Geomatics Canada Revolving Fund

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Statement of management responsibility

We have prepared the accompanying financial statements of the Geomatics Canada Revolving Fund as required by and in accordance with the Policy of Treasury Board on Special Revenue Spending Authorities and the reporting requirements and standards of the Receiver General for Canada. These financial statements were prepared by 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 in based on management's best estimates and judgment 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 statements and benefits from the advice of accounting personnel of Corporate Management and Services Sector (CMSS). 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.

CMSS develops and disseminates financial management and accounting policies and issues specific directives, which maintains 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 independent opinion 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:

Michel Nault, CPA, CGA
Corporate Management and Services Sector
A/Deputy Chief Financial Officer

Cheri Crosby
Assistant Deputy Minister,
Corporate Management and Services Sector
Chief Financial Officer

June 2, 2017
Ottawa, Canada

Statement of authority provided (used) (unaudited) for the year ended March 31

(in thousands of dollars)

  2017 2016
EstimatesLink to footnote 1 Actual EstimatesLink to footnote 1 Actual
Net results 100 574 100 262
Items not requiring use of funds
Operating source of funds 100 574 100 262
Items requiring use of funds
Net other assets (liabilities) 36 210
Authority provided (used) 100 610 100 472

Reconciliation of unused authority (unaudited) as at March 31

(in thousands of dollars)

  2017 2016
Debit balance in the accumulated net charge against the Fund's authority account 3,450 2,520
Payables at year-end charged against the appropriation account after March 31 (negative 1,002) (negative 681)
Net authority provided, end of year 2,448 1,839
Authority limit 5,000 5,000
Unused authority carried forward 7,448 6,839

Independent auditor's report

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

We have audited the accompanying financial statements of the Geomatics Canada Revolving Fund, which comprise the statement of financial position as at March 31, 2017, 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 the 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 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.

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, 2017 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 describes 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 Natural Resources Canada and should not be used by parties other than Natural Resources Canada and the Treasury Board of Canada.

PricewaterhouseCoopers LLP
Chartered Professional Accountants,
Licensed Public Accountants

June 2, 2017
Ottawa, Canada

Statement of financial position as at March 31

(in thousands of dollars)

  2017 2016
Assets
Financial assets
Accounts receivable (Note 3) 23 2
Inventory (Note 4) 48 24
Subtotal 71 26
Non-financial assets
Prepaid expenses 15
Tangible capital assets (Note 5)
At cost 2,868 2,868
Accumulated amortization (negative 2,868) (negative 2,868)
Total 71 41
Liabilities
Accounts payable and accrued liabilities (Note 6) 1,050 691
Vacation pay 64 32
Deferred revenue 30
Obligation for employee future benefits 35
Subtotal 1,144 758
Net assets (liabilities) (Note 7) (negative 1,073) (negative 717)
Total 71 41

Statement of operations and net assets (liabilities) for the year ended March 31

(in thousands of dollars)

  2017 2016
Revenues
Services 5,270 2,982
Products 360 392
Subtotal 5,630 3,374
Expenses
Utilities, materials and supplies 1,965 393
Professional and special services 1,333 1,440
Salaries and employee benefits 1,214 1,049
Corporate and sector services 327 125
Repairs and maintenance 96 52
Rentals 71 26
Transportation and communication 40 25
Other expenses 10 1
Provision for employee future benefits 1
Subtotal 5,056 3,112
Net results 574 262
Net assets (liabilities), beginning of year (negative 717) 194
Net financial resources provided (used) and change in the accumulated net charge against the Fund's authority during the year (negative 930) (negative 1,173)
Net assets (liabilities), end of year (negative 1,073) (negative 717)

Statement of cash flows for the year ended March 31

(in thousands of dollars)

  2017 2016
Operating activities
Net results from continuing operations 574 262
Variations in the statement of financial position
Decrease (increase) in accounts receivable (negative 21) 806
Decrease (increase) in inventory (negative 24) (negative 9)
Decrease (increase) in prepaid expenses 15 (negative 15)
Increase (decrease) in accounts payable and accrued liabilities 359 145
Increase (decrease) in vacation pay 32 19
Increase (decrease) in deferred revenues 30
Increase (decrease) in obligation for future employee benefits (negative 35) (negative 35)
Net financial resources provided by operating activities 930 1,173
Net financial resources provided and change in the accumulated net charge against the Fund's authority account, during the year 930 1,173
Accumulated net charge against the Fund's authority account, beginning of year 2,520 1,347
Accumulated net charge against the Fund's authority account, end of year 3,450 2,520

Notes to the financial statements for the year ended March 31, 2017

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 the Treasury Board of Canada 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 Fund's 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:

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 obligation for employee future benefits. 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. Revenues

Revenues are recognized when products are sold or services rendered.

d. Expenses

Unless otherwise disclosed, expenses are recorded in the period they are incurred. Internal service costs of Natural Resources Canada incurred on behalf of the Fund are recorded in these financial statements as corporate and sector service costs.

e. 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.

f. Inventory

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

g. Tangible capital assets

Tangible 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:

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

h. Pension benefits

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 the indexation of payments under the Supplementary Retirement Benefits Act.

i. Vacation pay

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

j. Employee severance benefits

Employees of the Fund are entitled to specified severance 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.

k. 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 reasonably be determined and accordingly have not been recorded in the accompanying 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 are as follows:

(in thousands of dollars)

  2017 2016
Other government departments and agencies 5
Outside parties 19 39
Subtotal 24 39
Less: allowance for doubtful accounts on receivables from outside parties (negative 1) (negative 37)
Total 23 2

4. Inventory

(in thousands of dollars)

  2017 2016
Topographic maps 343 341
Geographic maps 48 24
Subtotal 391 365
Less: provision for inventory obsolescence (negative 343) (negative 341)
Total 48 24

5. Tangible capital assets

(in thousands of dollars)

Cost Balance beginning of year Acquisitions Balance 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
Total 2,868 2,868
Accumulated amortization Balance beginning of year Amortization Balance 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
Total 2,868 2,868

6. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities are as follows:

(in thousands of dollars)

  2017 2016
Other government departments and agencies 562 324
Outside parties 488 367
Total 1,050 691

7. 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.

(in thousands of dollars)

  2017 2016
Contributed capital 1,438 1,438
Accumulated net charge against the Fund's authority (negative 3,450) (negative 2,520)
Transfer of the transition payments for implementing salary payments in arrears (negative 20) (negative 20)
Accumulated surplus 959 385
Net assets (liabilities) (negative 1,073) (negative 717)

8. 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, 2017, there were no claims outstanding against the Fund.

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. Comparative figures

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

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