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Financial Statements 2013-2014

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 three month period ended June 25, 2013, and all information contained in these statements relating to Canadian International Development Agency (CIDA or the Agency) rests with the Department of Foreign Affairs, Trade and Development (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 DFATD’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 three month period ended June 25, 2013 was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plan will be integrated in the annex for the Department of Foreign Affairs, Trade and Development for 2013-2014.

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 the Departmental Audit Committee (DAC), which advises the Deputy Ministers on maintaining adequate control systems and on the quality of financial reporting. The DAC confirms their support of the financial statements to the Deputy Ministers.

The financial statements of CIDA have not been audited.

Malcolm Brown
Deputy Minister of International Development

Nadir Patel
Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology

Daniel Jean
Deputy Minister of Foreign Affairs

Ottawa, Canada
Date: August 29, 2014

Table 1: Canadian International Development Agency Statement of Financial Position (Unaudited)
As at June 25, 2013 (In thousands of dollars)June 25, 2013March 31, 2013
Liabilities
Accounts payable and accrued liabilities (note 5)218,7451,032,845
Vacation pay and compensatory leave8,2356,656
Employee future benefits (note 6)11,42512,414
Other liabilities (note 7)605605
Total gross liabilities239,0101,052,520
Liabilities held on behalf of Government
Accounts payable and accrued liabilities (note 5)-(75,000)
Total liabilities held on behalf of Government-(75,000)
Total net liabilities239,010977,520
Financial assets
Due from Consolidated Revenue Fund216,319955,362
Accounts receivable and advances (note 8)3,2415,750
Loans receivable (note 9)529,046525,538
Investments and advances to International Financial Institutions (IFI) (note 10)7,442,1987,168,448
Allowance for valuation of investments and advances to IFI (note 10)(7,442,198)(7,168,448)
Canada Investment Fund for Africa (note 11)45,02445,024
Total gross financial assets793,6301,531,674
Financial assets held on behalf of Government
Accounts receivable and advances (note 8)(1,126)(942)
Loans receivable (note 9)(529,046)(525,538)
Investments and advances to IFI (note 10)(7,442,198)(7,168,448)
Allowance for valuation of investments and advances to IFI (note 10)7,442,1987,168,448
Canada Investment Fund for Africa (note 11)(45,024)(45,024)
Total financial assets held on behalf of Government(575,196)(571,504)
Total net financial assets218,434960,170
Agency net debt20,57617,350
Non-financial assets
Prepaid expenses572755
Tangible capital assets (note 12)6,8167,030
Total non-financial assets7,3887,785
Agency net financial position(13,188)(9,565)

Contingent liabilities (note 13)

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

Malcolm Brown
Deputy Minister of International Development

Nadir Patel
Assistant Deputy Minister and Chief Financial Officer, Corporate Planning, Finance and Information Technology

Daniel Jean
Deputy Minister of Foreign Affairs

Ottawa, Canada
Date: August 29, 2014

Table 2: Canadian International Development Agency Statement of Operations and Agency Net Financial Position (Unaudited)
For the 3 month period ended June 25, 2013
(In thousands of dollars)
Planned Results 2014For the 3 month period ended June 25, 2013For the 12 month period ended March 31, 2013
Expenses
Global engagement and strategic policy1,058,155507,4421,288,410
Low-income countries918,35090,284889,789
Canadian engagement for development268,58643,518310,998
Middle-income countries337,97529,658294,415
Fragile states and crisis-affected communities689,90428,483599,092
Internal services101,99324,251100,388
Expenses incurred on behalf of Government(5,751)(273,749)(403,846)
Total expenses3,369,212449,8873,079,246
Revenues
Gain on foreign exchange5,75129,20214,918
Amortization of discount on loans13,8274,76919,803
Miscellaneous revenues5,1451,0094,599
Revenues earned on behalf of Government(24,723)(34,980)(39,320)
Total revenues---
Net cost of operations before government funding and transfers3,369,212449,8873,079,246
Government funding and transfers
Net cash provided by Government3,440,5801,179,9752,835,971
Change in due from Consolidated Revenue Fund(94,325)(739,043)33,625
Services provided without charge by other government departments (note 14)22,2415,33225,184
Transfer of assets and liabilities to other government departments--(337)
Net cost of operations after government funding and transfers7163,623184,803
Agency net financial position - Beginning of year16,607(9,565)175,238
Agency net financial position - End of year17,323(13,188)(9,565)

