Geomatics Canada Revolving Fund

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Statement of Management Responsibility

The accompanying financial statements of the Geomatics Canada Revolving Fund have been prepared as required by and in accordance with Treasury Board of Canada Secretariat accounting standards which are consistent with Canadian generally accepted principles for the public sector. They 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. The information included in these financial statements is based on management's best estimates and judgement with due consideration given to materiality. To fulfill its accounting and reporting responsibilities, the Fund maintains a set of accounts, which provides a centralized record of the Fund's financial transactions and benefits from the advice of accounting personnel of Corporate Management and Services Sector. Financial information contained in the ministerial statements and elsewhere in the Public Accounts of Canada is consistent with that in these financial statements, unless indicated otherwise.

The Corporate Management and Services Sector develops and disseminates financial management and accounting policies and issues specific directives, which maintain standards of accounting and financial management. Transactions are executed in accordance with prescribed regulations, within parliamentary authorities and are properly recorded to maintain accountability of Government funds and safeguard the Fund's assets. Financial management and internal control systems are maintained at appropriate costs and are augmented by the maintenance of internal audit programs. Management also seeks to assure the objectivity and integrity of data in its financial statements. This is accomplished by a careful selection, training and development of qualified staff, organizational arrangements that provide appropriate divisions of responsibility and communication programs aimed at ensuring that its regulations, policies, standards and managerial authorities are understood throughout the organization.

In order to assure maximum objectivity and freedom from bias, an external auditor has examined the financial data contained in these financial statements. Its role is to express an informed judgment as to whether the Fund's financial statements, considered in their entirety, present fairly, in conformity with stated accounting policies, the Fund's financial condition and transactions. This judgment is based on procedures described in the opinion appended to these financial statements.

Approved by:

Marc Bélisle, CPA, CA
Deputy Chief Financial Officer
Corporate Management and Services Sector

Kami Ramcharan, CMA
Assistant Deputy Minister,
Chief Financial Officer
Corporate Management and Services Sector

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 (use) of funds and totals are displayed at authority provided (used).

(in thousands of dollars)

  2015 2014
Estimates Actual Estimates Actual
Net results 100 (negative 39) 100 (negative 15)
Items not requiring use of funds        
Amortization of capital assets   29    
Operating source (use) of funds 100 (negative 10) 100 (negative 15)
Items requiring use of funds        
Net other assets (liabilities)   (negative 438)   (negative 147)
Transition payments for implementing salary payments in arrears   (negative 20)    
Authority provided (used) 100 (negative 468) 100 (negative 162)

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 1,347) (negative 1,443)
Add: Payables at year‑end charged against the appropriation account after March 31 129 543
Less: amounts credited to the appropriation account after March 31 149 935
Net authority provided, end of year (negative 1,367) (negative 1,835)
Authority limit (Note 1) 5,000 5,000
Unused authority carried forward 6,367 6,835

Independent Auditor's Report

To the Assistant Deputy Minister and Chief Financial Officer, Natural Resources Canada

We have audited the accompanying financial statements of Geomatics Canada Revolving Fund, which comprise the statement of financial position as at March 31, 2015, and the statements of operations and net assets (liabilities), and cash flows for the year then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatory information. These financial statements have been prepared by management of the Fund to meet requirements of 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 and fair presentation of these financial statements in accordance with section 6.4 of the Treasury Board of Canadas 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.

Auditor's 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 auditor's 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 auditor considers 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 is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Geomatics Canada Revolving Fund as at March 31, 2015 and the results of its operations and cash flows for the year then ended 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 describe the basis of accounting. The financial statements are prepared to assist the Geomatics Canada Revolving Fund to meet the requirements of section 6.4 of the Treasury Board of Canada's Policy on Special Revenue Spending Authorities. As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for the management of the Geomatics Canada Revolving Fund and the Treasury Board of Canada and should not be used by parties other than the Geomatics Canada Revolving Fund or the Treasury Board of Canada

Other matter

The financial statements of the Geomatics Canada Revolving Fund for the year ended March 31, 2014 were audited by another auditor whose report, dated May 28, 2014, expressed and unmodified opinion on those statements.

PricewaterhouseCoopers LLP
Chartered Professional Accountants,
Licensed Public Accountants

Ottawa, Canada
May 28, 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: assets and liabilities, both displaying totals. Current item descriptions are grouped together for assets and for liabilities, both displaying subtotals. Subtotals are displayed for capital assets net of accumulated amortization.

