Financial Statements 2010-11

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Statement of Management Responsibility Including Internal Control Over Financial Reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2011, and all information contained in these statements rests with the management of the Canadian International Development Agency. These financial statements have been prepared by management in accordance with Treasury Board accounting policies, which are based on 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 fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the Agency's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the Agency's Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the Agency; and through conducting an annual assessment of the effectiveness of the system of internal control over financial reporting.

An assessment for the year ended March 31, 2011 was completed in accordance with the Policy on Internal Control and the results and action plans are summarized in the annex.

The system of internal control over financial reporting is designed to mitigate risks to a reasonable level based on an on-going process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments. The effectiveness and adequacy of the Agency's system of internal control is also reviewed through the work of internal audit staff, who conduct periodic audits of different areas of the Agency's operations, and by the Departmental Audit Committee, which advises the President of the Canadian International Development Agency on maintaining adequate control systems and on the quality of financial reporting, and which ultimately recommends the approval of financial statements to the President. The financial statements of the Canadian International Development Agency have not been audited.

Original signed by Margaret Biggs
on August 29, 2011

____________________________
Margaret Biggs
President

Gatineau, Canada

____________________________
Date

 

Original signed by Sue Stimpson
on August 29, 2011

____________________________
Sue Stimpson
Chief Financial Officer

Gatineau, Canada

____________________________
Date

Canadian International Development Agency
Statement of Financial Position (unaudited)
As at March 31


(in thousands of dollars)20112010
Restated
(Note 18)
Assets
Financial assets
Due from the Consolidated Revenue Fund716,2381,046,665
Accounts receivable and advances (note 4)239,6623,759
Loans to developing countries and International Financial Institutions (note 5)134,846137,326
Investments and advances to International Financial Institutions (note 6)6,399,5236,149,713
Allowance for valuation of investments and advances to International Financial Institutions (note 6)(6,399,523)(6,149,713)
Canadian Investment Fund for Africa (note 7)63,00491,605
Total financial assets1,153,7501,279,355
Non-financial assets
Prepaid expenses210,207181,702
Tangible capital assets (note 8)10,3236,865
Total non-financial assets220,530188,567
Total assets1,374,2801,467,922
Liabilities and Equity of Canada
Liabilities
Accounts payable and accrued liabilities (note 9)650,675865,394
Vacation pay and compensatory leave9,0827,921
Notes payable to International Financial Institutions (note 10)2,5406,198
Accrued liability for matching funds programs (Note 11)71,470175,745
Employee future benefits (Note 12)38,63535,778
Other liabilities (Note 13)21,088
Equity of Canada601,876375,798
Total liabilities and Equity of Canada1,374,2801,467,922

Contractual obligations (note 14)
Contingent liabilities (note 15)

The accompanying notes form an integral part of these financial statements.


_______________________________
Margaret Biggs
President

Gatineau, Canada

Date

 


_______________________________
Sue Stimpson
Chief Financial Officer

Canadian International Development Agency
Statement of Operations (Unaudited)
For the Year Ended March 31


(in thousands of dollars)20112010
Expenses
Global engagement and strategic policy1,138,2941,398,554
Fragile states and crisis-affected communities857,9241,014,713
Low-income countries841,089795,474
Middle-income countries306,685355,399
Canadian engagement253,787254,894
Internal services121,68190,361
Total expenses3,519,4603,909,395
Revenues
Global engagement and strategic policy259,357170,299
Middle-income countries16,10816,476
Low-income countries8821,749
Canadian engagement34216
Internal services54
Fragile countries and crisis-affected communities320
Total revenues276,389188,764
Net cost of operations3,243,0713,720,631

Segmented information (note 17)

The accompanying notes form an integral part of these financial statements.

Canadian International Development Agency
Statement of Equity of Canada (Unaudited)
For the Year Ended March 31


(in thousands of dollars)20112010
Restated (Note 18)
Equity of Canada, beginning of year375,798380,745
Net cost of operations(3,243,071)(3,720,631)
Net cash provided by Government of Canada3,775,6763,237,828
Change in due from the Consolidated Revenue Fund(330,427)454,919
Services provided without charge by other government departments (note 16)23,90022,937
Equity of Canada, end of year601,876375,798

The accompanying notes form an integral part of these financial statements.