Segmented information (note 15)

The accompanying notes form an integral part of these financial statements

Table 3: Statement of Change in Agency Net Debt (Unaudited)
For the 3 month period ended June 25, 2013
(in thousands of dollars)
Planned Results 2014For the 3 month period ended June 25, 2013For the 12 month period ended March 31, 2013
Net cost of operations after government funding and transfers7163,623184,803
Change due to tangible capital assets
Acquisition of tangible capital assets673822,018
Amortization of tangible capital assets(2,352)(596)(2,333)
Transfer from other government departments--15
Total change due to tangible capital assets(2,285)(214)(300)
Change due to prepaid expenses-(183)(204,537)
Net increase (decrease) in Agency net debt(1,569)3,226(20,034)
Agency net debt - Beginning of year22,02217,35037,384
Agency net debt - End of year20,45320,57617,350

The accompanying notes form an integral part of these financial statements

Table 4: Statement of Cash Flow (Unaudited)
For the 3 month period ended June 25, 2013
(in thousands of dollars)
For the 3 month period ended June 25, 2013For the 12 month period ended March 31, 2013
Operating activities
Net cost of operations before government funding and transfers449,8873,079,246
Non-cash items:
Amortization of tangible capital assets(596)(2,333)
Services provided without charge by other government departments (note 14)(5,332)(25,184)
Variations in Statement of Financial Position
Increase (decrease) in accounts receivable and advances(2,693)473
Decrease in prepaid expenses(183)(204,537)
Decrease (increase) in accounts payable and accrued liabilities739,100(24,862)
Decrease (increase) in vacation pay and compensatory leave(1,579)1,628
Decrease in accrued liability for Matching Fund program-3,225
Decrease in employee future benefits9896,011
Increase in other liabilities-(66)
Transfer of liabilities from other government departments-352
Cash used in operating activities1,179,5932,833,953
Capital investing activities
Acquisitions of tangible capital assets3822,018
Cash used in capital investing activities3822,018
Net cash provided by Government of Canada1,179,9752,835,971

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

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:

2. Government reorganization

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 (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 of $225,822,000 and net liabilities of $243,935,000 of CIDA are transferred to DFATD as of this date.

These financial statements represent the results of operations for the three month period ended June 25, 2013, and the financial position of the Agency as at June 25, 2013 immediately before the transfer of assets, liabilities, and commitments to DFATD on June 26, 2013. Comparative figures for the year ended March 31, 2013 are for a twelve month period.

3. 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 Agency Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 4 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Agency Net Financial Position as well as the Statement of Change in Agency Net Debt are the amounts reported in the future-oriented financial statements included in the 2013-2014 Report on Plans and Priorities.

(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 the Deputy Head is expected to maintain accounting control, he 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. For example, these expenses include related transactions arising from the recording of the loans receivable, including the recording of the discount and the future amortization of the unamortized discount component.

(f) Employee future benefits

(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.

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.

(h) 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.

(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 Agency 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 Agency 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) 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 Agency Net Financial Position.

(m) 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:

Table 5: 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.

(n) 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 the allowance for doubtful accounts, contingent liabilities, the allowance for loans, the useful life of tangible capital assets and the 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.

4. Parliamentary authorities

CIDA receives most of its funding through annual parliamentary authorities. Items recognized in the Statement of Operations and Agency 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

