- We protect over 150,000 people across North America
- Over 20 years experience in the industry
- One of the few alarm companies to manufacture our own technology
- You deal directly with AlarmForce at all times
- Lowest prices and best value in the business
Financial Information
(a) Income tax expense varies from the amount that would be computed by applying the combine federal and provincial statutory income taxes rate as a result of the following:
| 2004 | 2003 | |
| Income taxes based on combined federal and provincial | $ |
$ |
| statutory income tax rate of 36.12% in 2004 and 36.6% in 2003 | 909,413 | 710,176 |
| Increase (decrease) in income taxes resulting from: | ||
| Non-deductible expenses | 169,749 | 282,927 |
| Reduction in tax rates applicable to prior year’s | ||
| temporary difference | (25,019) | |
| Other temporary differences | 187,625 | (354,241) |
| Effective income tax provision | 1,241,768 | 638,862 |
(b) The significant components of the company’s future income tax liability consist of timing differences in the deferred charges which are expensed over the four year term of the customer rental agreement to which they relate, but are deducted for income tax purposes when incurred. Deferred revenue is recognized in income over a four-year term but taxable when received.
A summary of significant components of future tax liabilities calculated in accordance with Canadian accounting principles at October 31, 2004 and 2003 are as follows:
| 2004 | 2003 | |
| $ |
$ | |
| Non-current future tax liabilities | ||
| Deferred direct response advertising costs | (2,135,920) | (1,569,500) |
| Depreciable property, plant and equipment | (432,900) | (244,900) |
| Intangible assets | (10,900) | (17,700) |
| Non current future tax assets | ||
| Deferred revenue | 488,900 | 358,200 |
| Share issue costs | 140,820 | - |
| Scientific research and development tax pools | - | 226,900 |
| 629,720 | 585,100 | |
| Total Future tax liability | (1,950,000) | (1,247,000) |
12. CONTINGENT LIABILITY
The company is a defendant in a legal action with respect to a claim for fees subsequent to termination of an agreement. Based on the evidence available, it is management’s opinion that the claim is entirely without merit. No provision has been reflected in the financial statements relating to this action.
13. COMMITMENT
The company is committed to operating leases for premises, vehicles, and office equipment expiring at various dates up to June 30, 2008. Future minimum lease payments are as follows:
| Premises | Vehicle | Equipment | Total | |
| $ | $ | $ |
$ | |
| 2005 | 140,686 | 34,592 | 18,989 | 194,267 |
| 2006 | 120,243 | 34,592 | 17,446 | 172,282 |
| 2007 | 52,591 | 17,019 | 16,930 | 86,540 |
| 2008 | 35,061 | 468 | 6,565 | 42,094 |
| 348,581 | 86,671 | 59,930 | 495,182 |