Canadian International Development Agency
Statement of Cash Flow (Unaudited)
For the Year Ended March 31


(in thousands of dollars)20112010
Operating activities
Net cost of operations3,243,0713,720,631
Non-cash items:
Amortization of tangible capital assets(1,005)(854)
Services provided without charge by other government departments (note 16)(23,900)(22,937)
Variations in Statement of Financial Position:
Increase (decrease) in accounts receivable and advances235,903(148)
Decrease in loans to developing countries and International Financial Institutions(2,480)(5,672)
Decrease (increase) in the Canada Investment Fund for Africa(28,601)1,206
Increase (decrease) in prepaid expenses28,505(8,091)
Decrease (increase) in accounts payable and accrued liabilities214,719(295,177)
Decrease (increase) in vacation pay and compensatory leave(1,161)465
Decrease in notes payable to International Financial Institutions3,6583,565
Decrease (increase) in accrued liability for matching funds programs104,275(162,551)
Decrease (increase) in employee future benefits(2,857)3,633
Decrease (increase) in other liabilities1,086(88)
Cash used in operating activities3,771,2133,233,982
Capital investing activities
Acquisition of tangible capital assets4,4633,846
Cash used in capital investing activities4,4633,846
Net cash provided by Government of Canada3,775,6763,237,828

The accompanying notes form an integral part of these financial statements.


Notes to the Financial Statements (Unaudited)
For the year ended March 31, 2011

1. Authority and Objectives

The Canadian International Development Agency (CIDA) is designated as a department for the purposes of the Financial Administration Act by Order-in-Council P.C. 1968-923 of May 8, 1968. The authority for the CIDA program and related purposes is found in the Department of Foreign Affairs and International Trade Act, in the Annual Appropriations Act and in the International Development (Financial Institutions) Assistance Act. CIDA is the lead government organization responsible for Canada's Official Development Assistance (ODA). In addition, the Official Development Assistance Accountability Act (ODAAA) came into force on June 28, 2008. The ODAAA imposes reporting obligations on the Government.

CIDA's mandate is to manage Canada's support and resources effectively and accountably to achieve meaningful, sustainable results, and engage in policy development in Canada and internationally, enabling Canada's efforts to realize its development objectives. CIDA fulfills its mandate through six main program activities:

  • Fragile countries and crisis-affected communities: This program activity seeks to address developmental issues in selected countries identified as fragile or crisis-affected. Fragile countries are defined as those that face particularly severe development challenges with complex national and regional contexts given weak institutional capacity, poor governance, political instability, and ongoing violence or a legacy of past conflict. Improving the situation in these countries is frequently considered critical in meeting Canada's foreign policy objectives. CIDA's programming in these countries seeks to enhance long-term development by improving the effectiveness of public institutions and society, fostering stability and security, as well as supporting the delivery of key services. This program activity also involves humanitarian assistance in response to man-made crises or natural disasters to ensure the delivery of and access to essential emergency services to crisis-affected populations. In both cases, various partnerships offer flexibility and expertise to provide the most effective response.
  • Low-income countries: This program activity focuses on addressing pervasive poverty in countries having an annual gross national income (GNI) per capita equivalent to $995 US or less (2009 World Bank data). This requires engagement in long-term development assistance supporting the national priorities of a selected number of low-income countries, as well as programming with regional institutions addressing transboundary issues. CIDA's support aims to help these countries achieve their priority development goals that differ from country to country, and region to region. Programming aims at reducing poverty and increasing economic opportunities. It focuses on areas such as basic health and education, agriculture/food security, income generation, and the foundations for good governance.
  • Middle-income countries: This program activity focuses on addressing specific challenges in attaining self-reliance for countries having a GNI per capita equivalent to more than $996 US but less than $12,195 US (2009 World Bank data). It involves strategic assistance in a select number of middle-income countries, as well as programming with regional institutions addressing transboundary issues. These countries vary considerably in terms of their development needs. CIDA programming is tailored to respond to national priorities and development challenges to ensure basic services reach marginalized populations. Programming aims to build the foundation for sustainable and inclusive economic growth and accountable, democratic institutions.
  • Global engagement and strategic policy: This program activity shapes international development policy in Canada and globally in support of CIDA's strategic direction, and Canada's international assistance objectives and commitments. It also engages with multilateral and global organizations for two main purposes: to contribute effectively to the achievement of development results, and to influence partners' policies, planning, strategic directions, and organizational governance for greater development results.
  • Canadian engagement: This program activity involves delivering development results by supporting the aid efforts of Canadian organizations, and increasing awareness of international development in Canada. CIDA does this by co-investing through various delivery mechanisms with a range of Canadian organizations. In turn, these organizations partner with developing-country counterparts to deliver programs and services in support of CIDA's strategic outcome. Public engagement in Canada is achieved through the education and outreach activities of Canadian organizations such as Canadian civil society, academic institutions, and professional associations, as well as through CIDA's own efforts to inform Canadians.
  • Internal services: This program activity provides support services to CIDA programming for the delivery of the Canadian aid program. It includes governance and management support, resources-management services, and asset-management services.