Table 6: Parliamentary Authorities - Reconciliation of net cost of operations to current year authorities used
(in thousands of dollars)For the 3 month period ended June 25, 2013For the 12 month period ended March 31, 2013
Net cost of operations before government funding and transfers449,8873,079,246
Adjustments for items affecting net cost of operations but not affecting authorities:
Amortization of tangible capital assets(596)(2,333)
Services provided without charge by other government departments(5,332)(25,184)
Bad debt expense-261
Refunds of prior years' expenditures4,8697,756
Decrease in accrued liability for Matching Fund program-3,225
Decrease in accrued liabilities for workforce adjustment costs51611,813
Decrease (increase) in vacation pay and compensatory leave(1,579)1,628
Decrease in employee future benefits-7,001
Total items affecting net cost of operations but not affecting authorities(2,122)4,167
Adjustments for items not affecting net cost of operations but affecting authorities:
Acquisitions of tangible capital assets3822,018
Decrease in prepaid expenses(183)(204,537)
Acquisition of subscriptions to IFI on behalf of Government29,29193,401
Travel advances44-
Transfer payments recoverable on behalf of Government-225,000
Transfer payments to IFI on behalf of Government-247,881
Pakistan's debt forgiveness on behalf of Government-40,865
Loss on foreign exchange on behalf of Government29,20214,917
Total items not affecting net cost of operations but affecting authorities58,736419,545
Current year authorities used506,5013,502,958

(b) Authorities provided and used

Table 7: Parliamentary Authorities - Authorities provided and used
(in thousands of dollars)For the 3 month period ended June 25, 2013For the 12 month period ended March 31, 2013
Authorities provided:
Budgetary
Vote 25 - Operating expenditures38,222201,964
Vote 30 - Grants and contributions404,0443,150,878
Vote 32c - Debt forgiveness-303,048
Statutory amounts250,200314,219
Total Budgetary692,4663,970,109
Non-Budgetary
Statutory amounts29,29118,378,734
Total Non-Budgetary29,29118,378,734
Total authorities provided721,75722,348,843
Less:
Authorities available for future years-(18,545,119)
Lapsed: Operating-(7,868)
Lapsed: Grants and contributions-(292,898)
Current year authorities used721,7573,502,958

5. Accounts payable and accrued liabilities

The following table presents details of CIDA's accounts payables and accrued liabilities:

Table 8: Accounts payable and accrued liabilities
(in thousands of dollars)June 25, 2013March 31, 2013
Accounts payable - Other government departments and agencies1283,605
Accounts payable - External parties197,1561,004,443
Total accounts payable197,2841,008,048
Accrued liabilities21,46124,797
Gross accounts payable and accrued liabilities218,7451,032,845
Accounts payable held on behalf of Government-(75,000)
Net accounts payable and accrued liabilities218,745957,845

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 June 25, 2013 an obligation for termination benefits for an amount of $1.9 million ($2.4 million in 2012-2013) as part of accrued liabilities to reflect the estimated workforce adjustment costs.

6. Employee future benefits

(a) Pension benefits

CIDA’s employees participate in the Public Service Pension Plan (the “Plan”), which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with the Canada and Québec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Agency contribute to the cost of the Plan. Due to the amendment of the Public Service Superannuation Act following the implementation of provisions related to Canada’s Economic Action Plan 2012, employee contributors have been divided into two groups: Group 1 relates to existing plan members as of December 31, 2012 and Group 2 relates to members joining the Plan as of January 1, 2013. Each group has a distinct contribution rate.

For the 3 month period ended June 25, 2013, expense amounts to $4,022,000 ($19,203,000 in 2012-2013). For Group 1 members, the expense represents approximately 1.6 times (1.7 times in 2012-2013) the employee contributions and, for Group 2 members, approximately 1.5 times (1.6 times in 2012-2013) the employee contributions.

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 June 25, is as follows:

Table 9: Employee future benefits - Severance benefits
(in thousands of dollars)For the 3 month period ended June 25, 2013For the 12 month period ended March 31, 2013
Accrued benefit obligation - Beginning of year12,41418,425
Expense for the year1,0362,588
Benefits paid during the year(2,025)(8,599)
Accrued benefit obligation - End of year11,42512,414

7. 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.

The following table presents details of other liabilities:

Table 10: Other liabilities
(in thousands of dollars)June 25, 2013March 31, 2013
Other liabilities - Beginning of year605539
Amounts received during the year-87
Amounts disbursed during the year-(21)
Other liabilities - End of year605605

8. Accounts receivable and advances

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

Table 11: Accounts receivable and advances
(in thousands of dollars)June 25, 2013March 31, 2013
Receivables - External parties2,6375,789
Interest and service fees on loans1,127942
Receivables - Other government departments and agencies1,122702
Employee advances457
 4,9317,440
Allowance for doubtful accounts on receivables from external parties(1,690)(1,690)
Gross accounts receivable and advances3,2415,750
Accounts receivable held on behalf of Government(1,126)(942)
Net accounts receivable and advances2,1154,808

9. Loans receivable

The following table presents details of CIDA’s loans and transfer payments recoverable to developing countries and IFI:

Table 12: Loans receivable
(in thousands of dollars)June 25, 2013March 31, 2013
(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 Bank906969
Algeria4,4644,464
Andean Development Corporation1,3131,313
Argentina7575
Bolivia382382
Brazil125125
Central American Bank for Economic Integration344344
Chile441441
Colombia132132
Dominican Republic2,4702,470
Ecuador2,6282,628
Guatemala1,3811,381
Indonesia134,131134,131
Malaysia1,1681,168
Malta275275
Mexico1111
Morocco4,3794,379
Myanmar (Burma)8,3068,306
Pakistan260,158260,158
Paraguay7070
Peru1919
Philippines1,1121,112
Sri Lanka62,52362,523
Thailand11,06811,068
Tunisia35,40135,401
(d) 50-year term, 13-year grace period, unsecured, non-interest bearing, with the final
repayment in March 2023:
Algeria12,45112,451
Subtotal600,276601,537
Less:
Unamortized discount(370,900)(374,326)
Subtotal229,376227,211
Less:
Allowance for uncollectibility(107,641)(107,641)
Total – Loans to developing countries and IFI121,735119,570
(e) Transfer payments recoverable525,000525,000
Less:
Unamortized discount(117,689)(119,032)
Total – Transfer payments recoverable407,311405,968
Gross loans receivable529,046525,538
Loans receivable held on behalf of Government(529,046)(525,538)
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 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. 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.

10. Investments and advances to IFI

The following table presents details of CIDA’s investments and advances to IFI:

Table 13: Investments and advances to IFI
(in thousands of dollars)June 25, 2013March 31, 2013
Investments
African Development Bank229,250195,047
Asian Development Bank270,616266,157
Caribbean Development Bank42,26341,066
Inter-American Development Bank217,767210,645
 759,896712,915
Advances
African Development Fund2,545,2382,434,082
Asian Development Bank - Special27,02727,027
Asian Development Fund2,210,5052,162,815
Caribbean Development Bank - Agricultural Development Fund2,0002,000
Caribbean Development Bank - Commonwealth Caribbean Regional4,2044,064
Caribbean Development Bank – Special Development Fund285,164284,726
Global Environment Facility Trust Fund726,320671,570
Inter-American Development Bank - Fund for Special Operations347,671341,365
International Bank for Reconstruction and Development21,01820,320
International Fund for Agriculture Development354,383354,383
International Monetary Fund11,52811,145
Montreal Protocol Multilateral Fund97,93692,728
Multilateral Investment Fund49,30849,308
 6,682,3026,455,533
Subtotal Investments and advances to IFI7,442,1987,168,448
Less:
Allowance for valuation(7,442,198)(7,168,448)
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.

11. 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 March 31, 2015, CIDA will only receive income and returns of capital. Since its inception, the Agency received capital reimbursement from CIFA amounting to $33.0 million ($33.0 million in 2012-2013) and investment income of $6.7 million ($6.7 million in 2012-2013).

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

The following table presents details of the CIFA:

Table 14: Canada Investment Fund for Africa
(in thousands of dollars)June 25, 2013March 31, 2013
CIFA opening balance73,02478,496
Returns of capital-(6,570)
Capitalized management fees-1,098
 73,02473,024
Less: Allowance for valuation(28,000)(28,000)
Gross total45,02445,024
CIFA held on behalf of Government(45,024)(45,024)
Net total--

