2008-2009 - Financial Statements
Notes to the Financial Statements 2008-2009 (unaudited)
Statement of Management Responsibility
Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2009 and all information contained in these statements rests with departmental management. These financial statements have been prepared by management in accordance with Treasury Board accounting policies which are consistent with Canadian generally accepted accounting principles for the public sector.
Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management’s best estimates and judgment and gives due consideration to materiality. To fulfil its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the department’s financial transactions. Financial information submitted to the Public Accounts of Canada and included in the department’s Departmental Performance Report is consistent with these financial statements.
Management maintains a system of financial management and internal control designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are in accordance with the Financial Administration Act, are executed in accordance with prescribed regulations, within Parliamentary authorities, and are properly recorded to maintain accountability of Government funds. Management also seeks to ensure the objectivity and integrity of data in its financial statements by careful selection, training and development of qualified staff, by organizational arrangements that provide appropriate divisions of responsibility, and by communication programs aimed at ensuring that regulations, policies, standards and managerial authorities are understood throughout the department.
The financial statements of the department have not been audited.
| (Vacant) | |
| The paper version was signed by | |
| Deputy Head | Claude Majeau |
| Ottawa, Canada | Senior Financial Officer |
Copyright Board of Canada
Statement of Operations (unaudited)
For the year ended March 31
| (in dollars) | ||
|
|
2009 | 2008 |
| Operating Expenses | ||
| Salaries and employee benefits | 2 028 432 | 1 810 901 |
| Professional and special services | 443 763 | 426 917 |
| Accommodation | 228 162 | 216 260 |
| Travel | 138 261 | 154 814 |
| Information services | 102 084 | 56 007 |
| Rentals | 65 845 | 42 150 |
| Telecommunication services | 45 653 | 42 003 |
| Utilities, materials and supplies | 44 386 | 36 524 |
| Informatics equipment and software | 16 200 | 12 843 |
| Amortization | 11 038 | 11 039 |
| Postage and freight | 7 354 | 7 861 |
| Repairs and maintenance | 1 931 | 12 499 |
| Other | 618 | 4 657 |
| Net cost of operations | 3 133 727 | 2 834 475 |
|
The accompanying notes form an integral part of these financial statements. |
||
Copyright Board of Canada
Statement of Financial Position (unaudited)
At March 31
| (in dollars) | ||
| ASSETS | 2009 | 2008 |
| Financial assets | ||
| Accounts receivable (Note 8) | 41 574 | 69 276 |
| Non-financial assets | ||
| Tangible capital assets (Note 5) | 64 115 | 75 153 |
| TOTAL | 105 689 | 144 429 |
| Liabilities | ||
| Accounts payable and accrued liabilities (Note 4) | 185 865 | 226 054 |
| Vacation pay and compensatory leave | 163 845 | 123 317 |
| Employee future benefits (Note 6) | 247 595 | 197 211 |
| Total liabilities | 597 305 | 546 582 |
| Equity of Canada | (491 616) | (402 153) |
| TOTAL | 105 689 | 144 429 |
| Contractual obligations (Note 7) | ||
| The accompanying notes form an integral part of these financial statements. | ||
Copyright Board of Canada
Statement of Equity of Canada (unaudited)
For the year ended March 31
| (in dollars) | ||
| 2009 | 2008 | |
| Equity of Canada, beginning of year | (402 153) | (268 977) |
| Net cost of operations | (3 133 727) | (2 834 475) |
| Current year appropriations used (Note 3) | 2 678 055 | 2 520 656 |
| Refund of previous year accounts payable | (1 486) | (13 244) |
| Change in net position in the Consolidated Revenue Fund (Note 3) | 12 487 | (127 156) |
| Services provided without charge (Note 8) | 355 208 | 321 043 |
| Equity of Canada, end of year | (491 616) | (402 153) |
| The accompanying notes form an integral part of these financial statements. | ||
Copyright Board of Canada
Statement of Cash Flow (unaudited)
For the year ended March 31
| (in dollars) | ||
| 2009 | 2008 | |
| Operating activities | ||
| Net cost of operations | 3 133 727 | 2 834 475 |
| Non cash items: | ||
| Services provided without charge (Note 8) | (355 208) | (321 043) |
| Amortization of tangible capital assets (Note 5) | (11 038) | (11 039) |
| Variations in Statement of Financial Position: | ||
| Increase in liabilities | (50 723) | (106 841) |
| Decrease in receivables | (27 702) | (15 296) |
| Net cash provided by Government of Canada | 2 689 056 | 2 380 256 |
| The accompanying notes form an integral part of these financial statements. | ||
1 - Authority and Objectives
The Copyright Board of Canada is an independent administrative agency which has been conferred department status for purposes of the Financial Administration Act. Its mandate stems from the Copyright Act.
The Copyright Board of Canada plays a major role in the collective administration of copyright, particularly in respect of the public performance and the communication to the public, by telecommunication, of musical works, the retransmission of distant radio and television signals are concerned, the private copying regime and the reproduction right. The Board plays a surveillance role in three ways with respect to collective societies which administer very large repertoires of work created by a multitude of originators both in Canada and in other countries: as an economic regulatory body, by approving tariff proposals by the various copyright collective societies;as an arbitrator in private disputes;and as an arbitrator of the public interest.
The Board’s principal mandate is to set royalties which are fair and reasonable for both copyright owners and users of copyright-protected works, as well as issuing non-exclusive licences authorizing the use of works when the copyright owner cannot be located.
The Board reports annually to Parliament through the Minister of Industry.
2 - Summary of Significant Accounting Policies
The financial statements have been prepared in accordance with accounting standards issued by the Treasury Board of Canada Secretariat which are consistent with Canadian generally accepted accounting principles for the public sector.
Significant accounting policies are as follows:
- Parliamentary appropriations – the Department is financed by the Government of Canada through Parliamentary appropriations. Appropriations provided to the department do not parallel financial reporting according to generally accepted accounting principles since appropriations are primarily based on cash flow requirements. Consequently, items recognized in the statement of operations and the statement of financial position are not necessarily the same as those provided through appropriations from Parliament. Note 3 provides a high-level reconciliation between the two bases of reporting.
- Net cash provided by Government – The department operates within the Consolidated Revenue Fund (CRF). The CRF is administered by the Receiver General for Canada. All cash received by the department is deposited to the CRF and all cash disbursements made by the department are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.
- Change in net position in the Consolidated Revenue Fund is the difference between the net cash provided by the Government and appropriations used in the year, excluding the amount of non-respendable revenue recorded by the department. It results from timing between when a transaction affects appropriations and when it is processed through the CRF.
- Revenues – Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
- Expenses – Expenses are recorded on the accrual basis:
- Vacation pay and compensatory leave are expensed as the benefits accrue to employees under their respective terms of employment.
- Services provided without charge by other government departments for accommodation, and the employer’s contribution to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
- Employee future benefits
- Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer plan administered by the Government of Canada. The department’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the department to make contributions for any actuarial deficiencies of the Plan.
- Severance benefits: Employees are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the services necessary to earn them. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
- Account receivables are stated at amounts expected to be ultimately realized;a provision is made for receivables where recovery is considered uncertain.
- Tangible capital assets – All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. The department does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian Reserves and museum collections.
Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the assets as follows:
Asset Amortization period Machinery and Equipment 10 years - Measurement uncertainty –– The preparation of these financial statements in accordance with accounting standards issued by the Treasury Board of Canada Secretariat which are consistent with Canadian generally accepted accounting principles for the public sector requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
3 - Parliamentary Appropriations
The Department receives most of its funding through annual Parliamentary appropriations. Items recognized in the statement of operations and the statement of financial position in one year may be funded through Parliamentary appropriations in prior, current or future years. Accordingly, the Department has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences between net results of operations and appropriations are reconciled in the following tables.
3a) Reconciliation of net cost of appropriations to current year appropriations used
| (in dollars) | 2009 | 2008 |
| Net cost of operations | 3 133 727 | 2 834 475 |
| Adjustments for items affecting net cost | ||
| of operations but not affecting appropriations | ||
| Add (Less): | ||
| Services received without charge (Note 8) | (355 208) | (321 043) |
| Employee severance benefits (Note 6) | (50 384) | (18 210) |
| Amortization of tangible capital assets (Note 5) | (11 038) | (11 039) |
| Vacation pay and compensatory leave | (40 528) | 23 229 |
| Refund of previous year accounts payable | 1 486 | 13 244 |
| Current year appropriations used | 2 678 055 | 2 520 656 |
3b) Appropriations provided and used
| (in dollars) | 2009 | 2008 |
| Vote 45 - Operating expenditures | 2 518 446 | 2 430 700 |
| Statutory Amounts | 249 170 | 235 047 |
| Less: | ||
| Lapsed appropriations: Operating | (89 561) | (145 091) |
| Current year appropriations used | 2 678 055 | 2 520 656 |
3c) Reconciliation of net cash provided by Government to current year appropriations used
| (in dollars) | 2009 | 2008 |
| Net cash provided by Government of Canada | 2 689 056 | 2 380 256 |
| Refund of previous year accounts payable | 1 486 | 13 244 |
| 2 690 542 | 2 393 500 | |
| Change in net position in the Consolidated Revenue Fund | ||
| Variation in accounts payable and accrued liabilities | (40 189) | 111 860 |
| Variation in accounts receivable and advances | 27 702 | 15 296 |
| Total | (12 487) | 127 156 |
| Current year appropriations used | 2 678 055 | 2 520 656 |
4. Accounts payable and accrued liabilities
| (in dollars) | ||
| 2009 | 2008 | |
| External | ||
| Accrued liabilities | 116 724 | 175 939 |
| Accrued salaries and wages | 49 712 | 41 863 |
| Total External | 166 436 | 217 802 |
| Other Federal Government departments | 19 429 | 8 252 |
| Total Accounts payable and accrued liabilities | 185 865 | 226 054 |
5. Tangible Capital Assets
| (in dollars) | |||||||||
| Cost | Accumulated amortization | 2009 | 2008 | ||||||
| Capital asset class | Opening balance | Closing balance | Opening Balance | Amortization | Closing Balance | Net book value | Net book value | ||
| Machinery and equipment | 158 827 | 158 827 | 83 674 | 11 038 | 94 712 | 64 115 | 75 153 | ||
| Total | 158 827 | 158 827 | 83 674 | 11 038 | 94 712 | 64 115 | 75 153 | ||
| *Amoritization expense for the year ended March 31, 2009 is $11,038 (2007-2008 $11,039) | |||||||||
6. Employee Benefits
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Pension benefits: The department’s employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.
Both the employees and the department contribute to the cost of the Plan. The 2008-2009 expense amounts to $225,997 ($212,953 adjusted in 2007-2008), which represents approximately 2.0 (2.1 in 2007-2008) times the contributions by employees.
The department’s responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan’s sponsor.
- Severance benefits: The department provides severance benefits to its employees based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future appropriations. Information about the severance benefits, measured as at March 31, is as follows:
(in dollars) 2009 2008 Accrued benefit obligation, beginning of year 197 211 179 001 Expense for the year 50 384 18 331 Benefits paid during the year - (121) Accrued benefit obligation, end of year 247 595 197 211
7. Contractual Obligations
The nature of the department’s activities can result in some large multi-year contracts and obligations whereby the department will be obligated to make future payments when the services/goods are received. Significant contractual obligations that can be reasonably estimated are summarized as follows:
| (in dollars) | 2010 | 2011 | 2012 | 2013 | 2014 and thereafter | Total |
|---|---|---|---|---|---|---|
| Acquisition of goods and services | 554 694 | 6 057 | 4 748 | 812 | - | 566 311 |
| Employer contributions | 353 776 | - | - | - | - | 353 776 |
| Total | 908 470 | 6 057 | 4 748 | 812 | - | 920 087 |
8. Related party transactions
The department is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. The department enters into transactions with these entities in the normal course of business and on normal trade terms. Also, during the year, the department received services, which were obtained without charge from other Government departments as presented in part (a).
(a) Services provided without charge:
During the year the department received without charge from other departments, accommodation and the employer's contribution to the health and dental insurance plans. These services without charge have been recognized in the department's Statement of Operations as follows:
| (in dollars) | 2009 | 2008 |
| Accommodation | 228 162 | 216 260 |
| Employer's contribution to the insurance plans | 127 046 | 104 783 |
| Total | 355 208 | 321 043 |
The Government has structured some of its administrative activities for efficiency and cost-effectiveness purposes so that one department performs these on behalf of all without charge. The costs of these services, which include payroll and cheque issuance services provided by Public Works and Government Services Canada, are not included as an expense in the department's Statement of Operations.
(b) Receivables outstanding at year-end with related parties:
| (in dollars) | 2009 | 2008 |
| Receivables from other Federal Government departments | 41 574 | 69 276 |