Computer Modelling Group Announces Year End Results

CALGARY, ALBERTA--(Marketwired - May 21, 2015) - Computer Modelling Group Ltd. ("CMG" or the "Company") ( CMG.TO ) is very pleased to report our financial results for the fiscal year ended March 31, 2015.

MANAGEMENT'S DISCUSSION AND ANALYSIS

This Management's Discussion and Analysis ("MD&A") for Computer Modelling Group Ltd. ("CMG," the "Company," "we" or "our"), presented as at May 20, 2015, should be read in conjunction with the audited consolidated financial statements and related notes of the Company for the years ended March 31, 2015 and 2014. Additional information relating to CMG, including our Annual Information Form, can be found at www.sedar.com . The financial data contained herein have been prepared in accordance with International Financial Reporting Standards ("IFRS") and, unless otherwise indicated, all amounts in this report are expressed in Canadian dollars.

On May 21, 2014, the Board of Directors of the Company approved a two-for-one stock split of the Company's issued and outstanding Common Shares. The Common Shares were traded on a "due bill" basis from the opening on June 23, 2014 to July 2, 2014, inclusively. The stock split record date was June 25, 2014. Accordingly, all comparative number of shares and per share amounts have been retroactively adjusted to reflect the two-for-one split.

CORPORATE PROFILE

CMG is a computer software technology company serving the oil and gas industry. The Company is a leading supplier of advanced processes reservoir modelling software with a blue chip customer base of international oil companies and technology centers in approximately 60 countries. The Company also provides professional services consisting of highly specialized support, consulting, training, and contract research activities. CMG has sales and technical support services based in Calgary, Houston, London, Caracas, Dubai, Bogota and Kuala Lumpur. CMG's Common Shares are listed on the Toronto Stock Exchange ("TSX") and trade under the symbol "CMG".

VISION, BUSINESS AND STRATEGY

CMG's vision is to become the leading developer and supplier of dynamic reservoir modelling systems in the world. Early in its life CMG made the strategic decision to focus its research and development efforts on providing solutions for the simulation of difficult hydrocarbon recovery techniques, a decision that created the foundation for CMG's dominant market presence today in the simulation of advanced hydrocarbon recovery processes. CMG has continued this commitment by increasing spending on research and development and working closely with its customers to develop simulation tools relevant to the challenges and opportunities they face today. This includes the CoFlow project (formerly known as the DRMS project), a collaborative effort with our partners Shell International Exploration and Production BV ("Shell") and Petroleo Brasileiro S.A. ("Petrobras") to jointly develop the newest generation of reservoir simulation software. Our target is to develop a dynamic system that does more than optimize reservoir recovery; it will model the entire hydrocarbon reservoir system, including production systems.

Since its inception more than 35 years ago, CMG has remained focused on assisting its customers in unlocking the value of their hydrocarbon reservoirs. With petroleum production using conventional methods on the decline, the petroleum industry must use more difficult and costly advanced process extraction methods, while being faced with more governmental and regulatory requirements over environmental concerns. CMG's success can, in turn, be correlated with the oil industry becoming more reliant on the use of simulation technology due to the maturity of conventional petroleum reservoirs and the complexities of both current and emerging production processes.

CMG's success can specifically be attributed to a number of factors: advanced physics, ongoing enhancements to the Company's already robust product line, improved computational speed, parallel computing ability, ease of use features of the pre- and post-processor applications, cost effectiveness of the CMG solution for customers, and the knowledge base of CMG's personnel to support and advance its software.

CMG currently licenses reservoir simulation software to more than 500 oil and gas companies, consulting firms and research institutions in approximately 60 countries. In combination with its principal business of licensing its software, CMG also provides professional services consisting of highly specialized consulting, support, training, and funded research activities for its customers. While the generation of professional services revenue specifically tied to the provision of consulting services is not regarded as a core part of CMG's business, offering this type of service is important to CMG operationally. CMG performs a limited amount of specialized consulting services, which are typically of a highly complex and/or experimental nature. These studies provide hands-on practical knowledge, allowing CMG staff to test the boundaries of our software, and provide us the opportunity to increase software license sales to both new and existing customers. In addition, providing consulting services is important from the customer service perspective as it enables our customers to become more proficient users of CMG's software. The funded research revenue is derived from the customers who partner with CMG to assist in the development, testing and refinement of new simulation technologies. In addition to consulting, we allocate significant resources to training, which is an instrumental part of our company's success. Our training programs enable our customers to become more efficient and effective users of our software, which, in turn, contributes to higher customer satisfaction. Our training is continuous in nature and it helps us in developing and maintaining long-term relationships with our customers.

CMG remains true to its strategy of growing its revenue base while advancing its technological superiority over its competition. CMG firmly believes that, to become the dominant supplier of dynamic reservoir modelling systems in the world, it must be responsive to customers' needs today and accurately predict their needs in the future.

CMG invests a significant amount of resources each year towards maintaining its technological superiority. During fiscal 2015, CMG increased its overall spending on research and development by 16% (representing 20% of total revenue) and expects to continue spending at a similar level in relation to its revenue base in fiscal 2016. The increasing level of investment by CMG in its current product suite offering helps to ensure that its existing proven technology continues to be industry-leading. These significant levels of investment, in combination with partnering with Shell and Petrobras in the CoFlow project (formerly known as the DRMS project) to jointly develop the newest generation of reservoir simulation software, are targeted strategies to achieve our vision to become the leading developer and supplier of dynamic reservoir modelling systems in the world.

OVERALL PERFORMANCE

KEY PERFORMANCE DRIVERS AND CAPABILITY TO DELIVER RESULTS

One of the challenges the petroleum industry faces in trying to overcome barriers to production growth is the continuing need for breakthrough technologies. The facts facing the petroleum industry today are that brand new fields are increasingly difficult to find, especially on a large scale, and that there are a large number of mature fields and unconventional prospects where known petroleum reserves exist; the question is how to economically extract the petroleum reserves in place and do so utilizing environmentally conscious processes. These challenges have been made even more formidable given that the current economic environment and global political climate have led to increased uncertainty regarding capital markets and commodity prices.

The petroleum industry utilizes reservoir simulation to provide both vital information and a visual interpretation on how reservoirs will behave under various recovery techniques. Understanding the science of how a petroleum reservoir will react to difficult hydrocarbon recovery processes through simulation prior to spending the capital on drilling wells and injecting expensive chemicals and steam, for instance, is far less costly and risky than trying the various techniques on real wells.

CMG's existing product suite of software is the market leader in the simulation of difficult hydrocarbon recovery techniques. To maintain this dominant market position, CMG actively participates in research consortia that experiment with new petroleum extraction processes and technologies. CMG then incorporates the simulation of new recovery methods into its product suite and focuses on overcoming existing technological barriers to advance speed and ease of use, amongst other benefits, in its software.

In October 2014, CMG announced the naming of its newest generation of dynamic reservoir modelling system, previously referred to as the "DRMS project," to CoFlow. The newest generation of reservoir modelling software will provide a collaborative, integrated modelling framework to allow asset teams, including reservoir, production and geomechanical engineers, to work together on multiple, integrated reservoirs and production networks. The most recent version of the software, referred to as R9, achieved its target of successfully simulating a complex integrated asset model. The next version, R10, is scheduled for release in the second half of calendar 2015, for the application on additional target assets selected by our partners, Shell and Petrobras.

The development of our CoFlow system, the newest generation reservoir and production system simulation software, is a significant project for CMG and its partners; a project that to-date has represented over 345 man-years of development. The CoFlow team consists of 70 full-time equivalent persons made up of 44 CMG employees and consultants and 5 partner-seconded staff members, all working in CMG's Calgary offices, with an additional 21 partner staff members working remotely from their respective offices in the Netherlands, Brazil and the United States. CMG, through its participation in this joint project, will have full commercialization rights to the developed technology. CMG and its partners are committed to the ongoing funding of the project, with the Company's share of project costs estimated to be $6.4 million ($3.4 million net of overhead recoveries) for the upcoming fiscal year. As project operator, CMG receives a fee for operator services, which is reflected in revenue as professional services.

During fiscal 2015, CMG launched iSegWell, an advanced analytical wellbore modelling tool in IMEX black oil reservoir simulator, designed to simultaneously optimize well design and reservoir productivity by modelling flow and pressure changes throughout wellbore branches, tubing and equipment.

We expect CMG's share of the market for all petroleum recovery simulation to increase as the amount of easy-to-extract oil declines and as production from unconventional sources increases. The speed and the magnitude of growth in licenses sold for use of CMG's advanced recovery process simulators is enhanced by the shift in production from conventional means to more complex recovery methods.

CMG is in a very strong financial position with $60.9 million in working capital, no bank debt and a long history of generating earnings and cash from operating activities. In addition to its financial resources, CMG's real strength lies in the outstanding quality and dedication of its employees in all areas of the Company. While it has never been easy to find qualified staff as CMG has grown through the years, our expanding reputation as a challenging and rewarding place to work has somewhat eased this burden. CMG added 16 new full-time equivalent staff members to its employee complement in fiscal 2015 and is planning for a potential increase in its staff complement by a similar number by the end of fiscal 2016.

Our focus will remain on increasing software license sales to both existing and new customers and, with diversification of our geographic profile, we plan to strengthen our position in the global marketplace. Over 80% of our software license revenue is derived from our annuity and maintenance contracts, which generally represent a recurring source of revenue. Sustained revenue growth, combined with solid control over corporate costs, will continue to be the key variables in ensuring CMG's future profitability. During the fiscal year ended March 31, 2015, our EBITDA represented 51% of total revenue which demonstrates our ability to effectively manage our corporate costs.

We continue to return value to our shareholders in the form of regular quarterly dividend payments. During the year ended March 31, 2015, as compared to the prior fiscal year, we increased total dividends declared and paid by 3%.

We are confident that our sustainable business model driven by superior technology, commitment to research and development initiatives, and customer-oriented approach will continue contributing to CMG's future success.

ANNUAL PERFORMANCE
($ thousands, unless otherwise stated)		March 31, 2015		March 31, 2014		March 31, 2013
Annuity/maintenance licenses		63,431		57,139		54,555
Perpetual licenses		13,405		9,074		8,406
Software licenses		76,836		66,213		62,961
Professional services		8,025		8,290		5,659
Total revenue		84,861		74,503		68,620
Operating profit		41,516		36,782		34,290
Operating profit (%)		49%		49%		50%
EBITDA (1)		43,099		38,373		35,829
Net income for the year		32,648		27,630		24,822
Cash dividends declared and paid		31,462		30,304		27,905
Total assets		106,456		100,268		83,421
Total shares outstanding		78,487		78,419		76,258
Trading price per share at March 31		12.72		14.58		10.55
Market capitalization at March 31		998,353		1,143,351		804,130
Per share amounts - ($/share)
Earnings per share - basic		0.42		0.36		0.33
Earnings per share - diluted		0.41		0.35		0.32
Cash dividends declared and paid		0.40		0.39		0.37

(1)	EBITDA is defined as net income before adjusting for depreciation expense, finance income, finance costs, and income and other taxes. See "Non-IFRS Financial Measures".

QUARTERLY PERFORMANCE
		Fiscal 2014 (1)								Fiscal 2015 (2)
($ thousands, unless otherwise stated)		Q1		Q2		Q3		Q4		Q1		Q2		Q3		Q4
Annuity/maintenance licenses		13,958		13,153		14,278		15,750		15,966		15,331		16,071		16,063
Perpetual licenses		2,331		1,829		2,942		1,972		1,432		2,661		7,150		2,162
Software licenses		16,289		14,982		17,220		17,722		17,398		17,992		23,221		18,225
Professional services		1,827		2,202		2,007		2,254		2,154		1,739		1,985		2,147
Total revenue		18,116		17,184		19,227		19,976		19,552		19,731		25,206		20,372
Operating profit		9,350		8,296		9,575		9,561		9,121		9,560		14,315		8,520
Operating profit (%)		52		48		50		48		47		48		57		42
EBITDA		9,725		8,675		9,972		10,001		9,488		9,949		14,717		8,945
Profit before income and other taxes		9,999		8,133		10,249		10,761		8,733		10,411		15,144		11,310
Income and other taxes		2,918		2,525		3,044		3,025		2,489		2,938		4,162		3,361
Net income for the period		7,081		5,608		7,205		7,736		6,244		7,473		10,982		7,949
Cash dividends declared and paid		8,841		6,994		7,020		7,449		7,872		7,880		7,862		7,848
Per share amounts - ($/share)
Earnings per share - basic		0.09		0.07		0.09		0.10		0.08		0.09		0.14		0.10
Earnings per share - diluted		0.09		0.07		0.09		0.10		0.08		0.09		0.14		0.10
Cash dividends declared and paid		0.115		0.09		0.09		0.095		0.10		0.10		0.10		0.10

(1)	Q1, Q2, Q3 and Q4 of fiscal 2014 include $1.2 million, $0.2 million, $0.9 million and $1.8 million, respectively, in revenue that pertains to usage of CMG's products in prior quarters.
(2)	Q1, Q2, Q3 and Q4 of fiscal 2015 include $1.5 million, $0.2 million, $0.2 million and $0.3 million, respectively, in revenue that pertains to usage of CMG's products in prior quarters.

