annual report 2011/12 - Manitoba Agricultural Services Corporation

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Statement of Cash FlowsFor the Year Ended March 31, 2012(in thousands of dollars)2012 2011Cash provided by (used for):OperatingDeficit for the year $ (187,861) $ (54,585)Amortization of tangible capital assets 75 89Changes in:(187,786) (54,496)Receivables (96,099) 4,638Loans receivable 639 (2,370)Accounts payable and accrued liabilities 21,257 6,989Claims payable 103,486 4,271Provisions for losses on guaranteed loans 623 (118)Future employee benefits 77 459Prepaid expenses (7) (17)Inventories held for use 108 (87)Cash used for operating activities (157,702) (40,731)CapitalAcquisition of tangible capital assets (41) (54)Cash used for capital activities (41) (54)InvestingInvestments redeemed 153,070 32,158Loans disbursed (95,898) (77,009)Loan principal received 87,460 79,708Cash provided by investing activities 144,632 34,857FinancingDebt repayments to the Province of Manitoba (73,639) (68,824)Loans from the Province of Manitoba 84,000 64,200Cash provided by (used for) financing activities 10,361 (4,624)Net decrease in cash and cash equivalents (2,750) (10,552)Cash and cash equivalents, beginning of year 76,603 87,155Cash and cash equivalents, end of year $ 73,853 $ 76,603Cash and cash equivalents are comprised of the following:Investments $ 191,475 $ 350,227Investments with terms greater than 90 days (122,845) (275,915)Investments with terms of 90 days or less 68,630 74,312Cash 5,223 2,291$ 73,853 $ 76,603Supplemental Cash Flow InformationInterest paid $ 15,857 $ 16,619Interest received $ 23,620 $ 22,843The accompanying notes and schedules are an integral part of these financial statements.34Manitoba Agricultural SeRVICes Corporation – 2011/12 Annual Report
Notes to Financial Statementsas at March 31, 2012 (tabular amounts in thousands of dollars)1. NATURE OF ORGANIZATIONThe Manitoba Agricultural Credit Corporation (MACC) was established under The Agricultural Credit CorporationAct. The Manitoba Crop Insurance Corporation (MCIC) was established under The Crop Insurance Act. As a result ofthe proclamation of The Manitoba Agricultural Services Corporation Act, C.C.S.M. c.A25 on September 1, 2005, MACCand MCIC were amalgamated to form a provincial Crown corporation called the Manitoba Agricultural ServicesCorporation (MASC) and the legislation establishing the former corporations was repealed.MASC provides lending, insurance and other programs and services. Its core programs include direct loans toagriculture producers, loan guarantees, AgriInsurance and Hail Insurance. MASC also delivers the Wildlife DamageCompensation Program, Farmland School Tax Rebate Program and other programs and services.2. SIGNIFICANT ACCOUNTING POLICIES AND REPORTING PRACTICESMASC’s financial statements are presented in accordance with Canadian Public Sector Accounting (PSA) standards.MASC adopted PSA standards with a transition date of April 1, 2010. More details on this transition are provided in Note 4.MASC elected the early adoption of PS3450 Financial Instruments and PS3041 Portfolio Investments. No adjustmentto financial assets and liabilities was required.(A)(B)InvestmentsFunds in excess of operational needs are invested with the Province of Manitoba, in accordance with Section 52(1)of The Manitoba Agricultural Services Corporation Act. Investments are carried at cost or amortized cost.Investments are normally held to maturity, but if early redemption is required and results in a gain or loss, thegain or loss is realized on disposal.Loans ReceivableLoans receivable are recorded at cost or amortized cost less any amount for provisions for credit losses.Provisions for impaired loans are made when collection is in doubt. Interest is accrued on loans receivableuntil the date of write-off. The provision represents management’s best estimate of probable losses. Wherecircumstances indicated doubt as to the ultimate collectability of principal or interest, specific provisionsare established for individual accounts. These accounts are valued at the lower of their recorded value or theestimated net realizable value of the security held for the accounts. In addition to the provision for loss on loansidentified on an individual loan basis, MASC establishes a general provision representing management’s bestestimate of additional probable losses based on other factors including the composition and credit quality of theportfolio and changes in economic and business conditions. Actual loan accounts that have been written off arecharged to the appropriate provision once the available security has been realized and all other collection effortshave been exhausted.Periodically the Province of Manitoba will approve special assistance loans with concessionary interest rates.These loans are discounted using the present value method when they involve significant concessionary elements.The discounted amount is expensed at the time the loans are disbursed and is amortized to revenue over the lifeof the concessionary terms.Manitoba Agricultural SeRVICes Corporation – 2011/12 Annual Report 35
Page 1: 2011/12Annual ReportLENDING AND INS
Page 4 and 5: The Honourable Philip S. Lee, C.M.,
Page 6: Chair’s MessageThere can be no do
Page 9 and 10: Corporate GovernanceMandate of the
Page 11 and 12: Strategic Plan ReviewMASC’s visio
Page 13 and 14: • Progress on MASC’s corporate-
Page 16 and 17: expected grazing period and the num
Page 18 and 19: Table 1: Summary of 2011/12 AgriIns
Page 20 and 21: Table 2 - Five Year Insurance Stati
Page 22 and 23: Also included in this category are
Page 24 and 25: Rural Entrepreneur Assistance (REA)
Page 26 and 27: Farmland School Tax RebateSince 200
Page 28 and 29: Lake Dauphin Emergency FloodProtect
Page 30 and 31: Responsibility for Financial Statem
Page 32 and 33: Original signed by30MANITOBA AGRICU
Page 34 and 35: Statement of OperationsFor the Year
Page 38 and 39: (C)Claims PayableClaims payable is
Page 40 and 41: (N) Measurement UncertaintyThe prep
Page 42 and 43: 5. WILDLIFE DAMAGE COMPENSATION PRO
Page 44 and 45: of the program‘s administrative e
Page 46 and 47: Vacation pay liabilityThe amount re
Page 48 and 49: Remaining terms to maturities are a
Page 50 and 51: The Operating Credit Guarantee for
Page 52 and 53: The estimated farm loan incentives
Page 54 and 55: The Board of Directors is responsib
Page 56 and 57: 2012Scheduled Repaymentsnot Interes
Page 58 and 59: In addition to the financial protec
Page 60 and 61: Schedule 2:Schedule Of OPERATIONS A
Page 62: LENDING CORPORATE OFFICEUnit 100-15

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