2. Summary of significant accounting policies

These financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

(a) Parliamentary authorities

CIDA is financed by the Government of Canada through Parliamentary appropriations. Financial reporting of authorities provided to the department do not parallel financial reporting according to generally accepted accounting principles since authorities 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 authorities from Parliament. Note 3 provides a reconciliation between the bases of reporting.

(b) Net cash provided by Government of Canada

CIDA operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by CIDA is deposited to the CRF and all cash disbursements made by CIDA 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 Government.

(c) Amounts due from the CRF

Amounts due from the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that CIDA is entitled to draw from the CRF without further appropriations to discharge its liabilities.

d) Revenues

Revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place. CIDA's revenues mainly consist of foreign exchange gain on revaluation as well as interest and service fees on loans.

(e) Expenses

Expenses are recorded on the accrual basis. CIDA's expenses mainly consist of grants and contributions, operating transactions and foreign exchange loss on revaluation.

  • Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements.
  • Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement, provided that the transfer is authorized and a reasonable estimate can be made.
  • Vacation pay and compensatory leave are accrued as the benefits earned by employees under their respective terms of employment.
  • Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans, legal services and workers' compensation are recorded as operating expenses at their estimated cost.

(f) Employee future benefits

  1. Pension benefits: Eligible employees participate in the Public Service Pension Plan a multiemployer pension plan administered by the Government. CIDA's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation to the Plan. Current legislation does not require CIDA to make contributions for any actuarial deficiencies of the Plan.
  2. 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.

(g) Accounts receivable and advances

Accounts receivable and advances are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

(h) Loans to developing countries and International Financial Institutions

Loans to developing countries and International Financial Institutions (IFI) for international development assistance are recorded at cost and are adjusted to reflect the concessionary terms of those loans made on a long-term, low interest or interest-free basis. The discount determined at the date of the issuance is amortized to revenue using a straight-line amortization. Any interest or service fees revenue is recognized with the passage of time and according to the terms of the loan agreement. However, when specific loan balances are deemed uncollectible, interest and service fees revenue ceases to be accrued on these loans. No new loans have been recorded by CIDA since April 1, 1986.

An allowance for valuation is further used to reduce the carrying value of the loans to amounts that approximate their net realizable value. The allowance is determined based on the Government's identification and evaluation of countries that have formally applied for debt relief, estimated probable losses that exist on the remaining portfolio, and changes in the economic conditions of sovereign debtors.

Any loans written off or forgiven are presented as an expense in the Statement of Operations under Transfer payments, in the fiscal year during which the required Parliamentary authority is obtained and the government of Canada writes off or forgives the loan amounts owing to CIDA. Should subsequent recoveries arise, they are presented in the revenue in the Statement of Operations in the fiscal year during which the monies are received.

(i) Investments and advances to International Financial Institutions

Investments and advances to International Financial Institutions are recorded at cost.

