IDE INTERNATIONAL DEVELOPMENT ENTERPRISES ASSOCIATION INC. Financial Statements For the year ended December 31, 2015

Transcription

1 IDE INTERNATIONAL DEVELOPMENT ENTERPRISES Financial Statements

2 Financial Statements Contents Independent Auditor's Report 2 Financial Statements Statement of Financial Position 3 Statement of Changes in Net Assets 4 Statement of Operations 5 Statement of Cash Flows 6 Notes to Financial Statements 7 Supporting Schedules 15 DFATD Schedules 16

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5 Statement of Changes in Net Assets For the year ended December 31 Investment in Internally WASH Reserve Unrestricted Capital Assets Restricted Fund Fund Surplus Total Net assets, December 31, 2013 $ 2,866 $ 124,599 $ 55,222 $ - $ 173,508 $ 356,195 Excess (deficiency) of revenue over expenses (2,866) ,849 94,983 Transfers - - (11,044) - 11,044 - Net assets, December 31, ,599 44, , ,178 Excess of revenue over expenses ,352-49,198 70,550 Net assets, December 31, 2015 $ - $ 124,599 $ 65,530 - $ 331,599 $ 521,728 The accompanying notes are an integral part of these financial statements. 4

6 Statement of Operations For the year ended December 31 Revenue Donations $ 699,198 $ 593,466 Government grants (Page 15) 1,470,746 1,109,221 Interest and other 1,325 1,796 Program services 64, ,726 Sponsorships 93,500 71,500 2,329,290 2,018,709 Expenses International programs (Page 15) 1,934,021 1,598,390 Fundraising 187, ,915 General and administrative expenses 69,775 93,465 Public engagement and education 67,063 67,956 2,258,740 1,923,726 Excess of revenue over expenses $ 70,550 $ 94,983 Apportioned to the following funds: Wash Fund $ 21,352 $ - Unrestricted Surplus 49,198 94,983 $ 70,550 $ 94,983 The accompanying notes are an integral part of these financial statements. 5

7 Statement of Cash Flows For the year ended December 31 Cash Flows from Operating Activities Excess of revenue over expenses $ 70,550 $ 94,983 Adjustment for non-cash items: Amortization of capital assets - 2,865 Forgiveness of long-term debt (35,339) - 35,211 97,848 Net change in non-cash working capital Accounts receivable (29,478) (6,839) Project advances (696,312) - Loan receivable (33,981) - Prepaid expenses 3,026 2,989 Accounts payable and accrued liabilities 60,173 (10,351) Deferred revenue 1,267,555 (614,244) Project payable (30,820) 19, ,374 (511,580) Increase (decrease) in cash and bank 575,374 (511,580) Cash and bank, beginning of year 631,071 1,142,651 Cash and bank, end of year $ 1,206,445 $ 631,071 The accompanying notes are an integral part of these financial statements. 6

8 Notes to Financial Statements 1. Nature of Operations and Summary of Significant Accounting Policies Nature of Business The IDE International Development Enterprises Association Inc. is a not-for-profit organization without share capital, incorporated under the laws of Manitoba. The organization is a registered charity under the Income Tax Act. The organization is the Canadian arm of IDE. As part of IDE s global operations, the organization is responsible for the development and oversight of specific projects implemented through IDE field offices. IDE s consolidated global operations are reported on separately and only its Canadian operations are reflected in these financial statements. Basis of Accounting These financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations. Revenue Recognition The organization follows the deferral method of accounting for contributions. Revenue, primarily grant revenue, which contains conditions to its use, is deferred until the conditions are fulfilled. Donation revenue is recorded when received. Donation revenue received for specific campaigns is unrestricted and will be used at the discretion of the board. The board's practice is to allocate these funds as per the donor's request. See note regarding 'Donor Directed Project Fund' for further information. If response to an appeal exceeds the amount needed for the designated project or if a project cannot be completed, the excess or remaining funds will be used where most needed. Capital Assets Capital assets are stated at cost less accumulated amortization. Amortization based on the estimated useful life of the asset is calculated as follows: Computer equipment 5 year straight-line Internally Restricted Net Assets This reserve fund was established by the Board of Directors to provide continuity of operations in the event of future shortfalls in revenue over expenses. 7

9 Notes to Financial Statements 1. Nature of Operations and Summary of Significant Accounting Policies (continued) WASH Fund This internally restricted fund was established by the Board of Directors to support the work of IDE in the areas of water, sanitation and hygiene (Note 6). Reserve Fund The organization established a reserve fund to set aside, at the discretion of the Board, donor funds received for use for projects in particular countries. The following conditions must be met: a) That up to 50% of net income be added to the reserve fund based on calculations at the beginning of each year b) A maximum of 6 months operation expenses (including salaries) and a maximum of 50% of program commitments Foreign Currency Translation Foreign currency accounts are translated into Canadian dollars as follows: At the transaction date, each asset, liability, revenue and expense is translated into Canadian dollars by the use of the exchange rate in effect at that date. At the year end date, monetary assets and liabilities are translated into Canadian dollars by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in income in the current period. Financial Instruments Financial instruments are recorded at fair value when acquired or issued. In subsequent periods, financial assets in actively traded markets are reported at fair value, with any unrealized gains and losses reported in income. All other financial instruments are reported at cost or amortized cost less impairment, if applicable. Financial assets are tested for impairment when changes in circumstances indicate the asset could be impaired. Transaction costs are the acquisition, sale or issue of financial instruments are expensed for those items remeasured at fair value at each statement of financial position date and charged to the financial instrument for those measured at amortized cost. Use of Estimates The preparation of financial statements in accordance with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management's best estimates as additional information becomes available in the future. 8

10 Notes to Financial Statements 2. Loan Receivable Hydrologic Social Enterprise Co. Ltd., with interest at 5.00% receivable on a semi-annual basis beginning on March 31, 2014 and then on the last day of December and June in subsequent years, requiring semi-annual principal payments of $25,000 USD starting June 30, 2016, maturing December 31, $ 207,960 $ 173,979 Less: Current portion of loan receivable 69,320 - $ 138,640 $ 173,979 Principal repayments of the loan receivable for the next three years are as follows: 2016 $ 69, , ,320 $ 207, Capital Assets Accumulated Accumulated Cost) Amortization Cost Amortization Computer equipment and software $ 14,326 $ 14,326 $ 14,326 $ 14,326 Net book value $ - $ - 9

11 Notes to Financial Statements 4. Deferred Revenue Deferred contributions include designated government grants and contributions which remain unspent to December 31, 2015, as set out in the following table: Opening Accrued Recognized Closing Global Affairs Canada Cambodia $ 37,660 $ 159,788 $ (185,730) $ 11,718 Ethiopia 34, ,979 (203,620) 18,738 Canadian Support 27, ,804 (213,559) 40,026 Ghana 35, ,860 (266,178) 75,549 Ghana - Rushing - 1,474,910 (255,546) 1,219, ,687 2,354,341 (1,124,633) 1,365,395 Contributions Grand Challenge - 319,959 (287,112) 32,847 Honduras 7, ,500 Nicaragua - 5,000-5,000 7, ,959 (287,112) 45,347 $ 143,187 $ 2,679,300 $ (1,411,745) $ 1,410,742 Deferred contributions recognized as revenue are included in the designated government grants on the statement of operations. 10

12 Notes to Financial Statements 5. Long-term Debt Heb2 Holding Ltd., with interest at 5.00% payable on a semi-annual basis beginning December 31, 2013, requiring semi-annual principal payments of $8,333 USD starting June 30, 2016, unsecured, maturing December 31, $ 69,320 $ 57,993 Frank DeFehr Holding, with interest at 5.00% payable on a semi-annual basis beginning December 31, 2013, requiring semi-annual principal payments of $8,333 USD starting June 30, 2016, unsecured, maturing December 31, ,993 M&W Holdings Ltd., with interest at 5.00% payable on a semi-annual basis beginning December 31, 2013, requiring semi-annual principal payments of $8,333 USD starting June 30, 2016, unsecured, maturing December 31, ,320 57, , ,979 Current portion of long-term debt 46,213 - $ 92,427 $ 173,979 The purpose of the loans is to support the Hydrologic Social Enterprise Co. Ltd. (Hydrologic) of Phnom Penh, Cambodia. The organization may repay the loans at any time without penalty. The organization retains the right to forgo repayment to the three lenders if Hydrologic does not meet its obligation to the organization. Principal repayments for the next three years are as follows: 2016 $ 46, , ,214 $ 138,640 11

13 Notes to Financial Statements 6. WASH Fund The organization established a fund to support the work of IDE in the areas of water, sanitation and hygiene, at the discretion of the Board. The transactions of the WASH fund for the year are as follows: Opening balance $ 44,178 $ 55,222 Revenue 65,530 52,222 Expenses (44,178) (52,222) Transfer for Administration - (11,044) Ending balance $ 65,530 $ 44, International Programs In 2015, international programs consisted primarily of: a) The development of private extension services, improved access to farm inputs and supporting the introduction of high value crops to smallholder farmers in Cambodia, Asia. b) The development of improved access to farm inputs and supporting the introduction of high value crops to smallholder farmers in Ghana, Africa. c) The development of a sanitation marketing program in Nepal. d) The development of micro-irrigation technology and input supply chains, providing extension services and improving market access for smallholder farmers in Ethiopia, Africa. e) The development of a sanitation marketing program in Vietnam. Throughout the year, the organization provided funding to IDE entities of $1,934,021 ($1,598,390 in 2014). As at December 31, 2015, a receivable of $610,360 (payable of $30,820 in 2014) was due to IDE field offices, these amounts are non-interest bearing and have no terms of repayment. 12

