1 Canadian Council for International Co-operation Financial Statements Independent Auditor's Report 2-3 Financial Statements Financial Position 4 Revenues and Expenses 5 Changes in Net Assets 6 Cash Flows 7 Notes to Financial Statements 8-12 Supplementary Information 13
2 Independent Auditor's Report To the members of the Canadian Council for International Co-operation We have audited the accompanying financial statements of Canadian Council for International Co-operation, which comprise the statement of financial position as at and the statements of revenues and expenses, 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 generally accepted accounting principles 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 is sufficient and appropriate to provide a basis for our audit opinion.
3 3 Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Canadian Council for International Co-operation as at March 31, 2011 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. Chartered Accountants, Licensed Public Accountants Ottawa, Canada May XX, 2011
4 Financial Position 4 ASSETS Current assets Cash 626, ,772 Short-term investments (Note 4) 216, ,914 Advances to coalitions and other receivables 61,921 24,223 Projects receivable 132,120 Prepaid expenses 25,671 32, , ,351 Capital assets (Note 5) 32,031 1,170, ,205 2,033,985 LIABILITIES Current liabilities Accounts payable and accrued liabilities 197, ,680 Deferred contributions (Note 6) 102,813 94,964 Instalments on long-term debt 38, , ,284 Long-term debt (Note 7) 695, ,968 1,155,232 NET ASSETS Betty Plewes fund 4,666 19,606 Invested in capital assets 32, ,046 Unappropriated surplus 626, , , , ,205 2,033,985 The accompanying notes are an integral part of the financial statements. On behalf of the Board, Director Director
5 Revenues and Expenses Year ended 5 Revenues Canadian International Development Agency - Core Program 450,849 1,682,335 Membership fees 309, ,130 CCIC Projects 234, ,609 Other revenue and interest 265,202 42,393 Administration fees 21,185 68,934 Rent recovery 16,902 24,101 Transition fund 250,248 Gain on disposal of capital assets 138,400 Expenses by program (Supplementary Information - Expenses by category) 1,686,097 2,636,502 Communications 105, ,435 Organizational services 333, ,561 Policy dialogue 389, ,794 Organizational development 87, ,226 CEO's office 170, ,866 Program management 154, ,336 Board of directors and committees 79,724 86,034 Charity law education 202,402 1,321,575 2,568,654 Excess of revenues over expenses resulting from current operations 364,522 67,848 Relocation and severance expenses specifically approved to be paid from unappropriated surplus 565, ,126 Deficiency of revenues over expenses before Betty Plewes fund grant (200,576) (260,278) Betty Plewes fund grant, net of interest income (14,940) 135 Deficiency of revenues over expenses (215,516) (260,143) The accompanying notes are an integral part of the financial statements and note 4 provides other information on earnings.
6 Changes in Net Assets Year ended 6 Betty Plewes fund Invested in capital assets Unappropriated surplus Total Total $ Balance, beginning of year 19, , , ,753 1,138,896 Excess (deficiency) of revenues over expenses (14,940) 95,372 (295,948) (215,516) (260,143) Disposal of capital assets (1,233,975) 1,233,975 Principal repayment of long-term debt 734,588 (734,588) Balance, end of year 4,666 32, , , ,753 The accompanying notes are an integral part of the financial statements.
7 Cash Flows Year ended 7 OPERATING ACTIVITIES Deficiency of revenues over expenses (215,516) (260,143) Non-cash items Amortization of capital assets 43,028 70,686 Gain on disposal of capital assets (138,400) Changes in working capital items Advances to coalitions and other receivable (37,698) 19,451 Projects receivable 132,120 (43,071) Prepaid expenses 6,651 7,822 Accounts payable and accrued liabilities (128,525) 230,934 Deferred contributions 7,849 21,297 Cash flows from operating activities (330,491) 46,976 INVESTING ACTIVITIES Short-term investments 272,230 53,052 Acquisition of capital assets (140,164) Disposal of capital assets 1,233,975 Cash flows from investing activities 1,506,205 (87,112) FINANCING ACTIVITIES Long-term debt 104,597 Repayment of long-term debt (734,588) (35,009) Cash flows from financing activities (734,588) 69,588 Net increase in cash 441,126 29,452 Cash, beginning of year 185, ,320 Cash, end of year 626, ,772 The accompanying notes are an integral part of the financial statements.
8 Notes to Financial Statements GOVERNING STATUTES AND PURPOSE OF THE ORGANIZATION The Canadian Council for International Cooperation (CCIC), is a coalition of Canadian voluntary sector organizations working globally to achieve sustainable human development. CCIC seeks to end global poverty and to promote social justice and human dignity for all. The Council was founded in 1968 and is a registered charitable organization. 2 - ACCOUNTING POLICIES Basis of presentation The financial statements are prepared using the historical cost method, except for certain financial instruments that are recognized at fair value. No information on fair value is presented when the carrying amount corresponds to a reasonable approximation of the fair value. Accounting estimates The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts recorded in the financial statements and notes to financial statements. These estimates are based on management's best knowledge of current events and actions that the Council may undertake in the future. Actual results may differ from these estimates. Financial assets and liabilities The Council has chosen to apply the recommendations of Section 3861, Financial Instruments Disclosure and Presentation, of the Canadian Institute of Chartered Accountants' Handbook with respect to the presentation and disclosure of financial instruments. Initially, all financial assets and liabilities are measured at fair value. Subsequently, they are measured and recognized as follows: Cash Cash is classified as a held-for-trading financial asset. It is measured at its fair value. Term deposits The term deposits are classified as available-for-sale financial instruments. They are measured at their fair value and changes in fair value are recognized in net assets until the investments are disposed or become impaired, in which case the realized gain or loss is recognized in the statement of revenues and expenses. Advances to coalitions, other receivables and projects receivable Advances to coalitions, other receivables and projects receivable are classified as loans and receivables. They are measured at amortized cost which is generally the initially recognized amount, less any allowance for doubtful accounts.
9 Notes to Financial Statements ACCOUNTING POLICIES (Continued) Accounts payable and accrued liabilities and long-term debt Accounts payable and accrued liabilities and long-term debt are classified as other financial liabilities. They are measured as amortized cost using the effective interest method. Revenue recognition CCIC follows the deferral method of accounting for contributions. Restricted contributions, which includes Canadian International Development Agency - Core Program, CCIC projects and administration fees, are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when received or receivable if the amount can be reasonably estimated and collection is reasonably assured. Membership fees are recognized in the period to which they relate. Capital assets Capital assets are recorded at cost. When CCIC receives capital asset contributions, their cost is equal to their fair value at the contribution date or to a nominal value of $1 if the fair value cannot be reasonably determined. Amortization of capital assets is calculated according to the following methods, annual rate and period: Rate and Methods period Furniture Computers and equipment Foreign currency transactions 10 to 20 Straight-line years Diminishing balance 30% Revenue and expenses are translated at the rate of exchange in effect on the transaction date. Exchange gains or losses are included in the determination of the statement of revenues and expenses. Monetary assets and liabilities are translated using the exchange rate in effect at the balance sheet date. 3 - INFORMATION INCLUDED IN EARNINGS Interest on long-term debt 28,584 42,128 Amortization of capital assets 43,028 70, SHORT-TERM INVESTMENTS Short-term investments comprise a term deposit with a fair value of $216,684 bearing interest at the rates of 0.75% and maturing on September 4, 2011.
10 Notes to Financial Statements CAPITAL ASSETS 2011 Cost Accumulated amortization Net $ Furniture, computers and equipment 99,550 67,519 32, Cost Accumulated amortization Net $ Furniture, computers and equipment 880, ,626 84,886 Condominium 957,793 23, ,848 Parking lot 162,750 10, ,900 2,001, ,421 1,170, DEFERRED CONTRIBUTIONS Balance, beginning of year 94,964 73,667 Recognized as revenues (94,964) (73,667) Received relating to the following year 102,813 94,964 Balance, end of year 102,813 94,964 Deferred contributions represent unused resources which, as a result of external restrictions, are intended to cover CCIC's expenses for the coming year. 7 - LONG-TERM DEBT Mortgage loan, 5.92%, repaid during the year 636,051 Renovations loan, 5.34%, repaid during the year 98, ,588 Instalments due within one year 38, ,948
11 Notes to Financial Statements COMMITMENTS CCIC has entered into long-term lease agreements for the rental of equipment expiring on November 27, 2014, which call for lease payments totalling $52,592. The minimum lease payments for the next four years are $17,246 in 2012, $13,943 in 2013, $12,842 in 2014 and $8,561 in CCIC has entered into long-term flexible lease agreements for the rental of office space expiring on November 30, 2013, which call for lease payments totalling $106,800. The minimum lease payments for the next three years are $38,400 in 2012, $40,200 in 2013 and $27,600 in PENSION PLAN CCIC participates in an employer pension plan. The plan is a defined contribution pension plan. Contributions made during the year were $30,740 ($68,645 in 2010) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES, AND FINANCIAL RISKS Financial risk management objectives and policies CCIC is exposed to various financial risks resulting from both its operations and its investments activities. CCIC's management manages financial risks. CCIC does not enter into financial instrument agreements including derivative financial instruments for speculative purposes. Financial risks CCIC's main financial risk exposure and its financial risk management policies are as follows. Credit risk All of CCIC's cash is held by one financial institution. Credit risk relating to advances to coalitions and other receivables is generally diversified since CCIC negotiates with a large number of organizations. Credit risk relating to projects receivable is minimal as these amounts are part of funding agreements with well established organizations. Interest rate risk CCIC's investments are at fixed interest rates. Accordingly, there is limited exposure to interest rate risk. Liquidity risk Liquidity risk management serves to maintain a sufficient amount of cash and cash equivalents and to ensure that CCIC has financing sources such as bank loans for a sufficient authorized amount. CCIC establishes budget and cash estimates to ensure it has the necessary funds to fulfil its obligations.
12 Notes to Financial Statements FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES, AND FINANCIAL RISKS (Continued) Policies and processes for managing capital The CCIC's objectives when managing capital are: - To safeguard CCIC's ability to continue as a going concern; - To meet its general fund obligations. CCIC manages its capital structure in the context of economic and market conditions as well as related risks on the nature of capital, and the planned use of the capital.
13 Supplementary Information Year ended 13 EXPENSES BY CATEGORY Salaries and benefits 786,781 1,652,470 Consultants 99, ,092 Meeting expenses 72, ,578 Travel 63, ,186 Translation 49,500 97,127 Condo fees, rent and insurance 74,565 78,647 Amortization of capital assets 43,028 70,686 Interest on long-term debt 28,584 42,128 Photocopies, postage and office supplies 22,675 37,409 Equipment rental 25,060 36,177 Professional fees 25,987 15,796 Communications 14,382 14,970 Printing and graphics 12,113 Workshops and coalitions 5,892 Publications and subscriptions 4,526 5,640 Memberships and hospitality 2,069 5,577 Bank charges 3,520 4,811 Miscellaneous 1,622 4,582 Recruitment and training 4,292 1,469 Equipment maintenance 304 1,321,575 2,568,654