(in thousands of dollars)

  2015 2014
Assets    
Current    
Accounts receivable    
Government of Canada 755 764
Outside parties (Note 3) 53 67
Inventory (Note 4) 15 18
Prepaid expenses   20
Subtotal 823 869
Long‑term    
Capital assets (Note 5)    
At cost 2,868 2,868
Less: accumulated amortization (negative 2,868) (negative 2,839)
Total 823 898
Liabilities and Net Assets (Liabilities)    
Current    
Accounts payable and accrued liabilities    
Government of Canada 418 411
Outside parties 128 249
Vacation pay 13 13
Subtotal 559 673
Long‑term    
Employee termination benefits liability 70 68
Total 629 741
Net assets (liabilities) (Note 6) 194 157
Total 823 898

Statement of Operations and Net Assets (Liabilities) for the year ended March 31

Table Summary

The table presents on a comparative basis the statement of Operations and Net Assets (Liabilities). It consists of three columns: item descriptions, current year and previous year. Item descriptions for revenues and expenses are grouped together, each displaying subtotals. Subtotals for revenues and expenses are displayed. Net of total expenses are displayed at net results and totals are displayed at net liabilities end of year.

(in thousands of dollars)

  2015 2014
Revenue    
Services 1,977 2,060
Products 566 445
Consulting   115
Subtotal 2,543 2,620
Expenses    
Professional and special services 1,459 1,282
Salaries and employee benefits 636 599
Corporate and sector services 350 338
Occupancy costs 53 75
Utilities, materials and supplies 31 252
Amortization of capital assets 29  
Rentals 15 46
Other expenses 3 4
Provision for inventory obsolescence 3 3
Provision for employee termination benefits 2 2
Transportation and communication 1 8
Repairs and maintenance   26
Subtotal 2,582 2,635
Net results (negative 39) (negative 15)
Net assets (liabilities) ‑ beginning of year 157 (negative 147)
Transfer of the transition payments for implementing salary payments in arears (Note 11) (negative 20)  
Net financial resources used and change in the accumulated net charge against the Fund's authority during the year 96 319
Net assets (liabilities) ‑ end of year 194 157

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 together for the operating activities displaying subtotals. Subtotals are displayed at net financial resources provided (used) and change in the accumulated net charge against the Fund's authority account during the year. Totals are displayed at accumulated net charge against the Fund's authority account end of year.

(in thousands of dollars)

  2015 2014
Operating activities    
Net results from continuing operations (negative 39) (negative 15)
Items not affecting cash    
Amortization of capital assets 29  
Subtotal (negative 10) (negative 15)
Transition payments for implementing salary payments in arrears (negative 20)  
Changes in non‑cash working capital items (Note 8) (negative 68) (negative 306)
Changes in employee termination benefits liability 2 2
Net financial resources used by operating activities (negative 96) (negative 319)
Net financial resources used and change in the accumulated net charge against the Fund's authority account during the year (negative 96) (negative 319)
Accumulated net charge against the Fund's authority account ‑ beginning of year 1,443 1,762
Accumulated net charge against the Fund's authority account ‑ end of year 1,347 1,443

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

1. Authority and purpose

The Geomatics Canada Revolving Fund (the Fund) was originally established under Appropriation Act No. 3, 1993‑1994 as the "Surveys, Mapping and Remote Sensing Sector Revolving Fund" and approval was conditional on specified conditions. The purpose of the Fund was to shift the costs of offering goods and services from taxpayers to those specific users who directly benefit from them. Subsequently, on December 8, 1994, the "Surveys, Mapping and Remote Sensing Sector Revolving Fund" was renamed the "Geomatics Canada Revolving Fund". Having met its specified conditions, permanent continuing authority for the Fund was obtained from and registered with Treasury Board on February 9, 1995.

The Fund has received 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 at any time is not to exceed $5,000,000.

The Funds mandate is to produce geomatics products, services, and expertise that can be exploited commercially. Revenue‑generating activities further build on this work to produce saleable products or services for specific clients in the federal government, Canadian industry, Canadian public, provinces, territories, and other countries.

2. Significant accounting policies

a. Basis of accounting

The financial statements have been prepared in accordance with the significant accounting policies issued by the Treasury Board of Canada Secretariat and the reporting requirements for revolving funds described by the Receiver General for Canada The basis of accounting used in these financial statements differs from Canadian generally accepted accounting principles because: services received without charge from other government departments are not reported as expenses and the liability for termination benefits are based on management's best estimate rather than actuarial valuations.

b. Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates used in the preparation of the financial statements are the amount of certain accrued liabilities, the estimated useful lives of capital assets, the allowance for doubtful accounts, the provision for inventory obsolescence and the estimates related to the employee termination benefits liability. Actual results could differ from these estimates. These estimates are reviewed annually and as adjustments become necessary, they are recorded in the financial statements in the period in which they become known.

c. Revenue recognition

Revenues are recognized when products are sold or services rendered.

d. Accounts receivable

Accounts receivable are stated at amounts expected to be ultimately realized; a provision is made for receivables when a recovery is considered uncertain.

e. Inventory

The inventory of maps is valued at the lower of cost or net realizable value, with cost being determined using weighted cost of each title.

f. Capital assets

Capital assets purchased by the Fund since April 1, 1994 are recorded at cost. These assets are amortized on a straight‑line basis over their estimated useful lives, commencing with the month subsequent to acquisition. The estimated useful lives of these assets are as follows:

Table Summary

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

Computer equipment 2 to 5 years
Furniture 10 years
Mechanical equipment 10 years
Office equipment 5 years
Printing equipment 8 years
Scientific equipment 10 years

g. Pension plan

The Public Service Superannuation Act and the Supplementary Retirement Benefits Act cover employees of Natural Resources Canada whose salaries and other benefits are paid by the Fund. The Government's portion of the pension cost is included in the employee benefits expenses assessed against the Fund. Actual pension payments are made from the Public Service Superannuation and Supplementary Retirement Benefits Accounts. 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 indexation of payments under the Supplementary Retirement Benefits Act.

h. Vacation pay

Vacation pay is expensed as the benefits accrue to employees under their respective terms of employment.

i. Employee termination benefits

Employees of the Fund are entitled to specified termination benefits, calculated based on salary levels in effect at the time of termination as provided for under collective agreements and conditions of employment. The costs for benefits earned, as these accrue to employees, are recorded in the accounts.

j. Sick leave

Employees are permitted to accumulate unused sick leave. However, such leave entitlements do not vest and may only be used in the event of illness. The amount of accumulated sick leave entitlements, which will become payable in future years cannot be reasonably determined and accordingly have not been recorded in the financial statements. Payments of sick leave benefits are expensed as incurred and no amount has been accrued in these financial statements.

3. Accounts receivable

Accounts receivables with outside parties are as follows.

Table Summary

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

(in thousands of dollars)

  2015 2014
Accounts receivable with outside parties 94 106
Allowance for doubtful accounts (negative 41) (negative 39)
Total 53 67

4. Inventory

Table Summary

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

(in thousands of dollars)

  2015 2014
Topographic maps 309 309
Geographic maps 19 19
Subtotal 328 328
Provision for inventory obsolescence (negative 313) (negative 310)
Total 15 18

5. Capital assets

Table Summary

The table presents capital assets (above) and accumulated amortization (below), both displaying totals. The capital asset section of the table consists of four columns (item descriptions, balance at beginning of year, acquisitions and balance at end of year) and the accumulated amortization section of the table consists of four columns (item descriptions, balance at beginning of year, disposals and balance at end of year).

(in thousands of dollars)

Cost Balance at beginning of year Acquisitions Balance at end of year
Computer equipment 1,186   1,186
Furniture 10   10
Mechanical equipment 398   398
Office equipment 5   5
Printing equipment 988   988
Scientific equipment 281   281
Subtotal 2,868   2,868
Accumulated amortization Balance at beginning of year Disposals Balance at end of year
Computer equipment 1,158 28 1,186
Furniture 10   10
Mechanical equipment 398   398
Office equipment 4 1 5
Printing equipment 988   988
Scientific equipment 281   281
Subtotal 2,839 29 2,868

6. Net assets (liabilities)

The accumulated net charge against the Fund's authority is the non-lapsing authority amount that has been used since the inception of the Fund.

The accumulated surplus is an accumulation of each year's surpluses and deficits including the absorption of the opening net assets upon establishment of the Fund.

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

Table Summary

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

(in thousands of dollars)

  2015 2014
Contributed capital 1,438 1,438
Accumulated net charge against the Fund's authority (negative 1,347) (negative 1,443)
Transfer of the transition payments for implementing salary payments in arrears (Note 11) (negative 20)  
Accumulated surplus 123 162
Net assets (liabilities) 194 157

7. Contingencies

In the normal course of its operations, the Fund may become involved in various legal actions. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense is recorded in the financial statements. As at March 31, 2015, there were no claims outstanding against the Fund.

8. Changes in non-cash working capital items

Table Summary

The table presents on a comparative basis the changes in non‑cash working capital items for which the total is reported in the statement of cash flow. It consists of three columns: item descriptions, current year and previous year. Totals are displayed on the last row at total.

(in thousands of dollars)

  2015 2014
Accounts receivable    
Government of Canada 9 (negative 137)
Outside parties 14 3
Inventory 3 1
Prepaid expenses 20  
Accounts payable and accrued liabilities    
Government of Canada 7 (negative 211)
Outside parties (negative 121) 38
Total (negative 68) (negative 306)

9. Related party transactions

Through common ownership, the Geomatics Canada Revolving Fund is related to all Government of Canada Departments, Agencies and Crown Corporations. The Fund enters into transactions with such entities in the normal course of business which have been recorded at the exchange amount.

10. Financial instruments

The Fund's financial instruments consist of accounts receivable, accounts payable and accrued liabilities and vacation pay. The carrying values of these financial instruments approximate their fair value because of their short terms to maturity, except for employee severance benefits which are based on management's best estimate and which approximate fair value. Unless otherwise noted, it is managements opinion that the Fund is not exposed to significant interest, currency or credit risk arising from these financial instruments.

11. Transfer of the 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 Work and Government Services Canada, who is responsible for the administration of the Government pay system.

12. Comparative figures

Comparative figures have been reclassified to conform to the current year's presentation.

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