CORCAN Revolving Fund

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Statement of Management Responsibility

We have prepared the accompanying financial statements of the CORCAN Revolving Fund as required by and in accordance with the policy of Treasury Board on revolving funds and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared by the management of the Fund in accordance with the significant accounting policies set out in Note 2 of the statements, on a basis consistent with that of the preceding year.

Responsibility for the integrity and objectivity of these financial statements rests with the management of the Fund. To assure maximum objectivity and freedom from bias, the financial data contained in these financial statements has been examined by the audit committee of the Department. The information included in these financial statements is based on management's best estimates and judgement with due consideration given to materiality. To fulfil its accounting and reporting responsibilities, the Fund maintains a set of accounts which provides a centralized record of the Fund's financial transactions. Financial information submitted to the Public Accounts of Canada and included in the Departmental Performance Report is consistent with these financial statements.

The Fund's directorate of financial services develops and disseminates financial management and accounting policies and issues specific directives which maintain standards of accounting and financial management. The Fund maintains systems of financial management and internal control which gives due consideration to costs, benefits and risks. They are designed to provide reasonable assurance that transactions are properly authorized by Parliament, are executed in accordance with prescribed regulations, and are properly recorded to maintain accountability of Government funds and safeguard the assets under the Fund's administration. Financial management and internal control systems are augmented by the maintenance of internal audit programs. The Fund also seeks to assure the objectivity and integrity of data in its financial statements by the 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 its regulations, policies, standards and managerial authorities are understood throughout the organization.

Management has presented the financial statements to the Fund's external auditor, Ernst & Young, who audited them and has provided an independent opinion which has been appended to these financial statements.

Approved by:

Lynn R. Garrow B.Soc(Crim), MBA
Chief Executive Officer
CORCAN

Jacqueline A Goudal, CPA, CMA
Director, CORCAN Financial Services
CORCAN

May 28, 2015

Statement of Authority provided (Used) (Unaudited) for the year ended March 31

Table Summary

The table presents on a comparative basis the statement of Authority provided (Used) (Unaudited). It consists of five columns: item descriptions, current year with two columns — estimates and actual, and previous year with two columns — estimates and actual. Subtotals are displayed at operating source of funds and totals are displayed at authority used.

(in thousands of dollars)

  2015 2014
Estimates Actual Estimates Actual
Net results   (negative 3,324)   (negative 2,276)
Items not requiring use of funds 1,800 2,314 3,300 1,930
Operating source of funds 1,800 (negative 1,010) 3,300 (negative 346)
Items requiring use of funds        
Net capital acquisitions (negative 2,500) 1,281 (negative 2,500) (negative 195)
Transition payments for implementing salary payments in arrears   (negative 1,023)    
Net other assets and liabilities (negative 400) (negative 266) (negative 2,100) 322
Authority used (negative 1,100) (negative 1,018) (negative 1,300) (negative 219)

Reconciliation of Unused Authority (Unaudited) as at March 31

Table Summary

The table presents on a comparative basis the reconciliation of Unused Authority (Unaudited). It consists of three columns: item descriptions, current year and previous year. Subtotals are displayed at net authority provided end of year and totals are displayed at the unused authority carried forward.

(in thousands of dollars)

  2015 2014
Debit balance in the accumulated net charge against the Fund's authority account (negative 8,879) (negative 7,870)
Payables at year‑end charged against the appropriate account after March 31 10,717 8,521
Amounts credited to the appropriation account after March 31 (negative 1,083) (negative 914)
Net authority used (provided), end of year 755 (negative 263)
Authority limit 5,000 5,000
Unused authority carried forward 4,245 5,263

Independent Auditors' Report

To the Commissioner of Correctional Service of Canada
CORCAN Revolving Fund

We have audited the accompanying financial statements of the CORCAN Revolving Fund, which comprise the statement of financial position as at March 31, 2015, the statements of operations and net assets, and statement of cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information. These financial statements have been prepared by management of the CORCAN Revolving Fund to comply with section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities.

Management's responsibility for the financial statements

Management is responsible for the preparation of these financial statements in accordance with section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements of the CORCAN Revolving Fund as at and for the year ended March 31, 2015 are prepared, in all material respects, in accordance with section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities.