HIGHLIGHTS

During the year ended March 31, 2015, as compared to the previous fiscal year, CMG:

• Increased annuity/maintenance revenue by 11%

• Increased total revenue by 14%

• Increased spending on research and development by 16%

• Increased dividends per share declared and paid by 3%

• Realized basic earnings per share of $0.42, representing a 17% increase

• Purchased 808,000 Common Shares for cancellation under the Normal Course Issuer Bid ("NCIB")

REVENUE
Three months ended March 31,		2015		2014		$ change			% change
($ thousands)
Software licenses		18,225		17,722		503			3%
Professional services		2,147		2,254		(107	)		-5%
Total revenue		20,372		19,976		396			2%
Software license revenue - % of total revenue		89%		89%
Professional services - % of total revenue		11%		11%
Year ended March 31,		2015		2014		$ change			% change
($ thousands)
Software licenses		76,836		66,213		10,623			16%
Professional services		8,025		8,290		(265	)		-3%
Total revenue		84,861		74,503		10,358			14%
Software license revenue - % of total revenue		91%		89%
Professional services - % of total revenue		9%		11%

CMG's revenue is comprised of software license sales, which provide the majority of the Company's revenue, and fees for professional services.

Total revenue increased by 2% for the three months ended March 31, 2015, compared to the previous fiscal year, mainly due to an increase in software license revenue partially offset by a decrease in fees for professional services.

Total revenue increased by 14% for the year ended March 31, 2015, compared to the previous fiscal year, mainly due to an increase in software license revenue.

SOFTWARE LICENSE REVENUE

Software license revenue is made up of annuity/maintenance license fees charged for the use of the Company's software products which is generally for a term of one year or less and perpetual software license sales, whereby the customer purchases the-then-current version of the software and has the right to use that version in perpetuity. Annuity/maintenance license fees have historically had a high renewal rate and, accordingly, provide a reliable revenue stream while perpetual license sales are more variable and unpredictable in nature as the purchase decision and its timing fluctuate with the customers' needs and budgets. The majority of CMG's customers who have acquired perpetual software licenses subsequently purchase our maintenance package to ensure ongoing product support and access to current versions of CMG's software

Three months ended March 31,		2015		2014		$ change		% change
($ thousands)
Annuity/maintenance licenses		16,063		15,750		313		2%
Perpetual licenses		2,162		1,972		190		10%
Total software license revenue		18,225		17,722		503		3%
Annuity/maintenance as a % of total software license revenue		88%		89%
Perpetual as a % of total software license revenue		12%		11%
Year ended March 31,		2015		2014		$ change		% change
($ thousands)
Annuity/maintenance licenses		63,431		57,139		6,292		11%
Perpetual licenses		13,405		9,074		4,331		48%
Total software license revenue		76,836		66,213		10,623		16%
Annuity/maintenance as a % of total software license revenue		83%		86%
Perpetual as a % of total software license revenue		17%		14%

Total software license revenue grew by 3% and 16% in the three months and year ended March 31, 2015, respectively, compared to the same periods of the previous fiscal year, due to increases in both annuity/maintenance revenue and perpetual license sales.

CMG's annuity/maintenance license revenue increased by 2% during the three months ended March 31, 2015, compared to the same period of the previous fiscal year, due to the positive impact of the strengthening of the US dollar. CMG's annuity/maintenance license revenue increased by 11% during the year ended March 31, 2015, compared to the previous fiscal year, driven by sales to existing and new customers, an increase in maintenance revenue tied to perpetual sales and the positive impact of the strengthening of the US dollar.

All of our regions, with the exception of South America, experienced growth in annuity/maintenance revenue during the three months and year ended March 31, 2015, compared to the same periods of the previous fiscal year, with the most significant dollar growth being generated from our US market.

Our annuity/maintenance revenue is impacted by the revenue recognition from a long-standing customer for which revenue recognition criteria are fulfilled only at the time of the receipt of funds (see the discussion about revenue earned in the current period that pertains to usage of products in prior quarters above the "Quarterly Software License Revenue" graph). The variability of the amounts of the payments received and the timing of such payments may skew the comparison of the recorded annuity/maintenance revenue amounts between periods. To provide a normalized comparison, if we were to remove revenue from this particular customer from the fourth quarter of the current and previous fiscal years, we will notice that the annuity/maintenance revenue increased by 11%, instead of 2%, as compared to the same period of the previous fiscal year. Similarly, if we were to remove revenue from this particular customer from the years ended March 31, 2015 and 2014, we will notice that the annuity/maintenance revenue increased by 14%, instead of 11%, as compared to the previous fiscal year. Historically we have received payments from this particular customer, however, there is increasing uncertainty associated with the receipt of payments due to the economic conditions in the country where this customer is located. Payments from this customer will continue to be recorded on a cash basis which may introduce some variability in our reported quarterly annuity/maintenance revenue results.

Perpetual license sales increased by 10% for the three months ended March 31, 2015, compared to the same period of the previous fiscal year, mainly due to growth in perpetual sales in South America partially offset by fewer perpetual sales being realized in the US market.

Perpetual license sales increased by 48% for the year ended March 31, 2015, compared to the previous fiscal year, mainly due to a large perpetual sale to an existing customer in South America during the third quarter of the current fiscal year. The increase in South America was partially offset by decreases in the Eastern Hemisphere and US markets, compared to the previous fiscal year.

Software licensing under perpetual sales may fluctuate significantly between periods due to the uncertainty associated with the timing and the location where sales are generated. For this reason, even though we expect to achieve a certain level of aggregate perpetual sales on an annual basis, we expect to observe fluctuations in the quarterly perpetual revenue amounts throughout the fiscal year.

We can observe from the tables below that the exchange rates between the US and Canadian dollars during the three months and year ended March 31, 2015, compared to the same periods of the previous fiscal year, had a positive impact on our reported license revenue.

The following table summarizes the US dollar denominated revenue and the weighted average exchange rate at which it was converted to Canadian dollars:

Three months ended March 31,				2015		2014		$ change		% change
($ thousands)
US dollar annuity/maintenance license sales		US$		10,119		10,462		(343)		-3%
Weighted average conversion rate				1.161		1.072
Canadian dollar equivalent		CDN$		11,747		11,212		535		5%
US dollar perpetual license sales		US$		1,713		1,808		(95)		-5%
Weighted average conversion rate				1.238		1.091
Canadian dollar equivalent		CDN$		2,121		1,972		149		8%
Year ended March 31,				2015		2014		$ change		% change
($ thousands)
US dollar annuity/maintenance license sales		US$		41,669		38,030		3,639		10%
Weighted average conversion rate				1.098		1.030
Canadian dollar equivalent		CDN$		45,756		39,178		6,578		17%
US dollar perpetual license sales		US$		11,333		8,234		3,099		38%
Weighted average conversion rate				1.135		1.048
Canadian dollar equivalent		CDN$		12,867		8,627		4,240		49%

The following table quantifies the foreign exchange impact on our software license revenue:

Three months ended March 31,		Q4 2014		Incremental License			Foreign Exchange		Q4 2015
($ thousands)		Balance		Growth			Impact		Balance
Annuity/maintenance license sales		15,750		(590	)		903		16,063
Perpetual license sales		1,972		(62	)		252		2,162
Total software license revenue		17,722		(652	)		1,155		18,225
Year ended March 31,		2014		Incremental License			Foreign Exchange		2015
($ thousands)		Balance		Growth			Impact		Balance
Annuity/maintenance license sales		57,139		3,381			2,911		63,431
Perpetual license sales		9,074		3,360			971		13,405
Total software license revenue		66,213		6,741			3,882		76,836

REVENUE BY GEOGRAPHIC SEGMENT
Three months ended March 31,			2015		2014		$ change			% change
($ thousands)
Annuity/maintenance revenue
	Canada		6,475		6,225		250			4%
	United States		4,279		3,236		1,043			32%
	South America		1,502		2,616		(1,114	)		-43%
	Eastern Hemisphere (1)		3,807		3,673		134			4%
			16,063		15,750		313			2%
Perpetual revenue
	Canada		42		67		(25	)		-37%
	United States		175		787		(612	)		-78%
	South America		848		33		815			2470%
	Eastern Hemisphere		1,097		1,085		12			1%
			2,162		1,972		190			10%
Total software license revenue
	Canada		6,517		6,292		225			4%
	United States		4,454		4,023		431			11%
	South America		2,350		2,649		(299	)		-11%
	Eastern Hemisphere		4,904		4,758		146			3%
			18,225		17,722		503			3%
Year ended March 31,			2015		2014		$ change			% change
($ thousands)
Annuity/maintenance revenue
	Canada		25,538		23,120		2,418			10%
	United States		15,958		12,778		3,180			25%
	South America		7,742		8,027		(285	)		-4%
	Eastern Hemisphere (1)		14,193		13,214		979			7%
			63,431		57,139		6,292			11%
Perpetual revenue
	Canada		539		514		25			5%
	United States		349		1,641		(1,292	)		-79%
	South America		7,427		1,385		6,042			436%
	Eastern Hemisphere		5,090		5,534		(444	)		-8%
			13,405		9,074		4,331			48%
Total software license revenue
	Canada		26,077		23,634		2,443			10%
	United States		16,307		14,419		1,888			13%
	South America		15,169		9,412		5,757			61%
	Eastern Hemisphere		19,283		18,748		535			3%
			76,836		66,213		10,623			16%

(1)	Includes Europe, Africa, Asia and Australia.

During the three months ended March 31, 2015, on a geographic basis, total software license sales increased across all regions, with the exception of South America, as compared to the same period of the previous fiscal year, whereas all regions experienced growth during the year ended March 31, 2015, compared to the previous fiscal year.

The Canadian market (representing 34% of year-to-date total software revenue) experienced growth in annuity/maintenance license sales during the three months and year ended March 31, 2015, compared to the same periods of the previous fiscal year. This increase was mainly supported by sales to existing customers, but we also added new customers during the fiscal year. Perpetual revenue for the three months and year ended March 31, 2015 remained comparable to the respective periods of the previous fiscal year.

The US market (representing 21% of year-to-date total software revenue) had the most significant growth in annuity/maintenance license sales during the three months and year ended March 31, 2015, compared to the same periods of the previous fiscal year, driven by sales to existing and new customers. Perpetual revenue decreased during the three months and year ended March 31, 2015, compared to the same periods of the previous fiscal year. We continue to experience successive increases in annuity/maintenance license sales in the US as evidenced by the quarterly year-over-year increases of 16%, 16%, 30%, and 22% recorded during Q4 2014, Q1 2015, Q2 2015, and Q3 2015, respectively. This double-digit growth trend has continued into the fourth quarter of the current fiscal year with the recorded increase of 32%.

South America (representing 20% of year-to-date total software revenue) experienced a decrease in annuity/maintenance license sales during the three months and year ended March 31, 2015, compared to the same periods of the previous fiscal year. The revenue in our South American region can be impacted by the variability of the amounts recorded from a customer for which revenue is recognized only when cash is received (see the discussion about revenue earned in the current period that pertains to usage of products in prior quarters above the "Quarterly Software License Revenue" graph). To provide a normalized comparison, if we were to remove revenue from this particular customer from the fourth quarter of the current and previous fiscal years, we will notice that the annuity/maintenance revenue increased by 14%, instead of a decrease of 43%, as compared to the same period of the previous fiscal year. Similarly, if we were to remove revenue from this particular customer from the years ended March 31, 2015 and 2014, we will notice that the annuity/maintenance revenue increased by 15%, instead of a decrease of 4%, as compared to the previous fiscal year. The South American region experienced an increase in perpetual license sales during the three months and year ended March 31, 2015, compared to the same periods of the previous fiscal year. A large perpetual sale made during the third quarter of the current fiscal year contributed significantly to the increase in year-to-date perpetual revenue.

The Eastern Hemisphere (representing 25% of the year-to-date total software revenue) grew annuity/maintenance license sales by 4% and 7%, respectively, during the three months and year ended March 31, 2015, compared to the same periods of the previous fiscal year, driven by sales to existing and new customers. While perpetual revenue for the three months ended March 31, 2015 was comparable with the same period of the previous fiscal year, it decreased during the year ended March 31, 2015, compared to the previous fiscal year.

Software license revenue in the US, South America and the Eastern Hemisphere was positively affected by the strengthening of the US dollar during the three months and year ended March 31, 2015, compared to the same periods of the previous fiscal year.

Movements in perpetual sales across regions are indicative of the unpredictable nature of the timing and location of perpetual license sales. Overall, our recurring annuity/maintenance revenue base continued to grow during fiscal 2015. We will continue to focus our efforts on increasing our license sales to both existing and new customers and, supported by our product suite offering and our customer-oriented approach, we will endeavor to continue expanding our market share globally.

As footnoted in the Quarterly Performance table, in the normal course of business, CMG may complete the negotiation of certain annuity/maintenance contracts and/or fulfill revenue recognition requirements within a current quarter that includes usage of CMG's products in prior quarters. This situation particularly affects contracts negotiated with countries that face increased economic and political risks leading to the revenue recognition criteria being satisfied only at the time of the receipt of cash. The dollar magnitude of such contracts may be significant to the quarterly comparatives of our annuity/maintenance revenue stream and, to provide a normalized comparison, we specifically identify the revenue component where revenue recognition is satisfied in the current period for products provided in previous quarters.

To view Quarterly Software License Revenue graph, please click on the following link: http://media3.marketwire.com/docs/1007414_chart.pdf

DEFERRED REVENUE
		Fiscal		Fiscal
		2015		2014		$ change		% change
($ thousands)
Deferred revenue at:
Q1 (June 30)		26,628		22,014		4,614		21%
Q2 (September 30)		22,928		19,346		3,582		19%
Q3 (December 31)		19,180		18,069		1,111		6%
Q4 (March 31)		32,663		29,531		3,132		11%

CMG's deferred revenue consists primarily of amounts for pre-sold licenses. Our annuity/maintenance revenue is deferred and recognized on a straight-line basis over the life of the related license period, which is generally one year or less. Amounts are deferred for licenses that have been provided and revenue recognition reflects the passage of time.

