1 PURPOSE OF THE ORGANIZATION
The Canadian Internet Registration Authority (CIRA) is a not for profit Canadian Corporation, incorporated on December 30, 1998, that is responsible for operating the dot-ca Internet country code Top Level Domain (ccTLD) as a key public resource for all Canadians in an innovative, open and efficient manner. CIRA may carry out other Internet related activities for the Canadian community in a similar manner.

The organization is registered as a not for profit organization under the Income Tax Act (Canada) and accordingly is exempt from income taxes.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the organization are in accordance with Canadian generally accepted accounting principles and their basis of application are consistent with those of the previous year. Outlined below are those policies considered particularly significant.

EQUIPMENT:
Equipment is recorded at acquisition cost. Contributed equipment is recorded at the fair market value at the date of the contribution. Amortization is provided on the straight-line method over their estimated useful lives at the following annual rates:

Amortization of deferred contributions is provided on the same basis as amortization of the related equipment contributed.

DEFERRED LEASE INDUCEMENTS:
Lease inducements received are deferred and amortized on a straight-line basis over a period of three years.

LONG LIVED ASSETS:
Equipment is recorded at cost less accumulated amortization. If circumstances indicate that its carrying value may not be recoverable an impairment loss is recognized. As at March 31, 2009 there were no known circumstances that would indicate that the carrying value of the equipment may not be recoverable.

REVENUE RECOGNITION:
The organization follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Unrealized gains and losses on held for trading financial assets are included in net income in the period in which they arise.

Registration fees are recognized as revenue when received except for registration fees received in advance of the registration year, which are recorded as deferred revenue.

Application fees are recognized as revenue when received.

Certification fees are recognized as revenue when the registrar is certified by CIRA.

FUTURE ACCOUNTING ISSUES:
The Canadian Institute of Chartered Accountants (CICA) has issued a new accounting standard, Section 1535 Capital Disclosures, which requires the disclosure of qualitative and quantitative information that enables users of financial statements to evaluate the organization’s objectives, policies and processes for managing capital. This standard, which will be adopted effective September 1, 2008, will only require additional disclosures in the financial statements.

The CICA has also issued revisions to the Section 4400 and certain other sections to amend or improve certain parts of the CICA Handbook that relate to not for profit organizations. With respect to presentations, these changes include making the disclosure of net assets invested in capital assets optional; making Section 1540 Cash Flow Statements applicable to not for profit organizations; and requiring the reporting of revenues and expenses on a gross basis in the statement of operations unless not required by other guidance.

The organization is currently assessing the impact of these new accounting standards on its financial statements.

USE OF ESTIMATES
The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known.

3 CASH
During the 2003 fiscal year, the Board of Directors established a restricted cash fund to equal the deferred revenue on registrations of dot-ca domain names as calculated at the end of the fiscal year. As at March 31, 2009 $5,969,834 (March 31, 2008 $4,700,922) of the cash is restricted for the fund.

During the 2008 fiscal year, the organization’s cash was grouped into a consolidated banking system. The group is comprised of three separate bank accounts.

The deferred revenue cash account is equal to the deferred revenue for registrations of dot-ca domain names as calculated at the end of the 2008 fiscal year.

The restricted net assets cash account is equal to the amount required to fund one year of operating expenses as calculated at the end of the 2008 fiscal year.

The operating cash account is unrestricted and is for the operations of the organization.
Transfers will be made in the 2010 fiscal period from the operating cash account to the deferred revenue cash account and the restricted net assets cash account to equalize the balances in the cash accounts to the March 31, 2009 deferred revenue as at March 31, 2009 and the operating expense balances for the year ended March 31, 2009 respectively.

THE ORGANIZATION'S INVESTMENT POLICY AS FOLLOWS:
CIRA will invest funds in excess of normal daily operating requirements to provide maximum yields while ensuring that assets are not exposed to undue risk. The Board of Directors approves the investment objectives and guidelines and evaluate the results of investment activities. The Audit Committee is responsible for approving the selection and appointment of an investment advisor.

The organization’s investment guidelines provide for investments in Government backed securities and CIDC secured investments.

As at March 31, 2009 the organization has invested its funds in the three separate bank accounts as noted above. The bank accounts provide an interest rate of prime - 1.75%. Each bank account is insured under the regulations of the Canadian Deposit Insurance Corporation.

4 EQUIPMENT

The organization started to amortize assets in the month in which they were purchased versus prior year’s methodology of the half rate rule. This change has been accounted for prospectively.

5 DEFERRED REVENUE
Deferred revenue represents funds received for registration of dot-ca domain names in advance of the year of registration and certification fees received from Registrars who have not been certified by CIRA.

The current portion of the deferred revenue represents revenue, which will be recognized in the 2010 fiscal year.

6 LEASE INDUCEMENTS
The organization received lease inducements for office space which are being amortized by the straight-line method over a period of three years. The lease inducements are recorded as a reduction of rent expense and will be fully amortized in the 2012 fiscal year.

7 DEFERRED CONTRIBUTIONS RELATED TO EQUIPMENT
Deferred contributions related to equipment represent the unamortized portion of the contributed equipment.

8 NET ASSETS

INTERNALLY RESTRICTED NET ASSETS
During the 2005 fiscal year, the Board of Directors approved a policy change to the internally restricted net assets that were equal to nine months operating expenses. The change states that internally restricted net assets are equal to one year operating expenses as calculated at the end of each fiscal year and that any unrestricted net surplus each fiscal year is to be allocated to the internally restricted net assets until such time that the restricted net asset amount has been achieved. The March 31, 2009 financial statements reflect a transfer from the unrestricted net assets to the internally restricted net assets of $496,784.

INVESTED IN EQUIPMENT
The amount invested in equipment represents that portion of net assets that is not available to the organization for other purposes.

9 RELATED PARTY TRANSACTIONS
The financial statements include Directors fees paid to CIRA’s 12 Directors of $97,500 (2008: $101,200). These services were provided in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

10 DONATED PROPERTY AND SERVICES
During the year, voluntary services were provided. Because these services are not normally purchased by the organization and because of the difficulty of determining their fair value, other donated services are not recognized in these statements.

The property and equipment includes contributed computer hardware received from Sun Microsystems during the 2006 fiscal period as their contribution to CIRA’s work on the ENUM project. The fair value of the equipment received was $9,380.

11 COMMITMENTS
The organization is committed to minimum amount rentals under a long-term lease for premises, which commenced August 1, 2008 and expires July 31, 2018. Minimum rental commitments under this lease approximate $212,724 due within one year. Minimum commitments for successive years are as follows:

CIRA is also responsible for its share of operating costs, which are estimated by the landlord to be $ 224,424 per annum.

12 OPERATIONS
In the normal course of business it is common for CIRA to receive claims regarding domain name registrations. Management believes that these claims will not materially affect the financial position of the organization.

The organization is currently unable to estimate the outcome and the effect, if any, of these claims. Accordingly, no provision has been made in the accounts for the claims.

13 FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS
The corporation’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities. The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximates fair value as a result of the relatively short term nature of these instruments.

CREDIT RISK
The credit risk is minimal due to the nature of the organization’s receivables.

INTEREST RATE RISK
The cash invested with variable interest rates will expose the organization to interest rate risk.

14 COMPARATIVE FIGURES
The previous years comparative figures have been reclassified to conform to current years presentation.