1 FINANCIAL STATEMENTS
2 CONTENTS Page INDEPENDENT AUDITOR'S REPORT 1-2 FINANCIAL STATEMENTS Statement of Financial Position 3 Statement of Revenues and Expenditures and Changes in Fund Balance 4 Statement of Cash Flows 5 Notes to Financial Statements 6-10 Schedule of Expenditures 11
3 Day & Day Chartered Professional Accountants Licensed Public Accountant William Day CPA, CA & Marty Day CPA, CA 67 Kirk Drive, London, Ontario N6P 1C9 Phone: and Fax: INDEPENDENT AUDITOR'S REPORT To the Members of the Ontario Volleyball Association We have audited the accompanying financial statements of Ontario Volleyball Association, which comprise the statement of financial position as at August 31, 2015, and the statements of revenue and expenditures, changes in fund balances and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management and Directors' Responsibility for the Financial Statements Management and directors are 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 and directors determine are 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 is sufficient and appropriate to provide a basis for our audit opinion. 1.
4 INDEPENDENT AUDITOR'S REPORT Continued Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Ontario Volleyball Association as at August 31, 2015, 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. London, Ontario November 19, 2015 Day & Day CHARTERED PROFESSIONAL ACCOUNTANTS LICENSED PUBLIC ACCOUNTANT 2.
5 STATEMENT OF FINANCIAL POSITION AS AT ASSETS CURRENT Cash $ 259,033 $ 417,005 Investments - current portion (Note 3) 729, ,666 Accounts receivable 544, ,000 Accrued interest receivable 48,211 37,189 Government remittances receivable 28,948 30,445 Inventory 9,550 10,089 Prepaid expenses 55,360 53,108 1,675,145 1,047,502 INVESTMENTS (Note 3) 276, ,135 EQUIPMENT (Note 4) 324, ,702 DEPOSITS 69,863 27,616 LIABILITIES $ 2,346,328 $ 2,134,955 CURRENT Trade payables $ 390,877 $ 520,177 Payable to members 222, ,270 Deferred revenue- current portion (Note 5) 407, ,616 Current portion of long term debt (Note 6) 2,719 2,719 1,023,767 1,054,782 LONG TERM - DEFERRED REVENUE (Note 5) 27,789 39,653 LONG TERM DEBT (Note 6) 2,041 4,760 FUND BALANCE 1,053,597 1,099,195 CONTINGENCY RESERVE FUND (Note 7) 1,292,731 1,035,760 APPROVED ON BEHALF OF THE BOARD: Director Director $ 2,346,328 $ 2,134,955 3.
6 STATEMENT OF REVENUES, EXPENDITURES & CHANGES IN FUND BALANCE FOR THE YEAR ENDED REVENUE Fund raising $ 10,784 $ 7,086 Grants - Government of Ontario 354, ,543 Grants - Trillium Fund (Note 4 & 5) 115, ,333 Grants - Other 22,500 14,014 Investment income 16,497 21,564 Memberships 387, ,088 Other 29, Programs - tournaments, fees and other 3,401,278 3,138,139 Publication sales 15,873 13,780 Sponsorships 66,045 75,476 4,420,059 4,073,746 EXPENDITURES Administrative salaries & benefits 361, ,038 Amortization 54,665 51,483 Communications 17,828 14,767 Meetings 48,712 38,842 Other administrative costs (Schedule 1) 103, ,570 Programs (Schedule 1) 3,529,064 3,180,749 Publication costs 16,610 12,299 Special events 31,975 14,420 Loss on disposal of capital assets - 39,798 4,163,088 3,908,966 EXCESS REVENUES OVER EXPENDITURES 256, ,780 CONTINGENCY RESERVE FUND, BALANCE BEGINNING OF YEAR (Note 7) 1,035, ,980 CONTINGENCY RESERVE FUND, BALANCE END OF YEAR (Note 7) $ 1,292,731 $ 1,035,760 4.
7 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED OPERATING ACTIVITIES Cash provided by operations Excess revenues over expenditures $ 256,971 $ 164,780 Add (deduct): charges to income not involving cash Amortization 54,665 51,483 Loss on disposition of capital assets - 39, , ,061 Net change in non-cash working capital balances related to operations Investments (443,244) (121,343) Accounts receivable (331,133) (147,891) Accrued interest receivable (11,022) 15,746 Government remittances receivable 1,497 (14,170) Inventory 539 3,813 Prepaid expenses (2,252) 38,653 Trade payables (129,300) 143,213 Payable to members 66,571 20,948 Deferred revenue 19,850 41,282 (516,858) 236,312 FINANCING ACTIVITIES Long term debt advances - 9,599 Long term debt repayment (2,719) (2,120) (2,719) 7,479 INVESTING ACTIVITIES Additions to capital assets (31,835) (262,987) Net (increase) decrease in deposits (42,247) 16,500 Net (increase) decrease in investments 435,687 83, ,605 (163,110) (DECREASE) INCREASE IN CASH (157,972) 80,681 CASH, beginning of year 417, ,324 CASH, end of year $ 259,033 $ 417,005 5.
8 NOTES TO THE FINANCIAL STATEMENTS 1. PURPOSE OF THE ORGANIZATION Ontario Volleyball Association is a provincial organization operating programs to lead in the development and promotion of the sport throughout Ontario. Ontario Volleyball Association is incorporated in the province of Ontario under The Corporations Act as a not-for-profit organization. 2. SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared in accordance with Canadian accounting standards for Not-For-Profit Organizations (ASNFPO) and include the following significant accounting policies: (a) Basis of Presentation The financial statements of the Organization reflect the assets, liabilities, revenues and expenses of the operations of the organization. (b) Fund accounting Contingency Reserve Fund The objective of the contingency reserve fund is to maintain funds sufficient to meet the Association's annual working capital requirements and any planned future capital commitments. This reserve was established to ensure that the Association will be able to continue to operate as a going concern. (c) Revenue recognition The Organization follows the deferral method of accounting for grants. Grants are recognized as revenue in the year in which the related expenses are incurred. Program fees are recognized as revenue when the programs are held. Investment income includes interest income, realized investment gains and losses, and unrealized gains and losses. (d) Donated services The Organization benefits greatly from donated services in the form of volunteer work to assist the Ontario Volleyball Association in carrying out its service delivery activities. Because of the difficulty in determining their fair value, donated services are not recognized in the financial statements. (e) Inventory Inventory consists of books, manuals, score sheets and miscellaneous items necessary for the conduct of the Organization's operations. Inventory is recorded at the lower of cost and net realizable value using the weighted average method. 6.
9 NOTES TO THE FINANCIAL STATEMENTS (f) Equipment Equipment is recorded at cost. Annual amortization is provided on a straight line basis at the following annual rates: (g) Use of Estimates Office furniture - 10% straight line Volleyball courts & equipment - 10% straight line The preparation of these financial statements in conformity with Canadian generally accepted accounting principles for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the current period. These estimates are reviewed periodically and adjustments are made to income as appropriate in the year they become known. (h) Financial instruments Measurement of financial instruments The enterprise initially measures its financial assets and financial liabilities at fair value. The enterprise subsequently measures all its financial assets and financial liabilities at amortized cost, except for investments in equity instruments that are quoted in an active market, which are measured at fair value. Changes in fair value are recognized in net income. Financial assets measured at amortized cost include cash, investments, accounts receivable, and notes receivable. Financial liabilities measured at amortized cost include accounts payable and deferred revenue. (i) Deferred government assistance Fixed asset grants are accounted for as deferred government assistance and amortized on the same basis as the related fixed assets. 3. INVESTMENTS Bank Certificates and Deposits $ 1,006,134 $ 795,512 Investment cash account ,289 1,006, ,801 Less: Current portion - maturing in the next 12 months 729, ,666 $ 276,448 $ 712,135 Bank certificates and deposits mature in 2015 to 2018 and earn interest at rates between 1.9% and 2.5%. Interest is compounded and paid at maturity. 7.
10 NOTES TO THE FINANCIAL STATEMENTS 4. EQUIPMENT Accumulated Net Net Cost Amortization Volleyball courts & equipment $ 517,272 $ 201,214 $ 316,058 $ 335,950 Office furniture 29,385 20,571 8,814 11,752 $ 546,657 $ 221,785 $ 324,872 $ 347,702 In a prior year a grant of $150,000 was received to fund the purchase of some of the volleyball courts. The balance of the deferred grant revenue related to this grant as at August 31, 2015 is $30,000. It is being recognized as income in the amount of $10,000 per year, on the same basis as the amortization of the volleyball courts, straight line over ten years. 5. DEFERRED REVENUE Deferred revenue represents monies received prior to the year end which relate to events which will not occur until after the year end, or specifically will be designated as revenues. Ashbridges $ 14,683 $ 10,565 Canadian Sports Centre - Ontario - 12,500 Coaches Association of Ontario - grant 7,000 - Ministry of Tourism, Culture and Sport - Annual grant 153, ,287 Ministry of Tourism, Culture and Sport - OCSRF 74,844 - Ministry of Tourism, Culture and Sport - Sport Priority Funding - 100,000 Ontario championships travel fund 3,031 - Ontario Trillium Foundation - CS4L grant 104,535 63,364 Ontario Trillium Foundation - grant 14,000 - Other Fund previously Performance bonds 23,900 23,900 Solars Fund 9,789 11,653 Grant - volleyball courts (Note 4) 30,000 40, , ,269 Current portion of deferred revenue 407, ,616 $ 27,789 $ 39,653 Performance bonds payable represent amounts collected from all clubs for ongoing participation in the organization's programs. These funds are collected at the time of registration. The Ontario Volleyball Association has eliminated the requirement for performance bonds and refunded bonds where possible. The remaining funds will be used for operational indoor club volleyball. Previously, a volleyball club contributed $18,500 to the Association for its use. The Association has decided that the funds will be used for athlete assistance for athletes who are national team candidates. The fund will be known as the Solars Fund. The full amount less $2,000 for current awards, has been presented as long term. 8.