Investments

Investments consist of subscriptions to the share capital of a number of international financial institutions and are composed of both paid-in and callable capital. Subscriptions to international organizations do not provide a return on investment, but are repayable on termination of the organization or upon CIDA's withdrawal from the organization. Paid-in capital is made through a combination of cash payments and the issuance of non-interest bearing, non-negotiable notes payable to the organization. Callable share capital is composed of resources that are not paid to the banks but act as a guarantee to allow them to borrow on international capital markets to finance their lending program.

Advances

Advances are issued to International Financial Institutions that use these funds to issue loans to developing countries at concessionary terms.

For these investments and advances to International Financial Institutions, an allowance is established based on their estimated realizable value.

(j) Prepaid expenses

CIDA has the authority to make advance payments under CIDA's Terms and Conditions for contribution agreements before the expenditures are incurred. The portion of a payment which is intended to cover expenses to be incurred in a subsequent fiscal year is recorded as prepaid expenses.

(k) Contingent liabilities

Contingent liabilities are potential liabilities that 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 recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(l) Foreign currency transactions

Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect at year-end. Gains and losses resulting from foreign currency transactions are included in lines gain on foreign exchange and loss on foreign exchange on the Statement of Operations.

(m) Tangible capital assets

All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the tangible capital asset as follows:

Asset ClassAmortization period
Communication equipment3 years
Computer equipment3-5 years
Computer software5 years
Other equipment5 years
Vehicles5 years

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

(n) Notes payable to International Financial Institutions

Notes payable to International Financial Institutions represent non-interest bearing, non-negotiable demand notes for share capital subscriptions and advances that are later presented for encashment according to the terms of the agreement. Amounts pertaining to notes already issued and the related future encashment obligations are presented in the Statement of Financial Position under Notes payable to International Financial Institutions, while the amounts for notes payable that will be both issued and encashed under the terms of signed agreements are presented in Note 15 on contractual obligations.

(o) Measurement uncertainty

The preparation of these financial statements 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 in determining the allowance for doubtful accounts, allowance for loans, the useful life of tangible capital assets, contingent liabilities and the liability for employee severance benefits. Actual results could significantly 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 authorities

CIDA receives 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, CIDA has different net results of operations for the year on a government-funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of net cost of operations to current year authorities used

(in thousands of dollars)20112010
Net cost of operations3,243,0713,720,631
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets(1,005)(854)
Bad debt expense(28,266)(1,087)
Services provided without charge by other government departments(23,900)(22,937)
Refunds of prior years' expenditures17,22214,152
Gain on foreign exchange259,526170,211
Other revenue3,0364,726
Discount and allowance related to loans16,642)19,199
Variation in notes payables to International Financial Institutions3,6583,565
Accrued liability for matching funds programs104,275(162,551)
Vacation pay and compensatory leave(1,161)465
Employee future benefits(2,857)3,633
Other-(2,485)
Total items affecting net cost of operations but not affecting authorities3,556,9573,746,668
Adjustments for items not affecting net cost of operations but affecting authorities
Acquisitions of tangible capital assets4,4633,845
Increase in prepaid expenses28,505(8,091)
Advances / subscriptions to International Financial Institutions280,972268,097
Pakistan's debt forgiveness48,79116,148
Total items not affecting net cost of operations but affecting authorities362,731279,999
Current year authorities used3,919,6884,026,667
b) Authorities provided and used

(in thousands of dollars)20112010
Authorities provided:
Budgetary
Vote 20 — Operating expenditures222,174230,888
Vote 25 — Grants and contributions3,045,5373,065,331
Statutory amounts762,255915,443
Total Budgetary4,029,9664,211,662
Non-Budgetary
Vote H168 — Issuance of note to the Fund Accounts245,482264,532
Statutory amounts19,867,63011,359,735
Total Non-Budgetary20,113,11211,624,267
Total authorities provided24,143,07815,835,929
Less:
Authorities available for future years(20,215,378)(11,793,120)
Lapsed: Operating expenditures(4,947)(10,178)
Lapsed: Grants and contributions(3,065)(5,964)
Current year authorities used3,919,6884,026,667

4. Accounts receivable and advances

Accounts receivable and advances for CIDA consist mainly of:

  • Amounts to be recovered where the recipient has not complied with the terms and conditions of the contribution agreement for which a payment has been made.
  • Salaries to be recovered for CIDA's employees on secondment to another department or a private organization.

