Chair's Report

Financial report

Archived Financial Reports

Financial Report: Year ended March 31, 2004

• Auditors' Report to the Board of Directors
• Statement of Financial Position
• Statement of Operations
• Statement of Changes in Net Assets
• Statement of Grants Payable
• Statement of Cash Flows
• Notes to Financial Statements

AUDITORS' REPORT TO THE BOARD OF DIRECTORS

We have audited the statement of financial position of the Alberta Law Foundation as at March 31, 2004 and the statements of operations, changes in net assets, grants payable and cash flows for the year then ended. These financial statements are the responsibility of the Foundation's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Foundation as at March 31, 2004 and the results of its operations and its cash flows for the year then ended in accordance with the Canadian generally accepted accounting principles.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements of the Foundation taken as a whole. The supplementary information included in the Schedules is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such supplementary information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

(signed) KPMG LLP
Chartered Accountants

Calgary, Canada
April 30, 2004

	2004	2003
Assets
Cash	$ 148,818	$ 166,635
Accrued interest	509,367	487,474
	658,185	654,109
Fixed rate investments (note 2)	31,527,949	29,394,022
	$ 32,186,134	$ 30,048,131
Liabilities
Current liabilities:
Grants payable - general	$ 8,502,112	$ 8,698,717
Grants payable - provision for committed programs (note 3)	6,811,119	6,560,867
	$ 15,313,231	$ 15,259,584
Payable to Legal Aid Society of Alberta (note 4)	2,854,653	1,897,521
	$ 18,167,884	$ 17,157,105
Net Assets
Internally restricted (note 1)	13,622,238	12,600,000
Unrestricted (note 1)	396,012	291,026
	14,018,250	12,891,026
Commitment (note 7)	$ 32,186,134	$ 30,048,131

See accompanying notes to financial statements.

	2004	2003
Revenue
Interest received on lawyers' general trust accounts	$ 11,418,613	$ 7,590,086
Interest earned from fixed rate investments	1,381,700	1,482,870
	12,800,313	9,072,956
Expenses
Salaries	227,906	192,728
Rent and parking	43,848	44,453
Board travel and meetings	33,159	34,450
Insurance	13,227	10,865
Professional fees	12,170	7,704
Other	11,434	1,064
Staff travel and meetings	10,927	14,501
Postage	3,670	4,336
Telephone	2,521	2,146
Printing	2,309	4,153
Website and computer supplies	1,751	8,654
Photocopying	1,113	1,222
Office supplies	948	340
Bank charges	196	338
Executive search	-----	30,545
Equipment	-----	7,429
	365,179	364,9289
Allocation to Legal Aid Society of Alberta (note 4)	2,854,653	1,897,521
Excess of revenue over expenses before project allocations	9,580,481	6,810,507
Deduct: Project allocations from unrestricted net assets:
Research and reform	822,500	453,485
Law libraries	233,000	-----
Public legal education	417,955	759,713
Native and student assistance	30,023	51,008
	1,503,478	1,264,206
Provision for committed programs	7,052,602	6,471,711
Add:
Project refunds (note 5)	81,430	86,626
Allocations withdrawn from projects	21,393	22,614
	102,823	109,240
Excess (deficiency) of revenue over expenses	($719,944)	$ 3,503,317

See accompanying notes to financial statements.

	Internally Restricted	Unrestricted	2004 Total	2003 Total
Balance, beginning of year	$ 12,600,000	$ 291,026	$ 12,891,026	$ 13,707,196
Excess (deficiency) of revenue over expenses	-----	1,127,224	1,127,224	(816,170)
Internally designated Transfers	1,022,238	(1,022,238)	-----	-----
Balance, end of year	$ 13,622,238	$ 396,012	$ 14,018,250	$ 12,891,026

See accompanying notes to financial statements.

Grants Payable - General:

	2004	2003
Balance, beginning of year	$ 8,698,717	$ 9,830,433
ADD:
Allocations from Provision for Committed Programs:
Research and reform	2,545,638	2,476,077
Law libraries	875,000	850,000
Public legal education	2,638,083	2,486,037
Native and student assistance	743,629	738,873
	6,802,350	6,550,987
Project allocations from unrestricted net assets:
Research and reform	822,500	453,485
Law libraries	233,000	-----
Public legal education	417,955	759,713
Native and student assistance	30,023	51,008
	1,503,478	1,264,206
DEDUCT:
Allocations withdrawn from projects:
Research and reform	15,000	-----
Public legal education	2,446	21,970
Native and student assistance	3,947	644
	21,393	22,614
Allocations paid:
Research and reform	3,107,672	3,205,860
Law libraries	1,049,965	1,353,271
Public legal education	3,327,337	3,407,049
Native and student assistance	996,066	958,115
	8,481,040	8,924,295
Balance, end of year	$ 9,830,433	$ 8,848,379

See accompanying notes to financial statements.

