CIRA Annual Report 2007-2008

2007ANNUAL REPORT2008

© 2008 Canadian Internet Registration Authority.All rights reserved.350 Sparks Street, Suite 306Ottawa, Ontario K1R 7S8Canada(877) 860-1411www.cira.caDesign: 76designPrinted in Canada

2007ANNUAL REPORT2008

TABLE OF CONTENTSMESSAGE FROM THE CHAIR . . . . . . . . . . . . . . . . . . 2MESSAGE FROM THE PRESIDENT & CEO . . . . . . 31CIRA PASTAND FUTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53DELIVERINGTO OUR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . 135COMMITTING TO HIGHER STANDARDSIN OFFICE OPERATIONS . . . . . . . . . . . . . . . . . . . . . 2572007– 2008FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . 372DELIVERING ONGOVERNANCE REFORM . . . . . . . . . . . . . . . . . . . . . . 94DNS, TECHNOLOGYAND SYSTEMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196COMMITTING TOWORLDWIDE OUTREACH . . . . . . . . . . . . . . . . . . . . 318STATEOFTHE INDUSTRY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

2007–2008 CIRA Annual ReportMESSAGE FROM THE CHAIROn behalf of the Board of Directors of the Canadian Internet RegistrationAuthority (CIRA), I am pleased to present this Annual Report for thefiscal year ending March 31, 2008.2Last year CIRA invested in the right technology,infrastructure, and people to establish itsposition as a leader and steward of Canada’sunique Internet identity, reaching the one milliondot-ca domains milestone on April 15, 2008.A Strategic Plan, approved by the Board inDecember 2007, laid out CIRA’s strategic goalsfor the next three years. At a high-level these are:to ensure effective and accountable stewardshipof the dot-ca domain, to make CIRA recognizedinternationally as the registry standard ofexcellence in the operation of a ccTLD, tobe a benchmark for exemplary accountablegovernance within the Internet community, andto achieve organizational excellence.Among one of the most visible changes madein fiscal ’08 was the hiring of a new Presidentand Chief Executive Officer, Byron Holland.Byron immediately immersed himself in therole by translating the Strategic Plan into a newOperations Plan and Budget for fiscal ‘09. Byronhas proven himself as a valuable leader of CIRAas it establishes itself as a mature organizationin a dynamic Internet community with domainnaming, Internet security, and growth.In closing I would like to thank our Boardof Directors and Staff for their effort andcommitment to CIRA in building an organizationto frontier the challenges and opportunities aheadin managing Canada’s strong Internet presence.The Strategic Plan set the foundation for CIRA’sfocus in the second half of fiscal 08. The keypriorities were governance reform, the databaserestructure, a focus on marketing the dot-cadomain, and improvements in operationalexcellence.Sincerely,Debi RosatiChair, CIRA Board of Directors

MESSAGE FROM THE PRESIDENT AND CEOIt is with great pleasure that I present CIRA’s 2007 – 2008 Annual Report,my first with the organization.2007–2008 CIRA Annual Report3The Canadian Internet Registration Authority(CIRA) has had an extremely active year in2007 – 2008. My key initial priority was to translatethe Strategic Plan’s clear goals and prioritiesinto an actionable Operations Plan and Budgetfor fiscal ‘09. These high level goals; governancereform, the database restructure, a focus on marketingof dot-ca domain name, and improvementsin operational excellence have become a clearroadmap for the organization to use in navigatingthrough a rapidly changing Internet space.Fiscal ’08 saw progress toward one of CIRA’s longtermgoals: the rewriting of the dot-ca registry. Thecurrent registry system was designed and built in2000, and while it has functioned well, the currentlarger volume and complexity require a newsystem to enhance performance and provide newfeatures and flexibility. On completion, this projectwill encompass a complete revision of the registry’sinfrastructure layer (database and servers),applications layer (software programs), and governinglayer (business rules and company policies).To facilitate its growing staff last year CIRA beganlooking for a larger office space. In early 2008 itacquired appropriate rental space in the samebuilding it has occupied since 2001, at 350 SparksStreet. The new office plan includes roughly12,000 square feet of office space designed toaccommodate up to 50 staff members. In addition,there will be a dedicated computer lab, whichincludes special cooling to provide an optimalenvironment for the hardware.To conclude, I thank the staff, management,past and present members of CIRA’s Boardof Directors who have all contributed to thecontinuing success of the dot-ca domain. Theirwork at CIRA helped build an internationallyrespected organization. From its creation in1987 to the achievement of the one milliondot-ca domains milestone, dot-ca reflects thestrength and diversity of the Canadian Internetcommunity. I expect that 2008 – 2009 will be anactive and productive year for the CanadianInternet Registration Authority.One of the key investments made in fiscal ’08was the addition of nine new members to CIRA’sstaff, enlarging CIRA from 26 to 35 employees.The hiring initiative was part of a two-year planto reach a staff of 46 by late summer 2008 andto complement the Strategic and OperationalPlans with necessary skills and talent required toestablish CIRA as a mature organization.Sincerely,Byron HollandPresident and Chief Executive Officer, CanadianInternet Registration Authority

In the 10 years sinceit started, CIRA hasemployed some 60people (only), and I’veenjoyed working withevery one of them.— Ron Harbottle,Interim Chief Operating Officer (Retired)

1CIRA PASTAND FUTURESTAND ON GUARDCIRA is the Ottawabased,not-for-profitcorporation mandatedby Canada’s Governmentto reliably and efficientlymaintain the dot-caInternet domain for thebenefit of all Canadians.CIRA develops andimplements the policiesand rules for managingthe dot-ca domainnamespace and operatesthe hardware andsoftware requiredto keep dot-caworking robustly.

“ Finding the right domain namewas the key to our success,and Carpool.ca is so easy toremember and speaks directlyto our Canadian audience.Carpool.ca is featured onhighway signs in Calgary,Edmonton, British Columbia’sOkanagan region, and oncampuses across Canada.People use the site to findconvenient carpool partners,protect the environment, andsave and hundreds of dollarsannually.”2007–2008 CIRA Annual Report7CIRA was incorporated in December 1998through the efforts of two founders: businessmanager Ron Harbottle and Internet pioneerBernard Turcotte, who produced the businessplan, oversaw the development of supportingsoftware, and launched the company.Mr. Turcotte would serve as CIRA’s Presidentand CEO until August 2007, while Ron retiredin June 2008 with the title Interim ChiefOperating Officer.By 2000 CIRA had grown to a handful of stafferswith an interim Board of Directors and wasready to open its doors to new registrations. InDecember CIRA assumed the dot-ca registry,and its 60,000 existing dot-ca domain names,from the University of British Columbia.“CIRA and I have come along way from those earlydays. We are both now ina period of transition asCIRA revamps its businessprocedures to confronta dynamic and changingmarket and I look forwardto summers at thecottage.— Ron Harbottle,Interim Chief Operating Officer (Retired)”Twelve Directors are elected and hold votingseats; CIRA’s President and CEO and two BoardDirectors, including a representative fromIndustry Canada, are appointed and hold nonvotingseats. CIRA holds an annual membershipwideonline election to fill vacant Board seats.

CIRA now has areliable membershipfigure based onthe principal of oneperson one vote.— Ed Toy,Manager, Registration Services

2DELIVERING ONGOVERNANCEREFORMOUR GOVERNANCECIRA is steered bya member-electedBoard of Directorsthat sets policies andstrategies to supportCanada’s dot-caregistry. The CIRABoard consists of14 Directors plus ourPresident and CEO.Directors normallyserve three-year termswith no term limit onre-election.

2007–2008 CIRA Annual Report10BOARD OF DIRECTORS MEETINGS ANDANNUAL GENERAL MEETINGCIRA’s Board of Directors met nine times in’07–’08. Board-meeting agendas, minutes, andresolutions are posted on CIRA’s website:http://www.cira.ca/en/about_minutes.html andhttp://www.cira.ca/en/about_resolution.html.CIRA’s 2007 Annual General Meeting (AGM)took place on September 6 at Toronto’s RoyalMeridian King Edward Hotel. Open to all CIRAMembers and the public, the event was attendedby 270 Members and 35 non-members. On-siteregistration was greatly expedited through newattendee registration-and-check-in software andnew CIRA Membership cards. The AGM wassimultaneously webcast to permit interactivevoting and a question-and-answer period forinterested parties unable to attend in person.Members attending in person were also ableto cast their ballot in the Board of DirectorsElections onsite.“ONE MEMBER, ONE VOTE”In 2005, CIRA began pursuing a program ofcorporate governance reforms to ensure that“fair and sound practices are embedded acrossthe organization …including appropriate balanceof representation on the Board of Directors”(2005– 2008 Strategic Plan). The program’sfinal phase was achieved in fiscal ’07–’08 withCIRA’s new membership enrolment process andmembership drive. Because CIRA’s Board ofDirectors is elected by CIRA Members, ensuringa diverse and representative membership bearsclosely on CIRA’s governance and leadership.Because CIRA elections are held online andinclude thousands of voters, the need hadbeen felt for some time at CIRA to verify itsmembership to ensure the principle of“One Member, one vote.” CIRA Bylaws state thata person or organization is entitled to only oneCIRA membership and one vote in elections,no matter how many dot-ca domain names thatperson or organization may hold.

New processes were designed and deployed toverify Member identity and ensure a current,accurate membership roll. During the springof 2007 CIRA launched a membership drive tosimultaneously verify the identities of all existingMembers and enrol new ones. The membershipdrive required significant contributions fromCIRA’s legal, marketing and communications,development, and customer service teams forthe first six months of the fiscal year to achievethis goal in time for the 2007 Board of DirectorsElections.CIRA’s 2007 elections were held September 6 to 13and 1,454 Members voted online to elect fourDirectors: three from the Nomination Committeeslate and one from the Members’ slate. The onlineelection software, built in-house by CIRA, wasupgraded to add additional features and security.The election software performed well and CIRA’sindependent Elections Returning Officer auditedthe election process and signed off withoutany issues.“CIRA STAFF PROFILEWe made a big pushto improve customerservice generally in2007 – 2008. In that time,CIRA improved its abilityto listen to and talk tothe end users.”— Ed Toy,Manager, Registration ServicesA VERIFIED MEMBERSHIPThe response to the new Membership enrolmentprocess was overwhelming. To meet thechallenge, CIRA quickly expanded RegistrationsServices’ Customer Service Unit (CSU) andestablished a membership call centre to guidemembership-applicants through the procedureand to process the thousands of applicationsthat arrived online and by fax. At the peakof the campaign, CIRA was processing 1,000membership-related phone calls per day, plusfaxes, and email responses.This major campaign achieved its goals ofraising users’ awareness of CIRA, verifyingcurrent contact information, and ensuringan active and participating membership15,400 Members strong.2007–2008 CIRA Annual Report11

The new WHOIS policyis a good example ofwhere policy drivestechnology.— Tina Sollows,Technical Writer

3DELIVERINGTO OURCUSTOMERSTOWARD A MILLIONDOT-CA’SCIRA has remainedsuccessful at attractingCanadians to the dot-cadomain in a highlycompetitive market.From March 2004 toMarch 2008, thenumber of dot-caregistrations climbeda remarkable155 percent: fromjust under 400,000domain names to justunder a million. OnMarch 31, 2008, thedot-ca registry counted991,696 activedomain names.

Richard Findlaywww.bladetape.caVancouver,British ColumbiaWhile fiscal ’07 –’08 did not quite see themillion mark, it did set the record for net newregistrations in a single year: 172,951, a jumpof 21 percent from the prior year. Registrantrenewals for fiscal ’07 –’08 also remained strongat 76.7 percent. These growth figures place dotcaon a par with other domain names worldwidedespite the fact that dot-ca domain names areconfined to the relatively small population ofCanada due to Canadian presence requirements.In January 2008 with the million-namesmark ahead on the horizon, CIRA launched amarketing campaign to celebrate the expectedmilestone. CIRA held a Tell Us Your Dot-ca Storycontest, inviting Registrants across Canadato recount how they use their dot-ca domainnames. The response was overwhelming — fromover 4,000 personal profiles submitted, CIRAchose eight of the most inspiring and intriguingto use on its campaign website,www.onemilliondomains.ca, published in March2008 in anticipation of the millionth domain.The profiles were featured in national media andoffered a personal side to the website which alsofeatured a history of dot-ca and information onhow to register a dot-ca.LISTENING AND TALKING TO REGISTRANTSIn 2007 – 2008 CIRA greatly increased itsknowledge of and contact with our largeststakeholder and customer, the Registrant.Major Registrant-focused efforts includedthe membership drive (see Chapter 2), themarketing campaign celebrating One MillionDot-ca Domains, finalizing CIRA’s new WHOISpolicy, and a number of improvements toCIRA’s Registrations Services’ procedures andcommunications to provide an increased levelof customer service to our Registrants. Suchprojects strengthened CIRA as a Canadianinstitution by widening our accessibility toeveryday online Canadians.IMPROVED CUSTOMER SERVICEDuring 2007 – 2008 CIRA’s Customer Service Unit(CSU) instituted several significant proceduralchanges for its telephone and email contact

“ Bladetape.ca is the mostimportant tool in mybusiness today and is morethan just an online store.I use it daily to interactwith customers, marketBladeTape to a worldwideaudience, post pictures, makeannouncements, answerquestions, and publishtestimonials and customerstories. Coupled with thegood people behind me,my dot-ca website is anintegral and essential part ofBladeTape’s success.”2007–2008 CIRA Annual Report15with Registrants with the goal of deliveringbetter customer service and faster responsetime. CIRA identified and ranked a number ofcommon customer-service issues and set outto improve processes, communication andcustomer experience. Key changes involvedthe application of call-centre standards, revisedservice scripts, more supervisory presence,performance monitoring, a Registrant passwordretrieval feature and more-user-friendly CIRAemail form letters.CIRA started by tracking wait times and callabandonmentrates for incoming telephonesupportcalls. Upon noticing higher thanaverage wait times and abandonment rates weintroduced new procedures to provide quickerresponse time which immediately produceda drop in abandonment. All calls are nowautomatically recorded and stored, allowing forbetter auditing, documentation, and review bymanagement, in addition to providing a clearrecord in the event of a dispute. Email supportwas improved through mandating a five-dayresponse window on email support queries.Help with forgotten passwords was the topcustomer-service request. Under the old system,a Registrant who had forgotten a passwordhad to contact his or her Registrar for retrieval.To streamline this process CIRA introduced anew direct customer service and introduced apassword-retrieval tool on its website athttps://registrants.cira.ca/password/forgot/en.The new service allows for much faster, automaticresponse to this common service request and hasproven successful in simplifying the dot-causer experience.To improve communication between CIRA andRegistrants, CIRA revised emails covering14 common topics that CIRA routinely sends toRegistrants, for example, to alert them that theirdomain-name registration is about to expire andto invite them to renew. The new formats includeimprovements such as clearer language, a moreattractive layout, and adding the relevant domainname in the email subject line. Such changeshelped bring a more fluid interaction betweenCIRA and Registrants in fiscal ’07– ’08.

2007–2008 CIRA Annual Report16UNVEILING THE NEW WHOISCIRA’s revised WHOIS service reached thefinal stage of preparation in fiscal ’07–’08 inadvance of the planned launch of the newservice scheduled for June 2008. This launchwas the culmination of four years of preparationwhich included public consultations, legalconsultations, revisions to CIRA’s privacy policy,and development of new software and businessprocedures to enact the changes.“CIRA”— Jason Riley,Registration Support Agentinformation regarding certain organizationsmay be withheld based on the organization’sdocumented need for privacy.CIRA STAFF PROFILEcustomer service hasundergone a transformationin the past year. PreviouslyCIRA would often sendcustomers back to theirRegistrar, now we helpout where they’re havingtrouble.WHOIS is an Internet protocol that allows usersto look up information about website domainnames, including contact information forRegistrants, such as name and phone number.CIRA’s new Privacy Policy distinguishes betweenindividual and non-individual Registrants, andsafeguards individuals’ contact informationfrom being publicly displayed via dot-ca WHOISwhile still allowing access to information fornon-individual domain-name holders suchas corporations and other organizations.Alternatively, individual Registrants may elect tohave their information displayed on WHOIS;The new WHOIS was developed in responseto concerns over online privacy and identitytheft. The new WHOIS is the fruit of two publicconsultations by CIRA with dot-ca Registrantsand various interest groups including privacyand civil-liberties advocates, law enforcement,and legal counsel representing trademarkholders. Throughout the process, CIRA listenedto all stakeholders to create policy that balancedRegistrant privacy with the need forlegitimate access.

Although originally scheduled for April 2008,WHOIS implementation was postponed by60 days to better address technical concernsvoiced by Registrars and to adjust policy andprocedures to better accommodate the needsof law enforcement and trademark holders.The resulting WHOIS sets dot-ca as a leader inInternet privacy, and is a prime example of howpolicy and public interest can drive technology.WORKING WITH CERTIFIED REGISTRARSWhile CIRA maintains the dot-ca Registry, itdoes not directly offer registration, renewal,or transfer of individual dot-ca domain namesto Registrants. Instead a nationwide networkof CIRA Certified Registrars provides theseservices to customers. Registrars also offer avariety of accompanying services such as webhosting and website development, to enabledomain holders to maintain their domain names.As of March 31, 2008, CIRA counted 146 CertifiedRegistrars, a net increase of 20 over the prior12 months. During the year 23 new registrars“were certified, while 3 certifications expired. Alist of CIRA certified Registrars is available onCIRA’s website at http://ro.cira.ca/re_choose_en.CIRA’s wholesale pricing to Registrars in fiscal’07 – ’08 remained steady at $8.50 Cdn per domainname per year — exactly the same price as since2005. Retail pricing is determined by individualRegistrars based on their business needs andincludes the cost of providing support, registrationsystems, payment processing, and additionalservices (such as domain parking or DNS) offeredby the Registrar.CIRA STAFF PROFILEI work on continuouslyimproving our softwareapplications, which isgreat because I’m aperfectionist. My majorproject last year wasthe new dot-ca WHOISwhich added privacyprotection.— Anne Marie Walton,Application Developer”2007–2008 CIRA Annual Report17

In 2007 – 2008we gained moreresources, wrotebetter code, andcommunicated withcleaner emails.— Patrick Bujold,Manager, Development

4DNS, TECHNOLOGY,AND SYSTEMSA SYSTEM UNDERDEMANDProviding a reliable,secure, highperformanceDNS(Domain NameSystem) system iscentral to CIRA’smandate as Canada’stop-level domainname registry.

Jane Flanaganwww.janeflanagan.caToronto,OntarioAs dot-ca registrations have climbed steadilytoward a million domains, and Internet usagein general has increased, the demands on thedot-ca DNS system’s hardware, software, andother network infrastructure that underpins ithas grown. During calendar year 2007, CIRAaveraged 316.5 million requests per day. Basedon the growth rates of other ccTLDs (CountryCode Top Level Domains) CIRA can expect tohandle 3 billion requests per day by mid-2011.In addition to normal Internet traffic, the DNSsystem must also address the increased menaceof deliberate attacks aimed at Internet resourcesdesigned to destabilize or deny access towebsites or other network resources. Threatssuch as spammers, hackers, and the rising threatof a Botnet attack (where an army of centrallycontrolled zombie computers spread acrossthe Internet targeting a specific network) allchallenge the strength of the dot-ca DNS systemand the skill and readiness of its administrators.As a core service, CIRA has taken great lengthsto build and administer a robust DNS to servicedot-ca domains. CIRA’s DNS system enjoyed anexcellent year: the dot-ca DNS maintained100 percent uptime and extended its reacharound the world.GLOBAL DNS PRESENCEIn January 2008, the dot-ca DNS became globallydistributed. This advance came from activationof a new Anycast “cloud” to augment CIRA’sexisting DNS infrastructure with a 16-nodenetwork that encompasses the United States,South America, Europe, Africa, and Asia. Theeight new Anycast nodes join CIRA’s core DNSnodes: five Canadian nodes, located in Montreal,Ottawa, Toronto (two), Vancouver, and twoNorth American nodes located in California.The Anycast cloud makes dot-ca uniformlyand instantly available anywhere while addingadditional redundancy and capacity to the dot-caDNS. The Anycast system dramatically improves

“ My website showcases mywork as a journalist andblogger and provides easylinks to biographical andprofessional information. Asa writer and journalist with acollection of publications forboth online and printed mediamy dot-ca site allows me toarchive my writing in a singleonline portfolio. My dot-cawebsite allows me to reachan entirely new communityand to inject more of my ownpersonality into my work.”2007–2008 CIRA Annual Report21the performance and response time to dot-ca DNSqueries for computers outside of North America.Anycast employs a distributed cluster architecturewhich makes the DNS system robust: if one node’sequipment should fail, queries are directed to thenearest available node. The additional Anycastnodes also provide a significant protection againstDNS attacks by adding increased capacity (toprotect against ‘flood’ attacks) and a second DNStechnology platform to create a heterogeneousDNS infrastructure that is resistant to a singleattack vector.The Anycast nodes are provided under contractby the experienced DNS service providerNeustar/UltraDNS. CIRA’s decision to contractthe project rather than acquire and maintainthe nodes itself was the result of a time-costanalysis and the desire to rapidly deploy DNSperformance capacity and security capacity inthe most cost-effective and timely manner.IMPROVING THE CORE DNS INFRASTRUCTUREDuring fiscal 2008, three DNS nodes withinCanada received equipment upgrades includingnew servers, routers, and firewalls in keeping withequipment retirement schedules and performanceupgrades, and one new DNS node in Ottawa wasadded. Future projects include replacing the twosites in California.This attention to performance, equipmentupgrades, and the new Anycast deploymentin fiscal 2008 achieved better resiliency,performance, and uniform availability of dot-caDNS. Dot-ca truly has become a global product.COGNOS BUSINESS INTELLIGENCEIn fiscal 2008 CIRA invested in Cognos BusinessIntelligence software. Business Intelligencesoftware consolidates information by collectingand storing organizational data and providinganalytical and reporting mechanisms formeaningful and actionable business metrics.

2007–2008 CIRA Annual Report22Because of the centralization of information,every staff member accesses common datasimplifying decision making and providinguser focused reporting.CIRA began importing data into the BusinessIntelligence system in fiscal 2008. Thisdata set was limited in nature to allow forsystem customization and testing. CIRA’sSQL Programmer Analyst, Philip Mann wasmanaging this process. Results from the testingprocess have indicated that additional set-upand customization work is required.CIRA began building its data warehouse in 2008.The registry’s main database including its keydimensions was the first data-source importedinto the warehouse. Other data sources havesince followed. Among these sources is data thathelps CIRA better understand and analyze themarket categories that use dot-ca domains. Planshave been made to add additional data streamsinto CIRA’s warehouse and CIRA will continueto use Cognos Business Intelligence, one of theworld’s leading Business Intelligence solutionsto provide insightful and meaningful access toour data.DISASTER RECOVERY AND THEDATABASE BACKUPAs a key public resource CIRA must ensure thatit is able to maintain both DNS and the Registryin the event of a service interruption, networkoutage, or disaster. Essential to this goal is systemredundancy in the form of a dedicated backupsystem that is in a separate geographical locationfrom the main one. Although CIRA alreadymaintains multiple system nodes and backupcapabilities, the systems did not allow for seamlessservice delivery and the failure of one locationmay have led to limited service outages. CIRA’sOperations team deployed new hardware systemsto support the backup site in late fiscal 2008.These changes allow CIRA to provide service evenin the event of a failure of a primary node with nointerruption of service.

Bolstered by three new staff positions, includinga Database Developer, CIRA’s Developmentdepartment accomplished most of the redesignof the primary database in autumn 2007. Theredesign also offered the opportunity to upgradeand migrate both databases to Oracle 10g fromOracle 9i to deliver enhanced features, additionalutility, and greater accessibility support.The backup database and the Oracle upgradewere completed together in April with the actualmigration taking place in May 2008.OTHER DEVELOPMENTS IN DEVELOPMENTCIRA’s Development team had a busy yeardesigning and improving software used by theorganization. In addition to supporting coreRegistry systems with minor upgrades and bugfixes, several larger scale projects were alsoundertaken throughout 2008.“schedule. The membership drive andsupporting administrative system, electionssoftware, Annual General Meeting registrationand check-in, and Registrant-passwordretrieval all required significant Developmentresources. The nearly flawless performanceof all these programs — some of them highlycomplex — clearly demonstrates the kind of jobthat CIRA quietly does well.CIRA STAFF PROFILEAs a Systems Administratormy job is to be an overallcomputer manager and theultimate generalist. Sincemy focus is managing DNSServices, I deal more withexternal partners than otherCIRA staff to coordinateCIRA’s contribution tothe international DNShierarchy.— Matthew PounsettDNS Operations Manager”2007–2008 CIRA Annual Report23The Development team supported the newWHOIS which required significant developmentto core systems and an aggressive development

The company realizedit needed an HRdepartment mainly foremployee relationsas it moves from astart-up to a mature,forward-lookingorganization.— Heidi Hauver,Manager, Human Resources

5COMMITTING TOHIGHER STANDARDSIN OFFICEOPERATIONSA HIRING YEARIn anticipation ofmeeting establishedgoals such as thedatabase restructuringand an increasedfocus on marketingfiscal 2008 sawdramatic growth inthe size and makeupof CIRA’s staff.

Deb Viccars &Catherine Staveleywww.frocks.caVancouver,British ColumbiaNine new positions were created, enlargingthe company from 26 to 35 employees, or by34 percent, with Development and Marketingboth receiving a significant boost in staffing.Ten jobs were filled by replacement hiring,including two senior management positions.Additional changes to the organizationalstructure created several manager positions,including Manager of Development, Managerof Operations, and Director of Marketing andCommunications, in anticipation of the growthof these respective departments.development of an Operating Plan and budgetto accomplish the organization’s new three-yearStrategic Plan.TAKING CIRA TO NEW OFFICESAs CIRA continues to grow, so has its demandfor office space to house staff and supportequipment. By the middle of 2007 CIRA beganto search for larger offices to accommodate thelarger number of staff mandated by the StrategicPlan while creating a more comfortable workenvironment.CHANGES AT THE TOPIn August 2007, Bernard Turcotte, CIRA’s longservingCEO, stepped down to pursue otheropportunities. Ron Harbottle was appointedinterim Chief Operating Officer, while CIRAconducted a nationwide search for a new CEO.At the November 20, 2007, Board of Directorsmeeting, the Board voted to appoint ByronHolland as CIRA’s new President and CEO,effective January 21, 2008. Upon joining CIRA,Mr. Holland hit the ground running with theFollowing approval by the Board in March 2008,CIRA negotiated the lease of a larger space(approximately 12,500 square feet) in CIRA’sexisting building at 350 Sparks Street, with theplan that CIRA would migrate wholly fromFloor 11 to Floor 3 in summer 2008.The newoffices have room for over 50 staff members —46 are expected to start off there — and willaccommodate both staff and computer systemscomfortably. Notably, the new facilities includeprovisions for the special power and coolingsystems required by CIRA’s onsite network and

“ Frocks.ca is more than ourdomain name. It is a meetingplace for our customers,a source of inspiration forbrides, and an opportunity forsisters and friends around theworld to connect, sit back, andchat about while enjoying theirown glass of wine.”2007–2008 CIRA Annual Report27server hardware which were not available onFloor 11. The choice to keep CIRA in a downtownbuilding, enjoying a central location and highenergysurroundings, reflects management’s wishto maintain a dynamic workplace environmentfor staff and to promote CIRA as a nationalinstitution, located in the heart of the capital.STANDARDIZING OUR RELATIONS WITH STAFFTraditionally CIRA had handled Human Resources(HR) as part of general office administrationunder its Corporate Affairs Manager. With therapid growth of the company through 2007,management recognized that a dedicated HRdepartment was needed for recruitment, policy,and staff relations. In August 2007 CIRA createdand filled the HR Manager position.During the seven remaining months of fiscal’07–’08, HR revised CIRA’s Human ResourcesPolicies and Procedures to standardizeCIRA’s staff environment. The new procedureintroduced an orientation program andprobation period for new hires, exit interviewsfor departing employees, and enhancedrecruitment practices. HR also introduced aPerformance Management and Review system,including incentive bonuses and annualperformance reviews. Although officiallyintroduced in May 2008, these procedures werelargely developed during fiscal ’07–’08.EMPHASIZING WORKPLACE SAFETYFor any good employer, no concern standshigher than staff health and safety. Accordingly,CIRA established a worker health-and-safetyprogram that is compliant with Ministry ofLabour standards. Recent CIRA safety initiativesinclude fire-emergency and first-aid training,weekly workplace-safety message emails, theupkeep of first-aid resources, and individualizedergonomic assessments and fittings of each staffmember’s work environment. CIRA also adoptedthe Healthy Workplace Initiative of the NationalQuality Institute (NQI), to implement workplacehealth and safety practices.

2007–2008 CIRA Annual Report28UPGRADES IN OFFICE SYSTEMS ANDOPERATIONSCIRA continued to improve internal systems toincrease employee productivity and efficiency.Scheduled hardware upgrades to staffcomputers and monitors continued on a rollingthree-year basis to ensure that current hardwareis capable of running demanding applications.Microsoft Exchange Clustered Solution wasdeployed to deliver enhanced email capabilitiesand allow for better data collection and moreresponsive technical support. Migration toExchange included an improved system ofarchiving staff emails and remote access tosimplify access to email for staff while travelingor working outside of the office. Centralmonitoring was initiated for all office-computerservices, including printers and email systems.“”— Heidi Hauver,Manager, Human ResourcesCISCO’s Call Manager Express and Unityphone system was deployed. This Voice overInternet Protocol (VoIP) system has contributedsubstantially to office efficiency, providingservices such as the automatic recording ofphone calls that has proven so helpful to CIRA’sCustomer Service Unit.Also CIRA’s asset tracking and equipment-disposalprocedure was improved, including new securefile deletion and hardware-donation policies.NEW FINANCIAL MANAGEMENT SYSTEMTo meet organizational demands, CIRA madesignificant changes to its accounting softwareprogram and banking practices duringfiscal ’07 – ’08.CIRA STAFF PROFILEAlong with recruiting Ihave been working withsenior management tostandardize and developnew HR policies andpractices.

Between January and May, CIRA staffculminated a thorough evaluation period byselecting and migrating to Oracle’s JD Edwardsaccounting software package. JD Edwardsreplaced the existing QuickBooks system CIRAhad been using since its inception. QuickBookswas retired in May 2008. JD Edwards offers amore robust program with greater reporting andoversight capacity to simplify CIRA’s financialmanagement and provide greater detail andanalysis of its financial position.“CIRA STAFF PROFILEOn paper I’m the inofficeOps guy. ButI’m really the jack ofall trades, heavy-dutytroubleshooter. The jobcan vary widely frombeing asked to helpwith everything from amouse not working toserver problems withRegistrars.— Richard Wong,Systems Administrator”2007–2008 CIRA Annual Report29Further toward better efficiency and transparency,in March 2008 CIRA split its cash account, fromone united banking account to three consolidatedaccounts. The multiple accounts separate CIRA’sthree distinct types of funds — Operating,Restricted Net Assets, and Deferred Revenue.The new structure allows easier reporting and aclearer presentation of CIRA’s funds.

While dot-ca domainsare all about Canadians,the Internet is a globalnetwork that affectsevery country, language,and culture. To provideeffective stewardshipof the dot-ca resource,CIRA must activelyparticipate in bothinternational standardsbodies and policy settingorganizations.— Norm Ritchie,Chief Information Officer

6COMMITTINGTO WORLDWIDEOUTREACHA HIGHER PROFILEFOR DOT-CADuring 2007 CIRAcontinued to worktoward increasing thevisibility of the dot-cabrand and promotingCanadian intereston the Internetthrough participationwith peers andinternationalorganizations.

Jennifer Hamiltonwww.domesticgoddess.caToronto,OntarioThis outreach was pursued along twomain avenues:Working with industry peers CIRA Boardand management participated in Internetgovernanceorganizations like ICANN (theInternet Corporation for Assigned Names andNumbers, based in Marina del Rey, California)and CENTR (the Council of European NationalTop Level Domain Registries, based inBrussels) through conferences and workinggroups. CIRA’s participation ensures thatCanada maintains a strong voice in the globalInternet community on policy, governance, andtechnology issues.Within Canada CIRA has greatly enhanced itsmarketing efforts. New planning and resourceswent to promote dot-ca as a desirable productfor Canadians registering a domain name, anincreased focus on media relations to publicizedot-ca through mainstream North Americanmedia, participation in tradeshows in majorCanadian cities, and sponsorship of local andnational conferences and events.CIRA AND ICANNRepresentatives from CIRA’s Board and staffattended all three ICANN meetings in 2007:San Juan, Puerto Rico; Los Angeles, USA; andNew Delhi, India. While remaining in support ofICANN and ICANN’s governance model, CIRAhas raised public objections to ICANN’s slowprogress in achieving better transparency andaccountability in governance in the past. InMay 2007 CIRA again raised concerns in an openletter to ICANN about its methods regardingpublic consultations. In response, ICANNmanagement met with CIRA representatives infall 2007 and expressed a commitment to addressCIRA’s concerns.ICANN’s initiatives toward better accountability— including appointment of external auditors andimproved reporting of Board minutes — wereacknowledged in a letter of December 2007from CIRA Board Chair Debi Rosati to ICANNPresident and CEO Paul Twomey. The letterstated in part: “The adoption of these initiativeshas greatly increased our confidence in ICANNwith respect to transparency and accountability.

“ Domesticgoddess.ca is myfood blog and serves as botha memoir and a cookbookbecause these two thingsare always so closely relatedin my life. Since Januaryof 2004 I have watcheddomesticgoddess.ca growin popularity to an amazing23,000 unique visitors, 84,000page views, and 630,000 hitsper month! My readers aresearching for somethingdelicious to do in the kitchenand I’m glad that my dot-cawebsite provides the answer …what could be better?”2007–2008 CIRA Annual Report33In recognition of ICANN’s significant stridesto address our concerns, CIRA is pleased toconfirm that we are prepared to participate fullyin ICANN’s various committees and supportingorganizations.”surveys and studies the results of which wereshared by CENTR members with the goal ofexchanging valuable information and providingbetter insight into the challenges and potentialapproaches experienced by peer organizations.CIRA reiterated its support and favourableprogress being made by ICANN through asubmission to the Nation Telecommunicationsand Information Administration (NTIA) MidtermReview of the Joint Project Agreement(JPA) in February 2008.CIRA AND CENTRCENTR is an association of 47 ccTLD registries,including, Britain’s dot-uk, Italy’s dot-it, andGermany’s dot-de. No longer confined toEuropean membership, it serves as a vital forumfor discussions about legal, policy, technology,administration and marketing issues that affecttop national registries. As a full CENTR memberand long-time supporter, CIRA attendedthree CENTR meetings in fiscal 2008 with anemphasis on policy, legal, and technical issues.CIRA also participated in several internalCIRA AND TECHNICAL GROUPSCIRA continues to work closely with theBaltimore-based American Registry for InternetNumbers (ARIN), a not-for-profit organizationthat manages distribution of Internet numberresources (including IPv4 and IPv6 addressspace) in the U.S., Canada, and some two dozenCaribbean and North Atlantic nations. Two CIRAassociates — Board Director Paul Andersenand CIRA staff member Matt Pounsett, a DNSexpert — are the two Canadians currently onARIN’s Advisory Council, a 15-member electedbody responsible for proposing changes to ARIN’spolicy. Mr. Andersen and Mr. Pounsett wereelected by the ARIN community, and representCanadian interests with the Council.

2007–2008 CIRA Annual Report34Mr. Pounsett also participates in the CaliforniabasedDNS Operations, Analysis, and ResearchCenter (DNS OARC), an international forumfor discussing high-level DNS operations. DNSOARC runs several meetings per year; as part ofits commitment to OARC, CIRA will be hostingthe autumn 2008 meeting in Ottawa.Among several other technical and policyorganizations whose meetings Mr. Pounsettattends is NANOG, the North American NetworkOperators’ Group. NANOG sponsors face-tofaceand online forums on topics in networkoperations.MARKETING OUR DOT-CA PRODUCTPursuant to raising awareness of dot-ca inCanada and worldwide, CIRA dramaticallyramped up its marketing efforts in fiscal 2008.In the summer of 2007 CIRA hired a Directorof Marketing and Communications to tacklenumerous new projects in development. In fall2007 CIRA’s Marketing staff grew from two tofour, with hiring of a Marketing Manager anda Public Relations Communications Specialist.With these staff additions a more systematic,integrated approach to CIRA’s Marketing andCommunications has been introduced. CIRAincreased its production of press releases and itscontact efforts with print, broadcast, and onlinenews reporters. A Media Room was opened onthe CIRA website to archive press releases andother public information.CIRA continued its participation in tradeshowsthroughout 2007. CIRA exhibited at IT 360° inToronto in May 2007, Infosec Toronto in June2007, and at the Massive Technology Showin Vancouver in February 2008. Our presenceat such venues gives CIRA visibility in targetmarkets, allows members of the Canadianpublic to learn about dot-ca registration fromour representatives, and allows Registrants andMembers the opportunity to interact directlywith CIRA to ask questions.

CIRA’s new marketing capabilities were putto task in the development of a program andcampaign to promote the achievement ofthe Registry’s one millionth domain nameregistration. CIRA launched a promotionalwebsite, www.onemilliondomains.ca, inMarch 2008, to publicize its approachingmilestone of a million registrations. This wascoupled with a strong marketing campaign inboth print and online outlets and focused mediacoverage to support the event. The MarketingDepartment was also closely involved inpublicizing CIRA’s online elections, AGM,and WHOIS initiatives.“CIRA STAFF PROFILEAs Corporate Counsel,I am responsible fordrafting, reviewing, andnegotiating contracts,conducting legalresearch, and providinglegal advice. Sincejoining CIRA a yearago, I have not lookedback! I get to work withgreat people, deal withinteresting files, andadvise on policy issueswhich have an impacton Canadians.— Albert Chang,Corporate Counsel”2007–2008 CIRA Annual Report35

The improvementsmade to CIRA’s financialsystems in the last year,including the launchof the new accountingsoftware system,provide a foundationfor improved financialmanagement andreporting.— Susan Puderer,Manager, Finance

7CANADIANINTERNETREGISTRATIONAUTHORITYFINANCIALSTATEMENTSAuditors’ Report . . . . . . . . . . . . . . . . . . . . 38Statement of Financial Position . . . . . . . . . . 39Statement of Net Assets . . . . . . . . . . . . . . . 42Statement of Operations . . . . . . . . . . . . . . 43Statement of Cash Flows . . . . . . . . . . . . . . 44Notes to the Financial Statements . . . . . . . . 45MARCH 31, 2008

2007–2008 CIRA Annual Report38AUDITORS’ REPORTTo the Members of the Canadian Internet Registration AuthorityWe have audited the statement of financialposition of the Canadian Internet RegistrationAuthority as at March 31, 2008 and thestatements of operations and net assets andcash flows for the year then ended. Thesefinancial statements are the responsibility of theorganization’s management. Our responsibilityis to express an opinion on these financialstatements based on our audit.We conducted our audit in accordance withCanadian generally accepted auditing standards.Those standards require that we plan and performan audit to obtain reasonable assurance whetherthe financial statements are free of materialmisstatement. An audit includes examining, ona test basis, evidence supporting the amountsand disclosures in the financial statements. Anaudit also includes assessing the accountingprinciples used and significant estimates madeby management, as well as evaluating the overallfinancial statement presentation.In our opinion, these financial statementspresent fairly, in all material respects, thefinancial position of the organization as atMarch 31, 2008 and the results of its operationsand its cash flows for the year then ended inaccordance with Canadian generally acceptedaccounting principles.KRIENS~LAROSE, LLPChartered AccountantsLicensed Public AccountantsToronto, OntarioMay 14, 2008

CANADIAN INTERNETREGISTRATION AUTHORITYSTATEMENT OF FINANCIALPOSITIONAS AT MARCH 31, 20082007–2008 CIRA Annual Report392008$2007$ASSETSCURRENT ASSETSCash (Note 3)OperatingDeferred revenueRestricted net assetsAccounts receivablePrepaid expenses2,133,5624,221,6495,803,89883,525442,08512,684,71913,055,799——96,472390,21913,542,490EQUIPMENT(Note 4, 10)1,897,8761,004,594TOTAL ASSETS14,582,59514,547,084See accompanying notes to the financial statements

2007–2008 CIRA Annual Report402008$2007$LIABILITIESCURRENT LIABILITIESAccounts payable and accrued liabilities (Note 5)Current portion of deferred revenue (Note 6)Current portion of deferred contributions relatedto equipment (Note 7, 10)760,4922,207,8123,1272,971,4313,060,6612,338,6843,1275,402,472LONG TERM LIABILITIESDeferred revenue (Note 6)Deferred contributions related to equipment(Note 7, 10)2,493,1107822,493,8921,882,9653,9081,886,873TOTAL LIABILITIES5,465,3237,289,345See accompanying notes to the financial statements

2007–2008 CIRA Annual Report412008$2007$NET ASSETSUnrestricted net assetsInternally restricted net assets (Note 8)Invested in equipment (Note 8)—7,219,3961,897,876449,2475,803,8981,004,594TOTAL NET ASSETS9,117,2727,257,739TOTAL LIABILITIES AND NET ASSETS14,582,59514,547,084See accompanying notes to the financial statementsApproved On Behalf Of The Board:Debi RosatiChair, CIRA Board of DirectorsRick AndersonChair, Audit Committee

2007–2008 CIRA Annual Report42CANADIAN INTERNETREGISTRATION AUTHORITYSTATEMENT OF NET ASSETSFOR THE YEAR ENDED MARCH 31, 2008UnrestrictedNet Assets$InternallyRestrictedNet Assets$Invested inEquipment$Total2008$Total2007$Balance, beginningof yearExcess of revenues overexpenses for the yearEquipment purchasesAmortization ofdeferred contributionAmortizationInterfund transfer(Note 8)449,2471,859,533(1,500,012)3,126603,604(1,415,498)5,803,898————1,415,4981,004,594—1,500,012(3,126)(603,604)—7,257,7391,859,533————5,211,2572,046,482————BALANCE, END OF YEAR—7,219,3961,897,8769,117,2727,257,739See accompanying notes to the financial statements

CANADIAN INTERNETREGISTRATION AUTHORITYSTATEMENT OF OPERATIONSFOR THE YEAR ENDED MARCH 31, 20082007–2008 CIRA Annual Report43REVENUESRegistration feesInterestCertification feesApplication feesOther revenueOPERATIONAL EXPENSESSalaries and benefitsConsultingComputer operations and networkingProducts and mediaTravel and corporate relationsOffice and generalRentMembershipsMeetingsOffice telecommunicationsStaff training and developmentInsuranceTranslationBank charges and interestLoss on disposal of equipmentAmortization2008$8,600,269496,147140,00025,00014,3819,275,7973,263,428970,471700,864427,534361,705327,460257,443150,188117,477100,16555,70450,02022,4444,8172,940603,6047,416,2642007$7,214,824486,193129,00019,0001,3637,850,3802,559,254733,413548,69378,266446,42176,723238,651139,624110,41073,86261,11949,74242,4084,104—641,2085,803,898EXCESS OF REVENUES OVER EXPENSES FOR THE YEAR1,859,5332,046,482See accompanying notes to the financial statements

2007–2008 CIRA Annual Report44CANADIAN INTERNETREGISTRATION AUTHORITYSTATEMENT OF CASH FLOWSFOR THE YEAR ENDED MARCH 31, 20082008$2007$CASH WAS PROVIDED BY (USED IN):CASH FLOWS FROM OPERATING ACTIVITIESCash receipts from registrants and registrarsInterest receivedCash paid to suppliers and employees9,258,923506,094(9,161,695)603,3227,845,596471,324(4,777,573)3,539,347CASH FLOWS FROM INVESTING ACTIVITIESPurchase of equipmentChange in cashCash, beginning of yearCash, end of yearCASH CONSIST OF:OperatingDeferred revenueRestricted net assets(1,500,012)(896,690)13,055,79912,159,1092,133,5624,221,6495,803,89812,159,109(640,651)2,898,69610,157,10313,055,79913,055,799——13,055,799See accompanying notes to the financial statements

CANADIAN INTERNETREGISTRATION AUTHORITYNOTES TO THE FINANCIALSTATEMENTSFOR THE YEAR ENDED MARCH 31, 20082007–2008 CIRA Annual Report451. PURPOSE OF THE ORGANIZATIONThe Canadian Internet Registration Authority(CIRA) is a not for profit Canadian Corporation,incorporated on December 30, 1998, that isresponsible for operating the dot ca Internetcountry code Top Level Domain (ccTLD) asa key public resource for all Canadians in aninnovative, open and efficient manner. CIRA maycarry out other Internet related activities for theCanadian community in a similar manner.2. SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIESThe accounting policies of the organizationare in accordance with Canadian generallyaccepted accounting principles and their basisof application are consistent with those of theprevious year. Outlined below are those policiesconsidered particularly significant.Equipment:Equipment is recorded at acquisition cost.Contributed equipment is recorded at the fairmarket value at the date of the contribution.Amortization is provided on the straight-linemethod over their estimated useful lives at thefollowing annual rates:Computer hardware and software . . . . . . 3 yearsFurniture and fixtures . . . . . . . . . . . . . . . . . . 3 yearsOffice equipment . . . . . . . . . . . . . . . . . . . . . . . 3 yearsLeasehold improvement . . . . . . . . . . . . . . . . 3 yearsAmortization of deferred contributions isprovided on the same basis as amortization ofthe related equipment contributed.Revenue Recognition:The organization follows the deferral methodof accounting for contributions. Restrictedcontributions are recognized as revenue in theyear in which the related expenses are incurred.Unrestricted contributions are recognizedas revenue when received or receivable ifthe amount to be received can be reasonablyestimated and collection is reasonably assured.Unrealized gains and losses on held for tradingfinancial assets are included in net income in theperiod in which they arise.

2007–2008 CIRA Annual Report46Registration fees are recognized as revenuewhen received except for registration feesreceived in advance of the registration year,which are recorded as deferred revenue.Application fees are recognized as revenuewhen received.Certification fees are recognized as revenuewhen the registrar is certified by CIRA.Financial instruments:The Association has adopted new standardsrelated to recognition and measurement offinancial instruments as required by CICAHandbook Section 3855. The standards requirethat held-for-trading financial instruments bemeasured at fair value and all gains and lossesbe included in excess of revenues over expensesin the period in which they arise.The organization’s financial instruments consistof cash, accounts receivable, accounts payableand accrued liabilities and deferred revenue. Thecarrying amounts of these financial instrumentsapproximate their fair values because of theshort term nature of these assets and liabilities.Use of Estimates:The preparation of financial statements inaccordance with Canadian generally acceptedaccounting principles requires management tomake estimates and assumptions that affect thereported amount of assets and liabilities anddisclosure of contingent assets and liabilitiesat the date of the financial statements and thereported amount of revenues and expensesduring the reported period. These estimatesare reviewed periodically, and, as adjustmentsbecome necessary, they are reported in earningsin the period in which they become known.3. CASHDuring the 2003 fiscal year, the Board ofDirectors established a restricted cash fund toequal the deferred revenue on registrations of.ca domain names as calculated at the end ofthe fiscal year. As at March 31, 2008 $4,700,922(March 31, 2007 $4,221,649) of the cash isrestricted for the fund.

2007–2008 CIRA Annual Report47During the 2008 fiscal year, the organization’scash was grouped into a consolidated bankingsystem. The group is comprised of threeseparate bank accounts.The deferred revenue cash account is equal tothe deferred revenue for registrations of .cadomain names as calculated at the end of the2007 fiscal year.The organization’s investment policy is as follows:CIRA will invest funds in excess of normal dailyoperating requirements to provide maximumyields while ensuring that assets are not exposedto undue risk. The Board of Directors mustapprove the selection and appointment ofinvestment managers, approve the investmentobjectives and guidelines and evaluate the resultsof investment activities.The restricted net assets cash account is equalto the amount required to fund one year ofoperating expenses as calculated at the end ofthe 2007 fiscal year.The organization’s investment guidelines providefor investments in “A” rated Governmentsecurities, bank securities and “A” ratedcorporate securities.The operating cash account is unrestricted and isfor the operations of the organization.Transfers will be made in the 2009 fiscal periodfrom the operating cash account to the deferredrevenue cash account and the restricted netassets cash account to equalize the balances inthe cash accounts to the March 31, 2008 deferredrevenue as at March 31, 2008 and the operatingexpense balances for the year endedMarch 31, 2008 respectively.As at March 31, 2008 the organization hasinvested its funds in the three separate bankaccounts as noted above. The bank accountsprovide an interest rate of prime-1.75%. Eachbank account is insured under the regulations ofthe Canadian Deposit Insurance Corporation.

2007–2008 CIRA Annual Report484. EQUIPMENTCost$AccumulatedAmortization$Net2008$Net2007$Computer hardwareComputer softwareFurniture and fixturesOffice equipmentLeasehold improvements2,756,4391,291,269163,06675,349192,7301,542,593782,980134,98337,20283,2191,213,846508,28928,08338,147109,511601,111168,00136,25343,178156,0514,478,8532,580,9771,897,8761,004,5945. ACCOUNTS PAYABLE6. DEFERRED REVENUEAND ACCRUED LIABILITIESDeferred revenue represents funds received forThe March 31, 2007 accounts payable includes registration of .ca domain names in advance$2,143,656 owed to the University of British of the year of registration and certification feesColumbia (UBC) as CIRA’s final payment for the received from registrars who have not beenpurchase of the management authority over the certified by CIRA..ca Registry. The $2,143,656 was paid to UBC inthe 2008 fiscal period.The current portion of the deferred revenuerepresents revenue, which will be recognizedin the 2009 fiscal year.

2007–2008 CIRA Annual Report497. DEFERRED CONTRIBUTIONS RELATEDTO EQUIPMENTDeferred contributions related to equipmentrepresent the unamortized portion of thecontributed equipment.8. NET ASSETSInternally Restricted Net AssetsDuring the 2005 fiscal year, the Board ofDirectors approved a policy change to theinternally restricted net assets that were equalto nine months operating expenses. The changestates that internally restricted net assetsare equal to one year operating expenses ascalculated at the end of each fiscal year and thatany unrestricted net surplus each fiscal year isto be allocated to the internally restricted netassets until such time that the restricted net assetamount has been achieved. The March 31, 2008financial statements reflect a transfer from theunrestricted net assets to the internally restrictednet assets of $1,415,498.Invested in EquipmentThe amount invested in equipment representsthat portion of net assets that is not available tothe organization for other purposes.9. RELATED PARTY TRANSACTIONSThe financial statements include Directors feespaid to CIRA’s 12 Directors of $101,200. Theseservices were provided in the normal courseof business and are measured at the exchangeamount, which is the amount of considerationestablished and agreed to by the related parties.

2007–2008 CIRA Annual Report5010. DONATED PROPERTY AND SERVICES11. INCOME TAXESDuring the year, voluntary services wereThe organization is a not for profit organizationprovided. Because these services are notunder Section 149(1)(l) of the Income Tax Actnormally purchased by the organization and (Canada) and as such, is exempt from thebecause of the difficulty of determining their payment of income taxes.fair value, other donated services are notrecognized in these statements.12. COMMITMENTSCurrent LeaseThe property and equipment includesThe organization is committed to minimumcontributed computer hardware receivedamount rentals under the long term lease forfrom Sun Microsystems during the 2006 fiscal premises, which expires January 31, 2011.period as their contribution to CIRA’s work Minimum rental commitments remaining underon the ENUM project. The fair value of the this lease approximate $325,981 includingequipment received was $9,380.$115,052 due within one year. Minimumcommitments for successive years are as follows:2010 . . . . . . . . . . 115,0522011 . . . . . . . . . . . 95,877CIRA is also responsible for its share ofoperating costs, which are estimated by thelandlord to be $139,728 per annum.

2007–2008 CIRA Annual Report51Subsequent EventSubsequent to year end, the organizationentered into a new lease for premises whichcommences on August 1, 2008 to and expireson July 31, 2018. This lease replaces the originalpremises lease outlined above. Minimum rentalcommitments under this lease approximate$2,133,653 including $184,537 due within oneyear. Minimum commitments for successiveyears are as follows:13. OPERATIONSIn the normal course of business it is commonfor CIRA to receive claims regarding domainname registrations. Management believesthat these claims will not materially affectthe financial position of the organization. Theorganization is currently unable to estimate theoutcome and the effect, if any, of these claims.Accordingly, no provision has been made inthe accounts for the claims.2010 . . . . . . . . . . . . . . . . . . 219,2762011 . . . . . . . . . . . . . . . . . . 219,2762012 . . . . . . . . . . . . . . . . . . 219,2762013 . . . . . . . . . . . . . . . . . . 235,5162014 to 2018 . . . . . . . . 1,055,772CIRA is also responsible for its share ofoperating costs, which are estimated by thelandlord to be $231,336 per annum.

Since 1988, dot-cadomain usagehas grown at over20% per year. Thisgrowth is remarkableconsidering thatdot-ca domains arereserved exclusivelyfor Canadians.— Byron Holland,President and CEO

8STATE OF THEINDUSTRYAs the not-for-profitorganization responsiblefor managing the dot-cadomain, CIRA ispresenting this Stateof the Industry Reportto provide a benchmarkfor this rapidlychanging industry.Five key categoriesare examined; MarketShare, Registrations,Registrants, RegistryData, and Registrars.This report is intendedas a source of referencefor those involvedor interested in thisfascinating industryin Canada.

2007–2008 CIRA Annual Report3,000,0002,500,0002,746,652MARKET SHARE542,000,000CANADIAN MARKET SHARE1,500,0001,000,000991,696500,0000282,877214,520 185,08564,598.com .ca .net .info .org .biz80,000,00070,933,17460,000,00040,000,00020,000,00016,000,00012,000,00010,000,0008,000,0006,000,0004,000,0002,000,000011,125,58510,402,3027,150,9456,126,7855,981,4294,890,061ComGermany - deNetChina - cn2,579,457United Kingdom - uk2,523,152Org1,775,400InfoEuropean Union - euNetherlands - nl1,418,719Biz1,278,282Argentina - arItaly - it975,357United States - us946,160Brazil - br932,974Switzerland - ch914,389Japan - jp888,745Australia - au883,448Korea - krFrance - frCanada - caGLOBAL STANDING* As at June 30, 2007

REGISTRATIONSDOT CA DOMAIN REGISTRATIONS2007–2008 CIRA Annual Report551,200,0001,000,000991,696817,514800,000654,230600,000506,169400,000281,460333,256406,169200,000188,21502001 2002 2003 2004 2005 2006 2007 2008COMPOSITION BY PROVINCIAL LEVEL45.00%40.00%38.81%35.00%30.00%25.00%24.07%20.00%15.00%10.00%5.00%0.00%1.80%0.35%13.69%9.05%5.60%1.93%0.12%0.88%3.70%.ab.ca .bc.ca .mb.ca .nb.ca .nl.ca .ns.ca .nu.ca .on.ca .pe.ca .qc.ca .sk.ca

2007–2008 CIRA Annual Report56REGISTRATIONS (cont.)MONTHLY NEW REGISTRATIONS35,00030,00025,00020,00026,85524,86224,65623,75822,80023,44422,63230,39324,92320,07029,07028,84729,67615,00010,0005,0000Mar. 07Apr. 07May. 07Jun. 07Jul. 07Aug. 07Sept. 07Oct. 07Nov. 07Dec. 07Jan. 08Feb. 08Mar. 08OVERALL RENEWAL RATE, ANNUAL COMPARISON80 %79.4 %78 %76 %75.7 %76.5%77.7 %77.6 %76.7 %74 %72 %71.5 %70 %68 %66 %2002 2003 2004 2005 2006 2007 2008

REGISTRATIONS (cont.)DISTRIBUTION OF DOMAIN NAMES BY STARTING CHARACTER2007–2008 CIRA Annual Report5712.00%10.00%8.00%6.00%4.00%2.00%0.00%0 1 2 3 4 5 6 7 8 9 a b c d e f g h i j k l m n o p q r s t u v w x y zDISTRIBUTION OF DOMAIN NAMES BY LENGTH9.00%8.00%7.00%6.00%5.00%4.00%3.00%2.00%1.00%0.00%5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41

2007–2008 CIRA Annual ReportREGISTRATIONS (cont.)58NUMBER OF DOMAINS BY PROVINCE60.00%50.00%40.00%30.00%20.00%10.00%0.00%49.95%17.83%14.08%9.96%2.15% 1.27% 1.97% 1.51% 0.33% 0.11% 0.46%0.10%AlbertaBritish ColumbiaManitobaNew BrunswickNewfoundlandNova ScotiaNunavutOntarioPrince Edward IslandQuebecSaskatoonYukon

REGISTRANTSREGISTRANT LOCATION BY TOP 10 CITIES2007–2008 CIRA Annual Report59150,000120,000144,909122,87490,00086,62084,29360,00053,36730,00023,33517,00913,79512,24510,6880Greater Toronto AreaVancouverMontrealOttawaCalgaryEdmontonWinnipegHamiltonHalifaxLondonTOP 10 REGISTRANTS BY NUMBER OF DOMAINS HELD14,00012,55412,00010,0008,9888,0006,0004,0004,6034,208 4,1473,501 3,3982,862 2,6832,4182,0000A B C D E F G H I J

2007–2008 CIRA Annual ReportREGISTRANTS (cont.)INDIVIDUAL VS. NON-INDIVIDUAL REGISTRANTS6039 %61 %IndividualNon-individualSINGLE VS. MULTIPLE DOMAINS HELD23 %77 %SingleMultipleREGISTRANT COMPOSITION BY LANGUAGE (English vs. French)4 %96 %FrenchEnglish

18,000,000.00REGISTRY DATADNS QUERIES PER HOUR2007–2008 CIRA Annual Report16,000,000.0014,000,000.0013,617,859.0512,524,800.9714,267,134.4715,359,401.706112,000,000.0010,000,000.008,000,000.006,000,000.004,000,000.002,000,000.000Q1 - 2007 Q2 - 2007 Q3 - 2007 Q4 - 2007REGISTRARSREGISTRAR BUSINESS — TOP 10 RARS(no names used)180,000160,000157,763140,000135,089120,000100,00089,585 83,35249,038 44,800 44,041 42,747 37,89430,63580,00060,00040,00020,00001 2 3 4 5 6 7 8 9 10