CLENCH FRAUD TRUST Financial Statements Year Ended December 31, 2014

Transcription

1 Financial Statements MACNEILL EDMUNDSON

2 Index to Financial Statements Page INDEPENDENT AUDITOR'S REPORT 1 FINANCIAL STATEMENTS Balance Sheet 2 Statement of Changes in Beneficiaries Capital 3 Statement of Revenues and Expenditures 4 Statement of Cash Flows 5 Notes to Financial Statements 6-10 MACNEILL EDMUNDSON

3 INDEPENDENT AUDITOR'S REPORT To the Beneficiaries of Clench Fraud Trust We have audited the accompanying financial statements of Clench Fraud Trust, which comprise the balance sheet as at December 31, 2014 and the statements of revenues and expenditures, changes in beneficiaries capital 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 International Financial Reporting Standards, 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. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Clench Fraud Trust as at December 31, 2014 and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. London, Ontario May 19, 2015 CHARTERED PROFESSIONAL ACCOUNTANTS Authorized to practise public accounting by The Chartered Professional Accountants of Ontario

4 Balance Sheet December 31, ASSETS CURRENT Cash - Members (Note 3) $ 85,199 $ 101,213 Cash - Minors (Note 3) 6,245 32,801 Cash - Unpaid Members (Note 3) 2,665 - Marketable securities - Minors (Note 3) 635, ,798 Marketable securities - Members (Note 3) 12,226,718 12,002,129 Marketable securities - Unpaid Members (Note 3) 208,911 - Accounts receivable 745 1,375 $ 13,165,497 $ 12,799,316 LIABILITIES AND BENEFICIARIES CAPITAL CURRENT Accounts payable $ 23,373 $ 15,500 Trust distributions payable (Note 5) 111,037 96, , ,279 DUE TO MEMBERS (Note 4) 211, ,000 DUE TO MINORS (Note 4) 606, , , ,129 BENEFICIARIES CAPITAL Capital 11,571,338 11,571,338 Revenue 231, ,714 Projects 410,596 45,135 12,213,125 11,859,187 $ 13,165,497 $ 12,799,316 MACNEILL EDMUNDSON 2 see accompanying notes

5 Statement of Changes in Beneficiaries Capital Capital Revenue Projects BENEFICIARIES CAPITAL - BEGINNING OF YEAR $ 11,571,338 $ 242,714 $ 45,135 $ 11,859,187 $ 10,594,153 Excess of revenue over expenses - 794, ,711 1,437,002 Transfer to Projects from Revenue - (750,000) 750, Adjustment to reflect accrued interest on amounts unpaid to members (Note 4) - (56,234) - (56,234) - Distributions to benefit the community (Note 5) - - (384,539) (384,539) (171,968) BENEFICIARIES CAPITAL - END OF YEAR $ 11,571,338 $ 231,191 $ 410,596 $ 12,213,125 $ 11,859,187 MACNEILL EDMUNDSON 3 see accompanying notes

6 Statement of Revenues and Expenditures Budget REVENUE Gain (loss) on disposal of investments $ - $ 716,484 $ 295,015 Interest income - 178, ,318 Dividend income - 169, ,045 Foreign income - 73,974 63,732-1,138, ,110 EXPENSES Accounting fees 7,500 9,806 6,918 Administration contracts 53,840 54,779 43,908 Amendment expenditures 5,000 35,939 31,762 Consulting fees 3,400 7,875 2,034 Contingency 2,850 3,054 1,680 Election Interest and bank charges ,316 Investment management fees 80,000 79,098 73,209 Investment workshops - 7,216 10,783 Legal fees 5, ,961 Meetings and communications 5,000 8,008 5,053 Office rental 4,800 4,800 4,800 Office supplies 11,050 11,636 5,892 Strategic planning 5,000 3,789 2,910 Trustee honorariums 29,960 29,671 21,790 Trustee travel, training and other 15,000 20,185 10, , , ,125 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENSES FROM OPERATIONS (228,400) 861, ,985 OTHER INCOME Unrealized gains (losses) on investments - (66,768) 1,029,017 EXCESS (DEFICIENCY) OF REVENUE OVER EXPENSES $ (228,400) $ 794,711 $ 1,437,002 MACNEILL EDMUNDSON 4 see accompanying notes

