nunavut broadband development corporation … consolidated 201… · consolidated statement of...

NUNAVUT BROADBAND

DEVELOPMENT CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

NUNAVUT BROADBAND DEVELOPMENT CORPORATION

INDEX

MARCH 31, 2013

Page

INDEPENDENT AUDITORS' REPORT 1 - 2

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statement of Operations 3 - 4

Consolidated Statement of Changes in Fund Balance 5

Consolidated Statement of Financial Position 6

Consolidated Statement of Cash Flows 7

Notes to the Consolidated Financial Statements 8 - 17

SUPPLEMENTARY INFORMATION

Schedule of Operations by Activity 18 - 20

INDEPENDENT AUDITORS' REPORT

MembersNunavut Broadband Development Corporation

We have audited the accompanying consolidated financial statements of the Nunavut BroadbandDevelopment Corporation, which comprise the consolidated statement of financial position as atMarch 31, 2013, and the consolidated statements of operations, changes in fund balance and cashflows for the year then ended, and a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidatedfinancial statements in accordance with Canadian accounting standards for not-for-profitorganizations, and for such internal control as management determines is necessary to enable thepreparation of consolidated financial statements that are free of material misstatement, whetherdue to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements inaccordance with Canadian generally accepted auditing standards. Those standards require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the consolidated financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the consolidated financial statements. The procedures selected depend on theauditors' judgment, including the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the Company's preparation and fairpresentation of the consolidated financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Company's internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimatesmade by management, as well as evaluation of the overall presentation of the consolidatedfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinion.

1

MacKay

Landau

Chartered

Accountants

P.O. Box 20

Iqaluit, Nunavut

X0A 0H0

Telephone (867) 979-6603

Fax (867) 979-6493

www.mackaylandau.ca

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ttc4f=4 @) wclw5, kNK5 X0A 0H0

sc`lt (867) 979-6603 hvJ4f5 (867) 979-6493 www.mackaylandau.ca

Opinion

In our opinion, these consolidated financial statements present fairly, in all material respects, thefinancial position of the Nunavut Broadband Development Corporation as at March 31, 2013 andits financial performance and its cash flows for the year then ended in accordance with Canadianaccounting standards for not-for-profit organizations.

Iqaluit, Nunavut CHARTERED ACCOUNTANTSMay 21, 2013

2

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CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED MARCH 31, 2013

2013 2012

REVENUES

Amortization of deferred capital contributions $ 142,670 $ 204,592Infrastructure Canada - NSI I contribution (Note 5) 1,000,000 990,000Infrastructure Canada - NSI II contribution (Note 5) 1,601,516 2,810,573Infrastructure Canada - tools, capacity and other 1,506,448 1,653,817Canadian Northern Economic

Development Agency (CanNor) 172,524 150,000Government of Nunavut 332,438 389,159Network licence fees - NSI matching funds (Note 5) 3,426,516 4,460,573Network licence fees - tools, capacity and other 900,000 720,000Network licence fees - debt recovery 314,988 319,542Other (Note 14) 11,937 0

9,409,037 11,698,256

EXPENSES (Page 4) 9,298,792 11,635,658

EXCESS REVENUES $ 110,245 $ 62,598

3


CONSOLIDATED STATEMENT OF OPERATIONS (CONTINUED)


2013 2012

EXPENSESApplication Development

Design and development $ 8,282 $ 0Marketing and promotion 10,823 7,252Research 0 85,000Training 28,148 990Web site development 27,881 1,038

75,134 94,280General and Administrative

Bad debts 0 10,313Bank charges and interest 7,124 15,482Freight 1,483 893Insurance 2,970 2,970Interest on long term debt 129,612 142,803Rent 21,082 21,689Miscellaneous 0 5,790

162,271 199,940Office

Office supplies 2,637 4,556Telephone and internet 7,857 9,231Translation 3,057 5,062

