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Financial Statements 2012-2013

Table of Contents

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, 2013, and all information contained in these statements relating to the Canadian International Development Agency (CIDA or the Agency), rests with the management of the Department of Foreign Affairs, Trade and Development Canada (DFATD).These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

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 (ICFR) 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 risk-based assessment of the effectiveness of ICFR.

The system of ICFR 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.

A risk-based assessment of the system of ICFR for the year ended March 31, 2013 was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plan are summarized in the annex.

The effectiveness and adequacy of the Agency's system of internal control is reviewed by the work of internal audit staff, who conduct periodic audits of different areas of the Agency's operations, and by CIDA's Departmental Audit Committee, which advised the President of CIDA on maintaining adequate control systems and on the quality of financial reporting, and which ultimately recommends the approval of these financial statements to the Deputy Ministers.

The financial statements of CIDA have not been audited.

_______________________
Paul Rochon
Deputy Minister of International
Development

_______________________
Sue Stimpson
Vice-President and
Chief Financial Officer, former CIDA

_______________________
Morris Rosenberg
Deputy Minister of Foreign Affairs

Gatineau, Canada
August 29, 2013

_______________________
Nadir Patel
Assistant Deputy Minister and Chief
Financial Officer, Corporate Planning,
Finance and Human Resources

Canadian International Development Agency
Statement of Financial Position (Unaudited)
As at March 31
(in thousands of dollars)20132012
Restated (Note 19)
Liabilities
Accounts payable and accrued liabilities (note 4)1,032,8451,232,983
Vacation pay and compensatory leave6,6568,284
Notes payable to International Financial Institutions (IFI) (note 5)-2,540
Accrued liability for Matching Fund program (note 6)-3,225
Employee future benefits (note 7)12,41418,425
Other liabilities (note 8)605539
Total gross liabilities1,052,520 1,265,996
Liabilities held on behalf of Government
Accounts payable and accrued liabilities (note 4)(75,000)(300,000)
Notes payable to International Financial Institutions (IFI) (note 5)-(2,540)
Total liabilities held on behalf of Government(75,000)(302,540)
Total net liabilities977,520963,456
Financial assets
Due from Consolidated Revenue Fund955,362921,737
Accounts receivable and advances (note 9)5,7504,901
Loans receivable (note 10)525,538354,790
Investments and advances to IFI (note 11)7,168,4486,813,928
Allowance for valuation of investments and advances to IFI (note 11)(7,168,448)(6,813,928)
Canada Investment Fund for Africa (note 12)45,02450,496
Total gross financial assets1,531,6741,331,924
Financial assets held on behalf of Government
Accounts receivable and advances (note 9)(942)(566)
Loans receivable (note 10)(525,538)(354,790)
Investments and advances to IFI (note 11)(7,168,448)(6,813,928)
Allowance for valuation of investments and advances to IFI (note 11)7,168,4486,813,928
Canada Investment Fund for Africa (note 12)(45,024)(50,496)
Total financial assets held on behalf of Government(571,504)(405,852)
Total net financial assets960,170926,072
Departmental net debt17,35037,384
Non-financial assets
Prepaid expenses755205,292
Tangible capital assets (note 13)7,0307,330
Total non-financial assets7,785212,622
Departmental net financial position(9,565)175,238

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

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

_______________________
Paul Rochon
Deputy Minister of International
Development

_______________________
Sue Stimpson
Vice-President and
Chief Financial Officer, former CIDA

_______________________
Morris Rosenberg
Deputy Minister of Foreign Affairs

Gatineau, Canada
August 29, 2013

_______________________
Nadir Patel
Assistant Deputy Minister and Chief
Financial Officer, Corporate Planning,
Finance and Human Resources

