FONDATION HOPITAL MONTFORT FINANCIAL STATEMENTS MARCH 31, 2013 AND 2012

Transcription

1 FINANCIAL STATEMENTS MARCH 31, 2013 AND 2012

2 TABLE OF CONTENTS PAGE Independent Auditor s Report 1 Financial Statements Statements of Operations Statements of Changes in Fund Balances Statements of Financial Position Statements of Cash Flows Notes to the Financial Statements Schedules

3 INDEPENDENT AUDITOR S REPORT To the Directors of Fondation H6pital Montfort We have audited the accompanying financial statements of Fondation H6pital Montfort, which comprise the statements of financial position as at March 31, 2013, March 31, 2012 and April 1, 2011 and the statements of operations, changes in fund balances and cash flows for the years ended March 31, 2013 and March 31, 2012, as well as 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 audits. We conducted our audits 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 organization 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 organization 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 in our audits 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 Fondation HSpital Montfort as at March 31, 2013, March 31, 2012 and April 1, 2011, as well as the results of its operations and its cash flows for the years ended March 31, 2013 and March 31, 2012 in accordance with Canadian accounting standards for not-for-profit organizations. Chartered Accountants, Licensed Public Accountants Ottawa, Ontario May 21,2013

4 Statements of Operations for the years ended March 31, 2013 and 2012 Revenue General Fund Special Purpose Fund Unrestricted Restricted External Internal External Total 2013 (Restated) (Restated) 2012 Unrestricted Restrictions Restrictions Restrictions Restricted Total (Note 2) (Note 2) Total Donations $ 174,937 $ $ 279,695 $ 105,906 $ 385,601 $ 560,538 $ 101,480 $ 533,744 $ 635,224 Fundraising 543, , , ,854 Parking 3,861,020 3,861,020 3,861,020 3,627,244 3,627,244 Interest 6, , , ,941 6, , ,257 Expenses 725,051 4,090, , ,906 4,476,370 5,201, ,534 4,351,045 5,018,579 Salaries and benefits 507, , , ,176 Fundraising 130, , , ,248 Parking operations 804, , , , ,455 Operating expenses 99,611 1,179 1, ,790 84,225 1,835 86,060 Interest on long-term debt 368,569 39, , , , ,742 Amortization of intangible asset 547, , , , ,253 Amortization of capital assets 7,074 51,457 51,457 58,531 1,000 15,300 16, ,333 1,771,919 40,520 1,812,439 2,556, ,649 1,598,585 2,359,234 Excess of revenue over expenses before donations and others (19,282) 2,318, , ,906 2,663,931 2,644,649 (93,115) 2,752,460 2,659,345 Donations to H6pital Montfort (111,953) (400,000) (85,403) (485,403) (597,356) (137,930) (458,442) (596,372) Donations for the creation of Bursary Funds (7,500) (7,500) (7,500) (57,500) (57,500) Unrealized gains on investments 57,405 57,405 57, , ,484 Unrealized gains (losses) on interest rate swap 119, , ,836 (296,266) (296,266) (111,953) (230,259) (85,403) (315,662) (427,615) (137,930) (652,724) (790,654) Excess of revenue over expenses $ (131,235) $ 2,088,165 $ 239,601 $ 20,503 $ 2,348,269 $ 2,217,034 $ (231,045) $ 2,099,736 $ 1,868,691

5 Statements of Changes in Fund Balances for the years ended March 31, 2013 and 2012 General Fund External Unrestricted Restrictions Special Purpose Fund Internal External Restrictions Restrictions Total Restricted 2013 Total Unrestricted (Restated) (Note 2) Restricted (Restated) (Note 2) 2O 12 Total FUND BALANCES, BEGINNING OF YEAR $ 165,183 $ 7,405,718 $ (1,227,699) 140,529 $ 6,318,548 6,483,731 $ (424,655) $ 5,O39,695 $ 4,615,040 Restatement of prior period - (142,861) 142,861 As restated (Note 2) 165,183 7,405,718 (1,370,560) 283,390 6,318,548 6,483,731 (424,655) 5,039,695 4,615,040 Excess of revenue over expenses (131,235) 2,088, ,601 20,503 2,348,269 2,217,034 (231,045) 2,099,736 1,868,691 Interfund transfers (Note 13) 93,967 (100,000) 6,033 (93,967) 820,883 (820,883) FUND BALANCES, END OF YEAR $ 127,915 $ 9,393,883 $ (1,124,926) $ 303,893 $ 8,572,850 $ 8,700,765 $ 165,183 $ 6,318,548 $ 6,483,731

6 Statements of Financial Position March 31, 2013 and 2012 and April 1,2011 CURRENT ASSETS Cash Accounts receivable (Note 6) Prepaid expenses Current portion of investments (Note 7) Interfund advances (dues), without interest General Fund Special Purpose Fund External internal External Unrestricted Restrictions Restrictions Restrictions 240,765 $ 3,710,026 17, ,847 17, ,094 (4,339) 200, (299,554) 303, Total $ 4,151, ,143 17, , Total $ 4,102, ,819 28, ,530 April 1, ,596, ,257 32, , ,686 4,444,967 (98,259) 303,893 4,922,287 4,734,751 4,374,347 INVESTMENTS (Note 7) 5,849,615-5,849,615 4,747,413 4,012,635 LIFE INSURANCE POLICIES (Note 8) 69,909-69,909 INTANGIBLE ASSET (Note 9) - 6,977,473 6,977,473 7,524,726 8,071,978 CAPITAL ASSETS (Note 10) 42,989 65, , , , ,898 12,892,749 13,005,647 12,447,377 12,220,265 $ 384,584 $ 17,337,716 $ (98,259) $ 303,893 $ 17,927,934 $ 17,182,128 $ 16,594,6!2 CURRENT LIABILITIES Accounts payable and accrued liabilities (Note 11) $ 256,669 $ 53,024 $ $ $ 309,693 $ 499,227 $ 948,162 Current portion of long-term debt (Note 12) - 756,829 1,026,667 1,783,496 1,161,859 1,128, , ,853 1,026,667 2,093,189 1,661,086 2,076,668 LONG-TERM DEBT (Note 12) - 7,133,980 7,133,980 9,037,311 9,902,904 FUND BALANCES 256,669 7,943,833 1,026,667 9,227,169 10,698,397 11,979,572 Internal restrictions (1,124,926) (1,124,926) (1,227,699) (1,649,351) External restrictions 9,393, ,893 9,697,776 7,546,247 6,689,046 Unrestricted 127, , ,183 (424,655) 127,915 9,393,883 (1,124,926) 303,893 8,700,765 6,483,731 4,615,040 $ 384,584 $ 17,337,716 $ (98,259) $ 303,893 $ 17,927,934 $ 17,182,128 $ 16,594,612 Director Director

7 Statements of Cash Flows for the years ended March 31, 2013 and OPERATING Excess of revenue over expenses Adjustments for: Amortization of capital assets Amortization of intangible asset Loss on write-off of capital assets Unrealized gains on investments Unrealized (gains) losses on interest rate swap Net change in non-cash working capital items: Accounts receivable Prepaid expenses Accounts payable and accrued liabilities INVESTING Acquisition of capital assets Net change in investments Acquisition of life insurance policies FINANCING Repayment of long-term debt INCREASE IN CASH CASH, BEGINNING OF YEAR CASH, END OF YEAR 2,217,034 58, ,253 8,875 (57,405) (1t9,836) 2,654, ,676 10,822 (189,534) 2,639,416 (818) (1,358,361) (69,909) (1,429,088) (1,16t,858) 48,470 4,102,756 $ 4,151,226 $ 1,868,691 16, ,253 (159,484) 296,266 2,569,026 (84,562) 3,985 (448,935) 2,039,514 (55,887) (348,483) (404,370) (1,128,506) 506,638 3,596,118 4,102,756

8 Notes to the Financial Statements March 31, 2013 and 2012 and April 1,2011 STATUTE AND NATURE OF OPERATIONS Fondation H6pital Montfort (Foundation) was incorporated on March 25, 1986 as a charitable organization under the terms of Part II of the Canada (Corporations Act, to encourage and assist H6pital Montfort by providing financial support. The Foundation is exempt from income tax under paragraph 149(1)(0 of the Income Tax Act. 2. RESTATEMENT OF PRIOR PERIOD During the year, the Foundation had to restate its financial statements as at March 31, 2012 in order to correct the nature of a donation received last year. Consequently, donations revenue from Special Purpose Fund - External Restrictions was increased by $142,861 and donations revenue from Special Purpose Fund - Internal Restrictions was reduced by the same amount. Also, the Foundation modified the previous year s presentation of the revenue and expenses related to parking management. Parking management revenue previously recorded in the General Fund - Unrestricted and the related expenses previously recorded in the General Fund - External Restrictions are now presented under interfund transfer in the statements of changes in fund balances. As a result of this change in accounting policy, fundraising revenue included in the General Fund - Unrestricted for the year ended March 31, 2012 was decreased by $100,000 and parking operations expenses included in the General Fund - External Restrictions were decreased by the same amount. CHANGE IN ACCOUNTING ESTIMATES Due to new facts arising during the year, the useful life of some of the parking equipment was reduced to one year, increasing the amortization of capital assets by an amount of $38, 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: Fund accounting To ensure limitations and restrictions placed on the use of resources available are observed, the accounts of the Foundation are classified for reporting purposes into funds in accordance with the activities or objectives specified by the donors or in accordance with the directives issued by the Board of Directors. For financial reporting purposes, the fund balances have been classified into two funds consisting of the following: General Fund The General Fund includes the day-to-day transactions of the Foundation. Unless otherwise specified, interest earned is included in the General Fund. The external restrictions funds of the General Fund consist of the operations related to parking management. An agreement was signed with HSpital Montfort which specifies that all fund balances must be kept by the Foundation until expiration of the agreement. Special Purpose Fund The internal restrictions funds consist of fundraising campaign revenue. The external restrictions funds consist of donations, the use of which has been restricted by the donor for specific purposes.