14 Notes to Financial Statements 8. Allocation of Expenses Salaries and benefits totaling $375,432 ($363,807 in 2014) have been allocated between the various programs as follows: General and administrative expenses $ 44,307 $ 57,197 Fundraising 60,275 59,407 Public engagement and education 33,145 41,490 International programs 237, ,713 Total $ 375,432 $ 363, Related Parties Disclosures The following table summarizes the organization's related party transactions for the year: General and administrative expenses - Rent and utilities services received from a Director's 100% owned company. $ 10,250 $ 10,250 These transactions are in the normal course of operations, measured at the exchange amount, which is the amount agreed upon by the two parties. The amounts due to related parties at year end are as follows: Directors loans for Hydrologic Loan $ 69,320 $ 115,986 Due to (from) IDE - US 106,690 6,438 The amount due to directors is related to an interest bearing loan payable (Note 5). During the current year, a loan from one of the directors in the amount of $50,000 USD was forgiven. IDE - US is an affiliated not-for-profit organization with similar purposes, goals and policies. The amount due to (from) is a result of grant expenses paid by one organization on behalf of the other. 13

15 Notes to Financial Statements 10. Financial Instrument Risk The organization, through its financial assets and liabilities, is exposed to various risks in the normal course of operations. The organization's objective in risk management is to optimize the risk return trade-off, within set limits, by applying integrated risk management and control strategies, policies and procedures throughout the organization's activities. The following analysis provides a measurement of these risks at December 31, (a) Credit Risk and Market Risk Credit risk is the risk that one party to a financial instrument fails to discharge an obligation and causes financial loss to another party. Financial instruments which potentially subject the organization to credit risk consist principally of accounts receivable, loan receivable and project advances. The organization limits its exposure to credit risk and market risk by maintaining a diversified portfolio and by investing in high quality investments. The organization's maximum exposure to credit risk without taking account of any collateral or other credit enhancements is as follows: Accounts receivable $ 38,139 $ 8,661 Loan receivable 138, ,979 (b) Foreign Exchange Risk Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The organization's maximum exposure to foreign exchange risk is summarized below: US Dollar Cash $ 62,108 $ 15,126 Loan receivable 207, ,979 Loan payable (138,640) (173,979) (c) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. Financial instruments which potentially subject the organization to interest risk consist of long-term debt. 14

16 Supporting Schedules For the year ended December 31 Detailed Schedule of Government Grants Global Affairs Canada Cambodia $ 185,730 $ 96,065 Canadian costs 213,559 69,636 Ethiopia 203, ,670 Ghana 521, ,681 Manitoba Council for International Cooperation 59,001 43,790 Grand Challenges Canada 287, ,379 $ 1,470,746 $ 1,109,221 Detailed Schedule of International Program Expenses Cambodia $ 232,135 $ 132,635 Cambodia - Hydrologic 8,699 7,898 Ethiopia 271, ,357 Ghana 317, ,816 Ghana - Rushing 288,796 - Honduras 4,500 6,000 International support 443, ,315 Mozambique Nepal 322, ,282 Vietnam 44,178 56,550 $ 1,934,021 $ 1,598,390 15

17 GAC Schedules Schedule A - Summary Statement of Revenue GAC Funded Non-GAC Activities Total Government Revenue Global Affairs Canada NGO/ICD division $ 1,124,632 $ - $ - $ 1,124,632 Grand Challenges - 287, ,112 Provincial government (MCIC) - 59,001-59,001 Private Revenue Canadian matchable 374, , ,698 Interest income Interest Income - Hydrologic Loan - - 8,991 8,991 Other - iq Project Manager ,305 43,305 Other - WASH Fund Administration Other - Event Ticket Sales ,225 12,225 Other Total revenue $ 1,499,695 $ 763,962 $ 65,633 $ 2,329,290 Schedule B - Restricted Funds Received But Not Disbursed by Year End Liability and/or fund account(s) (1) deferred revenue $ 1,410,742 Not disbursed by year-end (3) $ 806,091 Summary of total restricted funds received but not disbursed by year-end: Previous Year Current Year Global Affairs Canada Funds (including Grand Challenges) $ 135,691 $ 1,398,242 Other Contributions Manitoba government matching grant program - - Private funding 7,500 12,500 Total restricted funds but not disbursed by year-end (4) $ 143,191 $ 1,410,742 16