Financial Information
13. DISCLOSURE CONTROLS AND PROCEDURES
As defined in Multilateral Instrument 52-1 09, disclosure controls and procedures mean controls and other procedures designed to provide reasonable assurance that all relevant information is gathered and reported to senior management, including the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), on a timely basis and in accordance with securities legislation.
As of the fiscal year ended October 31, 2008, the CEO and the CFO reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures as it applies to the preparation of the Management discussion and analysis, the Consolidated financial statements and financial reporting. Based upon that review and evaluation, they have concluded that those disclosure controls and procedures are effective at a reasonable assurance level and meet the requirements thereof.
14. ACCOUNTING POLICY DEVELOPMENTS
(i) Financial Instruments - Disclosure and Presentation: In December 2006, the CICA issued Section 3862, “Financial Instruments Disclosures,” and Section 3863, “Financial Instruments, Presentation.” These standards provide additional guidance on disclosing risks related to recognized and unrecognized financial instruments and how those risks are managed. This Section applies to interim and annual financial statements of the Company commencing 2008 fiscal year.
(ii) Capital Disclosures: CICA issued Handbook Section 1535, Capital Disclosures, which provides standards for disclosures regarding a company’s capital and how it is managed. Enhanced disclosure with respect to the objectives, policies and processes for managing capital and quantitative disclosures about what a company regards as capital is required. These recommendations are effective for fiscal years beginning on or after October 1, 2007 and, therefore, apply to the Company. See note 15 regarding additional disclosure.
15. CAPITAL STRUCTURE
The capital structure of the Company consists principally of shareholder’s equity comprised of retained earnings and share capital. The Company’s strategy is to minimize the use of debt financing to fund growth and manage its capital structure in light of economic conditions and the risk characteristics of the underlying assets. The Company’s primary uses of capital are to finance non-cash working capital requirements and capital expenditures, which are currently funded from its internally generated cash flows. The Company is not subject to any externally imposed capital requirements and does not presently utilize any quantitative measures to monitor its capital. The Company’s objectives in managing capital are to ensure sufficient liquidity to pursue its strategy of organic growth and to deploy capital to provide an appropriate return on investment to its shareholders.
16. FUTURE ACCOUNTING PRONOUNCEMENTS FOR 2009
(i) International Financial Reporting Standards (IFRS): In 2006, Canada’s Accounting Standards Board adopted a strategy of converging Canadian generally accepted accounting principles for publicly accountable enterprises with International Financial Reporting Standards (IFRS). The Company will be required to report using these converged standards for interim and annual financial statements for fiscal years commencing on or after January 1, 2011. The Company is currently in the process of evaluating the impacts of this convergence on the consolidated financial statements.
(ii) Goodwill and other intangible assets: In February 2008, the CICA issued Section 3064, Goodwill and other intangible assets and Section 3450, Research and development costs. The new Section establishes standards for the recognition, measurement, presentation and disclosure of goodwill subsequent to its initial recognition and of intangible assets by profitoriented enterprises. Standards concerning goodwill are unchanged from the standards included in the previous Section 3062. The new Section will be applicable to interim and annual financial statements relating to fiscal years beginning on or after October 1, 2008. The Company is currently evaluating the impact of these new Sections on its consolidated financial statements.
(iii) General standards on Financial Statement Presentation: In June 2007, the CICA Handbook Section 1400 , “General Standards on Financial Statement Presentation”, has been amended to include requirements to assess and disclose an entity’s ability to continue as a going concern. The changes are effective for interim and annual financial statements beginning on or after January 1, 2008. The Company is currently evaluating the impact of this new standard on its consolidated financial statements.
(iv) Inventory: In June 2007, the CICA issued Section 3031, “Inventories” resulting from the convergence with IFRS, which requires inventory to be measured at lower of cost and net realizable value. The standard also provides guidance on the costs that can be capitalized. In addition, previous inventory write-downs are now allowed to be reversed if the economic circumstances have changed to support an increased inventory value. The standard is effective for our annual and interim periods beginning on or after January 1, 2008. The Company is currently evaluating the impact of this standard, but does not anticipate any impact on the Company.
17. RISKS AND UNCERTAINTIES
In light of the current global economic climate, we expect to see continuous weakness in consumer spending and tightening of the credit markets that will lead to an overall deterioration of economic conditions potentially slowing the rate of growth in the subscriber account base. We, however, remain optimistic that the Company will be able to continue the momentum in new customer installations through continued investment in creative advertising campaigns directed at prospective subscribers in Canada and selected centers in the US.
In addition to general economic factors, the Company’s business is subject to a number of risk factors including consumer behaviors, technological changes, and competition as further described below. The Company has certain business risks linked to collection of receivables and subscriber attrition risk, which management believes is manageable.
Attrition of accounts
Customer attrition results fiom a variety of different factors including relocation of subscribers’ financial difficulties experienced by the customary competition and other socio-economic factors. Any significant increase in the Company’s attrition rates could have a materially adverse effect on the Company’s business’ financial condition’ liquidity and operating results.
Technological
As technology evolves in the security and telecommunication industries, the Company will attempt to keep abreast of changes in technologyy yet there are no assurances that the Company’s products or services will continue to be competitive as a result of such technological advancements. There are also no guarantees that the utility companies or other companies will not enter the security alarm business with improvements in technology,
Some of our monitoring services depend on wireless technology of security alarm systems and should the need arise we may be required to implement new technology which could require significant expenditures. The Company makes every attempt to fully embrace and implement the new wireless technology. However, we may not be able to successfully implement these new technologies or adapt to changing market demands within the specified time frames. If we are unable to adapt to changing technologies, market conditions or customer requirements in a timely manner, such inability could adversely affect our business.
