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Circular
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Ottawa, 23 August 1994
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CIRCULAR NO. 404
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TO ALL BROADCASTING LICENSEES
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Requirements for the Filing of Financial Statements with the Broadcasting Annual Return
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The specific regulations pertaining to licensees of cable, radio, television, pay television and specialty service undertakings and the Broadcasting Information Regulations, 1993 pertaining to those licensees not covered by specific regulations (the regulations) require that:
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On or before November 30 of each year, a licensee shall file with (submit to) the Commission, a statement of accounts, on the annual return (of broadcasting licensee) form issued by the Commission, for the year ending on the previous August 31.
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Currently, licensees of other than pay television and specialty service undertakings meet this requirement by filing their statements of account annually in the format of the Statistics Canada Annual Return with Statistics Canada who, in order to avoid the burden to licensees of making duplicate filings, subsequently shares this information with the Commission. Licensees of pay television and specialty service undertakings file their annual statements of account directly with the Commission on a separate annual return.
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Licensees filing the Statistics Canada Annual Return are required to include their most recent "financial statements". This has led to some inconsistencies in the past, as certain licensees have filed audited statements while others have filed non-audited statements. Licensees of pay television and specialty service undertakings, on the other hand, are more specifically directed in their annual returns to file "audited" financial statements.
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The Commission considers the filing of these statements on a basis that is consistent between similar licensed undertakings to be of paramount importance in carrying out its regulatory mandate. The purpose of this Circular is to clarify for licensees what the Commission requires by way of the "financial statements" to be filed with the various annual returns, in order to ensure that the requirements of the particular regulations are met. Specifically;
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Cable Television Licensees:
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i) subject to (ii) below, all licensees of cable distribution or broadcasting receiving undertakings that distribute programming services to subscribers by means of cable must file audited financial statements at the licensee level for each 12 month period ending August 31. (See also Notes 2 and 3 in the attached Appendix)
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ii) other than licensees who are public companies, all licensees of cable undertakings having no single undertaking of more than 6000 subscribers as at the August 31 of the annual return being filed may, in lieu of audited financial statements, file non-audited financial statements at the licensee level for each 12 month period ending August 31. (See Note 1 in the attached Appendix)
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Radio Licensees:
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i) subject to (ii) below, all licensees of radio programming undertakings, including radio networks, must file audited financial statements at the licensee level for each 12 month period ending August 31. (See also Notes 2 and 3 in the attached Appendix)
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ii) other than licensees who are public companies, all licensees of radio undertakings who do not have total radio advertising revenues of more than $10.0 million for all of their licensed radio undertakings combined may, in lieu of audited financial statements, file non-audited financial statements at the licensee level for each 12 month period ending August 31. (See Note 1 in the attached Appendix)
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Television Licensees:
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i) subject to (ii) below, all licensees of television programming undertakings, including television networks, must file audited financial statements at the licensee level for each 12 month period ending August 31. (See also Notes 2 and 3 in the attached Appendix)
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ii) other than licensees who are public companies, all licensees of television programming and network undertakings who do not have a condition of licence related to financial performance and who do not have total television advertising revenues of more than $10.0 million for all of their licensed television undertakings combined may, in lieu of audited financial statements, file non-audited financial statements at the licensee level for each 12 month period ending August 31. (See Note 1 in the attached Appendix)
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Pay and Specialty Services Licensees:
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i) subject to (ii) below, all licensees of Pay and Specialty Service undertakings must file audited financial statements at the licensee level for each 12 month period ending August 31. (See also Notes 2 and 3 in the attached Appendix)
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ii) other than licensees who are public companies, those Pay and Specialty Service licensees who do not have a condition of licence related to financial performance and who do not have total advertising and subscription revenues of more than $10.0 million for all of their licensed undertakings combined may, in lieu of audited financial statements, file non-audited financial statements at the licensee level for each 12 month period ending August 31. (See Note 1 in the attached Appendix)
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Other Licensees: (for example, subscription television systems, multi-channel television, radiocommunication distribution systems and multi-point distribution systems)
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i) subject to (ii) below, all licensees of undertakings not specifically covered by any of the cable, radio, television, pay or specialty service regulations must file audited financial statements at the licensee level for each 12 month period ending August 31. (See also Notes 2 and 3 in the attached Appendix)
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ii) other than licensees who are public companies, those licensees who do not have a condition of licence related to financial performance, who do not have a condition of licence related to a maximum authorized monthly subscriber fee and who do not have total advertising and subscription revenues of more than $10.0 million for all of their licensed undertakings combined may, in lieu of audited financial statements, file non-audited financial statements at the licensee level for each 12 month period ending August 31. (See Note 1 in the attached Appendix)
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Allan J. Darling
Secretary General
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APPENDIX
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1.
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Non-audited Financial Statements: although not subject to an audit by the licensee's external auditors, they must nevertheless be prepared in accordance with Generally Accepted Accounting Principles (G.A.A.P.)* and be signed and dated by the licensee as follows:
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"I, ___________________________________________________ ,
(Name) (Title)
am authorized to certify on behalf of ____________________________
(Licensee)
that these financial statements have been prepared in accordance with
Generally Accepted Accounting Principles (G.A.A.P.) and are
true and complete in all respects to the best of my knowledge and belief.
__________________________ __________________________ "
(Signed) (Date)
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* Where the statements have not been prepared in accordance with G.A.A.P., please indicate the areas involved and how you treated them.
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2.
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Licensees otherwise required to file audited financial statements and whose fiscal year end does not coincide with August 31 may, as an alternative to filing audited statements as at August 31, file non-audited financial statements at the licensee level for the 12 month period ending August 31 on which the licensee's auditor has performed a "Review Engagement" in accordance with section 8200 of the Canadian Institute of Chartered Accountant's handbook (the C.I.C.A. handbook"). Licensees who elect to provide Review Engagement financial statements must also file, with their annual return, their audited financial statements for the most recently completed fiscal year ending immediately prior to the 31 August of the annual return being filed.
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3.
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Licensees otherwise required to file audited financial statements and whose statements are included in the audited consolidated statements of a Parent company may, where audited statements at the licensee level are not prepared, file financial statements as follows:
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i) where the year-end of the Parent is August 31, file non-audited statements at the licensee level and the audited consolidated statements of the Parent both for the 12 month period ending August 31,
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ii) where the year-end of the Parent is other than August 31, file non-audited financial statements at the licensee level for the 12 month period ending August 31 on which the licensee's auditor has performed a Review Engagement and the audited consolidated financial statements for the Parent company's most recently completed fiscal year ending immediately prior to the 31 August of the annual return being filed.
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4. Nothing in this Circular is to be read as limiting the Commission from requesting a licensee to provide audited financial statements at the licensee level should circumstances so require.
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