13,551 18,849Professional Fees

Audit 41,569 38,282Legal 6,218 17,827Management 282,680 275,452

330,467 331,561Salaries and Wages

WCB expenses 1,868 2,275

Travel and Meetings 99,225 44,530

Depreciation 229,584 318,772

Satellite Space Segment Services NSI satellite space segment services (Note 5) 6,028,032 8,261,146 Classroom and generic tools projects 2,358,660 2,364,305

8,386,692 10,625,451

$ 9,298,792 $ 11,635,658

4


CONSOLIDATED STATEMENT OF CHANGES IN FUND BALANCE


2013 2012

BALANCE, OPENING $ (2,063,963) $ (2,126,561)

Excess revenues 110,245 62,598

BALANCE, CLOSING $ (1,953,718) $ (2,063,963)

5


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT MARCH 31, 2013

2013 2012

ASSETS

CURRENT

Cash $ 458,955 $ 235,456Accounts receivable (Note 4) 94,553 876,921Current portion of

satellite space segment services (Notes 2(f) and 5) 0 6,028,032Prepaid expenses 0 2,970

553,508 7,143,379

QINIQ NETWORK AND

OFFICE EQUIPMENT (Notes 2(e) and 6) 1,086,365 1,315,949

$ 1,639,873 $ 8,459,328

LIABILITIES

CURRENT

Notes payable (Note 7) $ 0 $ 74,020Accounts payable and accrued liabilities (Note 8) 238,909 244,079Due to SSI Micro Ltd. (Note 9) 1,320,469 1,815,516Current portion of contributions

received in advance (Notes 2(g) and 5) 0 6,028,032Current portion of long term debt (Note 10) 198,184 184,761

1,757,562 8,346,408

LONG TERM DEBT (Note 10) 1,505,335 1,703,519

DEFERRED CAPITAL CONTRIBUTIONS (Note 11) 330,694 473,3643,593,591 10,523,291

NET DEFICIT

UNRESTRICTED FUND (1,953,718) (2,063,963)

$ 1,639,873 $ 8,459,328

APPROVED BY THE BOARD:

_______________________________________________________________________________________________________________________________Director_______________________________________________________________________________________________________________________________Director

6


CONSOLIDATED STATEMENT OF CASH FLOWS


2013 2012

OPERATING ACTIVITIES

Excess revenues $ 110,245 $ 62,598Items not requiring (providing) cash:

Amortization of deferred capital contributions (142,670) (204,592)Depreciation 229,584 318,772

197,159 176,778Cash provided by (used for) changes

in non-cash working capital:Accounts receivable 782,368 (629,617)Prepaid expenses 2,970 (2,970)Accounts payable and accrued liabilities (5,170) 16,090

977,327 (439,719)

FINANCING ACTIVITIES

Long term debt repaid (184,761) (177,202)Advances from (to) SSI Micro Ltd. (495,047) 63,823Notes payable repaid (74,020) (7,427)

(753,828) (120,806)

INCREASE (DECREASE) IN CASH 223,499 (560,525)

CASH, OPENING 235,456 795,981

CASH, CLOSING $ 458,955 $ 235,456

7


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


1. NATURE OF THE ORGANIZATION

The Nunavut Broadband Development Corporation was incorporated under the Canada

Corporations Act - Part II on November 1, 2002. The purpose of the Company is tofacilitate the development, growth and availability of communication technology(broadband) within Nunavut for the public, including, without limitation, for the use bylocal governments, community groups, non-governmental organizations, private sectorbusinesses and individual residents of Nunavut.

The Company is a not-for-profit organization and is exempt from income tax under Sec.149(1)(l) of the Income Tax Act (Canada).

NBDC Inc., a wholly owned subsidiary, owns the assets as described in Note 6 and owesthe associated trade payable to SSI Micro Ltd. and long term debt to Nunavut BusinessCredit Corporation and Atuqtuarvik Corporation.