However, in 2010-2011, the Government of Canada, as represented by the Canadian International Development Agency, acknowledged the decision by the Inter-American Development's Board of Governors to convert into U.S. dollars the Ordinary Capital equity subject to maintenance of value in those cases where the Bank had a payable balance pursuant to the Agreement Establishing the Inter-American Development Bank. The Government of Canada is in agreement with the Bank's assessment that the amount payable to Canada as at March 31, 2011 is $227,300,000. Consequently, an account receivable has been recorded.

The following table presents details of accounts receivable and advances balances:

(in thousands of dollars)20112010
Receivable from Inter-American Development Bank227,300-
Receivables from external parties6,9735,342
Receivables from other Federal Government departments and agencies8,3991,727
Interest and service fees on loans570571
Employee advances5032
Subtotal243,2927,672
Less: Allowance for doubtful accounts on receivables from external parties, on interest and service fees on loans(3,630)(3,913)
Total239,6623,759

5. Loans to developing countries and International Financial Institutions

The following table presents details of loans to developing countries and International Financial Institutions:

(in thousands of dollars)20102011
(a) 30 year term, 7 year grace period, unsecured, 3 percent interest per annum, with the final repayment in March 2005:
Cuba9,5479,547
(b) 35 year term, 4 year grace period, unsecured, 5 percent interest per annum, semi-annual interest repayments with first principal repayment due January 2017 and final repayment in July 2026:
Egypt44,99644,996
(c) 50 year term, 10 year grace period, unsecured, non-interest bearing, with final repayments between March 2015 and September 2035:
African Development Bank1,2191,344
Algeria5,3215,748
Andean Development Corporation1,5631,688
Argentina112131
Bolivia466509
Brazil167188
Central American Bank for Economic Integration497574
Chile638735
Colombia184210
Dominican Republic2,9423,178
Ecuador3,2373,542
Guatemala1,5811,681
Indonesia153,725162,948
Malaysia1,2941,357
Malta325350
Mexico1719
Morocco5,4506,036
Myanmar (Burma)8,3068,306
Pakistan382,569431,360
Paraguay110130
Peru2630
Philippines1,3551,452
Sri Lanka71,17475,499
Thailand15,39816,245
Tunisia41,99345,289
(d) 50 year term, 13 year grace period, unsecured, non-interest bearing, with the final repayment in March 2023:
Algeria14,94116,186
Subtotal769,153839,278
Less: Unamortized discount(486,862)(533,783)
Subtotal282,291305,495
Less: Allowance for valuation(123,765)(168,169)
Total134,846137,326

The grace period refers to interval from date of issuance of the loan to first repayment of loan principal.

Final repayment on Cuba loan was due on March 2005. In default of payment, the country has been in arrears since that date. No repayment is anticipated. The allowance for valuation of loans is adjusted to reflect this situation.

The loan with the Philippines was issued in Canadian dollars. However, it is reimbursable in Philippine pesos in equivalent Canadian dollar semi-annual installments of $48,580 until September 2024. The installments are converted to Philippine pesos using the foreign exchange rate in effect at the time of repayment.

In 2006-2007, the Government of Canada, as represented by the Canadian International Development Agency, entered into an agreement with the Government of Pakistan to forgive its outstanding $447,500,000 loan. In order to expire its debt obligation, the Government of Pakistan will be required to make education sector investments over an estimated period of five years that are equivalent to the present value of its debt, at the date of the agreement, of $132,600,000. According to the agreement, Pakistan's debt is to be written off proportionally by the Canadian International Development Agency as the investments are made. In 2010-2011, the Government of Pakistan invested in its education sector program and these investments permitted CIDA to forgive $48,791,000 of the Government of Pakistan's debt. Since 2009-2010, the Government of Pakistan's debt has been reduced by a total amount of $64,939,000.