Basis of accounting and restriction on use

Without modifying our opinion, we draw attention to Note 2 to the financial statements, which describes the basis of accounting. The financial statements are prepared to assist the CORCAN Revolving Fund to comply with the financial reporting provisions of the Treasury Board of Canada referred to above. Our auditors' report is intended solely for the information and use of the CORCAN Revolving Fund and the Treasury Board of Canada and should not be used by parties other than CORCAN Revolving Fund or the Treasury Board Canada.

Ernst & Young LLP
Chartered Professional Accountants,
Licensed Public Accountants

Ottawa, Canada
May 25, 2015

Statement of Financial Position as at March 31

Table Summary

The table presents on a comparative basis the statement of Financial Position. It consists of three columns: item descriptions, current year and previous year. Item descriptions are grouped in two: the assets and the liabilities and net assets, both displaying totals. Current item descriptions are grouped together for assets and for liabilities, both displaying subtotals.

(in thousands of dollars)

  2015 2014
Assets    
Current    
Accounts receivable (Note 4) 3,432 2,839
Inventories (Note 5) 10,219 10,895
Capital assets, held for sale (Note 6)   1,380
Other 1 2
Total 13,652 15,116
Long‑term    
Capital assets (Note 6)    
At cost 30,941 34,008
Less: accumulated amortization 24,960 25,111
Subtotal 5,981 8,897
Less: current capital assets, held for sale   1,380
Net 5,981 7,517
Total 19,633 22,633
Liabilities and Net Assets    
Current    
Accounts payable (Note 7) 8,930 7,835
Deferred revenue 107 249
Vacation pay and salary accrual 3,222 2,261
Subtotal 12,259 10,345
Long‑term    
Employee termination benefits (Note 8) 1,689 1,247
Net assets (Note 10) 5,685 11,041
Total 19,633 22,633

Statement of Operations and Net Assets for the Year ended March 31

Table Summary

The table presents on a comparative basis the statement of Operations and Net Assets. It consists of three columns: item descriptions, current year and previous year. Subtotals are displayed for revenues, net of cost of goods sold. Item descriptions for other revenues and expenses and for expenses are grouped together, each displaying subtotals. Subtotals are displayed for net results. Totals are displayed at net assets end of year.

(in thousands of dollars)

  2015 2014
Revenue (Notes 3 and 11) 65,676 68,309
Cost of goods sold (Note 11) 69,005 73,648
Gross Margin (negative 3,329) (negative 5,339)
Other revenue    
Training and correctional fees (Note 3) 14,514 18,051
Miscellaneous 94 150
Subtotal 14,608 18,201
Expenses (Note 12)    
National/regional headquarters 8,552 8,526
Employment and employability programs 2,861 3,221
Selling and marketing 3,190 3,391
Subtotal 14,603 15,138
Net results from continuing operations (negative 3,324) (negative 2,276)
Capital asset impairment loss (Note 6)   (negative 315)
Net result (negative 3,324) (negative 2,591)
Net assets, beginning of year 11,041 11,180
Net financial resources used (provided) and change in the accumulated net charge against the Fund's authority, during the year (negative 1,009) 2,452
Transfer of the transition payments for implementing salary payments in arrears (Note 14) (negative 1,023)  
Net assets, end of year (Note 10) 5,685 11,041

Statement of Cash Flows for the year ended March 31

Table Summary

The table presents on a comparative basis the statement of Cash Flows. It consists of three columns: item descriptions, current year and previous year. Item descriptions are grouped in two: operating activities and investing activities, both displaying subtotals. Subtotals are displayed at net financial resources provided by (used in) operating activities and at net financial resources provided (used) and change in the accumulated net charge against the Fund's authority. Totals are displayed at accumulated net charge against the Fund's authority end of year.