NBDC Inc. has entered into a National Satellite Initiative ("NSI I") agreement withIndustry Canada and SSI Micro Ltd. to ensure funding for the cost of satellite spacesegment services purchased indirectly from Telesat Canada.

As well, NBDC Inc. has entered into a Network Agreement with SSI Micro Ltd. wherebyNetwork licence fees are earned sufficient to cover principal and interest payments onlong term debt and required NSI matching funds. Also, under the agreement SSI MicroLtd. is contracted to provide services to maintain and upgrade the Qiniq Network asrequired.

Qiniq Inc., a wholly owned subsidiary, is the operating company. It provides services toNunavut Broadband Development Corporation and others to assist in facilitating thedevelopment, growth and availability of broadband to the residents, businesses andorganizations of Nunavut.

Qiniq Inc. has entered into a National Satellite Initiative ("NSI II") agreement withInfrastructure Canada and SSI Micro Ltd. to ensure funding for the cost of satellite spacesegment services purchased indirectly from Telesat Canada.

As well, Qiniq Inc. has entered into a Network Agreement with SSI Micro Ltd. wherebyNetwork licence fees are earned sufficient to cover the required NSI matching funds.

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2. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies followed by the Company are in accordance with Canadianaccounting standards for not-for-profit organizations and include the followingsignificant accounting policies:

(a) Use of Estimates

The preparation of the financial statements of the Company requires management tomake estimates and assumptions that affect the reported amounts of assets and liabilities,the disclosure of contingent assets and liabilities at the date of the financial statementsand the reported amounts of revenue and expenses during the year. Significant itemssubject to such estimates and assumptions include the valuation of satellite space segmentservices, contributions received in advance and the estimated useful life of the Qiniqnetwork and office equipment. Actual results could differ from those estimates.

(b) Financial Instruments

The Company initially measures its financial assets and financial liabilities at fair valueadjusted by, in the case of a financial instrument that will not be measured subsequentlyat fair value, the amount of transaction costs directly attributable to the instrument.

The Company subsequently measures all its financial assets and financial liabilities atamortized cost, except for derivatives and equity securities quoted in an active market,which are subsequently measured at fair value.

Financial assets measured at amortized cost include cash and accounts receivable.

Financial liabilities measured at amortized cost include accounts payable and accruedliabilities, notes payable, due to SSI Micro Ltd. and long term debt.

Financial assets subsequently measured at amortized cost are tested for impairment whenthere are indicators of possible impairment. When a significant adverse change hasoccurred during the period in the expected timing or amount of future cash flows fromthe financial asset or group of assets, a write-down is recognized in net income. Thewrite-down reflects the difference between the carrying amount and the higher of:

a) the present value of the cash flows expected to be generated by the asset or groupof assets;

b) the amount that could be realized by selling the asset or group of assets;c) the net realizable value of any collateral held to secure repayment of the asset or

group of assets.

When events occurring after the impairment confirm that a reversal is necessary, thereversal is recognized in net income up to the amount of the previously recognizedimpairment.

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2. SIGNIFICANT ACCOUNTING POLICIES (continued)

(c) Investments

These consolidated financial statements include the accounts of Nunavut BroadbandDevelopment Corporation and its wholly owned subsidiaries, NBDC Inc. and Qiniq Inc.All significant inter-company balances and transactions have been eliminated in theseconsolidated financial statements.

(d) Revenue Recognition

The Company follows the deferral method of accounting for contributions. Restrictedcontributions are recognized as revenue in the year in which the related expenses areincurred. Unrestricted contributions are recognized as revenue when received orreceivable if the amount to be received can be reasonably estimated and collection isreasonably assured. Contributions in kind are recorded at their estimated fair value at thedate of contribution, where the value can be reasonably estimated.

(e) Qiniq Network And Office Equipment

Qiniq network and office equipment are recorded at cost. Depreciation is providedannually at rates calculated to write-off the assets over their estimated useful lives asfollows:

Broadband network 30% declining balanceStructures 4% declining balanceEquipment 20% declining balanceComputer equipment 45% declining balanceFurniture and fixtures 20% declining balance

One-half of the annual rate of depreciation is taken in the year of acquisition.

(f) Satellite Space Segment Services

Satellite space segment services incurred in the development of satellite capacity and therelated contributions received in advance are amortized over the term of the agreement.

(g) Capital Contributions

Capital contributions towards capital projects are recorded as deferred capitalcontributions. Deferred capital contributions are amortized into revenue on a decliningbalance basis at the same rate as the corresponding capital asset is depreciated.

(h) Expense Allocations

The Company allocates expenses using the following method. Expenses which arewholly attributable to a particular project are charged directly to the appropriate project.Expenses that are attributable to more than one particular project are allocated based on apercentage method at a rate deemed appropriate by management.

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3. IMPACT OF THE CHANGE IN THE BASIS OF ACCOUNTING

The Company elected to apply the Accounting Standards for Not-For-Profit Organizations,Part III of the Canadian Institute of Chartered Accountants (CICA) Handbook, in accordancewith Canadian generally accepted accounting principles.

These financial statements are the first financial statements for which the Company hasapplied the Canadian accounting standards for not-for-profit organizations and were preparedin accordance with the provisions set out in First-Time Adoption, Section 1501, of the CICAHandbook.

The transition rules require that the Company prepare an opening balance sheet at the date oftransition as if the accounting policies selected under accounting standards for not-for-profitorganizations had been applied in the past with restatement of comparative amounts withsome specific exceptions. As a result of adopting accounting standards for not-for-profitorganizations no such adjustments were necessary, there was no material impact on theopening balance sheet as at April 1, 2011 or comparative amounts presented in these financialstatements.

4. ACCOUNTS RECEIVABLE

2013 2012

SSI Micro Ltd. $ 0 $ 189,000Infrastructure Canada 47,787 595,882CanNor 21,436 0Government of Nunavut 21,597 50,000Goods and Services Tax 3,733 42,039

$ 94,553 $ 876,921

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5. SATELLITE SPACE SEGMENT SERVICES

The Canada-Nunavut Broadband Infrastructure I Agreement was re-profiled so theremaining funds available for the four fiscal years beginning April 1, 2009 through toMarch 31, 2013 were paid up front by Infrastructure Canada and SSI Micro Ltd.

The Canada-Nunavut Broadband Infrastructure II Agreement was negotiated so thefunding for satellite capacity was received up front for the five fiscal years beginningApril 1, 2008 through to March 31, 2013. The amounts contributed were $9,331,129from both Infrastructure Canada and SSI Micro Ltd.

The costs associated with these contributions were also paid out in advance to SSI MicroLtd. The revenues and costs are to be matched and amortized into income as outlined inthe terms of the agreements.

2013 2012Satellite space segment services:

Balance, opening $ 6,028,032 $ 14,289,178Amortization (6,028,032) (8,261,146)

0 6,028,032Less: current portion 0 (6,028,032)

Balance, closing $ 0 $ 0

Contributions received in advance:

Balance, opening $ 6,028,032 $ 14,289,178NSI I and II Contributions: Infrastructure Canada - NSI I (1,000,000) (990,000) Infrastructure Canada - NSI II (1,601,516) (2,810,573) Network licence fees - SSI Micro Ltd. (3,426,516) (4,460,573)

0 6,028,032Less: current portion 0 (6,028,032)

Balance, closing $ 0 $ 0

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6. QINIQ NETWORK AND OFFICE EQUIPMENT

2013 2012Accumulated Net Book Net Book

Cost Depreciation Value Value

Qiniq Network

Broadband network $ 7,430,130 $ 6,960,742 $ 469,388 $ 670,554Structures 846,750 235,913 610,837 636,288Equipment 15,496 12,896 2,600 3,250Computer Equipment