The increase in deferred revenue year-over-year as at the end of Q1, Q2, Q3 and Q4 is reflective of the growth in annuity/maintenance license sales. The above table illustrates the normal trend in the deferred revenue balance from the beginning of the calendar year (which corresponds with Q4 of our fiscal year), when most renewals occur, to the end of the calendar year (which corresponds with Q3 of our fiscal year). Our fourth quarter corresponds with the beginning of the fiscal year for most oil and gas companies, representing a time when they enter a new budget year and sign/renew their contracts.

Deferred revenue as at Q4 of fiscal 2015 increased by 11%, compared to Q4 of fiscal 2014, due to both the renewal of existing and signing of new annuity and maintenance contracts in the quarter.

PROFESSIONAL SERVICES REVENUE

CMG recorded professional services revenue of $2.1 million for the three months ended March 31, 2015, representing a slight decrease of $0.1 million, compared to the same period of the previous fiscal year. Professional services for the year ended March 31, 2015 amounted to $8.0 million, representing a slight decrease of $0.3 million, compared to the previous fiscal year, as a result of a decrease in project activities by our customers.

Professional services revenue consists of specialized consulting, training, and contract research activities. CMG performs consulting and contract research activities on an ongoing basis, but such activities are not considered to be a core part of our business and are primarily undertaken to increase our knowledge base and hence expand the technological abilities of our simulators in a funded manner, combined with servicing our customers' needs. In addition, these activities are undertaken to market the capabilities of our suite of software products with the ultimate objective to increase software license sales. Our experience is that consulting activities are variable in nature as both the timing and dollar magnitude of work are dependent on activities and budgets within customer companies.

EXPENSES
Three months ended March 31,		2015		2014		$ change			% change
($ thousands)
Sales, marketing and professional services		5,529		4,539		990			22%
Research and development		4,406		3,917		489			12%
General and administrative		1,917		1,959		(42	)		-2%
Total operating expenses		11,852		10,415		1,437			14%
Direct employee costs (1)		9,486		8,385		1,101			13%
Other corporate costs		2,366		2,030		336			17%
		11,852		10,415		1,437			14%
Year ended March 31,		2015		2014		$ change			% change
($ thousands)
Sales, marketing and professional services		19,278		16,144		3,134			19%
Research and development		16,994		14,623		2,371			16%
General and administrative		7,073		6,954		119			2%
Total operating expenses		43,345		37,721		5,624			15%
Direct employee costs (1)		34,377		30,292		4,085			13%
Other corporate costs		8,968		7,429		1,539			21%
		43,345		37,721		5,624			15%

(1)	Includes salaries, bonuses, stock-based compensation, benefits, commissions, and professional development.

CMG's total operating expenses increased by 14% and 15% for the three months and year ended March 31, 2015, respectively, compared to the same periods of the previous fiscal year, due to increases in both direct employee costs and other corporate costs.

DIRECT EMPLOYEE COSTS

As a technology company, CMG's largest area of expenditure is its people. Approximately 79% of the total operating expenses in the year ended March 31, 2015 related to direct employee costs, compared to 80% recorded in the comparative period of the previous fiscal year. Staffing levels for the current fiscal year grew in comparison to the previous fiscal year to support our continued growth. At March 31, 2015, CMG's full-time equivalent staff complement was 205 employees and consultants, up from 189 full-time equivalent employees and consultants as at March 31, 2014. Direct employee costs increased during the three months and year ended March 31, 2015, compared to the same periods of the previous fiscal year, due to staff additions, increased levels of compensation, and related benefits.

OTHER CORPORATE COSTS

Other corporate costs increased by 17% for the three months ended March 31, 2015, compared to the same period of the previous fiscal year, mainly attributable to an increase in rent and other office costs related to our international offices.

Other corporate costs increased by 21% for the year ended March 31, 2015, compared to the previous fiscal year, mainly attributable to the inclusion of the costs associated with CMG's biennial technical symposium which took place during the first quarter of the current fiscal year, a decrease in SR&ED credits and an increase in rent and other office costs related to our international offices.

RESEARCH AND DEVELOPMENT
Three months ended March 31,		2015			2014			$ change		% change
($ thousands)
Research and development (gross)		4,757			4,359			398		9%
SR&ED credits		(351	)		(442	)		91		-21%
Research and development		4,406			3,917			489		12%
Research and development as a % of total revenue		22%			20%
Year ended March 31,		2015			2014			$ change		% change
($ thousands)
Research and development (gross)		18,313			16,439			1,874		11%
SR&ED credits		(1,319	)		(1,816	)		497		-27%
Research and development		16,994			14,623			2,371		16%
Research and development as a % of total revenue		20%			20%

CMG maintains its belief that its strategy of growing long-term value for shareholders can only be achieved through continued investment in research and development. CMG works closely with its customers to provide solutions to complex problems related to proven and new advanced recovery processes.

The above research and development costs include CMG's share of joint research and development costs associated with the CoFlow project of $1.3 million and $4.7 million for the three months and year ended March 31, 2015, respectively (2014 - $1.0 million and $4.0 million). See discussion under "Commitments, Off Balance Sheet Items and Transactions with Related Parties."

The increases of 9% and 11% in our gross spending on research and development for the three months and year ended March 31, 2015, respectively, compared to the same periods of the previous fiscal year, demonstrate our continued commitment to the advancement of our technology which is the focal point of our business strategy.

Research and development costs, net of SR&ED credits, increased by 12% during the three months ended March 31, 2015, compared to the same period of the previous fiscal year, mainly due to an increase in employee compensation costs.

Research and development costs, net of SR&ED credits, increased by 16% during the year ended March 31, 2015, compared to the previous fiscal year, mainly due to an increase in employee compensation costs and a decrease in SR&ED credits.

SR&ED credits decreased for the year ended March 31, 2015, compared to the previous fiscal year, due to both a decrease in the Federal SR&ED input tax credit rate (from 20% to 15% effective January 1, 2014) and a decrease in SR&ED eligible expenditures associated with the CoFlow project.

DEPRECIATION
Three months ended March 31,			2015		2014		$ change			% change
($ thousands)
Depreciation of property and equipment, allocated to:
	Sales, marketing and professional services		151		118		33			28%
	Research and development		230		247		(17	)		-7%
	General and administrative		44		75		(31	)		-41%
Total depreciation			425		440		(15	)		-3%
Year ended March 31,			2015		2014		$ change			% change
($ thousands)
Depreciation of property and equipment, allocated to:
	Sales, marketing and professional services		509		423		86			20%
	Research and development		877		939		(62	)		-7%
	General and administrative		197		229		(32	)		-14%
Total depreciation			1,583		1,591		(8	)		-1%

Depreciation in the three months and year ended March 31, 2015 was relatively flat, as compared to the same periods in the previous fiscal year.

FINANCE INCOME
Three months ended March 31,		2015		2014		$ change			% change
($ thousands)
Interest income		153		165		(12	)		-7	%
Net foreign exchange gain		2,637		1,035		1,602			155	%
Total finance income		2,790		1,200		1,590			133	%
Year ended March 31,		2015		2014		$ change			% change
($ thousands)
Interest income		699		644		55			9	%
Net foreign exchange gain		3,383		1,716		1,667			97	%
Total finance income		4,082		2,360		1,722			73	%

Interest income in the three months ended March 31, 2015 was relatively flat, as compared to the same period of the previous fiscal year, while it increased in the year ended March 31, 2015, compared to the previous fiscal year, mainly due to investing larger cash balances.

CMG is impacted by the movement of the US dollar against the Canadian dollar as approximately 74% (2014 - 72%) of CMG's revenue for the year ended March 31, 2015 is denominated in US dollars, whereas only approximately 25% (2014 - 24%) of CMG's total costs are denominated in US dollars.

The following chart shows the exchange rates used to translate CMG's US dollar denominated working capital at March 31, 2015, 2014 and 2013 and the average exchange rates used to translate income statement items during the years ended March 31, 2015, 2014 and 2013:

CDN$ to US$		At March 31		Yearly average
2013		0.9846		0.9963
2014		0.9047		0.9452
2015		0.7885		0.8717

CMG recorded a net foreign exchange gain of $2.6 million for the three months ended March 31, 2015, compared to a net foreign exchange gain of $1.0 million recorded in the same period of the previous fiscal year, due to a weakening in the Canadian dollar during the quarter which contributed positively to the valuation of our US-denominated working capital.

CMG recorded a net foreign exchange gain of $3.4 million for the year ended March 31, 2015, compared to a net foreign exchange gain of $1.7 million recorded in the previous fiscal year, as the net foreign exchange gains recorded in Q2, Q3 and Q4 of fiscal 2015 were partially offset by the foreign exchange loss recorded in Q1 of fiscal 2015.

INCOME AND OTHER TAXES

CMG's effective tax rate for the year ended March 31, 2015 is reflected as 28.40% (2014 - 29.41%), whereas the prevailing Canadian statutory tax rate is now 25.0%. This difference is primarily due to the non-tax deductibility of stock-based compensation expense.

The benefit recorded in CMG's books on the SR&ED investment tax credit program impacts deferred income taxes. The investment tax credit earned in the current fiscal year is utilized by CMG to reduce income taxes otherwise payable for the current fiscal year and the federal portion of this benefit bears an inherent tax liability as the amount of the credit is included in the subsequent year's taxable income for both federal and provincial purposes. The inherent tax liability on these investment tax credits is reflected in the year the credit is earned as a non-current deferred tax liability and then, in the following fiscal year, is transferred to income taxes payable.

OPERATING PROFIT AND NET INCOME
Three months ended March 31,		2015			2014			$ change			% change
($ thousands, except per share amounts)
Total revenue		20,372			19,976			396			2%
Operating expenses		(11,852	)		(10,415	)		(1,437	)		14%
Operating profit		8,520			9,561			(1,041	)		-11%
Operating profit as a % of total revenue		42%			48%
Net income for the period		7,949			7,736			213			3%
Net income for the period as a % of total revenue		39%			39%
Basic earnings per share ($/share)		0.10			0.10			-			0%
Year ended March 31,		2015			2014			$ change			% change
($ thousands, except per share amounts)
Total revenue		84,861			74,503			10,358			14%
Operating expenses		(43,345	)		(37,721	)		(5,624	)		15%
Operating profit		41,516			36,782			4,734			13%
Operating profit as a % of total revenue		49%			49%
Net income for the period		32,648			27,630			5,018			18%
Net income for the period as a % of total revenue		38%			37%
Basic earnings per share ($/share)		0.42			0.36			0.06			17%

Operating profit as a percentage of total revenue for the three months ended March 31, 2015 decreased to 42%, compared to 48% in the same period of the previous fiscal year. While our revenue for the three months ended March 31, 2015 grew by 2%, as compared to the same period of the previous fiscal year, our operating expenses grew by 14%, having a negative impact on our operating profit. As discussed previously, our annuity/maintenance revenue is impacted by the revenue recognition from a long-standing customer for which revenue recognition criteria are fulfilled only at the time of the receipt of funds. If we were to normalize total revenue for this customer, the operating profit as a percentage of total revenue for the three months ended March 31, 2014 would have been 44%.

Operating profit as a percentage of total revenue for the year ended March 31, 2015 remained consistent at 49%, compared to the previous fiscal year (normalizing for the revenue amount described above does not impact the comparability between the fiscal years ended March 31, 2015 and 2014).

Net income for the period as a percentage of revenue remained consistent at 39% for the three months ended March 31, 2015, compared to the same period of the previous fiscal year.

Net income for the period as a percentage of revenue increased to 38% for the year ended March 31, 2015, compared to 37% for the previous fiscal year.

We have continued to maintain our profitability by focusing our efforts on increasing license sales while, at the same time, effectively controlling our operating costs. Managing these variables will continue to be imperative to our future success.

EBITDA
Three months ended March 31,			2015			2014			$ change			% change
($ thousands)
Net income for the period			7,949			7,736			213			3%
Add (deduct):
	Depreciation		425			440			(15	)		-3%
	Finance income		(2,790	)		(1,200	)		(1,590	)		133%
	Income and other taxes		3,361			3,025			336			11%
EBITDA			8,945			10,001			(1,056	)		-11%
EBITDA as a % of total revenue			44%			50%
Year ended March 31,			2015			2014			$ change			% change
($ thousands)
Net income for the period			32,648			27,630			5,018			18%
Add (deduct):
	Depreciation		1,583			1,591			(8	)		-1%
	Finance income		(4,082	)		(2,360	)		(1,722	)		73%
	Income and other taxes		12,950			11,512			1,438			12%
EBITDA			43,099			38,373			4,726			12%
EBITDA as a % of total revenue			51%			52%

EBITDA decreased by 11% for the three months ended March 31, 2015 and increased by 12% for the year ended March 31, 2015, compared to the same periods of the previous fiscal year. Similarly as explained under the "Operating Profit and Net Income" heading, our EBITDA was impacted by the revenue recognition from a long-standing customer for which revenue recognition criteria are fulfilled only at the time of the receipt of funds. If we were to normalize for this customer, EBITDA for the three months ended March 31, 2015 would have increased by 3%, rather than decreasing by 11%, as compared to the same period of the previous fiscal year. EBITDA for the year ended March 31, 2015 would have increased by 16%, instead of 12%, as compared to the previous fiscal year.

