Outside Looking In Financial Statements

Transcription

1 Outside Looking In Financial Statements

2 . Contents Page Independent Auditors Report 1 Statement of Financial Position 2 Statement of Operations and Changes in Net Deficiency 3 Statement of Cash Flows 4 Notes to the Financial Statements 5-7 Schedule 1 - Program Expenditures 8 Schedule 2 - Administrative Expenditures 8

3 LICENSED TO PRACTICE PUBLIC ACCOUNTING BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF ONTARIO ZHS-CA PROFESSIONAL CORPORATION CHARTERED ACCOUNTANTS - LICENSED PUBLIC ACCOUNTANTS Independent Auditors Report 2579 Hurontario Street, Unit Mississauga, Ontario, Canada L5A 2G4 Tel: (905) Fax: (416) info@zhs.ca To the Board of Directors of Outside Looking In We have audited the accompanying financial statements of Outside Looking In, which comprise the statement of financial position as at June 30, 2014, and the statement of operations and changes in net deficiency and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management's responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our qualified audit opinion. Basis for qualified opinion In common with many charities, Outside Looking In derives revenue from fundraising and awareness events and donations, the completeness of which is not susceptible to satisfactory audit verification. Accordingly, our verification of this revenue was limited to the amounts recorded in the records of Outside Looking In and we were not able to determine whether any adjustment might be necessary to revenue, excess (deficiency) of revenue over expenditures, assets and net deficiency. Opinion In our opinion, except for the possible effects of the matter described in the basis for qualified opinion paragraph, the financial statements present fairly, in all material respects, the financial position of Outside Looking In as at June 30, 2014, and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations. Other matter The financial statements as at June 30, 2013 and for the year then ended were audited by another firm of chartered accountants, who expressed an opinion without reservation, except for the completeness of revenues, as noted above. Mississauga, Canada December 23, 2014 Chartered Accountant Licensed Public Accountant (License #I-18018) 1

4 Statement of Financial Position As at June Assets Current Accounts receivable 1,000 - Harmonized sales taxes receivable 15,640 15,562 Accounts receivable 16,813 - Merchandise inventory 6,280 7,030 Prepaid expenses 3,250 3,262 42,983 25,854 Equipment [Note-3] 6,486 8,719 Total Assets 49,469 34,573 Liabilities Current Cash and outstanding cheques 6,211 17,218 Accounts payable and accrued liabilities 35,757 81,055 Unearned revenue [Note-4] 30,000 40,000 Total Liabilities 71, ,273 Net deficiency (22,499) (103,700) Net Assets 49,469 34,573 See accompanying notes Approved on behalf of the Board Director Director 2

5 Statement of Operations and Changes in Net Deficiency Year ended June Revenues Sponsorship 225, ,100 Grants [Note-5] 80, ,868 In-kind contributions 79, ,463 Donations 120,481 93,394 Future leaders 4,328 27,800 Tickets 8,987 22,320 Merchandise 10,453 1,037 Total Revenues 528, ,982 Expenditures Program expenditures [Schedule-1] 186, ,871 Administrative expenditures [Schedule-2] 261, ,817 Total Expenditures 447, ,688 Excess (deficiency) of revenues over expenditures 81,201 36,294 Deficiency, beginning of year (103,700) (139,994) Excess (deficiency) of revenues over expenditures 81,201 36,294 Deficiency, end of year (22,499) (103,700) See accompanying notes. 3

6 Statement of Cash Flows Year ended June Increase (decrease) in cash and cash equivalents Operating Excess (deficiency) of revenues over expenditures 81,201 36,294 Item not affecting cash: Amortization 2,233 2,747 83,434 39,041 Change in non-cash working capital items Accounts receivable (1,000) 1,339 Harmonized sales taxes receivable (78) (2,615) Employee advances (16,813) Merchandise inventory 750 9,517 Prepaid expenses 12 (762) Accounts payable and accrued liabilities (45,298) 23,184 Unearned revenue (10,000) (54,000) 11,007 15,704 Financing Increase (decrease) in cash and outstanding cheques (11,007) 17,218 Repayment to related parties - (36,403) (11,007) (19,185) Investing Purchase of equipment - (1,428) (Decrease) increase in cash - (4,909) Cash, beginning of year - 4,909 Cash, end of year - - See accompanying notes 4