(in thousands of dollars)

  2015 2014
Operating activities    
Net results (negative 3,324) (negative 2,591)
Add (deduct) items not involving cash :    
Termination benefits expense (Note 8) 679 67
Amortization (Note 6) 1,639 1,854
Loss on disposal/write down of capital assets (negative 4) 9
Capital asset impairment loss (Note 6)   315
Subtotal (negative 1,010) (negative 346)
Net change in non‑cash working capital balances related to operations :    
Accounts receivable (negative 593) (negative 1,020)
Inventories 676 1,760
Other 1 2
Employee termination benefits (Note 8) (negative 237) (negative 1,089)
Accounts payable 1,095 (negative 1,394)
Deferred revenue (negative 142) (negative 348)
Vacation pay and salary accrual 961 178
Transition payments for implementing salary payments in arrears (Note 14) (negative 1,023)  
Net financial resources provided by (used in) operating activities (negative 272) (negative 2,257)
Investing activities    
Capital asset acquisitions (negative 109) (negative 196)
Proceeds on disposal of capital assets 1,390 1
Net financial resources provided by (used in) investing activities 1,281 (negative 195)
Net financial resources provided (used) and change in the accumulated net charge against the Fund's authority, during the year 1,009 (negative 2,452)
Accumulated net charge against the Fund's authority, beginning of year 7,870 10,322
Accumulated net charge against the Fund's authority, end of year (Note 10) 8,879 7,870

Notes to financial statements for the year ended March 31, 2015

1. Authority and purpose

The CORCAN Revolving Fund ("CORCAN" or "the Fund") is a special operating agency within Correctional Service Canada ("CSC") financed by way of a Revolving Fund. CORCAN was established under Appropriation Act No. 4, 1991–92, which authorized the operation of the Fund effective April 1, 1992 in accordance with terms and conditions prescribed by the Treasury Board of Canada ("Treasury Board"). CORCAN's purpose is to aid in the safe reintegration of offenders into Canadian society by providing employment and training opportunities to offenders incarcerated in federal penitentiaries and, for brief periods of time, after they are released into the community. The Fund has a continuing non‑lapsing authority from Parliament to make payments out of the Consolidated Revenue Fund for working capital, capital acquisitions and temporary financing of accumulated operating deficits, the total of which is not to exceed $5,000,000 at any time. An amount of $15,218,000 representing net assets assumed by the Fund was charged to this authority when the Fund became operative on April 1, 1992. The Fund is a non‑taxable entity.

2. Significant accounting policies

a. Basis of accounting

These financial statements have been prepared in accordance with the significant accounting policies set out below to comply with the Treasury Board's reporting requirements for revolving funds prescribed by the Receiver General for Canada. The basis of accounting used in these financial statements differs from the Canadian Public Sector Accounting Standards as:

  • Employee's vacation pay liability is based on signed sollective agreements. Termination benefit liability is based on valuations provided by Treasury Board to management.
  • No liability is recorded for sick leave.
  • Funding for capital assets received from the Treasury Board at inception of the Fund is recorded as contributed capital and not as a reduction of the cost of capital assets.
  • Services received without charge from other government departments are not reported as expenses.
  • The statement of financial position does not segregate non-financial assets.
  • The debt indicator and statement of change in net debt are not presented in the financial statements.

b. Recognition of revenues and expenses

Except as noted below, the Fund recognizes revenue when persuasive evidence of a final agreement exists, delivery has occurred and services have been rendered, the selling price is fixed or determinable and collectability is reasonably assured.

Revenues is accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenue. Revenue that has been received but not yet earned is recorded as deferred revenue.

For construction contracts, the percentage of completion method of accounting is used. Degree of completion is determined by comparing direct costs incurred to date to the total direct costs anticipated for the entire contract. The effect of changes to the total estimated income for each contract is recognized in the period in which the determination is made and losses, if any, are recognized fully when anticipated.

Expenses are recorded in the period they are incurred. Vacation pay and compensatory leave are expensed as the benefits accrued to employees under their respective terms of employment.

c. Net cash provided by government

CORCAN operates within the Consolidated Revenue Fund, which is administered by the Receiver General for Canada. All cash received by CORCAN is deposited to the Consolidated Revenue Fund. The net cash provided by the federal government is the difference between all cash receipts and all cash disbursements including transactions between departments of the federal government.

d. Accounts receivable

Accounts receivable are stated at amounts expected to be ultimately realized; an allowance is made for receivables where recovery is considered uncertain.

e. Inventories

Raw materials, finished goods and work in progress inventories are valued at the lower of cost and net realizable value. The Fund makes provisions for obsolete inventory on a site by site basis.

f. Capital assets

Capital assets with an initial cost of $10,000 or greater are recorded at cost and are amortized on a straight‑line basis over their estimated useful lives commencing in the month after they are put into service, as follows:

Table Summary

The table presents capital assets and consists of 2 columns: the assets categories with respective amortization periods.