EBITDA as a percentage of total revenue decreased to 44% for the three months ended March 31, 2015, compared to 50% recorded in the same period of the previous fiscal year (47% normalized for the revenue amount described above).

EBITDA as a percentage of total revenue for the year ended March 31, 2015 was at 51%, which was comparable to 52% recorded in the previous fiscal year (normalizing for the revenue amount described above does not impact the comparability between the fiscal years ended March 31, 2015 and 2014).

LIQUIDITY AND CAPITAL RESOURCES
Three months ended March 31,			2015			2014

$ change % change ($ thousands) Cash, beginning of period 65,920 64,708 1,212 2% Cash flow from (used in): Operating activities 17,130 13,396 3,734 28% Financing activities (7,174 ) (5,324 ) (1,850 ) 35% Investing activities (534 ) (370 ) (164 ) 44% Cash, end of period 75,342 72,410 2,932 4% Year ended March 31, 2015 2014 $ change % change ($ thousands) Cash, beginning of period 72,410 59,419 12,991 22% Cash flow from (used in): Operating activities 40,718 32,860 7,858 24% Financing activities (36,037 ) (19,030 ) (17,007 ) 89% Investing activities (1,749 ) (839 ) (910 ) 108% Cash, end of period 75,342 72,410 2,932 4%

OPERATING ACTIVITIES

Cash flow generated from operating activities increased by $3.7 million in the three months ended March 31, 2015, compared to the same period of the previous fiscal year, mainly due to the change in the deferred revenue balance, the timing difference of when sales are made and when the resulting receivables are collected, and the timing difference of when trade payables and accrued liabilities are recorded and paid.

Cash flow generated from operating activities increased by $7.9 million in the year ended March 31, 2015, compared to the previous fiscal year, mainly due to an increase in net income, the timing difference of when trade payables and accrued liabilities are recorded and paid, and the timing difference of when sales are made and when the resulting receivables are collected partially offset by the change in the deferred revenue balance.

FINANCING ACTIVITIES

Cash used in financing activities during the three months ended March 31, 2015 increased by $1.9 million, compared to the same period of the previous fiscal year, due to receiving lower proceeds from the issuance of Common Shares and paying larger dividends.

Cash used in financing activities during the year ended March 31, 2015 increased by $17.0 million, compared to the previous fiscal year, due to buying back Common Shares, receiving lower proceeds from the issuance of Common Shares and paying larger dividends.

During the year ended March 31, 2015, CMG employees and directors exercised options to purchase 876,000 Common Shares, which resulted in cash proceeds of $5.3 million (2014 -2,161,000 options exercised to purchase Common Shares which resulted in cash proceeds of $11.3 million).

In the year ended March 31, 2015, CMG paid $31.5 million in dividends, representing the following quarterly dividends:

										2015
($ per share)		Q1		Q2		Q3		Q4		Total
Total dividends declared and paid		0.10		0.10		0.10		0.10		0.40

In the year ended March 31, 2014, CMG paid $30.3 million in dividends, representing the following quarterly dividends:

										2014
($ per share)		Q1		Q2		Q3		Q4		Total
Dividends declared and paid		0.090		0.090		0.090		0.095		0.365
Special dividend declared and paid		0.025		-		-		-		0.025
Total dividends declared and paid		0.115		0.090		0.090		0.095		0.390

On May 20, 2015, CMG announced the payment of a quarterly dividend of $0.10 per share on CMG's Common Shares. The dividend will be paid on June 15, 2015 to shareholders of record at the close of business on June 5, 2015.

In the fiscal 2012 Management's Discussion and Analysis, we reported that, beginning in fiscal 2013, we would increase the relative proportion of dividends paid quarterly and lower and/or eliminate the amount paid as a special dividend at the end of the fiscal year, in order to provide a more regular income stream to our shareholders throughout the year. The Company's focus will remain on a sustainable quarterly dividend; however, we may consider a special dividend as appropriate.

Based on our expectation of solid profitability and cash-generating ability driven by the predictability of our software revenue base and effective management of costs, we are cautiously optimistic that the company is well positioned for future growth which will enable us to continue to pay quarterly dividends.

On April 29, 2013, the Company announced a NCIB commencing on May 1, 2013 to purchase for cancellation up to 7,076,000 of its Common Shares. This NCIB finished on April 30, 2014 and no Common Shares were purchased.

On May 5, 2014, the Company announced a NCIB commencing on May 5, 2014 to purchase for cancellation up to 7,440,000 of its Common Shares. During the year ended March 31, 2015, 808,000 Common Shares were purchased at market price for a total cost of $9.8 million. This NCIB ends on May 4, 2015.

INVESTING ACTIVITIES

CMG's current needs for capital asset investment relate to computer equipment and office infrastructure costs, all of which will be funded internally. During the year ended March 31, 2015, CMG expended $1.7 million on property and equipment additions, primarily composed of computing equipment, furniture and leasehold improvements. CMG has a capital budget of $2.5 million for fiscal 2016.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2015, CMG has $75.3 million in cash, no debt, and has access to approximately $0.8 million under a line of credit with its principal banker.

During the year ended March 31, 2015, 25,830,000 shares of CMG's public float were traded on the TSX. As at March 31, 2015, CMG's market capitalization based upon its March 31, 2015 closing price of $12.72 was $998.4 million.

COMMITMENTS, OFF BALANCE SHEET ITEMS AND TRANSACTIONS WITH RELATED PARTIES

The Company is the operator of the CoFlow project, a collaborative effort with its partners Shell and Petrobras, to jointly develop the newest generation of reservoir and production system simulation software. The project has been underway since 2006 and, with the ongoing support of the participants, it is expected to continue until ultimate delivery of the software. The Company's share of costs associated with the project is estimated to be $6.4 million ($3.4 million net of overhead recoveries) for fiscal 2016. CMG plans to continue funding its share of the project costs associated with the development of the newest generation reservoir simulation software system from internally generated cash flows.

CMG has very little in the way of other ongoing material contractual obligations other than for pre-sold licenses, which are reflected as deferred revenue on its statement of financial position, and contractual obligations for office leases which are estimated for our fiscal years as follows: 2016 - $2.4 million; 2017 - $1.9 million; 2018 - $3.5 million; 2019 - $4.7 million; 2020 - $4.6; thereafter - $86.6 million. During the third quarter of the current fiscal year, CMG finalized a twenty year operating lease for our new Calgary offices which will commence in fiscal 2018.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. By their nature, these estimates are subject to estimation uncertainty. The effect on the financial statements of changes in such estimates in future periods could be material and would be accounted for in the period in which the estimates are revised and in any future periods affected.

Revenue recognition

Revenue consists primarily of software license fees with some fees for professional services. We recognize revenue in accordance with the current rules of IFRS. We follow specific and detailed guidelines in measuring revenue; however, certain judgments affect the application of our revenue recognition policies.

Software license revenue is comprised of annuity/maintenance license fees charged for the use of our software products which is generally for a term of one year or less, and perpetual software licensing, whereby the customer purchases the-then-current version of the software and has the right to use that version in perpetuity. We recognize software license revenue when persuasive evidence of an arrangement exists, the product has been delivered, the fee is fixed or determinable, and collection of the resulting receivable is probable. In cases where collectability is not deemed probable, revenue is recognized upon receipt of cash, assuming all other criteria have been met.

Annuity/maintenance revenue is deferred and recognized on a straight-line basis over the life of the related license period, which is generally one year or less. License fees for perpetual licenses are recognized fully in revenue when all recognition conditions are satisfied.

Certain software license agreements contain multiple-element arrangements as they may also include maintenance fees. Judgment is used in determining a fair value of each element of a contract.

Professional services revenue earned from certain consulting contracts is recognized by the stage of completion of the transaction determined using the percentage-of-completion method. Judgment is used in determining progress of each contract at period end. In assessing revenue recognition, judgment is also used in determining the ability to collect the corresponding account receivable.

Functional currency

The determination of the functional currency is a matter of determining the primary economic environment in which an entity operates. IAS 21, The Effects of Changes in Foreign Exchange Rates, sets out a number of factors to apply in making the determination of the functional currency. However, applying the factors in IAS 21 does not always result in a clear indication of functional currency. Where IAS 21 factors indicate differing functional currencies within a subsidiary, the Company uses judgment in the ultimate determination of that subsidiary's functional currency, including an assessment of the nature of the relationship between the Company and the subsidiary. Judgment was applied in the determination of the functional currency of certain of the Company's operating entities.

Research and development

Assumptions are made in respect to the eligibility of certain research and development projects in the calculation of SR&ED investment tax credits which are netted against the research and development costs in the statement of operations. SR&ED claims are subject to audits by relevant taxation authorities and the actual amount may change depending on the outcome of such audits.

Stock-based compensation

Assumptions and estimates are used in determining the inputs used in the Black-Scholes option pricing model, including assumptions regarding volatility, dividend yield, risk-free interest rates, forfeiture estimates and expected option lives.

Property and equipment

Estimates are used in determining useful economic lives of property and equipment for the purposes of calculating depreciation.

Deferred income taxes

Assumptions and estimates are made regarding the amount and timing of realization and/or settlement of the temporary differences between the accounting carrying value of the Company's assets versus the tax basis of those assets, and the tax rates at which the differences will be recovered or settled in the future.

NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED:

The Company adopted the following new standards and interpretations effective as of April 1, 2014:

Amendments to IAS 32 Offsetting Financial Assets and Liabilities

Clarify when an entity has a legally enforceable right to set-off and net versus gross settlement mechanisms. The Company adopted the amendments to IAS 32 in its consolidated financial statements for the annual period beginning on April 1, 2014. The amendments to IAS 32 did not have a material impact on the consolidated financial statements.

Amendments to IAS 36 Impairment of Assets

Clarify IASB's original intention to require the disclosure of the recoverable amount of impaired assets as well as additional disclosures about the measurement of the recoverable amount of impaired assets. The Company adopted the amendments to IAS 36 in its consolidated financial statements for the annual period beginning on April 1, 2014. The amendments to IAS 36 did not have a material impact on the consolidated financial statements.

ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE

The following standards and interpretations have not been adopted by the Company as they apply to future periods:

Standard/Interpretation		Nature of impending change in accounting policy		Impact on CMG's financial statements
Amendments to IAS 1, Presentation of Financial Statements On December 18, 2014, the IASB issued amendments to IAS 1 Presentation of Financial Statements as part of its major initiative to improve presentation and disclosure in financial reports. The amendments are effective for annual periods beginning on or after January 1, 2016. Early adoption is permitted.		These amendments will not require any significant change to current practice, but should facilitate improved financial statement disclosures.		The Company intends to adopt these amendments to IAS 1 in its consolidated financial statements for the annual period beginning April 1, 2016. The extent of the impact of adoption of the amendments has not yet been determined.
IFRS 9, Financial Instruments On July 24, 2014 the IASB issued the complete IFRS 9 (IFRS 9 (2014)). The mandatory effective date of IFRS 9 is for annual periods beginning on or after January 1, 2018 and must be applied retrospectively with some exemptions. Early adoption is permitted. The restatement of prior periods is not required and is only permitted if information is available without the use of hindsight.		IFRS 9 (2014) introduces new requirements for the classification and measurement of financial assets. Under IFRS 9 (2014), financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. The standard introduces additional changes relating to financial liabilities. It also amends the impairment model by introducing a new 'expected credit loss' model for calculating impairment. IFRS 9 (2014) also includes a new general hedge accounting standard which aligns hedge accounting more closely with risk management. This new standard does not fundamentally change the types of hedging relationships or the requirement to measure and recognize ineffectiveness, however it will provide more hedging strategies that are used for risk management to qualify for hedge accounting and introduce more judgment to assess the effectiveness of a hedging relationship. Special transitional requirements have been set for the application of the new general hedging model.		The Company intends to adopt IFRS 9 (2014) in its consolidated financial statements for the annual period beginning April 1, 2018. The Company does not expect IFRS 9 (2014) to have a material impact on the consolidated financial statements because of the nature of the Company's operations and the types of financial assets that it holds.
IFRS 15, Revenue from Contracts with Customers In May 2014 the IASB issued IFRS 15 Revenue from Contracts with Customers. The new standard is currently effective for fiscal years beginning on or after January 1, 2017; however, the IASB has proposed to defer the effective date to January 1, 2018. IFRS 15 is available for early adoption. IFRS 15 will replace IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers, and SIC 31 Revenue - Barter Transactions Involving Advertising Services.		IFRS 15 contains a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized. The new standard applies to contracts with customers. It does not apply to insurance contracts, financial instruments or lease contracts, which fall in the scope of other IFRSs.		The Company intends to adopt IFRS 15 in its consolidated financial statements for the annual period beginning April 1, 2017; however, if the IASB's deferral proposal is accepted the Company will delay adoption until the annual period beginning April 1, 2018. The extent of the impact of adoption of the standard has not yet been determined.

OUTSTANDING SHARE DATA

The following table represents the number of Common Shares and options outstanding:

As at May 20, 2015
(thousands)
Common Shares	78,543
Options	6,943

On July 13, 2005, CMG adopted a rolling stock option plan which allows the Company to grant options to its employees, officers and directors to acquire Common Shares of up to 10% of the outstanding Common Shares at the date of grant. Based upon this calculation, at May 20, 2015, CMG could grant up to 7,854,000 stock options.

BUSINESS RISKS

The Company has the following business risks:

Commodity Price Risk

CMG's customers are oil and gas companies and it might, therefore, be assumed that its financial results are significantly impacted by commodity prices. CMG's actual experience of growth in software license revenues during depressed oil price markets makes us believe that software license sales are influenced more by the utility of the software as opposed to the prevailing commodity price but different circumstances could prevail in the future. Low commodity prices and resulting lower cash flow in the industry could impact how customers license CMG software; one could expect sales of perpetual licenses to decrease in favour of leasing software on a term basis.

Volatility in commodity prices could have an impact on CMG's consulting business; however, this business segment generates less than 10% of total revenues and CMG has no current plans to significantly expand this area of business.

Credit and Liquidity Risks

Our product demand is dependent on the customers' overall spending plans, which are driven by commodity prices and the availability of capital. The Company's accounts receivable balances are with customers involved with the oil and gas industry. During times of depressed oil and gas markets, our customers may experience financial constraints. While the Company monitors its exposure to credit risk, lack of payment from multiple clients may have a material adverse effect on the Company's financial condition. This risk is mitigated by having a diversified customer base with the majority of revenue being derived from larger entities which are not as affected by the market volatility or cyclical downturns in commodity prices. In addition, our diversified geographic profile helps to mitigate the effects of economic recessions and instability experienced in any particular geographic region.

The Company mitigates the collection risk by closely monitoring its accounts receivable and assessing creditworthiness of its customers. The Company has not had any significant losses to date.

In terms of liquidity, the Company held $75.3 million of cash at March 31, 2015, which more than covers its obligations and it has approximately $0.8 million of the credit facility available for its use. The Company's cash is held with a reputable banking institution. For the described reasons, we believe that our liquidity risk is low.

Sales Variability Risk

CMG's software license revenue consists of annuity/maintenance software licensing, which is generally for a term of one year or less, and perpetual software licensing, whereby the customer purchases the-then-current version of the software and has the right to use that version in perpetuity. Software licensing under perpetual sales is a significant part of CMG's business but is more variable in nature as the purchase decision, and its timing, fluctuate with customers' needs and budgets. CMG has found that a number of customers prefer to acquire perpetual software licenses rather than leasing the software on an annual basis. The experience over the last few years is that a number of these customers are purchasing additional licenses to allow more users to access CMG technology in their operations. CMG has found that a large percentage of its customers who have acquired perpetual software licenses are subsequently purchasing maintenance licenses to ensure they have access to current CMG technology.

The variability in sales of perpetual licenses may cause significant fluctuations in the Company's quarterly and annual financial results, and these results may not meet the expectations of analysts or investors. Accordingly, the Company's past results may not be a good indication of its future performance.

CMG's customers are both domestic and international oil and gas companies and for the years ended March 31, 2015 and March 31, 2014, no customer represented revenue in excess of 10% of total revenue.

Foreign Exchange Risk

CMG's reported results are affected by the exchange rate between the Canadian dollar and the US dollar as approximately 74% (2014 - 72%) of product revenues in fiscal 2015 were denominated in US dollars. Approximately 25% of CMG's total costs in fiscal 2015 (2014 - 24%) were denominated in US dollars and provided a partial economic hedge against the fluctuation in currency exchange between the US and the Canadian dollar on revenues. CMG's residual revenues and costs are primarily denominated in Canadian dollars and its policy is to convert excess US dollar cash into Canadian dollars when received.

Geopolitical Risks

CMG sells its products and services in approximately 60 countries worldwide, and has operations in a number of different countries. Some of these countries have greater economic, political and social risks than experienced in North America which may adversely affect the Company's sales, costs and operations in those jurisdictions. Some of those risks include:

• Currency restrictions and exchange rate fluctuations

• Civil unrest and political instability

• Changes in laws governing existing operations and contracts

• Changes to taxation policies dramatically increasing tax costs to the Company

• Economic and legal sanctions

• Non-compliance with applicable anti-corruption and bribery laws

Any disruption in our ability to complete a sale cycle, including disruption of travel to customers' locations to provide training and support, and the cost of reorganizing daily activities of foreign operations, could have an adverse effect on our financial condition. CMG mitigates the potential adverse effect on sales by invoicing for the full license term in advance for the majority of software license sales and by invoicing as frequently as the contract allows for consulting and contract research services. CMG closely monitors the business and regulatory environments of the countries in which it conducts operations to minimize the potential impact on costs and operations.

Non-compliance with applicable anti-corruption and bribery laws could subject the Company to onerous penalties and the costs of prosecution. CMG has established business practices and internal controls to minimize the potential occurrence of any irregular payments. In addition, the Company has established well-defined anti-corruption and bribery policies and procedures that each employee and contractor is required to sign indicating their compliance.

Competition Risk

Competition is a risk for CMG as it is for almost every company in every sector. The reservoir simulation software industry currently consists of three major suppliers (including CMG) and a number of small suppliers. Some of the other suppliers, including two major suppliers, offer products or oil field services outside the scope of reservoir simulation. Some potential customers may prefer to deal with such multi-service suppliers, while others prefer an independent supplier, such as CMG.

Although competition is very active, CMG believes that its proven technology and the comprehensive scope of its products, combined with its international presence and recognition as a major independent supplier, provide distinct competitive advantages.

Sustaining competitive advantage is another issue, which CMG addresses by making a significant ongoing commitment to research and development spending. CMG expended $17.0 million (2014 - $14.6 million) in product research and development in its most recently completed fiscal year.

The introduction by competitors of products embodying new technology and the emergence of new industry standards and practices could render CMG's products obsolete and unmarketable and could exert price pressures on existing products, which could have negative effects on the Company's business, operating results and financial condition.

There is a significant barrier for new entrants into the reservoir simulation software industry. The cost of entry is substantial as a significant investment in research and development is required. In addition, to become a major supplier, a significant time investment is required to build up quality relationships with potential customers.

Labour Risk

The Company's continued success is substantially dependent on the performance of its key employees and officers. The loss of the services of these personnel as well as failure to attract additional key personnel could have a negative impact upon the Company's business, operating results and financial condition. Due to high levels of competition for qualified personnel, there can be no assurance that the Company will be successful in retaining and attracting such personnel. The Company attempts to overcome this by offering an attractive compensation package and providing an environment that provides the intellectual and professional stimulation sought by our employee group.

Intellectual Property Risk

CMG regards its software as proprietary and attempts to protect it with copyrights, trademarks and trade secret measures, including restrictions on disclosure and technical measures. Despite these precautions, it may be possible for third parties to copy CMG's programs or aspects of its trade secrets. CMG has no patents, and existing legal and technical precautions afford only limited practical protection. CMG could incur substantial costs in protecting and enforcing its intellectual property rights. Moreover, from time to time third parties may assert patent, trademark, copyright and other intellectual property rights to technologies that are important to CMG. In such an event, CMG may be required to incur significant costs in litigating a resolution to the asserted claim. There can be no assurance that such a resolution would not require that CMG pay damages or obtain a license of a third party's proprietary rights in order to continue licensing its products as currently offered, or, if such a license is required, that it will be available on terms acceptable to CMG.

CMG does not know of any infringement of any third party's patent rights, copyrights, trade secrecy rights or other intellectual property disputes in the development or support of its products.

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining disclosure controls and procedures ("DC&P") and internal control over financial reporting ("ICFR") as defined under National Instrument 52-109.

At March 31, 2015, the Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO") concluded that the design and operation of the Company's DC&P were effective (in accordance with the COSO control framework (1992)) and that material information relating to the Company, including its subsidiaries, was made known to them and was recorded, processed, summarized and reported within the time periods specified under applicable securities legislation. Further, the CEO and the CFO concluded that the design and operation of the Company's ICFR were effective at March 31, 2015 in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. It should be noted that while the Company's CEO and CFO believe that the Company's disclosure controls and procedures and internal controls over financial reporting provide a reasonable level of assurance that they are effective, they do not expect that such controls and procedures will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. The Company is in the process of implementing the updated COSO control framework (2013) which will supersede the 1992 framework.

During the year ended March 31, 2015, there have been no significant changes to the Company's ICFR that have materially affected, or are reasonably likely to materially affect, the company's ICFR.

NON-IFRS FINANCIAL MEASURES

This MD&A includes certain measures which have not been prepared in accordance with IFRS such as "EBITDA", "direct employee costs" and "other corporate costs." Since these measures do not have a standard meaning prescribed by IFRS, they are unlikely to be comparable to similar measures presented by other issuers. Management believes that these indicators nevertheless provide useful measures in evaluating the Company's performance.

"Direct employee costs" include salaries, bonuses, stock-based compensation, benefits, commission expenses, and professional development. "Other corporate costs" include facility-related expenses, corporate reporting, professional services, marketing and promotion, computer expenses, travel, and other office-related expenses. Direct employee costs and other corporate costs should not be considered an alternative to total operating expenses as determined in accordance with IFRS. People-related costs represent the Company's largest area of expenditure; hence, management considers highlighting separately corporate and people-related costs to be important in evaluating the quantitative impact of cost management of these two major expenditure pools. See "Expenses" heading for a reconciliation of direct employee costs and other corporate costs to total operating expenses.

"EBITDA" refers to net income before adjusting for depreciation expense, finance income, finance costs, and income and other taxes. EBITDA should not be construed as an alternative to net income as determined by IFRS. The Company believes that EBITDA is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to consideration of how those activities are amortized, financed or taxed. See "EBITDA" heading for a reconciliation of EBITDA to net income.

FORWARD-LOOKING INFORMATION

Certain information included in this MD&A is forward-looking. Forward-looking information includes statements that are not statements of historical fact and which address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as investment objectives and strategy, the development plans and status of the Company's software development projects, the Company's intentions, results of operations, levels of activity, future capital and other expenditures (including the amount, nature and sources of funding thereof), business prospects and opportunities, research and development timetable, and future growth and performance. When used in this MD&A, statements to the effect that the Company or its management "believes", "expects", "expected", "plans", "may", "will", "projects", "anticipates", "estimates", "would", "could", "should", "endeavours", "seeks", "predicts" or "intends" or similar statements, including "potential", "opportunity", "target" or other variations thereof that are not statements of historical fact should be construed as forward-looking information. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management of the Company. The Company believes that the expectations reflected in such forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.

With respect to forward-looking information contained in this MD&A, we have made assumptions regarding, among other things:

• Future software license sales

• The continued financing by and participation of the Company's partners in the CoFlow project and it being completed in a timely manner

• Ability to enter into additional software license agreements

• Ability to continue current research and new product development

• Ability to recruit and retain qualified staff

Forward-looking information is not a guarantee of future performance and involves a number of risks and uncertainties, only some of which are described herein. Many factors could cause the Company's actual results, performance or achievements, or future events or developments, to differ materially from those expressed or implied by the forward-looking information including, without limitation, the following factors which are discussed in greater detail in the "Business Risks" section of this MD&A:

• Economic conditions in the oil and gas industry

• Reliance on key customers

• Foreign exchange

• Economic and political risks in countries where the Company currently does or proposes to do business

• Increased competition

• Reliance on employees with specialized skills or knowledge

• Protection of proprietary rights

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievement may vary materially from those expressed or implied by the forward-looking information contained in this MD&A. These factors should be carefully considered and readers are cautioned not to place undue reliance on forward-looking information, which speaks only as of the date of this MD&A. All subsequent forward-looking information attributable to the Company herein is expressly qualified in its entirety by the cautionary statements contained in or referred to herein. The Company does not undertake any obligation to release publicly any revisions to forward-looking information contained in this MD&A to reflect events or circumstances that occur after the date of this MD&A or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

This Management's Discussion and Analysis was reviewed and approved by the Audit Committee and Board of Directors and is effective as of May 20, 2015.

OUTLOOK

During fiscal 2015, our annuity and maintenance revenue grew by 11%, compared to the previous fiscal year, with the most significant growth coming from the US at 25%. We also achieved record perpetual sales of $13.4 million. We continued to grow our revenue as a result of increased use of our products by existing customers, but we also added new accounts to our customer base throughout the fiscal year. Continued weakening of the Canadian dollar has also had a positive effect on our revenue balance given that over 74% of our revenue is denominated in US dollars. Our deferred revenue balance increased by 11% in the current quarter, compared to the same period of the previous fiscal year, which is indicative of the continued growth in our recurring revenue.

For the year ended March 31, 2015, our EBITDA represented 51% of our total revenue which demonstrates our continuous ability to effectively manage our corporate costs.

With a significant drop in oil prices in late calendar 2014, our customers began curtailing their spending and re-assessing their future asset development plans. Historically we have not been affected by such economic downturns, however, we have experienced softening in our fourth quarter results and we will continue assessing the impact of continued low oil prices on our customers' utilization of our software.

In the meantime, we will continue investing in our research and development initiatives which provide a foundation for future growth and position us to continue providing much-needed advanced technical tools to our customers now and when economic recovery eventually takes place.

In October 2014, during the Annual Technical Conference and Exhibition held by the Society of Petroleum Engineers in Amsterdam, Netherlands, we announced the naming of our newest generation of dynamic reservoir modelling system, previously referred to as the "DRMS project," as CoFlow, which is an on-going development project with our partners, Shell and Petrobras. CoFlow will provide a collaborative, integrated modelling framework to allow asset teams, including reservoir, production and geomechanical engineers, to work together on multiple, integrated reservoirs and production networks, which will result in superior engineering decisions for high-stakes offshore developments and reduce the cycle time from asset discovery to field implementation. We previously announced that the most recent version of CoFlow, referred to as R9, was released to our partners during the first quarter of calendar 2014 and it successfully simulated a complex integrated asset model. The next version, R10, is scheduled for release in the second half of calendar 2015, for the application on additional target assets selected by our partners. The CoFlow team continued to make progress during the quarter toward R10 development. CMG and its partners remain committed to funding the ongoing development and to the future success of the project.

During the year ended March 31, 2015, we purchased 808,000 Common Shares for $9.8 million under our NCIB given our strong liquidity and our belief that CMG's Common Shares were not trading in price ranges that reflected their underlying values. Using CMG's available capital for the purchase of Common Shares demonstrates our commitment to return value to our shareholders by reducing the number of Common Shares outstanding.

Supported by our strong working capital position, we will continue to invest in all aspects of our business in order to continue to grow and to ultimately return value to our shareholders in the form of regular quarterly dividend payments and growth in share value.

Kenneth M. Dedeluk

President and Chief Executive Officer

May 20, 2015

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(thousands of Canadian $)			March 31, 2015			March 31, 2014
Assets
Current assets:
	Cash		75,342			72,410
	Trade and other receivables (note 13(a))		27,083			24,025
	Prepaid expenses		1,271			1,153
	Prepaid income taxes (note 10)		42			128
			103,738			97,716
Property and equipment (note 4)			2,718			2,552
Total assets			106,456			100,268
Liabilities and shareholders' equity
Current liabilities:
	Trade payables and accrued liabilities (note 5)		7,753			5,947
	Income taxes payable (note 10)		2,415			1,287
	Deferred revenue		32,663			29,531
			42,831			36,765
Deferred tax liability (note 10)			169			335
Total liabilities			43,000			37,100
Shareholders' equity:
	Share capital		59,397			53,750
	Contributed surplus		8,561			5,853
	Retained earnings (deficit)		(4,502	)		3,565
Total shareholders' equity			63,456			63,168
Total liabilities and shareholders' equity			106,456			100,268

Subsequent events (notes 11(b) and 20)
See accompanying notes to consolidated financial statements.
Approved by the Board
Frank L. Meyer	Robert F. M. Smith
Director	Director

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Years Ended March 31, (thousands of Canadian $ except per share amounts)			2015		2014
Revenue (note 6)			84,861		74,503
Operating expenses
	Sales, marketing and professional services		19,278		16,144
	Research and development (note 7)		16,994		14,623
	General and administrative		7,073		6,954
			43,345		37,721
Operating profit			41,516		36,782
Finance income (note 9)			4,082		2,360
Profit before income and other taxes			45,598		39,142
Income and other taxes (note 10)			12,950		11,512
Net and total comprehensive income			32,648		27,630
Earnings Per Share
Basic (note 11(e))			0.42		0.36
Diluted (note 11(e))			0.41		0.35

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
								Retained
		Common			Contributed			Earnings			Total
(thousands of Canadian $)		Share Capital			Surplus			(Deficit)			Equity
Balance, April 1, 2013		40,498			4,673			6,239			51,410
Total comprehensive income for the year		-			-			27,630			27,630
Dividends paid		-			-			(30,304	)		(30,304	)
Shares issued for cash on exercise of stock options (note 11(b))		11,274			-			-			11,274
Stock-based compensation:
	Current period expense	-			3,158			-			3,158
	Stock options exercised	1,978			(1,978	)		-			-
Balance, March 31, 2014		53,750			5,853			3,565			63,168
Balance, April 1, 2014		53,750			5,853			3,565			63,168
Total comprehensive income for the year		-			-			32,648			32,648
Dividends paid		-			-			(31,462	)		(31,462	)
Shares issued for cash on exercise of stock options(note 11(b))		5,270			-			-			5,270
Common shares buy-back (notes 11(b) & (c))		(592	)					(9,253	)		(9,845	)
Stock-based compensation:
	Current period expense	-			3,677			-			3,677
	Stock options exercised	969			(969	)		-			-
Balance, March 31, 2015		59,397			8,561			(4,502	)		63,456

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended March 31, (thousands of Canadian $)			2015			2014
Cash flows from operating activities
Net income			32,648			27,630
Adjustments for:
	Depreciation (note 4)		1,583			1,591
	Income and other taxes (note 10)		12,950			11,512
	Stock-based compensation (note 11(d))		3,677			3,158
	Interest income (note 9)		(699	)		(644	)
			50,159			43,247
Changes in non-cash working capital:
	Trade and other receivables		(3,067	)		(4,876	)
	Trade payables and accrued liabilities		1,806			(100	)
	Prepaid expenses		(118	)		63
	Deferred revenue		3,132			4,242
Cash generated from operating activities			51,912			42,576
	Interest received		708			635
	Income taxes paid		(11,902	)		(10,351	)
Net cash from operating activities			40,718			32,860
Cash flows from financing activities
Proceeds from issue of common shares			5,270			11,274
Dividends paid			(31,462	)		(30,304	)
Common shares buy-back (note 11(c))			(9,845	)		-
Net cash used in financing activities			(36,037	)		(19,030	)
Cash flows used in investing activities
Property and equipment additions (note 4)			(1,749	)		(839	)
Increase in cash			2,932			12,991
Cash, beginning of year			72,410			59,419
Cash, end of year			75,342			72,410

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years ended March 31, 2015 and 2014.

1. REPORTING ENTITY:

Computer Modelling Group Ltd. ("CMG") is a company domiciled in Alberta, Canada and is incorporated pursuant to the Alberta Business Corporations Act, with its Common Shares listed on the Toronto Stock Exchange under the symbol "CMG". The address of CMG's registered office is Suite 200, 1824 Crowchild Trail N.W., Calgary, Alberta, Canada, T2M 3Y7. The consolidated financial statements as at and for the year ended March 31, 2015 comprise CMG and its subsidiaries (together referred to as the "Company"). The Company is a computer software technology company engaged in the development and licensing of reservoir simulation software. The Company also provides professional services consisting of highly specialized support, consulting, training, and contract research activities.

2. BASIS OF PREPARATION:

(a) STATEMENT OF COMPLIANCE:

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

These consolidated financial statements as at and for the year ended March 31, 2015 were authorized for issuance by the Board of Directors on May 20, 2015.

(b) BASIS OF MEASUREMENT:

The consolidated financial statements have been prepared on the historical cost basis, which is based on the fair value of the consideration at the time of the transaction.

(c) FUNCTIONAL AND PRESENTATION CURRENCY:

The consolidated financial statements are presented in Canadian dollars, which is the functional currency of CMG and its subsidiaries. All financial information presented in Canadian dollars has been rounded to the nearest thousand.

(d) USE OF ESTIMATES, JUDGMENTS AND ASSUMPTIONS:

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies, the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue, costs and expenses for the period. Estimates and underlying assumptions are based on historical experience and other assumptions that are considered reasonable in the circumstances and are reviewed on an on-going basis. Actual results may differ from such estimates and it is possible that the differences could be material. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

(i) Key judgments in applying accounting policies

The key judgments made in applying accounting policies, apart from those involving estimations (note 2(d)(ii) below), that have the most significant effect on the amounts recognized in these consolidated financial statements are as follows:

Functional currency - the determination of the functional currency is a matter of determining the primary economic environment in which an entity operates. IAS 21 - The Effects of Changes in Foreign Exchange Rates, sets out a number of factors to apply in making the determination of the functional currency. However, applying the factors in IAS 21 does not always result in a clear indication of functional currency. Where IAS 21 factors indicate differing functional currencies within a subsidiary, the Company uses judgment in the ultimate determination of that subsidiary's functional currency, including an assessment of the nature of the relationship between the Company and the subsidiary. Judgment was applied in the determination of the functional currency of certain of the Company's operating entities.

Research and development - assumptions are made in respect to the eligibility of certain research and development projects in the calculation of scientific research and experimental development ("SR&ED") investment tax credits which are netted against the research and development costs in the statement of comprehensive income. SR&ED claims are subject to audits by relevant taxation authorities and the actual amount may change depending on the outcome of such audits (note 7).

Revenue recognition - certain software license agreements contain multiple-element arrangements as they may also include maintenance fees. Judgment is used in determining a fair value of each element of a contract. Professional services revenue earned from certain consulting contracts is recognized by the stage of completion of the transaction determined using the percentage-of-completion method. Judgment is used in determining the progress of each contract at period end. In assessing revenue recognition, judgment is also used in determining the ability to collect the corresponding account receivable (note 6).

(ii) Estimation uncertainty

The following are the key sources of estimation uncertainty and key assumptions concerning the future, that have a significant risk of causing material adjustments to the carrying amount of assets and liabilities within the next financial year:

Stock-based compensation - assumptions and estimates are used in determining the inputs used in the Black-Scholes option pricing model, including assumptions regarding volatility, dividend yield, risk-free interest rates, forfeiture estimates and expected option lives (note 11(d)).

Property and equipment - estimates are used in determining useful economic lives of property and equipment for the purposes of calculating depreciation (note 4).

Deferred income taxes - assumptions and estimates are made regarding the amount and timing of realization and/or settlement of the temporary differences between the accounting carrying value of the Company's assets versus the tax basis of those assets, and the tax rates at which the differences will be recovered or settled in the future (note 10).

3. SIGNIFICANT ACCOUNTING POLICIES:

(a) BASIS OF CONSOLIDATION:

The consolidated financial statements include the accounts of CMG and its subsidiaries, all 100% owned. All inter-company transactions and balances have been eliminated on consolidation. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.

(b) REVENUE RECOGNITION:

Revenue consists of software license fees and professional service fees.

Software License Revenue

Software license revenue is comprised of annuity/maintenance license fees charged for the use of the Company's software products which is generally for a term of one year or less, and perpetual software licensing fees, whereby the customer purchases the-then-current version of the software and has the right to use that version in perpetuity.

Software license revenue is recognized when persuasive evidence of an arrangement exists, the product has been delivered, the fee is fixed or determinable, and collection of the resulting receivable is probable. In cases where collectability is not deemed probable, revenue is recognized upon receipt of cash, providing all other criteria have been met.

Annuity/maintenance revenue is recognized on a straight-line basis over the life of the related license period, which is generally one year or less. Revenue for licenses billed in advance is deferred and recognized in revenue over the relevant license period.

License fees for perpetual licenses are recognized fully in revenue when all recognition conditions are satisfied.

Software license agreements with multiple-element arrangements, such as those including license fees and maintenance fees, are recognized as separate units of accounting and are recognized as each element is earned based on the relative fair value of each element. A delivered element is considered a separate unit of accounting if it has value to the customer on a standalone basis, and delivery or performance of the undelivered elements is considered probable and substantially under the Company's control. If these criteria are not met, revenue for the arrangement as a whole is accounted for as a single unit of accounting.

Professional Services Revenue

Revenue from professional services, consisting of consulting, training and contract research activities, is recorded on a percentage-of-completion basis or as such services are performed as appropriate in the circumstances. Percentage-of-completion is used when the outcome of the contract can be estimated reliably and is assessed based on work completed as determined by the hours incurred. When the outcome of the contract cannot be estimated reliably, the amount of revenue recognized is limited to the cost incurred in the period.

(c) CASH:

Cash is comprised of interest-earning bank accounts.

(d) PROPERTY AND EQUIPMENT:

Property and equipment are recorded at cost less accumulated depreciation. Cost includes expenditures that are directly attributable to the acquisition of the asset.

Depreciation is based on the cost of an asset and is recognized from the date the item is ready for use in the statement of comprehensive income using the following annual rates and methods that are expected to amortize the cost of the property and equipment over their estimated useful lives:

Computer equipment	33 1/3% straight-line
Furniture and equipment	20% straight-line
Leasehold improvements	Straight-line over the lease term

Any gain or loss on disposal of an item of property and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) is recognized in the statement of comprehensive income.

The estimated useful lives and depreciation methods are reviewed at each fiscal year-end and adjusted if appropriate.

(e) RESEARCH AND DEVELOPMENT COSTS:

All costs of product research and development are expensed to operations as incurred as the impact of both technological changes and competition require the Company to continually enhance its products on an annual basis. Research and development costs are recorded net of related SR&ED investment tax credits.

(f) JOINT RESEARCH AND DEVELOPMENT COSTS:

The Company participates in a joint project engaged in product research and development and accordingly records its proportionate share of costs incurred as research and development costs within the statement of comprehensive income.

(g) FINANCE INCOME AND FINANCE COSTS:

Finance income comprises interest income earned on the bank balances and is recognized as it accrues through the statement of comprehensive income, using the effective interest method.

Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position. Foreign currency gains and losses are recognized in the period in which they occur.

(h) FOREIGN CURRENCY TRANSLATION:

Transactions in foreign currencies are translated to Canadian dollars, the functional currency of the Company, at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into Canadian dollars at the rate of exchange prevailing at the reporting date while non-monetary assets and liabilities that are measured in terms of historical cost are translated using the exchange rates at the dates of the transactions.

Revenues and expenses are translated at the rate of exchange in effect on the transaction dates. Realized and unrealized foreign exchange gains and losses are included in the statement of comprehensive income in the period in which they occur.

(i) INCOME TAXES:

Income taxes comprise current and deferred tax.

Current tax is the expected tax payable or receivable based on taxable profit for the period calculated using tax rates that have been enacted or substantively enacted at the reporting date, and includes any adjustments to tax payable in respect of previous years. Taxable profit differs from profit as reported in the Consolidated Statement of Operations and Comprehensive Income because of items that are taxable or deductible in other years and items that are never taxable and deductible. Prepaid income taxes and current income taxes payable are offset only when a legally enforceable right of offset exists and the prepaid income tax and tax payable arise in the same tax jurisdiction and relate to the same taxable entity.

Deferred taxes are recognized for temporary differences between the tax and accounting bases of assets and liabilities and for the benefit of losses available to be carried forward for tax purposes to the extent that it is probable that future taxable profits will be available against which the losses can be utilized. Deferred tax assets and liabilities are measured using the enacted or substantively enacted tax rates expected to apply in the years in which temporary differences are expected to be recovered or settled. Any change to the net deferred tax assets and liabilities is included in operations in the period it occurs. Deferred tax assets and liabilities are offset only when a legally enforceable right of offset exists and the deferred tax assets and liabilities arise in the same tax jurisdiction and relate to the same taxable entity.

In determining the amount of current and deferred tax, the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Company to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.

(j) INVESTMENT TAX CREDITS:

The Company receives federal and provincial investment tax credits in Canada on qualified scientific research and experimental development expenditures incurred in each taxation year. Investment tax credits are recorded as a deduction against related expenses or capital items provided that reasonable assurance over collection of the tax credits exists.

(k) EARNINGS PER SHARE:

Basic earnings per share is computed by dividing the net income by the weighted average number of Common Shares outstanding for the period. Diluted per share amounts reflect the potential dilution that could occur if securities or other contracts to issue Common Shares were exercised or converted to Common Shares. In calculating the dilutive effect of stock options, it is assumed that proceeds received from the exercise of in-the-money stock options are used to repurchase Common Shares at the average market price during the period.

(l) STOCK-BASED COMPENSATION PLAN:

The Company has a stock-based compensation plan that is described in note 11(d). The fair value of stock options is determined using the Black-Scholes valuation model as of the grant date and is expensed over the vesting period, with a corresponding increase in equity, based on the Company's estimate of the number of options that will actually vest. Measurement inputs include the share price on the measurement date, the exercise price of the instrument, expected volatility (based on an evaluation of the Company's historic volatility, particularly over the historic period commensurate with the expected term), expected term of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value. At the end of each reporting period, the Company revises its estimates of the number of options that are expected to vest and recognizes the impact of any revision in the statement of comprehensive income. When stock options are exercised, the Company records consideration received, together with amounts previously recognized in contributed surplus, as an increase in share capital.

(m) SHORT-TERM EMPLOYEE BENEFITS:

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

(n) FINANCIAL INSTRUMENTS:

(i) Non-derivative financial assets

The Company initially recognizes loans and receivables on the date that they are originated. All other financial assets are recognized initially on the trade date at which the Company becomes a party to the contractual provisions of the instruments. The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognized financial assets that is created or retained by the Company is recognized as a separate asset or liability. The Company classifies non-derivative financial assets into the following category:

Loans and receivables:

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. The Company's cash and trade and other receivables are classified as loans and receivables. The Company's loans and receivables are recognized initially at fair value plus any directly attributable transaction costs, and subsequently measured at amortized cost using the effective interest rate method less any provision for impairment. The Company's trade and other receivables are classified as current assets.

(ii) Non-derivative financial liabilities

Financial liabilities at amortized cost include trade payables and accrued liabilities. Such liabilities are initially recognized at fair value on the trade date at which the Company becomes a party to the contractual provisions of the instrument, represented by the amount required to be paid plus any directly attributable transaction costs, and subsequently measured at amortized cost using the effective interest method. Financial liabilities are classified as current liabilities if payment is due within a year; otherwise, they are classified as non-current liabilities. The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

(iii) Share Capital

Common Shares are classified as equity. Incremental costs directly attributable to the issue of Common Shares are recognized as a deduction from equity, net of any tax effects.

(o) IMPAIRMENT:

(i) Receivables

Trade and other receivables are assessed for impairment at each reporting date at both a specific and collective level. All individually significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired, together with receivables that are not individually significant, are collectively assessed for impairment by grouping together receivables with similar risk characteristics. In assessing collective impairment, the Company uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management's judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends. An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognized in the statement of comprehensive income and reflected in an allowance account against trade and other receivables. When a subsequent event (such as the repayment by a debtor) causes the amount of impairment loss to decrease, the decrease is reversed through the statement of comprehensive income.

(ii) Non-financial assets

The carrying amounts of the Company's non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated, and any impairment loss required is recognized in the statement of comprehensive income. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized.

(p) LEASES:

The Company's only lease commitments relate to its office premises which are classified as operating leases since they do not transfer the risks and rewards of ownership to the Company. Payments made under operating leases are recognized in the statement of comprehensive income on a straight-line basis over the term of the lease.

(q) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED:

(i) Amendments to IAS 32 Offsetting Financial Assets and Liabilities

Clarify when an entity has a legally enforceable right to set-off and net versus gross settlement mechanisms. The Company adopted the amendments to IAS 32 in its consolidated financial statements for the annual period beginning April 1, 2014. The amendments to IAS 32 did not have a material impact on the consolidated financial statements.

(ii) Amendments to IAS 36 Impairment of Assets

Clarify IASB's original intention to require the disclosure of the recoverable amount of impaired assets as well as additional disclosures about the measurement of the recoverable amount of impaired assets. The Company adopted the amendments to IAS 36 in its consolidated financial statements for the annual period beginning April 1, 2014. The amendments to IAS 36 did not have a material impact on the consolidated financial statements.

(r) ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET ADOPTED:

The following is a summary of new standards, amendments to standards and interpretations not yet effective for the year ended March 31, 2015, and have not been applied in preparing these consolidated financial statements:

(i) Amendments to IAS 1 Presentation of Financial Statements

Amends IAS 1 Presentation of Financial Statements to improve presentation and disclosure in financial reports. The amendments are effective for annual periods beginning on or after January 1, 2016. Early adoption is permitted. The Company intends to adopt these amendments to IAS 1 in its consolidated financial statements beginning April 1, 2016. The extent of the impact of adoption of the amendments has not yet been determined.

(ii) IFRS 9 Financial Instruments

Replaces the guidance in IAS 39 Financial Instruments: Recognition and Measurement, on the classification and measurement of financial assets, amends the impairment model and includes a new general hedge accounting standard. The mandatory effective date of IFRS 9 is for annual periods beginning on or after January 1, 2018 and must be applied retrospectively with some exemptions. Early adoption is permitted. The Company intends to adopt IFRS 9 (2014) in its consolidated financial statements beginning April 1, 2018. The Company does not expect IFRS 9 (2014) to have a material impact on the consolidated financial statements because of the nature of the Company's operations and the types of financial assets that it holds.

(iii) IFRS 15 Revenue from Contracts with Customers

Replaces the guidance in IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers, and SIC 31 Revenue - Barter Transactions Involving Advertising Services with a single model that applies to contracts with customers and two approaches to recognizing revenue: at a point in time or over time. Currently, the effective date for IFRS 15 is for annual periods beginning on or after January 1, 2017; however, the IASB has proposed to defer the effective date to January 1, 2018. IFRS 15 is available for early adoption. The Company intends to adopt IFRS 15 in its consolidated financial statements for the annual period beginning April 1, 2017; however, if the IASB's deferral proposal is accepted the Company will delay adoption until the annual period beginning April 1, 2018. The extent of the impact of adoption of the standard has not yet been determined.

4. PROPERTY AND EQUIPMENT:

Cost		Computer			Furniture and			Leasehold
(thousands of $)		Equipment			Equipment			Improvements			Total
Balance at April 1, 2013		5,399			1,687			2,715			9,801
Additions		810			29			-			839
Disposals		(505	)		(4	)		-			(509	)
Balance at March 31, 2014		5,704			1,712			2,715			10,131
Balance at April 1, 2014		5,704			1,712			2,715			10,131
Additions		1,122			243			384			1,749
Disposals		(281	)		(92	)		(159	)		(532	)
Balance at March 31, 2015		6,545			1,863			2,940			11,348
Accumulated Depreciation
(thousands of $)
Balance at April 1, 2013		(3,834	)		(1,032	)		(1,631	)		(6,497	)
Depreciation charge for the year		(908	)		(268	)		(415	)		(1,591	)
Disposals		505			4			-			509
Balance at March 31, 2014		(4,237	)		(1,296	)		(2,046	)		(7,579	)
Balance at April 1, 2014		(4,237	)		(1,296	)		(2,046	)		(7,579	)
Depreciation charge for the year		(1,000	)		(224	)		(359	)		(1,583	)
Disposals		281			92			159			532
Balance at March 31, 2015		(4,956	)		(1,428	)		(2,246	)		(8,630	)
Carrying Amounts
At March 31, 2014		1,467			416			669			2,552
At March 31, 2015		1,589			435			694			2,718

5. TRADE PAYABLES AND ACCRUED LIABILITIES:

(thousands of $)		March 31, 2015		March 31, 2014
Trade payables		714		344
Employee salaries, commissions and benefits payable		4,303		3,503
Accrued liabilities and other payables		2,736		2,100
		7,753		5,947

6. REVENUE:

Years ended March 31,		2015		2014
(thousands of $)
Software licenses		76,836		66,213
Professional services		8,025		8,290
		84,861		74,503

7. RESEARCH AND DEVELOPMENT COSTS:

Years ended March 31,		2015			2014
(thousands of $)
Research and development		18,313			16,439
SR&ED investment tax credits		(1,319	)		(1,816	)
		16,994			14,623

8. PERSONNEL EXPENSES:

Years ended March 31,		2015		2014
(thousands of $)
Salaries, commissions and short-term employee benefits		30,518		26,994
Stock-based compensation (note 11(d))		3,677		3,158
		34,195		30,152

9. FINANCE INCOME:

Years ended March 31,		2015		2014
(thousands of $)
Interest income		699		644
Net foreign exchange gain		3,383		1,716
Finance income		4,082		2,360

10. INCOME AND OTHER TAXES:

The major components of income tax expense are as follows:

Years ended March 31,		2015			2014
(thousands of $)
Current year income taxes		12,498			10,537
Adjustment for prior year		25			7
Current income taxes		12,523			10,544
Deferred tax recovery		(166	)		(44	)
Foreign withholding and other taxes		593			1,012
		12,950			11,512

The provision for income and other taxes reported differs from the amount computed by applying the combined Canadian Federal and Provincial statutory rate to the profit before income and other taxes.

The reasons for this difference and the related tax effects are as follows:

Years ended March 31,		2015		2014
(thousands of $, unless otherwise stated)
Combined statutory tax rate		25.00%		25.00%
Expected income tax		11,400		9,786
Non-deductible costs		945		814
Effect of tax rates in foreign jurisdictions		139		101
Withholding taxes		429		757
Adjustment for prior year		25		7
Other		12		47
		12,950		11,512

The components of the Company's deferred tax liability are as follows:

(thousands of $)		March 31, 2015			March 31, 2014
Tax liability on SR&ED investment tax credits		(230	)		(354	)
Tax asset on property and equipment		61			19
Net deferred tax liability		(169	)		(335	)

All movement in deferred tax assets and liabilities is recognized through net income of the respective period.

Prepaid income taxes and current income taxes payable have not been offset as the amounts relate to income taxes levied by different tax authorities to different taxable entities.

11. SHARE CAPITAL:

(a) AUTHORIZED:

An unlimited number of Common Shares, an unlimited number of Non-Voting Shares, and an unlimited number of Preferred Shares, issuable in series.

(b) ISSUED:

(thousands of shares)		Common Shares
Balance, April 1, 2013		76,258
Issued for cash on exercise of stock options		2,161
Balance, March 31, 2014		78,419
Balance, April 1, 2014		78,419
Issued for cash on exercise of stock options		876
Common shares buy-back		(808	)
Balance, March 31, 2015		78,487

Subsequent to March 31, 2015, 57,000 stock options were exercised for cash proceeds of $359,000.

On May 23, 2012, the Board of Directors considered the merits of renewing the Company's shareholder rights plan on or before the third-year anniversary of shareholder approval of the plan and determined that it was in the best interest of the Company to continue to have a shareholder rights plan in place. Upon careful review, the Board of Directors agreed to approve an amended and restated rights plan (the "Amended and Restated Rights Plan") between the Company and Valiant Trust Company, which is similar in all respects to the existing shareholder rights plan, with the exception of certain minor amendments. The Amended and Restated Rights Plan was approved by the Company's shareholders on July 12, 2012.

(c) COMMON SHARES BUY-BACK:

On April 29, 2013, the Company announced a Normal Course Issuer Bid ("NCIB") commencing on May 1, 2013 to purchase for cancellation up to 7,076,000 of its Common Shares. During the year ended March 31, 2014, no Common Shares were purchased.

On May 5, 2014, the Company announced a NCIB commencing on May 5, 2014 to purchase for cancellation up to 7,440,000 of its Common Shares. During the year ended March 31, 2015, 808,000 Common Shares were purchased at market price for a total cost of $9,845,000.

(d) STOCK-BASED COMPENSATION PLAN:

The Company adopted a rolling stock option plan as of July 13, 2005, which was reaffirmed by the Company's shareholders on July 10, 2014, which allows it to grant options to acquire Common Shares of up to 10% of the outstanding Common Shares at the date of grant. Based upon this calculation, at March 31, 2015, the Company could grant up to 7,849,000 stock options. Pursuant to the stock option plan, the maximum term of an option granted cannot exceed five years from the date of grant. The outstanding stock options vest as to 50% after the first year anniversary, from date of grant, and then vest as to 25% of the total options granted after each of the second and third year anniversary dates.