11 NOTES TO THE FINANCIAL STATEMENTS 6. LONG TERM DEBT Long term debt consists of the following: Green Tractors Inc. Loan payable due May 1, 2017, interest 0%, repayable in monthly payments of $227; secured by equipment with a net book value of $6,795. $ 4,760 $ 7,479 Less current portion of long term debt 2,719 2,719 $ 2,041 $ 4,760 Principal repayments for the year ended August 31, 2016 are expected to be $2,719 for the year ended August 31, $2, CONTINGENCY RESERVE FUND During the current fiscal year the Association created the contingency reserve fund (Note 2(b)). The previous net asset position is now being presented in the financial statements as the Contingency Reserve Fund, which is comprised of operating and capital funds. The Finance and Audit Committee determined the estimated target amount of funds required to meet working capital requirements and capital funding is $1,925,000. The target amount is comprised of capital funds and one base funding cycle, plus an average of other grants received. 8. SPONSORSHIPS The Association's financial statements reflect only cash sponsorships received from various sponsors. During the current fiscal year, the Association received additional donations of products from various sponsors with a retail value of approximately $65,750 ( $64,850). 9. ECONOMIC DEPENDENCE The continued operations of the Association depend to a large extent upon the funding that it receives from the Provincial Government. Any significant reduction in this source would significantly curtail the Association's ability to offer a complete range of programs. 10. OFFICE RENT & MAINTENANCE The Association leases premises at 3 Concorde Gate, Toronto, Ontario on a monthly basis from Crowne Property Management in trust for Artis Concorde Ltd. The association is reviewing the temporary lease with a term ending June 30, Monthly lease payments are $5,
12 NOTES TO THE FINANCIAL STATEMENTS 11. FINANCIAL INSTRUMENTS The Association as part of its operations carries a number of financial instruments, which include cash, accounts receivable, investments, accounts payable and accruals. The carrying amount of the Association's financial instruments approximates their face value due to their relatively short-term maturities. It is management's opinion that the Organization is not exposed to significant interest rate, currency or credit risks arising from its financial instruments, except as otherwise disclosed. 12. COMMITMENTS The Ontario Volleyball Association (OVA) has renewed its License Agreement with the City of Toronto for the use of beach volleyball facilities, Ashbridge's Bay Park and Woodbine Beach Park, for the term May 1st to September 30th in each of the years 2015 through The license fee consists of: a) A fixed payment of $180,000 plus GST or HST to be paid in instalments of $90,000 each on June 1st and September 1st of each year during the Term, commencing June 1, 2015; b) For the 2015 season, an additional payment of 8% of gross revenues; for the 2016 season, 8.5% of gross revenues; for the 2017 season, 9% of gross revenues; for the 2018 season 9.5% of gross revenues and for the 2019 season, 10% of gross revenues, payable one month after the Licensee's fiscal year end. c) A variable portion throughout the Term being any and all other payments which are the Licensee's responsibility pursuant to the Agreement. The OVA has provided the City of Toronto with a security deposit in the amount of $10,000. The security deposit may be used by the City to remedy any of the Licensee's defaults. The OVA has provided the City of Toronto with a letter of credit in the amount of $59,863. The letter of credit may be used by the City to remedy any of the Licensee's defaults. 10.
13 SCHEDULE OF EXPENDITURES FOR THE YEAR ENDED Schedule 1 PROGRAMS Beach $ 291,250 $ 317,787 Beach Nationals 45,962 48,760 Coaching 90,123 84,115 CS4L - Trillium Fund 105, ,533 Officials 330, ,563 Programs - Ashbridges Beach Volleyball 535, ,536 Programs - Sitting Volleyball 7,271 - Programs - Learn To Train 132, ,722 Programs - Train To Train 651, ,946 Programs - Learn To Compete 730, ,474 Programs - Train To Compete 86, ,310 Programs - Volleyball Canada Centres of Excellence 43,317 - Programs - Sitting Volleyball 7,271 - Provincial championships 479, ,099 Sport Court - Trillium Fund - 37,904 $ 3,529,064 $ 3,180,749 OTHER ADMINISTRATION COSTS Bad debt expense (recovery) $ (714) $ 1,225 Bank, credit card & payroll service charges 9,538 4,508 Insurance 17,051 20,492 Office supplies and other 9,260 6,326 Phone, fax & internet 11,139 9,237 Postage & courier 3,294 2,334 Printing & copying 426 1,376 Professional services 32,972 96,617 Rent 20,149 19,455 $ 103,115 $ 161,