Computer hardware 205,938 203,509 2,429 4,418Office Equipment

Computer equipment 13,798 13,708 90 163Furniture and fixtures 6,761 5,740 1,021 1,276

$ 8,518,873 $ 7,432,508 $ 1,086,365 $ 1,315,949

7. NOTES PAYABLE

2013 2012Baffin Business Development Corporationterm loan, unsecured. The loan is repayablein monthly installments of interest onlywith interest at 10%. Due on demand. Thenotes was paid in full March 19, 2013. $ 0 $ 74,020

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

2013 2012

CanNor $ 0 $ 19,304Government of Nunavut 0 5,841Accounts payable and accrued liabilities 238,909 218,934

$ 238,909 $ 244,079

9. DUE TO SSI MICRO LTD.

SSI Micro Ltd. has agreed to carry the amounts due to SSI Micro Ltd. until long termdebt or other financing is utilized. These amounts are due on demand, unsecured andnon-interest bearing.

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10. LONG TERM DEBT

2013 2012

Nunavut Business Credit Corporation termloan, secured by specific Qiniq Networkequipment, a general security agreement andguarantee by the Company. The loan isrepayable in blended monthly installmentsof $8,112 with interest at 7.19% per annum.Due July 2014. $ 192,542 $ 273,146

Atuqtuarvik Corporation fixed term loan,secured by specific Qiniq Networkequipment, and a general securityagreement, assignment of accountsreceivable and revenues related to the QiniqNetwork, and unlimited guarantee by theCompany. The loan is repayable in blendedmonthly installments of $18,137 withinterest at 7.25% per annum. DueSeptember 2016. 1,510,977 1,615,134

1,703,519 1,888,280

Less: current portion 198,184 184,761

$ 1,505,335 $ 1,703,519

Long term debt is expected to be repaid annually as follows:

2014 $ 198,1842015 226,1672016 128,9202017 1,150,248

$ 1,703,519

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11. DEFERRED CAPITAL CONTRIBUTIONS

2013 2012Original Accumulated Unamortized Unamortized

Cost Amortization Balance Balance

Qiniq Network

Industry Canada 30% $ 3,885,000 $ 3,661,037 $ 223,963 $ 319,946SSI Micro Ltd. 30% 280,365 223,147 57,218 81,740

2.5 GHz Upgrade

Indian and NorthernAffairs Canada 30% 346,719 326,731 19,988 28,554

Government ofNunavut 30% 250,000 235,588 14,412 20,588

Hamlets 30% 220,000 207,318 12,682 18,117

Computer Equipment

Indian and NorthernAffairs Canada 45% 186,422 184,222 2,200 4,000

Government ofNunavut 45% 19,516 19,285 231 419

$ 5,188,022 $ 4,857,328 $ 330,694 $ 473,364

12. INCOME TAXES

NBDC Inc., a wholly owned subsidiary, has non-capital losses carried forward of$1,713,899. The tax benefits related to these losses expire as follows:

2016 $ 52,6472027 777,4692028 557,4162029 244,3752030 81,992

$ 1,713,899

The tax benefits related to the non-capital losses carried forward have not been includedin these financial statements.

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13. ECONOMIC DEPENDENCE

The Company receives the majority of its funding from the Governments of Canada andNunavut. Without continued funding from the Governments of Canada and Nunavut, itis unlikely the Company's operations would be able to continue.

14. MISCELLANEOUS REVENUE

Included in "Other Revenue" on the consolidated statement of operations and also in the"Miscellaneous Revenue Project" on Schedule 1 is $11,804 that was owing to CanNor asa result of project under-spending in fiscal 2012. CanNor has confirmed that this amountis no longer owing.

15. COMMITMENTS

The Company has signed a share purchase option agreement. The agreement grants SSIMicro Ltd. the sole and exclusive option, irrevocable until the expiry or other terminationof the Network Agreement, which is the earlier of March 31, 2019 and the end of thecommercially useful life of the Network Property, to purchase all, but not less than all, ofthe issued shares in the capital stock of the Company's wholly owned subsidiary, NBDCInc., which currently consists of 100 common shares, for an aggregate price equal to theamount of all debts and other obligations of the Company and NBDC Inc., includingwithout limitation, all obligations secured by Permitted Encumbrances, as definedpursuant to the Network Agreement, plus one dollar ($1.00). Provided that any suchpurchase will not contravene any term, condition or restriction, express or implied, of anyPermitted Encumbrances, the IC Contribution Agreement, or the NSI ContributionAgreement as such terms are defined by the Network Agreement.

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16. GOING CONCERN ISSUE IN NBDC INC.

The financial statements of NBDC Inc., a wholly owned subsidiary, have been preparedin accordance with Canadian generally accepted accounting principles that are applicableto a going concern, meaning that the Company will be able to realize its assets anddischarge its liabilities in the normal course of operations. However, there is uncertaintyabout the Company's ability to realize its assets and discharge its liabilities. The financialstatements do not reflect adjustments that would be necessary if the going concernassumption were not appropriate, because management believes that the measures itintends to take will mitigate the conditions that raise doubt about the appropriateness ofthe going concern assumption.

17. FINANCIAL ASSETS AND LIABILITIES

The significant financial risks to which the Company are exposed are credit risk andliquidity risk.

a) Credit riskCredit risk is the risk that one party to the financial instrument will cause a financial lossfor the other party by failing to discharge an obligation. The Company is exposed tocredit risk in the event of non-performance by customers in connection with its accountsreceivable. The Company does not obtain collateral or other security to support theaccounts receivable subject to credit risk but mitigates this risk by dealing with only whatmanagement believes to be financially sound customers and, accordingly, does notanticipate significant loss for non-performance.

b) Liquidity riskLiquidity risk is the risk that the Company will encounter difficulty in meetingobligations associated with financial liabilities. The Company is exposed to liquidity riskarising primarily from the long term debt. The Company's ability to meet obligationsdepends on receipt of funds from government sources and SSI Micro Ltd., whether in theform of revenue or advances.

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SCHEDULE 1

Page 1NUNAVUT BROADBAND DEVELOPMENT CORPORATION

SCHEDULE OF OPERATIONS BY ACTIVITY


Web DevelopmentWorkshop SPW Board AGM Core Operations

EDT EDT EDT EDT

REVENUES

Infrastructure Canada $ 0 $ 0 $ 0 $ 0CanNor 0 0 0 0Government of Nunavut 32,780 15,500 3,058 281,100Network licence fees 0 0 0 0Other 0 0 0 133Deferred capital contributions 0 0 0 0

32,780 15,500 3,058 281,233EXPENSES

Application DevelopmentDesign and development 0 0 0 2,560Marketing and promotion 344 0 1,294 4,910Training 23,870 1,143 0 3,093Web site development 0 0 0 15,830

24,214 1,143 1,294 26,393General and Administrative

Bank charges and interest 0 0 0 7,125Freight 0 0 0 828Insurance 0 0 0 2,970Interest on long term debt 0 0 0 0Rent 0 0 0 21,082

0 0 0 32,005Office

Office supplies 0 0 17 2,590Telephone and internet 1,000 0 0 6,857Translation 117 0 1,700 1,115

1,117 0 1,717 10,562Professional Fees

Audit 0 0 0 31,256Legal 0 0 0 6,218Management 0 3,000 0 163,666

0 3,000 0 201,140Salaries and Wages

WCB expenses 0 0 0 1,868

Travel and meetings 7,449 11,378 47 9,265

Depreciation 0 0 0 0

Satellite Space Segment Services 0 0 0 0

32,780 15,521 3,058 281,233

EXCESS REVENUES (EXPENSES) $ 0 $ (21) $ 0 $ 0

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SCHEDULE 1

Page 2




ClassroomSatelliteCapacity

Generic ToolsSatelliteCapacity

InfrastructureII

Qiniq 2000+SatelliteCapacity ICT Summit

INFC INFC INFC INFC CanNor

REVENUES

Infrastructure Canada $ 558,660 $ 900,000 $ 47,788 $ 1,601,516 $ 0CanNor 0 0 0 0 97,524Government of Nunavut 0 0 0 0 0Network licence fees 0 900,000 0 1,601,516 0Other 0 0 0 0 0Deferred capital contributions 0 0 0 0 0

558,660 1,800,000 47,788 3,203,032 97,524EXPENSES

Application DevelopmentDesign and development 0 0 0 0 5,722Marketing and promotion 0 0 3,896 0 379Training 0 0 42 0 0Web site development 0 0 0 0 12,051

0 0 3,938 0 18,152General and Administrative

Bank charges and interest 0 0 0 0 0Freight 0 0 654 0 0Insurance 0 0 0 0 0Interest on long term debt 0 0 0 0 0Rent 0 0 0 0 0

0 0 654 0 0Office

Office supplies 0 0 30 0 0Telephone and internet 0 0 0 0 0Translation 0 0 0 0 125

0 0 30 0 125Professional Fees

Audit 0 0 10,313 0 0Legal 0 0 0 0 0Management 0 0 30,417 0 10,597

0 0 40,730 0 10,597Salaries and Wages

WCB expenses 0 0 0 0 0

Travel and Meetings 0 0 2,436 0 68,650

Depreciation 0 0 0 0 0

Satellite Space Segment Services 558,660 1,800,000 0 3,203,032 0

558,660 1,800,000 47,788 3,203,032 97,524

EXCESS REVENUES (EXPENSES) $ 0 $ 0 $ 0 $ 0 $ 0

19

SCHEDULE 1

Page 3NUNAVUT BROADBAND DEVELOPMENT CORPORATION



Infrastructure I -Qiniq Infrastructure I PDI

(Note 14)Miscellaneous

Assets/Debt NSI CanNor Revenue Total

REVENUES

Infrastructure Canada $ 0 $ 1,000,000 $ 0 $ 0 $ 4,107,964CanNor 0 0 75,000 0 172,524Government of Nunavut 0 0 0 0 332,438Network licence fees 314,988 1,825,000 0 0 4,641,504Other 0 0 0 11,804 11,937Deferred capital contributions 142,670 0 0 0 142,670

457,658 2,825,000 75,000 11,804 9,409,037EXPENSES

Application DevelopmentDesign and development 0 0 0 0 8,282Marketing and promotion 0 0 0 0 10,823Training 0 0 0 0 28,148Web site development 0 0 0 0 27,881

0 0 0 0 75,134General and Administrative

Bank charges and interest 0 0 0 0 7,125Freight 0 0 0 0 1,482Insurance 0 0 0 0 2,970Interest on long term debt 129,612 0 0 0 129,612Rent 0 0 0 0 21,082

129,612 0 0 0 162,271Office

Office supplies 0 0 0 0 2,637Telephone and internet 0 0 0 0 7,857Translation 0 0 0 0 3,057

0 0 0 0 13,551

Professional FeesAudit 0 0 0 0 41,569Legal 0 0 0 0 6,218Management 0 0 75,000 0 282,680

0 0 75,000 0 330,467Salaries and Wages

WCB expenses 0 0 0 0 1,868

Travel and meetings 0 0 0 0 99,225

Depreciation 229,584 0 0 0 229,584

Satellite Space Segment Services 0 2,825,000 0 0 8,386,692

359,196 2,825,000 75,000 0 9,298,792

EXCESS REVENUES (EXPENSES) $ 98,462 $ 0 $ 0 $ 11,804 $ 110,245

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