The following table outlines changes in stock options:

Years ended March 31,					2015					2014
(thousands except per share amounts)
		Options Granted			Weighted Average Exercise Price ($/share)		Options Granted			Weighted Average Exercise Price ($/share)
Outstanding at beginning of year		5,858			9.25		5,876			6.56
Granted		2,148			13.01		2,328			12.22
Exercised		(876	)		6.01		(2,162	)		5.20
Forfeited		(130	)		11.74		(184	)		8.49
Outstanding at end of year		7,000			10.76		5,858			9.25
Options exercisable at end of year		3,341			9.07		2,166			6.72

The range of exercise prices of stock options outstanding and exercisable at March 31, 2015 is as follows:

		Outstanding						Exercisable
Exercise Price ($/option)		Number of Options (thousands)		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price ($/option)		Number of Options (thousands)		Weighted Average Exercise Price ($/option)
4.53 - 6.71		1,225		1.2		6.21		1,225		6.21
6.72 - 9.09		1,432		2.4		9.07		1,002		9.06
9.10 - 12.20		2,211		3.4		12.19		1,099		12.20
12.21 - 14.97		2,132		4.4		13.02		15		14.08
		7,000		3.1		10.76		3,341		9.07

The fair value of stock options granted was estimated using the Black-Scholes option pricing model under the following assumptions:

Years ended March 31,	2015	2014
Fair value at grant date ($/option)	1.27 to 2.50	1.53 to 2.47
Share price at grant date ($/share)	11.80 to 14.97	12.20 to 14.57
Risk-free interest rate (%)	0.43 to 1.36	1.21 to 1.64
Estimated hold period prior to exercise (years)	2 to 4	2 to 4
Volatility in the price of common shares (%)	22 to 28	26 to 28
Dividend yield per common share (%)	2.67 to 3.21	2.78 to 3.21

The Company recognized total stock-based compensation expense for the year ended March 31, 2015 of $3,677,000 (2014 - $3,158,000).

(e) EARNINGS PER SHARE:

The following table summarizes the earnings and weighted average number of Common Shares used in calculating basic and diluted earnings per share:

Years ended March 31, (thousands except per share amounts)	2015						2014
	Earnings ($)		Weighted Average Shares Outstanding		Earnings Per Share ($/share)		Earnings ($)		Weighted Average Shares Outstanding		Earnings Per Share ($/share)
Basic	32,648		78,581		0.42		27,630		77,465		0.36
Dilutive effect of stock options			1,139						1,932
Diluted	32,648		79,720		0.41		27,630		79,397		0.35

During the year ended March 31, 2015, 88,000 options (2014 - 216,000) were excluded from the computation of the weighted-average number of diluted shares outstanding because their effect was not dilutive.

12. CAPITAL MANAGEMENT:

The Company's objectives in managing capital are to ensure sufficient liquidity to pursue its strategy of organic growth combined with strategic acquisitions and to maximize the return to its shareholders. The capital structure of the Company consists of cash, credit facilities and shareholders' equity. The Company does not have any externally imposed capital requirements and does not presently utilize any quantitative measures to monitor its capital.

The Company's policy is to pay quarterly dividends based on the Company's overall financial performance and cash flow generation. Decisions on dividend payments are made on a quarterly basis by the Board of Directors. There can be no assurance as to the amount or payment of such dividends in the future.

Since November 2002, the Company embarked on a series of normal course issuer bids to buy back its shares. Reference is made to note 11(c).

The Company makes adjustments to its capital structure in light of general economic conditions and the Company's working capital requirements. In order to maintain or adjust its capital structure, the Company, upon approval from its Board of Directors, may pay dividends, buy back shares or undertake other activities as deemed appropriate under the specific circumstances. The Board of Directors reviews and approves any material transactions not in the ordinary course of business.

13. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT:

(i) Classification of financial instruments

	Classification		Measurement
Cash	Loans and receivables		Amortized cost
Trade and other receivables	Loans and receivables		Amortized cost
Trade payables and accrued liabilities	Other financial liabilities		Amortized cost

(ii) Fair values of financial instruments

The carrying values of cash, trade and other receivables, trade payables and accrued liabilities approximate their fair values due to the short-term nature of these instruments.

OVERVIEW:

The Company is exposed to risks of varying degrees of significance and likelihood which could affect its ability to achieve its strategic objectives for growth. The main objectives of the Company's risk management process are to ensure that risks are properly identified and that the capital base is adequate in relation to those risks. The principal financial risks to which the Company is exposed are described below:

(a) CREDIT RISK:

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligation and arises principally from the Company's trade and other receivables. The amounts reported in the statements of financial position for trade receivables are net of allowances for bad debts, estimated by the Company's management based on prior experience and their assessment of the current economic environment.

The Company's trade receivables consist primarily of balances from customers operating in the oil and gas industry, both domestically and internationally, as the Company sells its products and services in approximately 60 countries worldwide. Some of these countries have greater economic and political risk than experienced in North America and as a result there may be greater risk associated with sales in those jurisdictions. The Company manages this risk by invoicing for the full license term in advance for the majority of software license sales and by invoicing as frequently as the contract allows for consulting and contract research services. In cases where collectability is not deemed probable, revenue is recognized upon receipt of cash, assuming all other criteria have been met. Historically, the Company has not experienced any significant losses related to individual customers or groups of customers in any particular geographic area; therefore, no allowance for doubtful accounts has been established at March 31, 2015 and 2014.

As at March 31, 2015, the Company has a concentration of credit risk with 14 domestic and international customers who represent 79% of trade receivables (2014 - 13 customers; 73%).

The carrying amount of trade and other receivables represents the maximum credit exposure. The maximum exposure to credit risk at March 31, 2015 was $27.1 million (2014 - $24.0 million). The aging of trade and other receivables at the reporting date was:

(thousands of $)	March 31, 2015	March 31, 2014
Current	13,638	11,204
31-60 days	8,938	8,445
61-90 days	2,460	2,801
Over 90 days	2,047	1,575
Balance, end of year	27,083	24,025

The Company assesses the creditworthiness of its customers on an ongoing basis and it regularly monitors the amount and age of balances outstanding. Payment terms with customers are 30 days from invoice date; however, industry practice can extend these terms. Accordingly, the Company views the credit risks on these amounts as normal for the industry.

The Company minimizes the credit risk of cash by depositing only with a reputable financial institution in highly liquid interest-bearing cash accounts.

(b) MARKET RISK:

Market risk is the risk that changes in market prices of the foreign exchange rates and interest rates will affect the Company's income or the value of its financial instruments.

(i) Foreign Exchange Risk

The Company operates internationally and primarily prices its products in either the Canadian or US dollar. This gives rise to exposure to market risks from changes in the foreign exchange rates between the Canadian and US dollar. Approximately 74% (2014 - 72%) of the Company's revenues for the year ended March 31, 2015 were denominated in US dollars and at March 31, 2015, the Company had approximately $19.1 million (2014 - $16.7 million) of its working capital denominated in US dollars. The Company currently does not use derivative instruments to hedge its exposure to those risks but as approximately 25% (2014 - 24%) of the Company's total costs are also denominated in US dollars they provide a partial economic hedge against the fluctuation in this currency exchange. In addition, the Company manages levels of foreign currency held by converting excess US dollars into Canadian dollars at spot rates.

The Company's operations are exposed to currency risk on US denominated financial assets and liabilities with fluctuations in the rate recognized as foreign exchange gains or losses in the Consolidated Statements of Operations and Comprehensive Income. It is estimated that a one cent change in the US dollar would result in a net change of approximately $143,000 to equity and net income for the year ended March 31, 2015. A weaker US dollar with respect to the Canadian dollar will result in a negative impact while the reverse would result from a stronger US dollar.

(ii) Interest Rate Risk

The Company has significant cash balances and no interest-bearing debt. The Company's current policy is to invest excess cash in interest-bearing deposits and/or guaranteed investment certificates issued by its principal banker. The Company is exposed to interest cash flow risk from changes in interest rates on its cash balances. Based on the March 31, 2015 cash balance, each 1% change in the interest rate on the Company's cash balance would change equity and net income for the year ended March 31, 2015 by approximately $565,000.

(c) LIQUIDITY RISK:

Liquidity risk is the risk that the Company is not able to meet its financial obligations as they fall due or can do so only at excessive cost. The Company manages liquidity risk through the management of its capital structure as outlined in note 12. The Company's growth is financed through a combination of the cash flows from operations and its cash balances on hand. Given the Company's available liquid resources as compared to the timing of the payments of its liabilities, management assesses the Company's liquidity risk to be low. The Company monitors its expenditures by preparing annual budgets which are updated periodically. At March 31, 2015, the Company has significant cash balances in excess of its obligations and approximately $800,000 of the line of credit (note 15) available for its use.

14. COMMITMENTS:

(a) RESEARCH COMMITMENTS:

The Company is the operator of the CoFlow research and development project (the "CoFlow project", formerly known as the DRMS project), a collaborative effort with its partners Shell International Exploration and Production BV ("Shell") and Petroleo Brasileiro S.A. ("Petrobras"), to jointly develop the newest generation of reservoir and production system simulation software. The project has been underway since 2006 and, with the ongoing support of the participants, it is expected to continue until ultimate delivery of the software. The Company's share of costs associated with the project is estimated to be $6.4 million ($3.4 million net of overhead recoveries) for fiscal 2016.

(b) LEASE COMMITMENTS:

The Company has operating lease commitments relating to its office premises with the minimum annual lease payments as follows:

Years ended March 31,	2015	2014
(thousands of $)
Less than one year	2,444	2,189
Between one and five years	14,735	3,817
More than five years	86,564	-
	103,743	6,006

The Company leases a number of properties under operating leases. During the year ended March 31, 2015, $2.5 million (2014 - $2.3 million) was recognized as an expense in the statement of comprehensive income in respect of operating leases related to office premises.

The Company entered into a twenty year operating lease commitment relating to its Calgary office premises commencing in calendar 2017. The minimum annual lease payments have been reflected in the above schedule.

15. LINE OF CREDIT:

The Company has arranged for a $1.0 million line of credit with its principal banker, which can be drawn down by way of a demand operating credit facility or may be used to support letters of credit. As at March 31, 2015, US $165,000 (2014 - US $165,000) had been reserved on this line of credit for the letter of credit supporting a performance bond.

16. SEGMENTED INFORMATION:

The Company is organized into one operating segment represented by the development and licensing of reservoir simulation software. The Company provides professional services, consisting of support, training, consulting and contract research activities, to promote the use and development of its software; however, these activities are not evaluated as a separate business segment.

Revenues and property and equipment of the Company arise in the following geographic regions:

(thousands of $)	Revenue		Property and equipment
	Years ended March 31,		As at March 31,
	2015	2014	2015	2014
Canada	29,428	26,690	2,064	2,364
United States	16,803	15,276	294	53
South America	18,144	12,763	303	76
Eastern Hemisphere(1)	20,486	19,774	57	59
	84,861	74,503	2,718	2,552

(1)	Includes Europe, Africa, Asia and Australia.

No customer represented 10% or more of total revenue in the years ended March 31, 2015 and 2014.

17. SUBSIDIARIES:

CMG is the beneficial owner of the entire issued share capital and controls all the votes of its subsidiaries. The principal activities of all the subsidiaries are the sale and support for the use of CMG's software licenses. Transactions between subsidiaries are eliminated on consolidation.

The following is the list of CMG's subsidiaries:

Subsidiary	Country of Incorporation
Computer Modelling Group Inc.	United States
CMG Venezuela	Venezuela
CMG Middle East FZ LLC	Dubai, United Arab Emirates
CMG (Europe) Limited	United Kingdom

18. JOINT OPERATION:

The Company is the operator of a joint software development project, the CoFlow project (formerly known as the DRMS project), which gives the Company exclusive rights to commercialize the jointly developed software while the other partners will have unlimited software access for their internal use. Accordingly, the Company records its proportionate share of costs incurred on the project (37.04%) as research and development costs within the consolidated statements of operations and comprehensive income.

For the year ended March 31, 2015, CMG included $6.1 million (2014 - $4.8 million) of costs in its consolidated statements of operations and comprehensive income related to this joint project.

Additionally, the Company is entitled to charge the project for various services provided as operator, which were recorded in revenue as professional services and amounted to $2.7 million during the year ended March 31, 2015 (2014 - $2.4 million).

19. RELATED PARTIES:

(a) INTERCOMPANY TRANSACTIONS:

The Company has four wholly owned subsidiaries (note 17) which have intercompany transactions under the normal course of operations and are eliminated upon consolidation.

(b) KEY MANAGEMENT PERSONNEL COMPENSATION:

The key management personnel of the Company are the members of the Company's executive management team and Board of Directors, and control approximately 5.2% of the outstanding shares of CMG at March 31, 2015.

In addition to their salaries and director fees, as applicable, directors and executive officers also participate in the Company's stock option plan (note 11(d)), which is available to almost all employees of the Company.

Key management personnel compensation comprised the following:

Years ended March 31,	2015	2014
(thousands of $)
Salaries, bonus and employee benefits	4,296	3,707
Stock-based compensation	995	870
	5,291	4,577

20. SUBSEQUENT EVENTS:

On May 20, 2015, the Board of Directors declared a quarterly cash dividend of $0.10 per share on its Common Shares, payable on June 15, 2015, to all shareholders of record at the close of business on June 5, 2015.