2011/08/15 Minutes

Minutes of the Meeting of the CIRA Board of Directors held via teleconference, on August 15, 2011 at 1:00 p.m.  Ottawa time

Directors attending: Paul Andersen, Richard Anderson, Kerry Brown, John Demco (ex-officio), Byron Holland (ex-officio), Jim Grey, John King, Rowena Liang, Lynne Mackan-Roy, Ross Rader, Tom Williams, Victoria Withers
        
Corporate Secretary: Michael Stewart

Guest: Paul Havey

Regrets: Heather Dryden (ex-officio), Louise Macdonald, Barry Shell

Recording Secretary: Lynn Gravel

1. Approval of Agenda

The agenda was approved as distributed.

2. Bank Signing Authorization

Staff presented an updated banking resolution to replace the role of the Manager of Finance with the role of Controller.  It was noted that this was required by the bank to add the new Controller as an authorized cheque signing authority.
    
It was therefore resolved that the Board of Directors approve the Banking resolution as presented.

(Moved: V. Withers, seconded: R. Liang, unanimously carried)

3. Approval of the 2011 Audited Financial Statements

The Chair of the Audit Committee informed the Board of Directors that the Committee had met on several occasions in the last months and most recently in July to review the proposed adjustments, the draft audited financial statements, the audit report and the audit findings report to the Audit Committee.   It was noted that, as a standard part of their audit, the external auditors did not identify any internal control deficiencies or any illegal and/or fraudulent activity as a result of their audit engagement. Staff noted that a change in accounting policy with respect to the revenue recognition and intangible assets will require a restatement of the FY10 audited financial statement.  

The Chair of the Audit Committee noted that as a result of the change in accounting policies on revenue recognition and capitalization of intangible assets, staff will be re-forecasting the FY12 budget to reflect the impact of this change.

Staff reviewed the audited financial statements, noting only the two primary restatements to the Statement of Financial Position and Statement of Operations.  Staff noted that as a result of prior period errors, the long-term assets increased by $729,118, the current and long-term liabilities increased by $4,924,968, the opening net assets decreased by $4,000,106 and the excess of revenue over expense decreased by $195,744.

It was also determined that costs directly attributable to the development of software to be used by CIRA met the recognition and measurement criteria under generally accepted accounting principles and thus should have been capitalized rather than recorded as a current period expense. The effect of this adjustment is that intangible assets were increased by $729,118 and salaries and benefits expense and consulting decreased by $538,357 and $190,761 respectively.

For fiscal 2010 and earlier, CIRA recognized the full annual registration fee as revenue when received, except for registration fees received in advance of the registration year which were recorded as deferred revenue. Accordingly, a full 12 months of service revenue was recognized as revenue at the commencement of each initial registration and subsequent renewal or anniversary date. Generally accepted accounting principles require that revenue from services be recognized as services are performed. Accordingly, CIRA has revised its revenue recognition to recognize revenue over the registration term. The effect of this adjustment is that the opening balance of net assets as at March 31, 2010 has been decreased by $4,000,106, registration revenue decreased by $924,862 and current and long-term portion of deferred revenue increased in aggregate by $4,924,968.

It was therefore resolved that:
 
1. The Board of Directors approve the financial statements of the Canadian Internet Registration Authority for the fiscal year ended March 31, 2011;

2. The financial statements of CIRA be presented to the members of CIRA at the next Annual General Meeting; and

3. P. Andersen and L. Mackan-Roy be authorized to sign CIRA’s 2011 financial statements on behalf of the Board of Directors to signify approval of the Board.

(Moved: L. Mackan-Roy, seconded: K. Brown, unanimously carried)

4. Next Meeting

The next meeting of the Board of Directors will be held in Vancouver on Monday, September 19, 2011 in conjunction with the Annual General Meeting on September 20, 2011.

5. In-Camera Session

The Board of Directors held an in camera session.

6. Adjournment

There being no further business, on motion by V. Withers and seconded by R. Liang, the meeting was concluded at 1:26 p.m.