Equipment 10 years
Leasehold improvements Term of the lease
Vehicle fleet 5 years
Other 3 years

g. Pension plan

Employees of the Fund are covered by the Public Service Retirement Pension Plan (the "Plan") administered by the Government of Canada. Under present legislation, contributions made by the Fund to the Plan are limited to an amount equal to the employee's contributions on account of current service. These contributions represent the total pension obligations of the Fund and are charged to operations on a current basis. The Fund is not required under present legislation to make contributions with respect to actuarial deficiencies of the Public Service Superannuation Account and/or with respect to charges to the Consolidated Revenue Fund for the indexation of payments under the Supplementary Retirement Benefits Act.

h. Employee termination benefits

Employees of CORCAN, as stipulated under their collective agreement, are entitled to termination benefits under labour contracts or conditions of employment. These benefits are accrued as employees render the necessary services. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee termination benefits for the government as a whole.

i. Sick leave

Employees are permitted to accumulate unused sick leave. However, such leave entitlements may only be used in the event of an illness. As per current government practice, unused sick leave upon employee termination is not payable to the employee. Accordingly, no amount has been accrued in these financial statements.

j. Financial instruments

The fair value of the financial instruments approximates costs unless otherwise specified. The Fund's financial instruments consist of accounts receivable and accounts payable. It is management's opinion that the Fund is not exposed to significant interest, currency or credit risks arising from these financial instruments.

k. Measurement uncertainty

The preparation of these financial statements in accordance with the Treasury Board's accounting policies requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions used to be reasonable. The most significant items where estimates are used are the liability for employee termination benefits and the useful lives of capital assets. Actual results could significantly differ from these estimates. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the period they become known.

3. Related party transactions

CORCAN is related as a result of common ownership to all Government of Canada departments, agencies, and Crown corporations. CORCAN enters into transactions with these entities in the normal course of business and on normal trade terms.

During the year, CSC, the parent organization of CORCAN, has provided and will continue to provide CORCAN with the use of existing infrastructure including buildings and shops as well as maintenance of said facilities, financial systems, human resource services and corporate financial services. The cost of these services is not included as an expense in CORCAN's Statement of Operations and Net Assets.

The Correctional and Training fees are provided by CSC to offset salary and operating costs that cannot be recovered by CORCAN through the sale of goods and services due to the correctional environment in which it operates.

The Government of Canada 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, IT desktop and other telecommunication support and services, cheque issuance services and legal services provided by Public Works and Government Services Canada, Shared Services Canada and Justice Canada, are not included as an expense in CORCAN's Statement of Operations and Net Assets.

CORCAN entered into the following transactions with the CSC and other government departments:

Table Summary

The table presents on a comparative basis the related party transactions. It consists of three columns: item descriptions, current year and previous year. The last row presents the totals.

(in thousands of dollars)

  2015 2014
Correctional Service of Canada    
Trade revenue 17,896 28,314
Training, correctional and other fees 14,514 18,051
Other Government Departments    
Trade revenue 40,849 32,902
Total 73,259 79,267

4. Accounts receivable

The accounts receivables consist of the following:

Table Summary

The table presents on a comparative basis the total accounts receivable with subtotals. It consists of three columns: item descriptions, current year and previous year. The last row presents the totals for accounts receivable net of allowance for doubtful accounts.

(in thousands of dollars)

  2015 2014
Government of Canada 1,342 1,297
Outside parties 2,112 1,579
Subtotal 3,454 2,876
Allowance for doubtful accounts (negative 22) (negative 37)
Total 3,432 2,839

5. Inventories

Inventory consist of the following:

Table Summary

The table presents on a comparative basis inventories with subtotals. It consists of three columns: item descriptions, current year and previous year. The last row presents the totals for inventories net of provision for obsolete inventory.

(in thousands of dollars)

  2015 2014
Raw materials 5,177 5,559
Work in progress 290 348
Finished goods 5,233 5,336
Subtotal 10,700 11,243
Provision for obsolete inventory (negative 481) (negative 348)
Total 10,219 10,895

6. Capital assets

Capital assets consist of the following:

Table Summary

The table presents the capital assets, with eleven columns. The first column lists the item descriptions and the next eight columns are grouped in two: cost (opening balance, acquisitions, disposals & write‑offs and closing balance) and accumulated amortization (opening balance, amortization, disposals & write‑offs and closing balance). The last two columns provide the net book value for the current year and for previous year. Totals are displayed at the last row.

(in thousands of dollars)

  Cost Accumulated amortization 2015 Net book value 2014 Net book value
Opening balance Acquisitions Disposals and write-offs Closing balance Opening balance Amortization Disposals and write-offs Closing balance
Equipment 30,456 109 3,131 27,434 22,101 1,424 1,740 21,785 5,649 8,355
Leasehold improvements 1,343     1,343 1,009 136   1,145 198 334
Vehicle fleet 2,095   45 2,050 1,919 62 50 1,931 119 176
Other 114     114 82 17   99 15 32
Total 34,008 109 3,176 30,941 25,111 1,639 1,790 24,960 5,981 8,897

In April 2012, the Government of Canada announced it would close operations at three Correctional Service Canada sites, including Leclerc Institution. The closures were completed in September 2013 as planned. The net book value of all capital assets at the Leclerc Institution owned by CORCAN as of March 31, 2014, were written down to $1,380,000 to reflect their estimated market value net of expected selling costs. This represented an impairment loss of $315,493 which was recorded in the Statement of Operations in the previous year. CORCAN received the proceeds of disposition of $1,380,175 from the Leclerc assets in December 2014.

7. Accounts payable

Table Summary

The table presents on a comparative basis the total accounts payable. It consists of three columns: item descriptions, current year and previous year. Totals are displayed at the last row.

(in thousands of dollars)

  2015 2014
Government of Canada 1,015 983
Outside parties 7,915 6,852
Total 8,930 7,835

8. Employee future benefits

Pension benefits: CORCAN's employees participate in the Public Service Pension Plan ("PSPP"), 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/Quebec Pension Plans' benefits and they are indexed to inflation.

Both plan members and CORCAN contribute to the cost of the Plan. Effective January 2013, important changes were made to the Public Service Superannuation Act (the act governing the PSPP) through the Jobs and Growth Act, 2012, including:

  • Contribution rates for all active and future public service pension plan members were increased effective January 2014 with the objective of reaching a more balanced cost‑sharing ratio for employer/plan member contribution of 50:50 overtime; and
  • The age at which a new employee who began participating in the public service pension plan on or after January 1, 2013 can receive an unreduced pension benefit was raised from age 60 to 65.

CORCAN's responsibility with regards 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.

Termination Benefit: Following the ratification of new collective agreements, the unionized employees in the Core Public Administration have accepted the elimination of severance benefits for voluntary separation, namely for retirement or resignation. The Treasury Board had subsequently eliminated severance benefits for voluntary separation for the executive and non‑represented employees. As at March 31, 2014, there were no CORCAN employees with collective agreements where severance pay had not been eliminated.

Employees were given three payment options: a single and immediate cash‑out of their severance pay, a deferral of this payment to when they terminate their employment or a combination of both options.

The employee termination benefits were adjusted using actuarial rate provided by the Treasury Board for the government as a whole.

Information about the termination benefits, measured as at March 31, is as follows:

Table Summary

The table presents on a comparative basis the employee future benefits. It consists of three columns: item descriptions, current year and previous year. Totals are displayed at accrued benefit obligation end of the year.

(in thousands of dollars)

  2015 2014
Accrued benefit obligation, beginning of the year 1,247 2,269
Expenses for the year 679 67
Benefits paid during the year (negative 237) (negative 1,089)
Accrued benefit obligation, end of the year 1,689 1,247

9. Contractual obligations

CORCAN is committed to pay under the terms of lease agreements for a total amount of $2,455,589. These commitments are related to the Kingston warehouse, the lease for national corporate office space and other minor commitments. The amount paid during the year for the Kingston warehouse was $1,136,000 (2014 — $1,131,000).

Future yearly payment amounts are estimated as follows:

Table Summary

The table presents total annual contractual obligations. It consists of two columns, the year and the estimated payment amount. The last row presents the totals for those years.

(in thousands of dollars)

2016 1,523
2017 706
2018 193
2019 32
2020 2
Total 2,456

10. Net assets

The net assets consist of the following:

Table Summary

The table presents on a comparative basis the net assets. It consists of three columns: item descriptions, current year and previous year. Totals are displayed at net assets end of year.

(in thousands of dollars)

  2015 2014
Contributed capital 30,542 30,542
Accumulated net charge against the Fund's authority (negative 8,879) (negative 7,870)
Accumulated deficit (negative 14,955) (negative 11,631)
Transition payments for implementing salary payments in arrears (negative 1,023)  
Net assets, end of year 5,685 11,041

Contributed capital represents the value of capital assets financed from contributed capital at the inception of the Fund.

Accumulated net charge against the Fund's authority represents the amount of the Fund's non‑lapsing authority that has been used (provided) since inception of the Fund.

The accumulated deficit is an accumulation of each year's surpluses (losses).

11. Segmented information

Table Summary

The table presents segmented information for the year ended March 31, 2015, with seven columns. The first column lists the item descriptions and the next five columns are: manufacturing, construction, textile, services and other. The last column provides the total of the previous five columns at total. Subtotals for revenues and cost of goods sold are displayed at gross margin. Below the gross margin is displayed a list of identifiable assets with respective amounts.

(in thousands of dollars)

Year ended March 31, 2015 Manufacturing Construction Textile Services Other Total
Revenue 40,604 12,741 5,955 6,376   65,676
Cost of Goods Sold 41,578 13,809 6,579 7,039   69,005
Gross Margin (negative 974) (negative 1,068) (negative 624) (negative 663)   (negative 3,329)
Identifiable assets:            
Financial Assets 1,180 391 80 1,515 266 3,432
Inventories 8,150   1,565 504   10,219
Capital assets (net) 4,717 69 75 805 315 5,981
Amortization of capital assets 1,227 35 16 189 172 1,639
Table Summary

The table presents segmented information for the year ended March 31, 2014, with six columns. The first column lists the item descriptions and the next four columns are: manufacturing, construction, textile and services. The last column provides the total of the previous four columns at total. Subtotals for revenues and cost of goods sold are displayed at gross margin. Below the gross margin is displayed a list of identifiable assets with respective amounts.

(in thousands of dollars)

Year ended March 31, 2014 Manufacturing Construction Textile Services Other Total
Revenues 41,318 13,822 7,259 5,910   68,309
Cost of Goods Sold 43,965 14,144 7,796 7,743   73,648
Gross Margin (negative 2,647) (negative 322) (negative 537) (negative 1,833)   (negative 5,339)
Identifiable assets:            
Financial Assets 1,495 237 73 830 204 2,839
Inventories 8,839   1,527 529   10,895
Capital assets, net 5,938 104 91 2,374 390 8,897
Amortization of capital assets 1,300 41 26 313 174 1,854

12. Expenses

The following table represents details of national and regional headquarters, employment and employability programs, and selling and marketing expenses by category:

Table Summary

The table presents on a comparative basis the expenses. It consists of three columns: item descriptions, current year and previous year. The last row presents the totals for expenses.

(in thousands of dollars)

  2015 2014
Salaries 7,289 7,324
Employee benefits 1,560 1,706
Professional and special services 3,801 3,745
Rentals 1,211 1,436
Transportation and communications 182 312
Utilities, materials and supplies 323 310
Other expenditures 164 184
Purchased repair and maintenance 65 82
Information 8 39
Total 14,603 15,138

13. Contingencies

In the normal course of operations, CORCAN is involved in various claims and legal proceedings. It is the opinion of management that no significant claims exist as of March 31, 2015.

14. Transition payments for implementing salary payments in arrears

The government of Canada implemented salary payments in arrears in 2014–2015. As a result, a one‑time payment was issued to employees and will be recovered from them in the future. The transition to salary payments in arrears forms part of the transformation initiative that replaces the pay system and also streamlines and modernizes the pay processes. This change to the pay system had no impact on the expenses of the Revolving Fund. However, it did result in the use of authorities by the Revolving Fund and impacted the accumulated net charge against the Fund's authority. Prior to year end, transition payments for implementing salary payments in arrears were transferred to a central account administered by Public Works and Government Services Canada, who is responsible for the administration of the Government pay system.

15. Comparative figures

Certain comparative figures for 2014 have been reclassified to conform with the presentation adopted for the current year.

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