7 Statement of Cash Flows OPERATING ACTIVITIES Excess of revenue over expenses $ 794,711 $ 1,437,002 Items not affecting cash: Gain on disposal of assets (716,484) (295,015) Unrealized gains (losses) on investments 66,768 (1,029,017) 144, ,970 Changes in non-cash working capital: Accounts receivable 630 (1,375) Accounts payable 7,873 (2,816) Due to Members 46,819 (1,500) Due to Minors (56,707) (2,698) Accrued investment income on amount owing to members (Note 4) (56,234) - (57,619) (8,389) Cash flow from operating activities 87, ,581 INVESTING ACTIVITIES Marketable securities - Members 425,127 68,688 Marketable securities - Minors 26,784 10,450 Marketable securities - Unpaid Members (208,911) - Distributions to benefit the community (384,539) (171,968) Trust distributions payable 14,258 13,783 Cash flow used by investing activities (127,281) (79,047) INCREASE (DECREASE) IN CASH FLOW (39,905) 25,534 Cash - beginning of year 134, ,480 CASH - END OF YEAR $ 94,109 $ 134,014 CASH CONSISTS OF: Cash - Members $ 85,199 $ 101,213 Cash - Minors 6,245 32,801 Cash - Unpaid Members 2,665 - $ 94,109 $ 134,014 MACNEILL EDMUNDSON 5 see accompanying notes

8 Notes to Financial Statements DESCRIPTION OF TRUST The trust was created on November 26, 2004 with the purpose of receiving the settlement from the Government of Canada relating to the Clench Defalcation. The trust was created to benefit the members of the Chippewas of the Thames First Nation. Trust property is to be used to provide funding for benevolent purposes, to promote economic development and to assist in housing needs. The trustees are currently in the process of completing amendments to the trust agreement which will be brought to the community for a vote in the near future. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The financial statements were prepared in accordance with International Financial Reporting Standards (GAAP). The trust separates the beneficiaries capital into three categories: capital, revenue and projects. Capital The Capital portion is restricted and was used to report the initial defalcation settlement, the legal fees paid relating to that settlement and the initial distribution payments made to the members of the Chippewas of the Thames First Nation. The Capital portion is increased annually by an amount approved by the trustees. Revenue The Revenue portion is unrestricted and it is used to report the investment income earned on the members portion of the settlement and the administrative expenses incurred by the trust. The Revenue portion is reduced annually by the amount the trustees approve to be transferred to the Capital and Projects portions of the beneficiaries capital. The amount remaining in the Revenue portion is used to fund the future administrative expenses and other expenses deemed necessary by the trustees. Projects The projects portion of the beneficiaries capital is increased annually by an amount approved by the trustees. Distributions made to benefit the community are recorded as disbursements from the projects portion. Revenue recognition a) Income from investments held is recognized when earned. Investments Short term investments are considered held-for-trading financial instruments and as such are recognized at their fair market value. MACNEILL EDMUNDSON 6

9 Notes to Financial Statements 2. FINANCIAL INSTRUMENTS The trust's financial instruments consist of cash, investments, accounts payable and accrued liabilities. The trust has significant investments in interest bearing securities and a change in the interest rates would produce a substantial change in the value of these investments. The fair value of these financial instruments approximate their carrying values at the financial statement date, unless otherwise noted. 3. MARKETABLE SECURITIES Members Investments Investments $ 10,727,871 $ 10,436,514 Unrealized gain on investments 1,498,848 1,565,615 Market value at December 31 12,226,719 12,002,129 Cash 85, ,213 Total value of cash and investments at December 31 $ 12,311,918 $ 12,103,342 Minors Investments Investments $ 575,209 $ 595,074 Unrealized gain on investments 59,805 66,724 Market value at December , ,798 Cash 6,245 32,801 Total value of cash and investments at December 31 $ 641,259 $ 694,599 Unpaid Members Investments Investments $ 204,942 $ - Unrealized gain on investments 3,969 - Market Value at December ,911 - Cash 2,665 - Total value of cash and investments at December 31 $ 211,576 $ - MACNEILL EDMUNDSON 7

10 Notes to Financial Statements 4. DISTRIBUTIONS PAYMENTS DUE TO MEMBERS AND MINORS On February 28, 2005, the Trustee's of the Clench Fraud Trust approved a one-time payout to each member of the Chippewas of the Thames First Nation on the date the settlement was signed with the Government of Canada. Each member received $1,500 if they were 18 years of age on November 26, All minors will receive their payout plus accrued interest on their 18th birthday and once high school graduation is confirmed. If at age 21 high school graduation has not been achieved, the distribution will then be made. As at December 31, 2014, 103 members and 309 minors ( members and 359 minors) had not yet received their distribution. The members who have not received their distribution payment will receive the principal amount of $1,500 plus any accrued interest to the date of final payment DUE TO MEMBERS Opening balance $ 165,000 $ 166,500 Distribution payments made (10,500) (1,500) Interest paid on distribution payments (3,554) - Adjustment to reflect accrued investment income 56,234 - Investment income on investments 4,391 - Unrealized gain (loss) on investments 3,968 - Gain (loss) on disposal of investments (3,720) - $ 211,819 $ 165,000 In 2014 the trustee's approved the segregation of the amounts unpaid to members as per the trust agreement. A total of $221,234 was transferred to a new investment account to fund the 103 members that remain unpaid. Independent research is currently being undertaken to verify the total number of unpaid members. When this number is determined any required adjustments will be made at that time. DUE TO MINORS Opening balance $ 662,850 $ 665,548 Distribution payments made (75,000) (54,000) Interest paid on distribution payments (26,796) (17,087) Investment income (loss) on investments 25,837 24,033 Unrealized gain (loss) on investments (6,919) 36,843 Gain (loss) on disposal of investments 30,688 11,971 Expenses related to Minors Trust (4,517) (4,458) $ 606,143 $ 662,850 MACNEILL EDMUNDSON 8