6. Investments and advances to International Financial Institutions

The following table presents details of investments and advances to International Financial Institutions:

(in thousands of dollars)20112010
Investments
African Development Bank106,892108,977
Asian Development Bank190,835161,242
Caribbean Development Bank19,40420,031
Inter-American Development Bank174,813182,984
Total investments491,944473,234
Advances
African Development Fund2,213,5252,116,190
Asian Development Bank-Special27,02727,027
Asian Development Fund2,067,4352,019,744
Caribbean Development Bank — Agricultural Development Fund2,0002,000
Caribbean Development Bank — Commonwealth Caribbean Regional3,8784,063
Caribbean Development Bank — Special248,974231,969
Global Environment Facility Trust Fund562,070505,320
Inter-American Development Bank — Fund for Special Operations331,257338,740
International Bank for Reconstruction and Development19,39220,316
International Fund for Agriculture Development291,883279,383
International Monetary Fund10,63611,143
Montreal Protocol Multilateral Fund83,37880,777
Multilateral Investment Fund46,12439,807
Total advances5,907,5795,676,479
Subtotal investments and advances6,399,5236,149,713
Less: Allowance for valuation(6,399,523)(6,149,713)
Total--

The allowance for valuation reduces the net realizable value of the investments and advances to International Financial Institutions to zero, as it is not expected that CIDA will recover these investments and advances in the future.

7. Canada Investment Fund for Africa (CIFA)

The CIFA is a joint public-private sector initiative designed to provide risk capital for private investments in Africa that generate growth. The CIFA is a direct response to the New Partnership for Africa's Development (NEPAD) and the G8 Africa Action Plan. The main objectives of the CIFA are to optimize public-private investment in the Fund, to confer a beneficial development impact on Africa by way of increased foreign direct investment and to optimize the beneficial impact of the Fund's activities on Canadian interests.

The Government of Canada is a limited partner in the CIFA and its commitment towards the Fund was subject to matching funds of other investors and was to be equal to the lesser of: (i) $100 million or (ii) the aggregated commitments of all other limited partners of the partnership. The investment period in the CIFA ended January 1, 2009. From there on, and until the term of the partnership is reached on December 31, 2013, the Canadian International Development Agency will only receive incom e and returns of capital. Since its inception, the Canadian International Development Agency received capital reimbursement from CIFA amounting to $13,212,000 and investment income of $5,211,000.

The fair value of the CIFA has declined over the last four years. In accordance with Public Sector Accounting Standards, an allowance for valuation of $28,000,000 was recorded in 2010-2011. The net residual value of the investment as of March 31, 2011, is $63,004,000.

The following table presents details of the Canada Investment Fund for Africa. The CIFA is presented at cost.

(in thousands of dollars)20112010
CIFA opening balance91,60590,399
Returns of capital(1,504)(2,107)
Capitalized management fees9033,313
Less: Allowance for valuation(28,000)-
CIFA closing balance63,00491,605

8. Tangible capital assets

Tangible capital assets
(in thousands of dollars)CostAccumulated AmortizationNet Book Value
Capital asset ClassOpening balanceAcquisitionsDisposals and write-offsClosing balanceOpening balanceAmortizationDisposals and write-offsClosing balance20112010
Communication Equipment845--84579055-845-55
Informatic Equipment12,1061,272-13,37810,368677-11,0452,3331,738
Computer Software1921,168-1,36051242-2931,067141
Other Equipment1,586--1,5861,51428-1,5424472
Vehicles179--17910425-1295075
Assets under construction4,7843,1591,1146,829----6,8294,784
Total19,6925,5991,11424,17712,8271,027-13,85410,3236,865

Disposals of assets under construction represent assets that were put into use in the year and have been transferred to the other capital asset classes as applicable.

The amortization expense for the year ended on March 31, 2011 is $1,005,000 ($854,000 in 2010).

9. Accounts payable and accrued liabilities

The following table presents details of accounts payable and accrued liabilities:

(in thousands of dollars)20112010
Accounts payable:
Multilateral organizations362,820529,857
Non-government and private sector organizations128,226178,519
Foreign governments124,725103,496
Para-governmental organizations6,03716,408
Other government departments and agencies3,3695,162
Individuals1,1871,460
Employees248205
Subtotal for Accounts payable626,612835,107
Accrued liabilities14,33521,584
Contractors' holdback9,1178,671
Accrued salaries61132
Subtotal24,06330,287
Total650,675865,394

10. Notes payable to International Financial Institutions

The following table presents details of notes payable to International Financial Institutions:

(in thousands of dollars)20112010
Advances
Global Environment Facility Trust Fund2,5406,198
Total2,5406,198

During the year, note issuances amounted to $245,476,000 ($264,532,000 in 2010) and note encashment amounted to $249,134,000 ($268,097,000 in 2010) for a net decrease of notes payables of $3,658,000.

11. Accrued liability for matching funds programs

The matching funds programs are initiatives committed by the Government of Canada to match donations in support for humanitarian crisis.

The following table presents details of matching funds by initiative:

(in thousands of dollars)20112010
Haïti71,470162,893
Tsunami-10,468
Pakistan-2,384
Total71,470175,745

12. Employee future benefits

(a) Pension benefits:

CIDA's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. 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 the Canada/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Agency contribute to the cost of the Plan. The 2010-2011 expense amounts to $19,010,000 ($19,889,000 in 2009-2010), which represents approximately 1.9 times (1.9 in 2009-2010) the contributions by employees.

CIDA'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.

(b) Severance benefits:

CIDA 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 thousands of dollars)20112010
Accrued benefit obligation, beginning of year35,77839,411
Expense for the year5,632(161)
Benefits paid during the year(2,775)(3,472)
Accrued benefit obligation, end of year38,63535,778

13. Other liabilities

Other liabilities consist of funds received from external organizations to carry out specific aid projects and to be administered by CIDA on their behalf.

In 2010-2011, the liability represents contribution received from the Government of Denmark to support water management programs in Nicaragua and from the Governments of the United Kingdom and the Netherlands for various projects in the education sector in Malawi and in Nicaragua.

Information about the other liabilities, measured as at March 31, is as follows:

(in thousands of dollars)20112010
Other liabilities, beginning of year1,0881,000
Amounts received during the year4,46811,968
Amounts disbursed during the year(5,554)(11,880)
Other liabilities, end of year21,088

14. Contingent liabilities

(a) Callable share capital:

CIDA is liable for callable share capital in certain international organizations that could require future payments to those organizations. Callable share capital is composed of resources that are not paid to the organizations but act as a guarantee to allow them to borrow on international capital markets to finance their lending program. Callable share capital would only be utilized in extreme circumstances to repay unrecoverable loans, should the organization's reserves not be sufficient. Callable share capital has never been drawn on by the organizations. For this reason, despite the difficult international economic environment, these contingent liabilities represent no additional risk to the Agency. During the year, CIDA has committed to subscribe to an additional 317,479 shares of the non-voting callable capital stock of the African Development Bank, an additional 355,365 shares of non-voting callable capital stock of the Asian Development Bank and an additional 12,170 shares of non-voting callable capital stock of the Caribbean Development Bank. These increases have been approved in accordance with the conditions established in the Resolution of the Board of Governors of these banks, which includes representation from Government of Canada. As at March 31, 2011, the callable share capital is valued at $19.8 billion ($11.4 billion in 2010) and no provision was recorded for this amount.

Also, different methods are used by CIDA and by the Asian Development Bank (ADB) to calculate the value of CIDA's callable shares for disclosure as a contingent liability. CIDA uses the US foreign exchange rate at the time of the investments and revalues its shares at the end of every fiscal year using the year-end US exchange rate. On the basis of this method, CIDA's valuation of its ADB callable shares is $6,240,199,681 as at March 31, 2011 ($2,154,411,000 in 2010).

However, ADB decided to use the Special Drawing Right (SDR) for purposes of denominating its capital in lieu of the US dollar. The value of the SDR against the US and Canadian dollar exchange rates at the time of inception was used to establish the par value of SDR. This par value of CIDA's callable shares is then translated using the latest exchange rate of SDR against the US and Canadian dollar exchange rates. Valuation of these callable shares on this basis amounts to $8,127,513,171 ($2,654,030,000 in 2010) representing a difference of $1,887,313,490 with CIDA's own valuation as at March 31, 2011 ($499,619,000 in 2010).

(b) Claims and litigation:

Claims have been made against CIDA in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. Based on CIDA's assessment, legal proceedings for claims estimated at $5,326,000 ($1,026,000 in 2009-2010) were pending at March 31, 2011. 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 recorded in the financial statements.

15. Contractual obligations

The nature of CIDA's activities can result in some large multi-year contracts and obligations whereby CIDA will be obligated to make future payments in order to carry out its transfer payment programs or when the services/goods are received.

Significant contractual obligations that can be reasonably estimated are summarized as follows:

(in thousands of dollars)20122013201420152016 and
thereafter
Total
Transfer payments1,433,9471,018,574648,422317,242125,1663,543,351
Professional services7,6372,32539--10,001
Repairs and maintenance1,5142833729291,892
Operating leases237180836923592
Encashment of notes by International Financial Institutions248,062228,564163,28827,470-667,384
Total1,691,3971,249,926811,869344,810125,2184,223,220

16. Related party transactions

CIDA is related as a result of common ownership to all Government of Canada departments, agencies and Crown corporations. CIDA enters into transactions with these entities in the normal course of business and on normal trade terms. Throughout the year, the Agency received services that were obtained without charge from other Government departments as presented in part (a).

(a) Common services provided without charge by other government departments

During the year, CIDA received services without charge from certain common service organizations, related to accommodation, legal services, the employer's contribution to the health and dental insurance plans and workers' compensation coverage.

These services provided without charge have been recorded in CIDA's Statement of Operations as follows:

(in thousands of dollars)20112010
Employer's contribution to the health and dental insurance plans13,73013,513
Accommodation9,4408,736
Legal services670620
Workers' compensation6068
Total23,90022,937

The Government has centralized some of its administrative activities for efficiency, costeffectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada are not included in CIDA's Statement of Operations.

(b) Other transactions with related parties

(in thousands of dollars)20112010
Expenses - Other Government departments and agencies147,629157,119

17. Segmented information

Presentation by segment is based on CIDA's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2.

The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

(in thousands of dollars)Global engagement and strategic policyFragile countries and crisis- affected communitiesLow-income countriesMiddle-income countriesCanadian engagementInternal services2011
Total
2010
Total
Transfer payments
Other countries and international organizations1,079,215827,153768,502280,641236,106-3,191,6173,473,864
Operating expenses
Salaries and employee benefits22,35325,02137,17722,45214,63984,816206,458195,864
Loss on foreign exchange32,027-----32,027170,260
Professionnal and special services1,4361,7931,7208561,69020,27427,76933,547
Travel1,8471,9833,9111,6414953,15713,03412,154
Rental and accommodation1,0361,4831,7521,0526826,23112,23612,080
Repair and maintenance3411224,5584,6074,209
Communication48315030511,6401,8504,182
Amortization of tangible capital assets-----4,1821,005854
Other32941927,97611122-28,8572,381
Total operating expenses59,07930,77172,58726,04417,681121,681327,843435,531
Total expenses1,138,294857,924841,089306,685253,787121,6813,519,4603,909,395
Revenues
Gain on foreign exchange259,318-----259,318170,211
Amortization of discount on loans---13,827--13,82713,827
Miscellaneous revenues3938822,2813453,2444,726
Total revenues259,357388216,108345276,389188,764
Net cost from continuing operations878,937857,921840,207290,577253,753121,6763,243,0713,720,631

18. Adoption of new accounting policies

During the year, CIDA adopted the revised Treasury Board accounting policy TBAS 1.2: Departmental and Agency Fi nancial Statements which is effective for CIDA for the 2010-2011 fiscal year. The major change in the accounting policies of CIDA required by the adoption of the revised TBAS 1.2 is the recording of amounts due from Consolidated Revenue Fund as an asset on the Statement of Financial Position.

The adoption of the new Treasury Board accounting policies have been accounted for retroactively with the following impact on comparatives for 2009-2010:

(in thousands of dollars)2010
As previously
stated
Effect of changes2010
Restated
Statement of Financial Position:
Assets421,2571,046,6651,467,922
Equity of Canada(670,867)1,046,665375,798

19. Comparative information

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

Footnotes

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