Canadian International Development Agency
Statement of Operations and Departmental Net Financial Position (Unaudited)
For the Year Ended March 31
(in thousands of dollars)2013
Planned Results
20132012
Restated (note 19)
Expenses
Global engagement and strategic policy1,292,7741,288,4101,460,329
Low-income countries1,121,757889,789822,175
Fragile states and crisis-affected communities701,420599,092722,107
Middle-income countries385,020294,415303,450
Canadian engagement for development323,191310,998249,304
Internal services118,629100,388116,961
Expenses incurred on behalf of Government(362,598)(403,846)(486,088)
Total expenses3,580,1933,079,2463,188,238
Revenues
Gain on foreign exchange21,83614,91822,057
Amortization of discount on loans13,82719,80313,827
Miscellaneous revenues3,2494,5993,024
Revenues earned on behalf of Government(38,912)(39,320)(38,908)
Total revenues---
Net cost of operations before government funding and transfers3,580,1933,079,2463,188,238
Government funding and transfers
Net cash provided by Government2,835,9712,728,132
Change in due from Consolidated Revenue Fund33,625208,039
Services provided without charge by other government departments (note 16)25,18424,773
Transfer of assets and liabilities to other government departments(337)(924)
Net cost of operations after government funding and transfers184,803228,218
Departmental net financial position - Beginning of year175,238403,456
Departmental net financial position - End of year(9,565)175,238

Segmented information (note 18)

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

Canadian International Development Agency
Statement of Change in Departmental Net Debt (Unaudited)
For the Year Ended March 31
(in thousands of dollars)20132012
Net cost (revenues) of operations after government funding and transfers184,803228,218
Change due to tangible capital assets
Acquisition of tangible capital assets2,0181,052
Amortization of tangible capital assets(2,333)(2,209)
Net loss on disposal of tangible capital assets-(45)
Transfer from (to) other government departments15(1,791)
Total change due to tangible capital assets(300)(2,993)
Change due to prepaid expenses (note 19)(204,537)(4,915)
Net increase (decrease) in departmental net debt(20,034)220,310
Departmental net debt - Beginning of year37,384(182,926)
Departmental net debt - End of year17,35037,384

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)20132012
Restated (note 19)
Operating activities
Net cost of operations before government funding and transfers3,079,2463,188,238
Non-cash items:
Amortization of tangible capital assets(2,333)(2,209)
Loss on disposal of tangible capital assets-(45)
Services provided without charge by other government departments (note 16)(25,184)(24,773)
Variations in Statement of Financial Position
Increase (decrease) in accounts receivable and advances473(234,757)
Decrease in prepaid expenses(204,537)(4,915)
Increase in accounts payable and accrued liabilities(24,862)(282,308)
Decrease in vacation pay and compensatory leave1,628798
Decrease in accrued liability for Matching Fund program3,22568,245
Decrease in employee future benefits6,01120,210
Increase in other liabilities(66)(537)
Transfer of liabilities from (to) other government departments352(867)
Cash used in operating activities2,833,9532,727,080
Capital investing activities
Acquisitions of tangible capital assets2,0181,052
Cash used in capital investing activities2,0181,052
Net cash provided by Government of Canada2,835,9712,728,132

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

Notes to the Financial Statements (Unaudited) For the Year Ended March 31

1. Authority and objectives

The Canadian International Development Agency (CIDA or the Agency) 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 aid resources effectively and accountably to achieve meaningful, sustainable development results, and to engage in policy development in Canada and internationally, enabling Canada's effort to realize its development objectives. CIDA fulfills its mandate through six main programs:

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2. Summary of significant accounting policies

These financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

(a) Parliamentary authorities

CIDA is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Agency 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 Departmental Net Financial Position and in 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. The planned results amounts in the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2012-2013 Report on Plans and Priorities. The planned results from the future-oriented financial statements for 2012-2013 have been restated to reflect the cost of operations net of the revenues earned on behalf of Government and expenses incurred on behalf of Government. This restatement resulted in a $323,686,000 decrease in planned net cost of operations before government funding and transfers. In addition, the future-oriented financial statements will be reclassified to conform to the current year presentation.

(b) Net cash provided by Government

The Agency 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 authorities 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

Revenues that are non-respendable are not available to discharge the Agency's liabilities. While expected to maintain accounting control, the Deputy Head has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.

(e) Expenses

Expenses are recorded on the accrual basis.