7 Notes to the Financial Statements Year ended June 30, Nature of operations Outside Looking In (the "Organization") is incorporated, without share capital, under the Canada Corporations Act as a not-forprofit organization. The purpose of the Organization is to provide opportunities for self-expression to Indigenous youth through the arts and to educate Canadians on Indigenous people through their performances. The Organization is a registered charity exempt from income tax under the Income Tax Act. 2. Significant accounting policies These financial statements are prepared in accordance with Canadian accounting standards for not-for-profit organizations. The significant policies are detailed as follows: Use of estimates The preparation of financial statements in conformity with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates relate to the value of in-kind contributions. Actual results could differ from those estimates. Revenue recognition Outside Looking In follows the deferral method of accounting for contributions. Unrestricted contributions are recognized as revenue when the amount is measurable and ultimate collection is reasonably assured. Restricted contributions are deferred until the period in which the related expenses are incurred. In-kind contributions The Organization receives sponsorships in-kind from various contributors throughout the year. In-kind contributions are valued by the contributor and market value is agreed to by the Organization, based on the sponsorships provided, and included at the agreed upon rate on the statement of operations and changes in net deficiency. Contributed services Volunteers contribute time to assist the Organization in carrying out its art program. Because of the difficulty of determining their fair value, contributed services are not recognized in the financial statements. Merchandise inventory Inventory, primarily consisting of finished goods, is valued at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. 5

8 Notes to the Financial Statements Year ended June 30, 2014 Significant accounting policies (continued) Equipment Equipment is recorded at cost. The Organization provides for amortization using the declining balance method at rates designed to amortize the cost of the equipment over its estimated useful life. The annual amortization rates are as follows: Financial instruments Computer equipment 30% Furniture and fixtures 20% The Organization's financial instruments consist of cash, accounts receivable, HST receivable, cash and outstanding cheques, accounts payable, and advances from related parties. Cash, accounts receivable, HST receivable and accounts payable are measured at fair value. The Organization subsequently measures all of its financial assets and financial liabilities at amortized cost with the exception of advances from related parties, which are stated at cost, as the amortized cost of the advances is not determinable. 3. Equipment Cost Accumulated Net Book Net Book Value Amortization Value Computer equipment 13,836 10,414 3,422 4,889 Furniture and fixtures 5,319 2,255 3,064 3,830 19,155 12,669 6,486 8, Unearned Revenue Unearned revenue, beginning of year 40,000 94,000 Funds received - 40,000 Less: revenue recognized (10,000) (94,000) Unearned revenue, end of year 30,000 40,000 Unearned revenue relates to community participation fees and sponsorship funds collected for the following program year. Of the amounts deferred at June 30, 2013, an amount of $10,000 has been recognized in fiscal Grants Included amongst grants are two amounts ($35,000 and $20,000) received during the fiscal year from Ontario Arts Council. 6

9 Notes to the Financial Statements Year ended June 30, Financial instruments The Organization is exposed to various risks through its financial instruments. The following analysis provides a measure of the Organization's risk exposures and concentrations at June 30, 2014 Liquidity risk Liquidity risk is the risk that the Organization will encounter difficulty in meeting its obligations associated with financial liabilities. The Organization is, therefore, exposed to liquidity risk with respect to its cash and outstanding cheques, accounts payable and advances from related parties. The Organization reduces its exposure to liquidity risk by ensuring that it documents when authorized payments are due. Credit risk Credit risk arises as a result of the potential non-performance by counterparties of contract obligations which could lead to a financial loss to the Organization. The Organization's credit risk relates to its amounts receivable. In the opinion of management, the credit risk exposure to the Organization is not significant due to the nature of the amounts receivable. Interest rate risk Interest rate risk is the risk that the fair value of or future cash flows from a financial instrument will fluctuate because of market changes in interest rates. The Organization was not exposed to fluctuations in interest rates as it had no interest-bearing debt. 7. Comparatives The comparative figures presented here, were audited by another firm of Chartered Accountants. Certain comparative amounts have been reclassified from those previously presented to conform to the presentation of the 2014 financial statements. 7

10 Schedule 1 - Program Expenditures Year ended June Production costs 106, ,393 In-kind production costs 79, , , ,871 Schedule 2 - Administrative Expenditures Year ended June Salaries and benefits 172, ,156 Professional fees 12,974 31,733 Rent 30,098 27,026 Advertising and promotion 10,389 25,149 Office 5,182 23,050 Interest and bank charges 6,132 14,287 Telephone and utilities 6,716 5,822 Travel and accommodation 7,198 3,073 Amortization 2,233 2,747 Memberships 3,506 1,794 Insurance 2,890 - Interest on related party advances Repairs and maintenance Subcontractor 1, , ,817 8