12. Tangible capital assets

Table 15: Tangible capital assets
(in thousands of dollars)CostAccumulated AmortizationNet Book Value
Opening BalanceAcquisitionsAdjustments1Disposals & Write-offsClosing BalanceOpening BalanceAcquisitionsAdjustments1Disposals & Write-offsClosing BalanceJune 25, 2013March 31, 2013
1 Adjustments include assets under construction of $109,000 that were transferred to other asset categories upon completion of the assets.
Communication equipment49---49371--381112
Computer equipment401---4013397--3465562
Computer software9,472-109-9,5814,272582--4,8544,7275,200
Other equipment1,497---1,4971,4842--1,4861113
Vehicles180---1801584--1621822
Assets under construction1,721382(109)-1,994-----1,9941,721
Total13,320382--13,7026,290596--6,8866,8167,030

13. 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 June 25, 2013, the callable share capital is valued at $18.9 billion ($18.3 billion as at March 31, 2013) 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 $6,713,378,380 as at June 25, 2013 ($6,510,254,928 as at March 31, 2013). 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 $8,378,756,658 as at June 25, 2013 ($8,025,180,111 as at March 31, 2013) representing a difference of $1,665,378,278 with CIDA's own valuation as at June 25, 2013 ($1,514,925,183 as at March 31, 2013).

(b) Claims and litigation:

Claims have been made against CIDA in the normal course of operations. These claims include items where the amount of damages is specified, and others for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable. Pending claims and legal proceedings for which the outcome is not determinable and a reasonable estimate can be made by management amount to approximately $11,899,000 as at June 25, 2013 ($11,899,000 as at March 31, 2013).

An allowance for claims and litigation is established when it becomes likely that the Agency is liable and it will incur an expense and the amount can be reasonably estimated. In management's opinion, the ultimate disposition of these actions, individually or in the aggregate, will not have a material adverse effect on the financial condition of the Agency.

14. 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 Agency Net Financial Position as follows:

Table 16: Related party transactions - Common services provided without charge by other government departments
(in thousands of dollars)For the 3 month period ended June 25, 2013For the 12 month period ended March 31, 2013
Employer's contribution to the health and dental insurance plans2,82414,545
Accommodation2,3139,853
Legal services186742
Workers' compensation944
Total5,33225,184

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 Agency Net Financial Position.

(b) Other transactions with related parties

Table 17: Related party transactions - Other transactions with related parties
(in thousands of dollars)For the 3 month period ended June 25, 2013For the 12 month period ended March 31, 2013
Expenses - Other government departments and agencies17,59986,491

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

15. Segmented information

Presentation by segment is based on CIDA’s program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 3. The following table presents the expenses incurred and revenues generated for the main programs, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

Table 18: Segmented information
(in thousands of dollars)Global engagement and strategic policyLow-income countriesFragile states and crisis- affected communitiesMiddle-income countriesCanadian engagement for developmentInternal servicesPeriod ended June 25, 2013Year ended March 31, 2013
Transfer payments
Other countries and international organizations472,08680,59825,60225,10440,347-643,7373,243,092
Transfer payments incurred on behalf of Government(244,547)-----(244,547)(388,929)
Total transfer payments227,53980,59825,60225,10440,347-399,1902,854,163
Operating expenses
Salaries and employee benefits5,5458,5572,5804,0172,89020,18843,777184,666
Loss on foreign exchange29,202-----29,20214,919
Professional and special services742057187661,1991,70215,867
Travel23945382231641461,2156,972
Accommodation2924591462171511,5712,83612,220
Repair and maintenance-----5095092,510
Communication-811-515251
Amortization of tangible capital assets-----5955952,333
Other4411-3848262
Expenses incurred on behalf of Government(29,202)-----(29,202)(14,917)
Total operating expenses6,1549,6862,8814,5543,17124,25150,697225,083
Total expenses233,69390,28428,48329,65843,51824,251449,8873,079,246
Revenues
Gain on foreign exchange29,202-----29,20214,918
Amortization of discount on loans1,3634-3,402--4,76919,803
Miscellaneous revenues4024205691221,0094,599
Revenues earned on behalf of Government(30,967)(8)(20)(3,971)(12)(2)(34,980)(39,320)
Total revenues--------
Net cost of operations233,69390,28428,48329,65843,51824,251449,8873,079,246
Date Modified: