Financial Statements Burlington Chamber of Commerce. December 31, 2014

Transcription

1 Financial Statements Burlington Chamber of Commerce December 31, 2014

2 Contents Page Independent Auditor s Report 1-2 Statement of Operations 3 Statement of Changes in Net Assets 4 Statement of Financial Position 5 Statement of Cash Flows 6 Notes to the Financial Statements 7-10 Schedule of General and Administrative Expenses 11

3 Independent Auditor s Report To the Members of Burlington Chamber of Commerce Grant Thornton LLP 3600 Dundas St. Suite 300 Burlington, ON L7M 4B8 T (289) F (289) We have audited the accompanying financial statements of the Burlington Chamber of Commerce, which comprise the statement of financial position as at December 31, 2014 and the statements of operations, changes in net assets 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 Chamber 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 Chamber 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. Audit Tax Advisory Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd

4 Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Burlington Chamber of Commerce as at December 31, 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. Burlington, Canada February 17, 2015 Chartered Accountants Licensed Public Accountants Audit Tax Advisory Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd

5 Statement of Operations For the Year Ended December Revenues Membership fees $ 358,820 $ 355,910 Programmes 323, ,654 Magazine 24,645 36,513 Group insurance administrative fee 75,241 70,946 Membership directory 45,766 3,504 Website 2,957 4,590 Miscellaneous 7,233 7, , ,351 Expenses Membership 12,857 13,564 Programmes 201, ,342 Magazine 24,856 35,329 Directory 44, Committees Amortization 915 1,237 Strategic planning 2,000 - General and administrative (Page 11) 534, , , ,417 Excess of operating revenues over expenses for the year 16,941 3,934 Interest income - reserve funds 4,311 4,512 Excess of revenues over expenses for the year $ 21,252 $ 8,446 See accompanying notes to the financial statements. 3

6 Statement of Changes in Net Assets For the Year Ended December 31, 2014 Investment in General Capital Capital Assets Reserve Fund Reserve Fund Unrestricted Total Total Balance, beginning of year $ 4,115 $ 286,043 $ 73,090 $ 63,711 $ 426,959 $ 418,513 Excess of operating revenues over expenses for the year (915) ,856 16,941 3,934 Excess of reserve fund revenues over expenses for the year Interest income - 3, ,311 4,512 Transfers - 12,705 4,236 (16,941) - - Balance, end of year $ 3,200 $ 302,182 $ 78,203 $ 64,626 $ 448,211 $ 426,959 4

7 Statement of Financial Position as at December Assets Current assets Cash and cash equivalents $ 56,520 $ 71,669 Accounts receivable (Note 3) 68, ,020 Prepaid expenses 22,519 14, , ,096 Restricted cash and investments (Note 4) General reserve fund 302, ,043 Capital reserve fund 78,203 73,089 Capital assets (Note 5) 3,201 4,115 $ 531,413 $ 554,343 Liabilities Current liabilities Accounts payable and accrued liabilities (Note 7) $ 63,164 $ 61,372 Deferred revenue 20,038 66,012 83, ,384 Net assets Investment in capital assets 3,200 4,115 Internally restricted funds 380, ,133 Unrestricted net assets 64,626 63, , ,959 $ 531,413 $ 554,343 Approved by: President Director of Finance See accompanying notes to the financial statements. 5

8 Statement of Cash Flows For the Year Ended December Excess of revenues over expenses for the year $ 21,252 $ 8,446 Operating Items not affecting cash Amortization 915 1,237 Loss on disposal of equipment Changes in non-cash working capital items Accounts receivable 36,230 (50,886) Prepaid expenses (8,112) (12,364) Accounts payable and accrued liabilities 1,792 19,739 Deferred revenue (45,974) 48,404 6,103 15,043 Financing Investment in reserve funds (21,252) (8,444) Net increase (decrease) in cash and cash equivalents (15,149) 6,599 Cash and cash equivalents Beginning of year 71,669 65,070 End of year $ 56,520 $ 71,669 See accompanying notes to the financial statements. 6

9 Notes to the Financial Statements December 31, Nature of operations The Burlington Chamber of Commerce (the Chamber ) is a not-for-profit organization which was established in 1947 to promote civic, commercial, and industrial progress in the Burlington area. The key objectives of the Chamber are to provide networking, education and advocacy services to members. 2. Summary of significant accounting policies The financial statements have been prepared by management in accordance with Canadian accounting standards for not-for-profit organizations (ASNPO), the more significant of which are outlined below. Use of estimates Items subject to significant management estimates include the amortization of capital assets. Cash and cash equivalents Cash and cash equivalents include cash and short term investments with maturities of three months or less from the date of acquisition. Financial instruments The Chamber s financial instruments consist of cash and cash equivalents, accounts receivable, restricted cash and investments, and accounts payable and accrued liabilities. Unless otherwise noted, it is management s opinion that the Chamber is not exposed to significant interest, currency or credit risks arising from its financial instruments and the carrying amounts approximate fair values. A financial asset or liability is recognized when the Chamber becomes party to contractual provisions of the instrument. Initial measurement Upon initial measurement, the Chamber's financial assets and liabilities are measured at fair value. Financial assets or financial liabilities that will be measured subsequently at amortized cost are increased or decreased by the amount of the related financing fees and transaction costs. Financial assets measured at amortized cost include cash and cash equivalents, accounts receivable, and restricted cash and investments. Financial liabilities measured at amortized cost include accounts payable and accrued liabilities. Subsequent measurement At each reporting date, the Chamber measures its financial assets and liabilities at amortized cost (including any impairment in the case of financial assets). 7

10 Notes to the Financial Statements December 31, Summary of significant accounting policies (continued) Capital assets Capital assets are recorded at cost and subsequently measured at cost less accumulated amortization. Amortization is based on their estimated useful life on a diminishing balance basis at the following rates: Furniture and fixtures 20% Website 45% The amortization method and estimated useful lives are reviewed annually. When a capital asset no longer has any long-term service potential to the organization, the excess of its net carrying amount over any residual value is recognized as an expense in the statement of operations. Any write-downs recognized are not reversed. Revenue recognition The Chamber follows the deferral method of accounting for contributions. Revenues received in advance for advertising and special events are deferred and are recognized in the year when services are provided or the event takes place. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Annual membership fee revenues are recognized into income in the month the fees are due. Other forms of revenue are recognized as they are earned. Internally restricted funds The general reserve fund has been established to provide funding for future requirements of the Chamber. The capital reserve fund has been established to provide funding for future capital purchase requirements of the Chamber. Reserve fund investments consist of cashable and non-cashable guaranteed investment certificates with banks, and are carried at amortized cost. 8

11 Notes to the Financial Statements December 31, Accounts receivable Accounts receivable $ 77,229 $ 107,566 Less: Allowance for doubtful accounts (8,441) (2,546) $ 68,788 $ 105, Restricted cash and investments The Chamber has set aside cash and investments to match its internally restricted general reserve fund and capital reserve fund. General reserve fund Cash $ 45,512 $ 32,425 Guaranteed income certificates, bearing interest at 1.2%, maturing February , ,618 $ 302,182 $ 286,043 Capital reserve fund Cash $ 15,530 $ 11,162 Guaranteed income certificates, bearing interest at 1.2% maturing January and February ,673 61,927 $ 78,203 $ 73, Capital assets Accumulated Net Net Cost Amortization Book Value Book Value Furniture and fixtures $ 39,462 $ 36,462 $ 3,000 $ 3,749 Website 2,200 1, $ 41,662 $ 38,461 $ 3,201 $ 4,115 9

12 Notes to the Financial Statements December 31, Commitments The Chamber has an operating lease for its premises at $4,986 per month that expires in The Chamber also has an operating lease for its photocopier. The photocopier is leased at $319 per month until Future lease payments aggregate $245,097 and include the following amounts payable over the next four years $ 65, , , ,832 $ 245, Government remittances Government remittances payable total $9,736 at December 31, 2014 ($ 20,009 December 31, 2013). 8. Financial instrument risks The Chamber s main financial instrument risk exposure is detailed as follows. Credit risk The Chamber has determined that the financial assets with credit risk exposure are accounts receivable since failure of any of these parties to fulfill their obligations could result in significant financial losses for the Chamber. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Chamber is exposed to interest rate risk with respect to investments in GICs. Liquidity risk The Chamber's liquidity risk represents the risk that the Chamber could encounter difficulty in meeting obligations associated with its financial liabilities. The Organization is, therefore, exposed to liquidity risk with respect to its accounts payable. 10

13 Schedule of General and Administrative Expenses December 31, 2014 Expenses Advertising and promotion $ 4,242 $ 8,734 Bad debts 6,799 2,546 Bank charges 10,050 8,652 Bookkeeping 25,380 26,215 Christmas Open House Computer 13,176 8,033 Conventions 12,180 12,378 Courier and postage 1, Equipment 8,707 10,378 Insurance 4,311 4,106 Loss on disposal of equipment Office supplies and subscriptions 3,479 4,930 Professional fees 5,128 3,960 Rent 62,259 61,331 Salaries and wages 367, ,607 Telephone 1, Training 1, Travel and entertainment 6,998 6,944 $ 534,224 $ 526,236 11