Chair's Report

Financial report

Archived Financial Reports

Financial Report: Year ended March 31, 2005

• 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, 2005 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, 2005 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 27, 2005

	2005	2004
Current assets:
Cash	$ 146,336	$ 148,818
Accrued interest	384,730	509,367
	531,066	658,185
Fixed rate investments (note 2)	31,569,746	31,527,949
	$ 32,100,812	$ 32,186,134
Liabilities
Current liabilities:
Grants payable: General	$ 8,797,535	$ 8,502,112
Grants payable: Provision for committed programs (note 3)	6,957,248	6,811,119
	$ 15,754,783	$ 15,313,231
Payable to Legal Aid Society of Alberta (note 4)	2,411,437	2,854,653
	$ 18,166,220	$ 18,167,884
Net Assets
Internally restricted (note 1)	13,914,496	13,622,238
Unrestricted (note 1)	20,096	396,012
	13,934,592	14,018,250
Commitment (note 7)
	$ 32,100,812	$ 32,186,134

See accompanying notes to financial statements.

	2005	2004
Revenue:
Interest received on lawyers' general trust accounts	$ 9,645,747	$ 11,418,613
Interest earned from fixed rate investments	1,199,307	1,446,660
	10,845,054	12,865,273
Expenses:
Salaries	156,951	227,906
Investment advisory fee	66,575	64,960
Rent and parking	47,788	43,848
Board travel and meetings	26,844	33,159
Insurance	14,010	13,227
Professional fees	9,630	12,170
Postage	3,993	3,670
Staff travel and meetings	3,506	10,927
Printing	3,006	2,309
Telephone	2,079	2,521
Website and computer supplies	1,819	1,751
Other	1,358	11,434
Photocopying	865	1,113
Office supplies	676	948
Bank charges	365	196
	339,465	430,139
Allocation to Legal Aid Society of Alberta (note 4)	2,411,437	2,854,653
Excess of revenue over expenses before project allocations	8,094,152	9,580,481
Deduct: Project allocations from unrestricted net assets:
Research and reform	512,017	822,500
Law libraries	292,800	233,000
Public legal education	348,475	417,955
Native and student assistance	13,491	30,023
	1,166,783	1,503,478
Provision for committed programs	7,101,416	7,052,602
Add:
Project refunds (note 5)	71,535	81,430
Allocations withdrawn from projects	18,854	21,393
	90,389	102,823
Excess (deficiency) of revenue over expenses	$ (83,658)	$ 1,127,224

See accompanying notes to financial statements.

	Internally Restricted	Unrestricted	2005 Total	2004 Total
Balance, beginning of year	$ 13,622,238	$ 396,012	$ 14,018,250	$ 12,891,026
Excess (deficiency) of revenue over expenses	-----	(83,658)	(83,658)	1,127,224
Internally designated Transfers	292,258	(292,258)	-----	-----
Balance, end of year	$ 13,914,496	$ 20,096	$ 13,934,592	$ 14,018,250

See accompanying notes to financial statements.

Grants Payable - General:

	2005	2004
Balance, beginning of year	$ 8,502,112	$ 8,698,717
ADD:
Allocations from Provision for Committed Programs:
Research and reform	2,624,091	2,545,638
Law libraries	875,000	875,000
Public legal education	2,673,395	2,638,083
Native and student assistance	782,801	743,629
	6,955,287	6,802,350
Project allocations from unrestricted net assets:
Research and reform	512,017	822,500
Law libraries	292,800	233,000
Public legal education	348,475	417,955
Native and student assistance	13,491	30,023
	1,166,783	1,503,478
DEDUCT:
Allocations withdrawn from projects:
Research and reform	17,345	15,000
Public legal education	1,509	2,446
Native and student assistance	-----	3,947
	18,854	21,393
Allocations paid:
Research and reform	3,038,424	3,107,672
Law libraries	1,010,819	1,049,965
Public legal education	2,983,758	3,327,337
Native and student assistance	774,792	996,066
	7,807,793	8,481,040
Balance, end of year	$ 8,797,535	$ 8,502,112

See accompanying notes to financial statements.

	2005	2004
Cash provided by (used in):
Operations:
Excess (deficiency) of revenue over expenses	$ (83,658)	$ 1,127,224
Changes in non-cash working capital:
Grants payable	441,552	53,647
Payable to Legal Aid Society of Alberta	(443,216)	957,132
	(85,322)	2,138,003
Investments:
Amortization of premiums and discounts	(60,743)	(33,064)
Purchase of fixed rate investments	(21,403,455)	(19,855,397)
Maturities of fixed rate investments	21,422,401	17,754,534
Accrued interest	124,637	(21,893)
	82,840	(2,155,820)
Decrease in cash	(2,482)	(17,817)
Cash, beginning of year	148,818	166,635
Cash, end of year	$ 146,336	$ 148,818

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. The interest earned is calculated and remitted to the Foundation based on agreements made with individual financial institutions. 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) Interest received on lawyers' general trust accounts:
The Foundation reports interest received on lawyers' general trust accounts as received. The lawyers' general trust accounts are not the property of, nor administered by, the Foundation. Therefore the Foundation is unable to determine the amount of interest that may be accruing until such time as amounts are received from the individual financial institutions.

(b) 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.

(c) 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.

(d) 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.

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

2. Fixed rate investments:

	2005		2004
	Cost	Market Value	Cost	Market Value
Government of Canada T-Bills	$ 1,407,896	$ 1,409,563	$ 564,631	$ 564,659
Crown Corporations notes	8,207,388	8,193,057	9,950,000	10,085,262
Provincial Government notes	3,250,000	3,240,369	5,848,129	5,979,030
Canadian Banks notes	13,417,598	13,449,468	5,299,949	5,371,587
Corporations notes, debentures	4,787,848	4,843,555	9,865,240	10,015,969
Municipal notes	499,016	499,331	-----	-----
	$31,569,746	$31,635,343	$31,527,949	$32,016,507

Fixed rate investments yield to maturity 2.15% to 6.35% per annum. Interest of $1,360,676 (2004 - $1,363,099) 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 in accordance with their investment policy.

3. Provision for committed programs:

Provision for committed programs represents the funding for the Foundation's committed program allocations for the following year.

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, 2005, the Foundation was committed to future operating lease payments for office premises, expiring August 31, 2006, in the following amounts:

8. Comparative figures:

Certain comparative figures have been reclassified to conform with the financial statement presentation adopted in the current year.

Archived Reports

Updated: July 2005