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FIRST PEOPLES' HERITAGE, LANGUAGE AND CULTURE COUNCIL

FINANCIAL STATEMENTS

Year Ended March 31, 2008


FINANCIAL STATEMENTS


CONTENTS

PageAuditors' Report 2

Financial StatementsStatement of Financial Position 3Statement of Operations 4Statement of Changes in Net Assets 5Statement of Cash Flows 6Notes to Financial Statements 7 - 10Statement of Program Activities (Unaudited) 11

1.

Auditors' Report

To the Minister of Aboriginal Relations and Reconciliation, Province of British ColumbiaTo the Members of the Board of First Peoples' Heritage, Language and Culture Council

We have audited the statement of financial position of First Peoples' Heritage, Language andCulture Council as at March 31, 2008 and the statements of operations, changes in net assetsand cash flows for the year then ended. These financial statements are the responsibility of theCouncil's management. Our responsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards.Those standards require that we plan and perform an audit to obtain reasonable assurancewhether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation.

In our opinion, these financial statements present fairly, in all material respects, the financialposition of the Council as at March 31, 2008 and the results of its operations and cash flows forthe year then ended in accordance with Canadian generally accepted accounting principles.

Sidney, B.C.May 13, 2008 Professional Accountants

2.


Statement of Operations


2008 2007(Note 10)

RevenueGrants $ 3,204,011 $ 2,837,898Interest and other 54,646 49,717Administration fees 10,000 -Training and consulting 400 17,400

3,269,057 2,905,015

ExpendituresGrants 2,352,606 1,412,644Advertising 33,475 22,089Bank charges 1,032 1,482Community expenses 62,696 38,363Contractor fees 277,642 37,040Council and advisory committee expenses 55,919 72,698Equipment rental 12,017 9,900Insurance 3,441 2,033Jury / Peer Review Committee 31,186 30,104Licenses and fees 5,862 9,100Office 26,696 41,876Professional fees 29,666 31,151Protocol 3,007 4,999Rent 42,000 20,194Repairs and maintenance 20,419 24,388Telephone 14,183 15,351Travel 83,004 93,313Uncollectible grants 15,722 -Utilities 9,691 2,638Wages and benefits 579,515 486,607Amortization 79,926 72,185

3,739,705 2,428,155

(Shortfall)/Excess of revenue over expenditures $ (470,648) $ 476,860

4.


Statement of Changes in Net Assets


Invested inProperty, Plant Unrestricted 2008 2007and Equipment Funds Total Total

(Note 10)

Balance, beginning of year $ 233,023 $ 621,172 $ 854,195 $ 377,335

Excess (deficiency) ofrevenue over expenses (80,396) (390,252) (470,648) 476,860

Invested in property,plant and equipment 31,721 (31,721) - -

Balance, end of year $ 184,348 $ 199,199 $ 383,547 $ 854,195

5.


Statement of Cash Flow


2008 2007(Note 10)

Cash flows from operating activitiesCash received from:

2010 Legacies Now $ 129,641 $ 161,500Assembly of First Nations 93,747 (63,040)BC Arts Council 249,500 45,000BC Ministry of Aboriginal Relations & Reconciliation 1,424,750 2,000,000BC Ministry of Education - 30,000BC Ministry of Finance 44,700 -BC Ministry of Labour & Citizen's Services 250,000 25,000Canada Council of the Arts 50,950 10,000Department of Canadian Heritage 265,060 191,206First Nations Technology Council 25,000 4,000First Peoples' Cultural Foundation (Note 3) 125,000 40,300New Relationship Trust Corporation 975,000 -Interest Income and other miscellaneous receipts 55,046 64,017

3,688,394 2,507,983

Cash used for grants and awards (1,880,789) (1,357,481)Cash used for salaries and benefits (576,157) (431,613)Cash used for materials and services (642,252) (453,189)

589,196 265,700Cash flows from financing activities

Advances to First Peoples' Cultural Foundation - (38,547)

Cash flows from investing activitiesPurchase of property, plant and equipment (31,721) (259,452)

Increase (Decrease) in cash 557,475 (32,299)

Cash, beginning of year 435,575 467,874

Cash, end of year $ 993,050 $ 435,575

6.


Notes to Financial Statements


1. PURPOSE OF THE ORGANIZATION

The First Peoples' Heritage, Language and Culture Council ("the Council") is a CrownCorporation, established under the First Peoples' Heritage, Language and Culture Act andis an agent of the Crown. The Council commenced operations April 1, 1991. The missionof the Council is as follows:

• To preserve, restore and enhance First Nations' heritage, language, and culture; • To increase understanding and sharing of knowledge, within both First Nations

and non-First Nations' communities; and• To heighten appreciation and acceptance of the wealth of cultural diversity

among British Columbians.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) AmortizationRates and bases of amortization applied to write off the cost less estimated salvagevalue of capital assets over their estimated lives are as follows:

Leasehold improvements 7 years, straight-lineFurniture and equipment 5 years, straight-lineComputers 3 years, straight-lineComputer software 3 years, straight-line

No amortization has been taken on the Art Collection.

(b) Revenue RecognitionThe Council 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.

(c) Donated Services and MaterialsDonated materials are recorded both as donations and expenses at their fair valuewhen fair value can be reasonably estimated. Donated services are not recorded inthe financial statements, as they cannot be reasonably estimated. The Council alsoreceives a number of volunteer hours, which have not been recognized, due to thedifficulty of estimating their value.

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(d) Use of EstimatesIn preparing the Council's financial statements, management is required to makeestimates 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 reported amounts of revenue and expenses during the period. Actual resultscould differ from these estimates.

(e) Financial InstrumentsThe Council's financial instruments consist of cash, receivables, payables and accrualsand amounts due from related parties. Unless otherwise noted, it is management'sopinion that the Council is not exposed to significant interest, currency or credit risksarising from these financial instruments. The fair value of these financial instrumentsapproximates their carrying values, unless otherwise noted.

3. RELATED PARTY TRANSACTIONS

First Peoples' Cultural FoundationIn previous years the Council and the First Peoples' Cultural Foundation ("the Foundation")were related parties due to the fact that they had some common members on their Boardof Directors and shared certain employees. In April 2007, the Constitution of theFoundation was amended and the purposes of the Foundation were expanded to includecharitable work outside of the Council. As of April 2007, there was a change in Boardmembers: the Foundation no longer has common members or employees.

OtherThe Council's directors are appointed by the Minister of Aboriginal Relations andReconciliation from the Advisory Committee which has tribal council representatives fromFirst Nations across the province of British Columbia. It is, therefore, inevitable that therewill be grants made to a community within a tribal council that a Council memberrepresents. A standard application and peer review process ensuring that there is not aconflict of interest is followed in all cases to determine which communities are awardedgrants.

The First Peoples' Heritage, Language and Culture Council is related through commonownership to all Province of British Columbia ministries, agencies and Crown corporations.Transactions with these entities are made under normal operational terms and conditions.

8.




4. PROPERTY, PLANT AND EQUIPMENT

Accumulated 2008 2007Cost Amortization Net Net

Art Collection $ 3,100 $ - $ 3,100 $ -Computerequipment 165,335 134,775 30,560 41,250

Furniture andequipment 71,914 43,498 28,416 35,567

Leasehold improvements 167,499 47,857 119,642 143,571

Software 37,482 34,852 2,630 12,635

$ 445,330 $ 260,982 $ 184,348 $ 233,023

5. DEFERRED CONTRIBUTIONS

The Council has continuing programs at March 31, 2008. Contributions related to thecompletion of these programs have been deferred as follows:

2008 2007

Canada Council (Arts Capacity Building Project) $ 24,659 $ 2,203Canada Coucil (Flying Eagle Project) - 4,000First People's Cultural Foundation 9,349 -First People's Cultural Foundation (Language Nest Project) 50,000 -Ministry of Education (Mapping Project) 42,992 95,386Ministry of Labour & Citizen's Services (FirstVoices) 223,207 -New Relationship Trust (FirstVoices) 34,654 -New Relationship Trust (Master Apprentice Project) 63,000 -

$ 447,861 $ 101,589

6. NET ASSETS

In the prior year the Council carried over funds from the FirstVoices program to revitalizeFirst Nations languages. As the majority of the community work did not start until thecurrent 2007/08 year, the Board had reallocated these surplus funds to the FirstVoicesprogram for the current year budget.

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7. CAPITAL STOCK

The capital of the Council is one share with a par value of $100. The share is issued toand held by Her Majesty the Queen in right of the Province of British Columbia.

8. EMPLOYEE PENSION PLAN

The Council and its employees contribute to the Public Service Plan. The Plan is a multi-employer defined benefit plan. The British Columbia Pension Corporation administers thePlan, including the payment of pension benefits on behalf of employers and employees inaccordance with the Public Sector Pension Plans Act.

The risks and rewards associated with the Plan's unfunded liability or surplus are sharedbetween the employers and the Plan's members and may be reflected in their futurecontributions. Based on the most recent actuarial valuation, the Public Service PensionPlan is in a surplus position. Portions of the surplus are not attributed to individualemployers.

9. COMMITMENTS

Effective February 14, 2007, the Council entered into a seven year lease agreementexpiring on February 14, 2014 for its premises. Minimum rent payable in aggregate and foreach of the next six years are as follows:

2009 $ 42,0002010 42,0002011 42,0002012 42,0002013 42,0002014 42,000

$ 252,000

10. RECLASSIFICATION OF COMPARATIVE FIGURES

The 2007 comparative figures have been reclassified to conform with the financialstatement presentation adopted for 2008. The prior year comparative figures were auditedby another accounting firm.

10.

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