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Testimonials
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We were having trouble with our door alarm and it was going off without reason. In one way it was annoying as Alarmforce kept calling us, but it was good to know they were protecting our home. Alarmforce corrected the problem and the problem stopped. I have accidentally set of the alarm myself, but the Alarm Force personnel were extremely patient with me and I am glad that they were there. Thanks Alarm Force, your staff is amazing and I have already recommended you to other people including my sister-in-law who lives alone and feels very secure now knowing she has the two-way voice in case of emergency.
-Brenda M.- Edmonton, AB -
I am very happy with AlarmForce. It gives me a great sense of security. Thank you very much.
-Shirley S. -
"Why security systems? If we read the papers, local and otherwise, we unfortunately know the answer. Why AlarmForce? When I recently heard about my neighbor 6 doors down having THEIR door kicked in, I knew it was time for me to investigate security systems and providers. AlarmForce had been on my radar, as a friend had signed up with them. I happily joined "The Force" when I heard about the monthly price plus AlarmForce would work with my cell phone since I don't have a land line. My experience: Quick response a couple of times when my handman guy came by and was he surprised!!! When the day comes for real, whether at night sleeping or when I'm away from home, I know someone's watching my investment! Thanks!"
-Bob, Minneapolis, MN -
By, the way the alarm system is great - I feel much safer now especially when my husband is on the graveyard shift. The fellow that installed it for us too was very professional and helpful.
-Debbie, BC -
Excellent customer service and very knowledgeable service staff.
-Kelley, BC -
Dear Joel: I have listened to your comments about your service on the radio for a while. As a retired Volunteer Fire Rescue Captain, I realize the importance of a quick response. I am currently looking after my bosses house while he is on vacation. I entered the premises, and hit the wrong button to disarm. Immediately, your dispatcher was talking to me. He called on the land line, and helped me out. I'm extremely impressed with your service, and your personnel. So much so, I want to install Alarm Force in my house. Keep up the good work Joel. I'll rest easier knowing you're on our side
-John, AB -
We are very impressed with your service. Keep up the great work!
-Jennifer T. & Jon K. -
It was five days before Christmas in 2009, when I was finally getting off of work, to come home and enjoy my holidays. I had been in Northern Alberta and British Columbia working for awhile and not getting the chance to come home very often. My landlord of the house, my spouse and I were renting, lived across the street and was able to watch our house while we were both out of town. It was 9:00pm the night before I flew home, when my landlord called to say our house had gotten broken into. I was very frustrated, upset and angry mainly because I come from a small town in Saskatchewan and not a lot of crime goes on. I did not know what to expect when I got home to see if all of our belongings were missing and the house destroyed. I remember coming home from the airport, very scared, not wanting to even stay at my house over night. When I got home, there was this feeling of someone there, but really there wasn't. Everything seemed to still be intact, and not missing, but I did not feel safe staying there by myself that night. I decided to stay with family. The next day, I called Alarm Force to have a system set up in our house. I was leaving for Saskatchewan within 72 hours, and no one from alarm force could come. This was very understandable since it was short timing. I explained to AlarmForce over the phone what had happened, how I did not feel safe, and I wanted to purchase a system. AlarmForce was very helpful. Their best intention was to get a system for me installed as soon as possible so I would feel safe in my own home. AlarmForce was very helpful and they worked with my landlord and me in installing a system in my house, even knowing me and my spouse were gone from Christmas. After Christmas I came home to find a wonderful, easy, accessible alarm to use that was very understanding to learn. The best part was how much room the alarm took up, which was not much! The amount of money I have to pay for having the alarm is well worth than having my belongings maybe gone one day, or myself in danger. I like how the payment system is set up on a monthly payment, and I can transfer my system to friends or family if need be. We still live in the house so it is definitely paying off. I also love that if we were to move, we can move our system to different locations. I am more home now, than I used to be but my spouse is still out of town lots. I sometimes get very nervous staying by myself which affects sometimes the way I sleep. Being paranoid about staying in a house by yourself is not a very good feeling. It bothers me a lot that for whoever broke in knows where I live and what belongings are in the house. Will they return? But when I put my alarm system on while I am in the house, and at night going to sleep- the system makes me feel very stress and paranoid free. I know if something was to happen and someone had gotten into my house- help would be around the corner. One time, my family was up visiting with our family dog, and we were going out for supper. I was not used to having a pet around, and I set the alarm not even thinking the dog was in the house. I had received a call from Alarm Force on our way to the restaurant but I missed the call. Next thing I knew, my landlord was calling me to state that he had received a call from AlarmForce. He knew most likely I set the alarm and the dog had been in the house. I was very shocked in how the phone call was sent out asking if everything was okay. This was the first time in over a year, AlarmForce had to call, and it was amazing how comforting the time was and how it did not take long for someone to contact me. This made me feel even better about the purchase we made of installing Alarm Force in our house. I would recommend Alarm Force to anyone who is insisting to have a system put into their house. I have told many people about my story of how Alarm Force was there for me, even if I was not able to be there. I explain to others how comforting it is to have someone “with” you even knowing no body physically is there. It is an affordable way to keep one or one's family safe.
-Sara G. - Edmonton, AB