11 Notes to Financial Statements 5. TRUST DISTRIBUTION PAYMENTS 2013 accrued 2014 projects 2014 payments 2014 accrued 2013 projects BENEVOLENT PURPOSES CULTURAL Christmas giveaway 4, ,500 (156,450) ,759 Competition POW WOW 1, ,000 10,000 Thunderbird Lodge (Sundance) (700) - 7,000 Traditional Gathering Circle 700 (2,483) - (1,783) 7,000 Chippewa Seniors Social Group - 4,000 (3,600) Homecoming 4,400 - (4,400) - - Travelling Elder (500) Mount Elgin Memorial Committee 1,250 (1,250) Chippewa Thunderbird Sundance Lodge - 9,321 (8,389) Thunderbird Radio - 49,195 (10,000) 39,195 - RECREATION Lil NHL 11,075 10,000 (11,075) 10,000 10,000 Ontario Aboriginal Summer Games 681 (681) - - 6,085 Chippewa Recreational Ice (992) - - EDUCATION Secondary School Experience 15,000 - (15,000) - 15,000 Helping Grace Progress (337) Health and Physical Education program for ARES 5,461 - (5,461) - - Mental Health Services for ARES 3,850 - (3,850) - - Nutrition Program ARES 2,000 - (2,000) - - Support for Doctoral studies - 2,732 (2,459) Education Continuation - Athabasca University - 5,730 (5,157) HEALTH Chippewa Social Initiatives 1,660 10,160 (10,804) 1,016 - Replacement of dentures Sabrina's Smile - 2,430 (2,187) COTTFN Yoga - 7,800 (7,800) - - Perscription Assistance (827) 11 - Health Perscription Supplement - 2,040 (1,948) 92 - Child Play and Therapy - 6,450 (6,450) - - OTHER Land Claim Trust 8,000 - (7,200) 800 8,000 Chippewa Veterans 34 6,700 (5,780) Chippewas Beautification (signs) 6, ,132 - Emergency 10,000 - (3,480) 6,520 - Chippewa beautification 2, ,500 - St. Andrews - Elevator - 38,000-38,000 - Healing - 20,000 (20,000) - - HOUSING ASSISTANCE Housing - 46,707 (46,707) - (3,195) (continues) MACNEILL EDMUNDSON 9

12 Notes to Financial Statements 5. TRUST DISTRIBUTION PAYMENTS (continued) 2013 accrued 2014 projects 2014 payments 2014 accrued 2013 projects COTTFN Idle No More 1, ,000 10,000 Chippewa Fire - Carbon Cylinders ,540 Sensitive Site Mapping (224) Maurice Law (2,500) Master Archeological Plan 3,000 - (3,000) - - Fire Department shortfall 2,300 - (2,300) - - Chippewa Food Bank 1,500 - (1,500) - - Fire Department Safety Equipment 1,500 - (1,500) - - Chippewa CCP Youth Strategy 1,400 - (1,400) - - Chippewa communication officer 5,500 (5,500) Chippewa cultural committee - 15,000 (13,500) 1,500 - Annual Firefighters Competition - 4,850 (4,365) , ,539 (370,281) 111, ,968 The above payments have been made to support the Chippewas of the Thames First Nation. 6. TRUST DISTRIBUTION COMMITMENTS The Trust also has the following commitments to disburse funds to support the Chippewas of the Thames First Nation: BENEVOLENT PURPOSES Chippewa Veterans $ - $ 3,700 HOUSING ASSISTANCE Housing assistance 3,293 - ECONOMIC DEVELOPMENT Economic development 33,289 3,289 $ 36,582 $ 6, COMPARATIVE FIGURES Some of the comparative figures have been reclassified to conform to the current year's presentation. MACNEILL EDMUNDSON 10