UNited
STATES Securities and Exchange Commission
Washington,
D.C. 20549
Form 40-F
[ ] Registration Statement
Pursuant to Section 12 of the Securities Exchange Act of 1934
or
[x] Annual Report Pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 2019
Commission file number 001-36897
FirstService Corporation
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s
name into English (if applicable))
Ontario, Canada
(Province or other jurisdiction of incorporation or organization)
6500
(Primary Standard Industrial Classification Code Number (if applicable))
N/A
(I.R.S. Employer Identification Number (if applicable))
1255 Bay Street, Suite 600
Toronto, Ontario, Canada M5R 2A9
416-960-9566
(Address and telephone number of Registrant’s principal
executive offices)
Mr. Santino Ferrante, Ferrante & Associates
126 Prospect Street, Cambridge, MA 02139
617-868-5000
(Name, address (including zip code) and telephone number (including
area code) of agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b)
of the Act:
Title of each class
|
Trading Symbol
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Name of each exchange on which registered
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Common Shares
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FSV
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NASDAQ Stock Market
Toronto Stock Exchange
|
Securities registered or to be registered
pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act: None
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:
41,495,957 Common Shares
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.
[x] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
[x] Yes [ ] No
Indicate by check mark whether the registrant is an emerging growth company as defined
in Rule 12b-2 of the Exchange Act.
Emerging growth company [ ]
If an emerging
growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. [ ]
PRINCIPAL DOCUMENTS
The following documents have been filed as part
of this Annual Report on Form 40-F:
A. Annual Information Form
For the Registrant’s Annual Information
Form for the year ended December 31, 2019, see Exhibit 1 of this Annual Report on Form 40-F.
B. Audited Annual Financial Statements
For the Registrant’s audited consolidated
financial statements as at December 31, 2019 and 2018 and for the years ended December 31, 2019 and 2018, see Exhibit 2 of this
Annual Report on Form 40-F.
C. Management’s Discussion and Analysis
For the Registrant’s management’s
discussion and analysis for the year ended December 31, 2019, see Exhibit 3 of this Annual Report on Form 40-F.
DISCLOSURE CONTROLS AND PROCEDURES
The Registrant’s Chief Executive Officer
and Chief Financial Officer have evaluated the effectiveness of the Registrant’s disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
as of the end of the period covered by this annual report (the “Evaluation Date”). Based on that evaluation, the Chief
Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, the Registrant’s disclosure
controls and procedures were effective to ensure that information required to be disclosed by the Registrant in reports that it
files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in
the rules and forms of the Securities and Exchange Commission (the “SEC”) and (ii) accumulated and communicated to
the Registrant’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.
MANAGEMENT’S ANNUAL REPORT ON INTERNAL
CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate
internal control over financial reporting for the Registrant. Internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles.
Due to its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any evaluation of its effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
Management has excluded fifteen entities acquired by the Registrant
during the last fiscal period from its assessment of internal control over financial reporting as at December 31, 2019. The total
assets and total revenues of the fifteen majority-owned entities represent 11.8% and 13.4%, respectively, of the related consolidated
financial statement amounts as at and for the year ended December 31, 2019.
Management has assessed the effectiveness of the Registrant’s
internal control over financial reporting as at December 31, 2019, based on the criteria set forth in Internal Control –
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment,
management has concluded that, as at December 31, 2019, the Registrant’s internal control over financial reporting was effective.
The effectiveness of the Registrant’s internal control over
financial reporting as at December 31, 2019 has been audited by PricewaterhouseCoopers LLP, the Registrant’s independent
registered public accounting firm, as stated in their report filed in Exhibit 2 of this Annual Report on Form 40-F.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL
REPORTING
During the year ended December 31, 2019, there were 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 REGULATION BTR
There were no notices required by Rule 104 of Regulation BTR that
the Registrant sent during the year ended December 31, 2019 concerning any equity security subject to a blackout period under Rule
101 of Regulation BTR.
AUDIT COMMITTEE FINANCIAL
EXPERT
The Registrant’s board of directors (the
“Board of Directors”) has determined that it has at least one audit committee financial expert (as such term is defined
in item 8(a) of General Instruction B to Form 40-F) serving on its audit committee (the “Audit Committee”). Mr. Bernard
I. Ghert has been determined by the Board of Directors to be such audit committee financial expert and is independent (as such
term is defined by the NASDAQ Stock Market’s corporate governance standards applicable to the Registrant).
Mr. Ghert was previously President and Chief Executive Officer of
the Cadillac Fairview Corporation Limited from 1981 to 1987 and President of Stelworth Investments Inc. from 1987 to 1992. Mr.
Ghert has been a director of many organizations in the private and public sectors, including Cadillac Fairview, Stelworth, CT Financial
and Canada Trust, Wellington Insurance and the Canada Deposit Insurance Corporation. Mr. Ghert has served as Director of the Managers
of several Middlefield Funds, President of the Canadian Institute of Public Real Estate Companies and was a former member of the
Advisory Board of the Office of the Superintendent of Financial Institutions. Mr. Ghert currently is Chairman of the Independent
Review Committee of Middlefield Fund Management Limited, President of the B.I. Ghert Family Foundation, President of Coppi Holdings
Ltd., a Director Emeritus on Sinai Health System’s Board, Co-Chair on Sinai Health System’s Audit and Risk Management
Committee and Past Chair of the Mount Sinai Hospital Board of Directors. Mr. Ghert holds a Master of Business Administration degree.
The SEC has indicated that the designation of
Mr. Bernard I. Ghert as an audit committee financial expert does not make him an “expert” for any purpose, impose on
him any duties, obligations or liability that are greater than the duties, obligations or liability imposed on him as a member
of the Audit Committee and the Board of Directors in absence of such designation, or affect the duties, obligations or liability
of any other member of the Audit Committee or Board of Directors.
CODE OF ETHICS
The Registrant has adopted a Code of Ethics and Conduct that applies
to all directors, officers and employees of the Registrant and its subsidiaries, and a Financial Management Code of Ethics, which
applies to senior management and senior financial and accounting personnel of the Registrant and its subsidiaries. A copy of the
Code of Ethics and Conduct and the Financial Management Code of Ethics can be obtained, free of charge, on the Registrant’s
website (www.firstservice.com) or by contacting the Registrant at (416) 960-9566.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets out the fees billed to
the Registrant by PricewaterhouseCoopers LLP for professional services rendered for the fiscal period ended December 31, 2019 and
2018. During this period, PricewaterhouseCoopers LLP was the Registrant’s only external auditor.
(in thousands of US$)
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Year ended December 31, 2019
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|
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Year ended December 31, 2018
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Audit fees (note 1)
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$
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843
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$
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726
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Audit-related fees (note 2)
|
|
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94
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|
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45
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Tax fees (note 3)
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298
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|
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50
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All other fees (note 4)
|
|
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101
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|
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118
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|
|
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$
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1,336
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$
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939
|
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Notes:
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1.
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Refers to
the aggregate fees billed by the Registrant's external auditor for audit services relating
to the audit of the Registrant and statutory audits required by subsidiaries.
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2.
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Refers to
the aggregate fees billed for assurance and related services by the Registrant's external
auditor that are reasonably related to the performance of the audit or review of the
Registrant's financial statements and are not reported under (1) above, including professional
services rendered by the Registrant's external auditor for accounting consultations on
proposed transactions and consultations related to accounting and reporting standards.
Such fees included amounts incurred in respect of: due diligence and other work related
to the disposition and acquisition of businesses, such work being unrelated to the audit
of the Registrant's financial statements; accounting consultations with respect to proposed
transactions, as well as other audit-related services.
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3.
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Refers
to the aggregate fees billed for professional services rendered by the Registrant's external
auditor for tax compliance, tax advice and tax planning.
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4.
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Refers to fees for licensing and subscriptions to accounting
and tax research tools, as well as administration and out-of-pocket expenses.
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The Registrant’s Audit Committee pre-approves
all audit services and permitted non-audit services provided to the Registrant by PricewaterhouseCoopers LLP. The Audit Committee
has delegated to the Chair of the Audit Committee, who is independent, the authority to act on behalf of the Audit Committee with
respect to the pre-approval of all audit and permitted non-audit services provided by its external auditors from time to time.
Any approvals by the Chair are reported to the full Audit Committee at its next meeting. All of the services described in footnotes
2, 3 and 4 under “Principal Accountant Fees and Services” above were approved by the Audit Committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
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 material effect on the Registrant’s financial performance
or financial condition.
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
The information provided in the table entitled
“Contractual Obligations” under the section entitled “Liquidity and Capital Resources” in the management’s
discussion and analysis included as Exhibit 3 to this Annual Report on Form 40-F, is incorporated herein by reference.
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 are Messrs. Bernard
I. Ghert (Chair – 2019 and prior), Michael Stein, and Joan Sproul (Chair – Present).
CORPORATE GOVERNANCE
The Registrant is a “foreign private issuer”
as defined in Rule 3b-4 under the Exchange Act and its Common Shares are listed on the Toronto Stock Exchange and The NASDAQ Global
Select Market ("NASDAQ"). NASDAQ Marketplace Rule 5615(a)(3) permits a foreign private issuer to follow its home country
practices in lieu of certain requirements in the NASDAQ Listing Rules. A foreign private issuer that follows home country practices
in lieu of certain corporate governance provisions of the NASDAQ Listing Rules must disclose each NASDAQ corporate governance requirement
that it does not follow and include a brief statement of the home country practice the issuer follows in lieu of the NASDAQ corporate
governance requirement(s), either on its website or in its annual filings with the Commission. A description of the significant
ways in which the Registrant’s corporate governance practices differ from those followed by domestic companies pursuant to
the applicable NASDAQ Listing Rules is disclosed on the Registrant’s website at:
http://www.firstservice.ca/social_purpose/nasdaq_canadian_corporate_governance.html
.
UNDERTAKING AND CONSENT
TO SERVICE OF PROCESS
A. Undertaking
The Registrant undertakes to make available, in
person or by telephone, representatives to respond to inquiries made by the staff of the SEC, and to furnish promptly, when requested
to do so by the SEC staff, information relating to: the securities registered pursuant to Form 40-F, the securities in relation
to which the obligation to file an Annual Report on Form 40-F arises, or transactions in said securities.
B. Consent
to Service of Process
The Registrant has previously filed with the SEC an Appointment
of Agent for Service of Process and Undertaking on Form F-X in connection with its Common Shares.
SIGNATURE
Pursuant to the requirements of the Exchange Act, the Registrant
certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on
its behalf by the undersigned, thereto duly authorized.
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FirstService Corporation
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Date: February 20, 2020
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By:
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/s/ Jeremy Rakusin
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Name:
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Jeremy Rakusin
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Title:
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Chief Financial
Officer
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EXHIBIT INDEX
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