	2004	2003
Cash provided by (used in):
Operations:
Excess (definicency) of revenue over expenses	$ 1,127,224	$ (816,170)
Changes in non-cash working capital:
Grants payable	53,647	(1,210,9920
Payable to Legal Aid Society of Alberta	957,132	(703,298)
	2,138,003	(2,730,460)
Investments:
Amotization of premiums and discounts	(33,064)	(11,053)
Purchase of fixed rate investments	(19,855,397)	(13,153,405)
Maturities of fixed rate investments	17,754,534	16,034,307
Accrued interest	(21,893)	(17,304)
	(2,155,820)	2,852,545
Increase (decrease) in cash	(17,817)	122,085
Cash, beginning of year	166,635	44,550
Cash, end of year	$ 148,818	$ 166,635

See accompanying notes to financial statements.

Nature of operations:

The Alberta Law Foundation (the "Foundation") was established by amendments to the Legal Profession Act, which became effective on April 1, 1973. The Foundation is the recipient of the interest which banks, credit unions, trust companies, and treasury branches must pay on clients' funds held in lawyers' general trust accounts. This does not include interest paid on a specific trust investment held for an individual client. The interest is made available by the Foundation to organizations engaged in activities, which are considered to be in keeping with the Foundation's objects pursuant to the Legal Profession Act. The Foundation is a not-for-profit organization as defined in the Income Tax Act (Canada) and is exempt from income taxes.

1. Significant accounting policies:

(a) Fixed rate investments:
Fixed rate investments are carried at cost. If the market value of investments becomes lower than cost and this decline is considered to be other than temporary, the investments are written down to market value. The purchase premium or discount, if any, is charged to revenue and expenses over the life of the investment. Interest earned on fixed rate investments is recorded on the accrual basis.

(b) Property and equipment:
Purchases of property and equipment are recorded at cost. Depreciation is provided on a straight-line basis over the estimated life of the asset. All individual items under $5,000 are expensed in the year purchased.

(c) Internally restricted:
Internally restricted net assets represents amounts which are reserved for future funding of committed programs and require the approval of the Board of Directors prior to allocation.

(d) Unrestricted:
Unrestricted net assets represents amounts which have not been committed to projects.

		2004	2003
	Cost	Market Value	Cost
Government of Canada bonds	$ 564,631	$ 564,659	-----
Crown Corporations secured notes	9,950,000	10,085,262	7,900,000
Provincial Government bonds	5,848,129	5,979,030	7,683,160
Canadian Banks secured notes	5,299,949	5,371,587	2,911,412
Corporations secured notes	9,154,944	9,302,210	10,299,527
Utilities bonds	710,296	713,759	599,923
	$ 31,527,949	$ 32,016,507	$ 29,394,022

Fixed rate investments yield to maturity 1.95% to 6.36% per annum. Interest of $1,363,099 (2003 - $1,450,941) was received during the year.

Interest rate risk: Interest rate risk arises from holding fixed rate investments.

Credit risk: Credit risk arises from the potential for an investee to fail. Credit risk is managed by the Foundation's Board of Directors.

3. Provision for committed programs:

Provision for committed programs represents the funding for the Foundation's committed program allocations for the following year and are comprised as follows:

4. Payable to Legal Aid Society of Alberta:

The Legal Profession Act requires the Foundation to pay 25% of its interest received on lawyers’ trust accounts to the Legal Aid Society of Alberta not more than six months after each fiscal year end.

5. Project refunds:

Project refunds represent funds returned to the Foundation from projects which did not require all the funds originally advanced to them by the Foundation.

6. Financial instruments:

The Foundation’s financial instruments recognized in the balance sheet consist of cash, accrued interest, grants payable and a payable to Legal Aid Society of Alberta. The fair values of these financial instruments approximate their carrying amounts.

7. Commitment:

At March 31, 2004, the Foundation was committed to future operating lease payments for office premises in the following amounts:

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