Transfer payments are recorded as expenses when authorization for the payment exists and the recipient has met the eligibility criteria or the entitlements established for the transfer payment program. In situations where payments do not form part of an existing program, transfer payments are recorded as expenses 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. Transfer payments that become repayable as a result of conditions specified in the contribution agreement that have come into being are recorded as a reduction to transfer payment expense and as a receivable.

Vacation pay and compensatory leave are accrued as the benefits are 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.

Expenses related to assets that are not available to discharge the Agency's liabilities are considered to be incurred on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross expenses.

(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 departmental obligation to the Plan. The Agency'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.
  2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. 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) Notes payable to IFI

Notes payable to IFI 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 IFI, while the amounts for notes payable that will be both issued and encashed under the terms of signed agreements are presented in note 14 on contractual obligations.

Notes payable related to assets that are not available to discharge the Agency's liabilities are considered to be held on behalf of the Government of Canada.

(h) 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

Accounts receivable and advances that are not available to discharge the Agency's liabilities are considered to be held on behalf of the Government of Canada.

(i) Loans receivable

Loans to developing countries and IFI for international development assistance and transfer payments recoverable 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.

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 and Departmental Net Financial Position, 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 as a revenue in the Statement of Operations and Departmental Net Financial Position, in the fiscal year during which the monies are received.

Loans receivable are not available to discharge the Agency's liabilities and are therefore considered to be held on behalf of the Government of Canada.

(j) Investments and advances to IFI

Investments and advances to IFI are recorded at cost.

Investments consist of subscriptions to the share capital of a number of IFI 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 are issued to IFI that use these funds to issue loans to developing countries at concessionary terms.

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

Investments and advances to IFI and related allowance are not available to discharge the Agency's liabilities and are therefore considered to be held on behalf of the Government of Canada.

(k) Canada Investment Fund for Africa (CIFA)

The Canada Investment Fund for Africa (CIFA) is designed to provide risk capital for private investments in Africa that generate growth. The CIFA is presented at cost.

The investment period ended on January 2009. Returns on investment generated by the CIFA are recorded as revenues while the return of capital and applicable management fees are capitalized in the investment. An allowance was established based on the estimated realizable value of the fund.

CIFA is not available to discharge the Agency's liabilities and is therefore considered to be held on behalf of the Government of Canada.

(l) 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 if an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

(m) 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 the gain on foreign exchange and loss on foreign exchange in the Statement of Operations and Departmental Net Financial Position.

(n) Tangible capital assets

All tangible capital assets having an initial cost of $10,000 or more are recorded at their acquisition cost. The Agency does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on Indian reserves and museum collections.

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the tangible capital asset as follows:

Amortization of tangible capital assets
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.

(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, useful life of tangible capital assets, contingent liabilities and liability for employee future 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.

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3. Parliamentary authorities

CIDA receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Financial Position and the Statement of Financial Position in one year may be funded through parliamentary authorities 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)20132012
Net cost of operations before government funding and transfers3,079,2463,188,238
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets(2,333)(2,209)
Loss on disposal of tangible capital assets-(45)
Services provided without charge by other government departments(25,184)(24,773)
Bad debt expense261309
Refunds of prior years' expenditures7,7567,790
Decrease in accrued liability for Matching Fund program3,22568,245
Desrease (Increase) in accrued liabilities for workforce adjustment11,813(14,192)
Decrease in vacation pay and compensatory leave1,628737
Decrease in employee future benefits7,00119,810
Total items affecting net cost of operations but not affecting authorities4,16755,672
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets2,0181,052
Decrease in prepaid expenses(204,537)(4,915)
Acquisition of subscriptions to IFI on behalf of Government93,401107,870
Transfer payments recoverable on behalf of Government225,000300,000
Transfer payments to IFI on behalf of Government247,881285,582
Pakistan's debt forgiveness on behalf of Government40,86581,546
Loss on foreign exchange on behalf of Government14,91720,089
Total items not affecting net cost of operations but affecting authorities419,545791,224
Current year authorities used3,502,9584,035,134
(b) Authorities provided and used
(in thousands of dollars)20132012
Authorities provided:
Budgetary
Vote 25 — Operating expenditures201,964219,963
Vote 30 — Grants and contributions3,150,8783,319,156
Vote 32c — Debt forgiveness303,048384,595
Statutory amounts314,219355,638
Total Budgetary3,970,1094,279,352
Non-Budgetary
Statutory amounts18,378,73418,091,763
Total Non-Budgetary18,378,73418,091,763
Total authorities provided22,348,84322,371,115
Less:
Authorities available for future years(18,545,119)(18,281,880)
Lapsed: Operating(7,868)(8,472)
Lapsed: Grants and contributions(292,898)(45,629)
Current year authorities used3,502,9584,035,134

4. Accounts payable and accrued liabilities

CIDA's accounts payable and accrued liabilities:
(in thousands of dollars)20132012
Accounts payable — Other government departments and agencies3,6052,217
Accounts payable — External parties1,004,4431,194,422
Total accounts payable1,008,0481,196,639
Accrued liabilities24,79736,344
Gross accounts payable and accrued liabilities1,032,8451,232,983
Accounts payable held on behalf of Government(75,000)(300,000)
Net accounts payable and accrued liabilities957,845932,983

In Canada's Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the next three fiscal years starting in 2012-2013. As a result, the Agency has recorded at March 31, 2013 an obligation for termination benefits for an amount of $2.4 million ($14.2 million in 2011-2012) as part of accrued liabilities to reflect the estimated workforce adjustment costs.

5. Notes payable to IFI

Notes payable to IFI:
(in thousands of dollars)20132012
Global Environment Facility Trust Fund-2,540
Gross notes payable to IFI-2,540
Notes payable to IFI held on behalf of Government-(2,540)
Net notes payable to IFI--

During the year, note issuances amounted to $245,341,121 ($285,582,000 in 2011-2012) and note encashment amounted to $247,881,121 ($285,582,000 in 2011-2012).

6. Accrued liability for Matching Fund program

The Matching Fund program is an intiative committed by the Government of Canada to match donations in support for humanitarian crisis.

CIDA's matching funds by initiative:
(in thousands of dollars)20132012
Haïti-3,225
Total-3,225

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7. 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 2012-2013 expense amounts to $19,203,000 ($19,476,000 in 2011-2012), which represents approximately 1.7 times (1.8 in 2011-2012) 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 salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

Information about the severance benefits, measured as at March 31, is as follows:
(in thousands of dollars)20132012
Accrued benefit obligation — Beginning of year18,42538,635
Transferred to other government department (note 17)-(400)
Subtotal18,42538,235
Expense for the year2,588(2,732)
Benefits paid during the year(8,599)(17,078)
Accrued benefit obligation — End of year12,41418,425

8. 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.

Information about the other liabilities, measured as at March 31, is as follows:
(in thousands of dollars)20132012
Other liabilities — beginning of year5392
Amounts received during the year87602
Amounts disbursed during the year(21)(65)
Other liabilities — end of year605539

9. Accounts receivable and advances

The following table presents details of CIDA's accounts receivable and advances balances:
(in thousands of dollars)20132012
Receivables — External parties5,7896,165
Interest and service fees on loans942566
Receivables — Other Federal Government departments and agencies702812
Employee advances76
Subtotal7,4407,549
Allowance for doubtful accounts on receivables from external parties(1,690)(2,648)
Gross accounts receivable5,7504,901
Accounts receivable held on behalf of Government(942)(566)
Net accounts receivable4,8084,335

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10. Loans receivable

The following table presents details of CIDA's loans and transfer payments recoverable to developing countries and IFI:
(in thousands of dollars)20132012
(a) 30-year term, 7-year grace period, unsecured, 3.0 percent interest per annum, with the agreed final repayment in March 2005:
Cuba9,5479,547
(b) 35-year term, 4-year grace period, unsecured, 5.0 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 Bank9691,094
Algeria4,4644,892
Andean Development Corporation1,3131,438
Argentina7593
Bolivia382424
Brazil125146
Central American Bank for Economic Integration344421
Chile441539
Colombia132158
Dominican Republic2,4702,706
Ecuador2,6282,932
Guatemala1,3811,481
Indonesia135,281144,503
Malaysia1,1681,231
Malta275300
Mexico1114
Morocco4,3794,864
Myanmar (Burma)8,3068,306
Pakistan260,158301,023
Paraguay7090
Peru1922
Philippines1,1601,258
Sri Lanka62,52366,848
Thailand11,06814,551
Tunisia35,40138,697
(d) 50-year term, 13-year grace period, unsecured, non-interest bearing, with the final repayment in March 2023:
Algeria12,45113,696
Subtotal601,537666,270
Less: Unamortized discount(374,326)(417,723)
Subtotal227,211248,547
Less: Allowance for uncollectibility(107,641)(120,641)
Total - Loans to developing countries and IFI119,570127,906
(e) Transfer payments recoverable525,000300,000
Less: Unamortized discount(119,032)(73,116)
Total - Transfer payments recoverable405,968226,884
Gross loans receivable525,538354,790
Loans receivable held on behalf of Government(525,538)(354,790)
Net loans receivable--

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 in March 2005. In default of payment, the country has been in arrears since that date. No repayment is anticipated. The allowance for uncollectibility 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 instalments of $48,580 until September 2024. The instalments 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 CIDA, 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 is required to make education sector investments over an estimated period of five years that are equivalent to the current present value of its debt of $132,600,000. According to the agreement, Pakistan's debt is to be written down proportionally by CIDA as the investments are made. In 2012-2013, the Government of Pakistan invested in its education sector program. This investment permitted CIDA to forgive $40,865,000 of the Government of Pakistan's debt. Since 2009-2010, The Government of Pakistan's debt has been reduced by a total amount of $187,350,000.

Transfer payments recoverable relate to contributions made to outside parties which are repayable based on conditions specified in the contribution agreement that have come into being.

11. Investments and advances to IFI

The following table presents details of CIDA's investments and advances to IFI:
(in thousands of dollars)20132012
Investments
African Development Bank195,047164,480
Asian Development Bank266,157229,686
Caribbean Development Bank41,06623,225
Inter-American Development Bank210,645193,309
Subtotal - Investments712,915610,700
Advances
African Development Fund2,434,0822,324,156
Asian Development Bank - Special27,02727,027
Asian Development Fund2,162,8152,115,125
Caribbean Development Bank - Agricultural Development Fund2,0002,000
Caribbean Development Bank - Commonwealth Caribbean Regional4,0643,990
Caribbean Development Bank - Special Development Fund284,726266,909
Global Environment Facility Trust Fund671,570616,820
Inter-American Development Bank - Fund for Special Operations341,365337,162
International Bank for Reconstruction and Development20,32019,950
International Fund for Agriculture Development354,383341,883
International Monetary Fund11,14510,942
Montreal Protocol Mutilateral Fund92,72887,956
Multilateral Investment Fund49,30849,308
Subtotal - Advances6,455,5336,203,228
Subtotal - Investments and advances7,168,4486,813,928
Less: Allowance for valuation(7,168,448)(6,813,928)
Gross and net investments and advances to IFI--

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

12. Canada Investment Fund for Africa

The Canada Investment Fund for Africa (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 investments in the Fund, to confer a beneficial development impact on Africa by way of increased foreign direct investments 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 mechanism 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, CIDA will only receive income and returns of capital. Since its inception, the Agency received capital reimbursement from CIFA amounting to $33.0 million ($26.5 million in 2011-2012) and investment income of $6.7 million ($5.7 million in 2011-2012).

The fair value of the CIFA has declined over the last six years. An allowance for valuation of $28.0 million was recorded en 2010-2011.

The following table presents details of the CIFA:
(in thousands of dollars)20132012
CIFA opening balance78,49691,004
Returns of capital(6,570)(13,240)
Capitalized management fees1,098732
Subtotal73,02478,496
Less allowance for valuation(28,000)(28,000)
Gross total45,02450,496
CIFA held on behalf of Government(45,024)(50,496)
Net total--

13. Tangible capital assets

Tangible capital assets
(in thousands of dollars)CostAccumulated AmortizationNet Book Value
Capital Asset ClassOpening balanceAcquisitionsAdjustments Footnote 1Disposals and write-offsClosing balanceOpening balanceAmortizationAdjustments Footnote 2Disposals and write-offsClosing balance20132012
Communication equipment142--93491246-93371218
Computer equipment521--12040143227-1203396289
Computer software9,175297--9,4722,0242,248--4,2725,2007,151
Other equipment1,497---1,4971,45529--1,4841342
Vehicles157-23-180127238-1582230
Assets under construction-1,721--1,721-----1,721-
Total11,4922,0182321313,3204,1622,33382136,2907,0307,330

14. 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:

Contractual obligations
(in thousands of dollars)20142015201620172018 and
thereafter
Total
Transfer payments1,533,631933,229444,139211,89853,7233,176,620
Encashment of notes by IFI259,58593,63542,525--395,745
Total1,793,2161,026,864486,664211,89853,7233,572,365

15.  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. As at March 31, 2013, the callable share capital is valued at $18.3 billion ($18.0 billion in 2012) 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 $6,510,254,928 as at March 31, 2013 ($6,402,582,038 in 2012). 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 $8,025,180,111 ($8,163,909,981 in 2012) representing a difference of $1,514,925,183 with CIDA's own valuation as at March 31, 2013 ($1,761,327,943 in 2012).

(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. While the total amount claimed in these actions is significant, their outcomes are not determinable. The Agency has recorded an allowance for claims and litigations where it is likely that there will be a future payment and a reasonable estimate of the loss can be made. Claims and litigations for which the outcome is not determinable and a reasonable estimate can be made by management amount to approximately $11,899,000 at March 31, 2013 ($13,691,000 in 2012).

16.  Related party transactions

CIDA is related as a result of common ownership to all government departments, agencies and Crown corporations. CIDA enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Agency received common services which were obtained without charge from other government departments as disclosed below.

(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 and Departmental Net Financial Position as follows:

Common services provided without charge by other government departments
(in thousands of dollars)20132012
Employer's contribution to the health and dental insurance plans14,54514,496
Accommodation9,8539,525
Legal services742691
Workers' compensation4461
Total25,18424,773

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness 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 and audit services provided by the Office of the Auditor General are not included in CIDA's Statement of Operations and Departmental Net Financial Position.

(b) Other transactions with related parties

Other transactions with related parties
(in thousands of dollars)20132012
Expenses - Other Government departments and agencies86,491133,671

These expenses exclude common services provided without charge, which are already disclosed in (a).

17. Transfers to other government departments

Effective November 15, 2011, CIDA transferred the responsibility for the email, data centre and network services to Shared Services Canada (SSC) in accordance with Order-in-Council P.C 2011-0877 and 2011-1297, including the stewardship responsibility for the related assets and liabilities. Accordingly, the Agency transferred the following assets and liabilities to SSC on November 15, 2011:

Transferred assets and liabilities to SSC on November 15, 2011
(in thousands of dollars)20132012
Assets
Tangible capital assets (net book value)-1,791
Total assets transferred-1,791
Liabilities
Accrued Salaries-12
Vacation pay and compensatory leave-61
Accounts payable-394
Employee future benefits (note 7)-400
Total liabilities transferred-867
Adjustment to the departmental net financial position-924

During the transition period, the Agency continued to administer the transferred activities on behalf of SSC. The administered expenses and acquisitions of capital assets amounted to $4,255,230 for 2011-2012 and are not recorded in these financial statements.

18.  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:

Expenses and revenues presented by segment
(in thousands of dollars)Global engagement and strategic policyLow-income countriesFragile states and crisis- affected communitiesMiddle-income countriesCanadian engagement for developmentInternal services2013
Total
2012
Total
Restated
(note 19)
Transfer payments
Other countries and international organizations1,248,322842,601584,050272,049296,070-3,243,0923,396,408
Transfer payments incurred on behalf of Government(388,782)--(147)--(388,929)(465,999)
Total transfer payments859,540842,601584,050271,902296,070-2,854,1632,930,409
Operating expenses
Salaries and employee benefits21,47140,94612,87419,55513,17676,644184,666208,285
Loss on foreign exchange14,919-----14,91920,089
Professionnal and special services7581,41765975839411,88115,86721,211
Travel1,3112,6207381,0243978826,9729,571
Accommodation1,1672,2017231,0477086,37412,22011,937
Repair and maintenance1-21--2,4882,5103,252
Communication1923111316169251773
Amortization of tangible capital assets-----2,3332,3332,209
Other442(19)16(31)237(383)262591
Expenses incurred on behalf of Government(14,917)-----(14,917)(20,089)
Total operating expenses25,171 47,188 15,042 22,366 14,928 100,388 225,083 257,829
Total expenses884,711 889,789 599,092 294,268 310,998 100,388 3,079,2463,188,238
Revenues
Gain on foreign exchange14,917----114,91822,057
Amortization of discount on loans4,20218-15,583--19,80313,827
Miscellaneous revenues1,1231,044-2,26316184,5993,024
Revenues earned on behalf of Government(20,242)(1,062)-(17,846)(161)(9)(39,320)(38,908)
Total revenues--------
Net cost of operations884,711889,789599,092294,268310,998100,3883,079,2463,188,238

19. Accounting changes

Change in on accounting policy:

On April 1, 2012, CIDA has adopted the revised CICA PS3410 on Government Transfers. The major change in the revised standard is the recording of transfer payments made in advance as expenses instead of assets in the Statement of Financial Position. As a result, all transfer payments are recognized as expenses in the Statement of Operations.

The adoption of the revised standard has been applied prospectively. Consequently, comparative information for 2011-2012 has not been restated. The effect of this change was to decrease total financial assets by $204,536,370 for 2013.

Corrections in prior year financial statements:

During 2011, amendments were made to Treasury Board Accounting Standard 1.2—Revenues earned and expenses incurred on behalf of the government are now presented distinctly in the Statement of Operations and Departmental Net Financial Position, as are the financial assets and liabilities held on behalf of the government in the Statement of Financial Position. The amendments are effective for financial reporting of fiscal years ending March 31, 2012, and are applicable to future years.

In 2012-2013, corrections were made in determining liabilities and expenses considered as held on behalf of the government. These changes have been applied retroactively, and comparative information for 2011-2012 has been restated.

The effect of these corrections were to decrease the net cost of operations before government funding and transfers by $388,929,000 for 2012-2013 ($465,999,000 for 2011-2012).

Accounting changes
(in thousands of dollars)2012
As previously stated
Effect of correction2012
Restated
Statement of Financial Position:
Liabilities held on behalf of Government-302,540302,540
Due from Consolidated Revenue Fund1,224,277(302,540)921,737
Departmental net financial position175,238-175,238
Statement of Operations and Departmental Net Financial Position:
Expenses3,654,237(465,999)3,188,238
Net cost of operations before government funding and transfers3,654,237(465,999)3,188,238
Government funding and transfers
Net cash provided by Government2,894,131(165,999)2,728,132
Change in due from Consolidated Revenue Fund508,039(300,000)208,039

20. Subsequent events

In Canada's Economic Action Plan 2013, the government announced its intention to amalgamate the Department of Foreign Affairs and International Trade (DFAIT) and the Canadian International Development Agency (CIDA). The new department, the Department of Foreign Affairs, Trade and Development Canada (DFATD), will continue to serve the same functions as those of previously served by DFAIT and CIDA.

Economic Action Plan 2013 Act, No. 1, the act that implemented the amalgamation, received Royal Assent on June 26, 2013. As a result of this amalgamation the net assets (estimated at $238,155,000) and net liabilities (estimated at $244,451,000) of CIDA will be transferred to DFATD as of this date.

21. Comparative information

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

Date Modified: