTERED ACCOUNTANT FEES AND SERVICES

 

The aggregate fees billed in respect of the fiscal years ending January 31, 2010 and January 31, 2009 for professional services rendered by Deloitte & Touche LLP (“D&T”), the Registrant’s independent registered chartered accountant and Licensed Public Accountant, are as follows (all amounts in table are in US dollars – amounts that were billed in Canadian dollars are converted to US dollars at the applicable exchange rate on the last day of the applicable fiscal period):

 

 

 

AUDIT FEES— Audit fees consist of fees for professional services rendered for the audit of the Registrant’s annual consolidated financial statements and services provided in connection with statutory audits and regulatory filings or engagements including fees for statutory audit of the Company’s foreign subsidiaries.

 

AUDIT RELATED FEES— Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit or review of the Registrant’s consolidated financial statements and are not reported as “Audit Fees”. These services included accounting research concerning financial accounting and reporting standards.

 

PRE-APPROVAL POLICIES AND PROCEDURES

 

The Registrant’s audit committee is responsible for overseeing the work of the independent auditors and has adopted a policy requiring its pre-approval of all audit and permissible non-audit services provided by the independent auditors. The Registrant’s Pre-Approval Policy and Procedure for Engagements of the Independent Auditor is filed as Appendix B to the Registrant’s Renewal Annual Information Form dated April 29, 2010 filed as Exhibit 99.1 hereto and incorporated by reference herein.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

The Registrant does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Registrant’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

 

The following table presents, as of January 31, 2010, the Registrant’s known contractual obligations in respect of operating lease obligations (in millions of U.S. dollars):

 

 

 

The Registrant is committed under non-cancelable operating leases for business premises and computer equipment with terms expiring at various dates through 2020. The future minimum amounts payable under these lease agreements are described in the chart above.

 

The Registrant has a commitment for income taxes incurred to various taxing authorities related to unrecognized tax benefits in the amount of $5.2 million. At this time, the Registrant is unable to make reasonably reliable estimates of the period of settlement with the respective taxing authority due to the possibility of the respective statutes of limitations expiring without examination by the applicable taxing authority.

 

IDENTIFICATION OF THE AUDIT COMMITTEE

 

The Registrant has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The members of the audit committee as of the date of the filing of this 40-F are: Mr. J. Ian Giffen (Chair), Mr. David I. Beatson and Mr. Michael Cardiff.

 

DISCLOSURE PURSUANT TO THE REQUIREMENTS OF NASDAQ

 

The registrant was granted an exemption from Nasdaq Stock Market Rules requiring each issuer to provide for a quorum at any meeting of the holders of common stock of no less than 331/3% of the outstanding shares of the issuer’s common voting stock. This exemption was granted because Nasdaq’s requirements regarding the quorum required for meetings of the holders of common stock are contrary to generally accepted business practices in Canada. In particular, Section 139(1) of the Canada Business Corporations Act provides that a company’s by-laws may set the quorum requirements for a meeting of shareholders. The relevant provisions of the Registrant’s by-laws state that “Subject to the Act in respect of a majority shareholder, a quorum for the transaction of business at any meeting of shareholders shall be persons not being less than two in number and holding or representing by proxy not less than 20 percent of the issued and outstanding shares of the Corporation for the time being enjoying voting rights at such meeting. If a quorum is present at the opening of any meeting of shareholders, the shareholders present or represented may proceed with the business of the meeting notwithstanding that a quorum is not present throughout the meeting. If a quorum is not present at the opening of any meeting of shareholders, the shareholders present or represented may adjourn the meeting to a fixed time and place but may not transact any other business.”

 

UNDERTAKING

 

Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

 

SIGNATURES

 

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.