9 Notes to the Financial Statements March 31, 2013 and 2012 and April 1,2011 SIGNIFICANT ACCOUNTING POLICIES (continued) Use of estimates The preparation of financial statements in compliance with the ASNFPO requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the period. Actual amounts could differ from these estimates. Revenue recognition The Foundation follows the restricted fund method of accounting for contributions. Donations and sponsorship contributions that are restricted by the donors are recognized as revenue of the Special Purpose Fund when received. All unrestricted donations are recognized as revenue of the General Fund when received. Restricted contributions for which the Foundation has no corresponding restricted fund are recognized as revenue of the General Fund in the year in which the related expenses are incurred. Other revenue is recognized when earned. Contributed services Volunteers contribute many hours to assist the Foundation in carrying out its activities. Because of the difficulty in assessing the number of hours of contributed services and in determining their fair value, contributed services are not recognized in the financial statements. The Foundation recognizes contributed supplies and services when the fair value of these contributions can be reasonably estimated and if it would have had to otherwise acquire these supplies and services for its normal operations. Intangible asset The intangible asset is recorded at cost. Amortization of the parking license is calculated on the straight-line basis over a 20-year period. Capital assets Capital assets are recorded at cost. Amortization of the parking equipment is calculated on the straight-line basis over 1-year and 20-year periods. Amortization of equipment is calculated on the straight-line basis over 5-year and 10-year periods. Impairment of long.lived assets A long-lived asset is tested for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds the sum of the undiscounted cash flows resulting from its use and eventual disposition. The impairment loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value.

10 Notes to the Financial Statements March 31,2013 and 2012 and April 1, SIGNIFICANT ACCOUNTING POLICIES (continued) Measurement of financial instruments The Foundation initially measures its financial assets and liabilities at fair value, except for certain non-arm s length transactions. The Foundation 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 and accounts receivable. Financial liabilities measured at amortized cost include accounts payable and accrued liabilities and long-term debt. Financial assets measured at fair value include investments, life insurance policies and derivative instruments not designated as part of a hedging relationship. Impairment Financial assets measured at amortized cost are tested for impairment when there are indicators of impairment. The amount of the write-down is recognized in net income. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account, provided it is no greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously. The amount of the reversal is recognized in net income. Transac~on cos~ The Foundation recognizes its transaction costs in net income in the period incurred. However, financial instruments that will not be subsequently measured at fair value are adjusted by the transaction costs that are directly attributable to their origination, issuance or assumption. 5. IMPACT OF THE CHANGE IN THE BASIS OF ACCOUNTING The Foundation has elected to apply the ASNFPO. These financial statements are the first financial statements for which the Foundation has applied the ASNFPO. The financial statements for the year ended March 31, 2013 were prepared in accordance with the ASNFPO and provisions set out in Section 1501, "First-time adoption by not-for-profit organizations", for first-time adopters of this basis of accounting. The impact of adopting these standards was accounted for in the fund balances at the date of transition of April 1,2011. The Foundation has elected to designate all of its investments to be measured at fair value. Investments and long-term debt As at April 1,2011, the Foundation has recorded all of its investments at fair value. Under previous accounting standards, these investments were recorded at fair value as financial assets available for sale and unrealized gains were presented directly to the statement of changes in fund balances. These unrealized gains are now recognized in income. There is no effect on investments or on fund balances. However, this change has had an effect on the income statement. As at April 1,2011, the Foundation has recorded its derivative financial instruments at fair value. According to previous accounting standards, derivative financial instruments were also recorded at fair value and unrealized losses were presented directly in the statement of changes in fund balances. These unrealized losses are now recorded in net income. There is no net effect on long-term debt or on fund balances. However, this change has had an effect on the income statement.

11 Notes to the Financial Statements March 31, 2013 and 2012 and April 1, IMPACT OF THE CHANGE IN THE BASIS OF ACCOUNTING (continued) Reconciliation of the statement of financial position as at April 1,2011 is presented in Schedule A. Reconciliation of the excess of revenue over expenses presented in the financial statements as at March 31, 2012 is presented in Schedule B. Reconciliation of the fund balances presented in the financial statements as at March 31, 2012 is presented in Schedule C. 6. ACCOUNTS RECEIVABLE April 1, H6pital Montfort Sant6 Montfort Other Balance, end of year $ 197,053 $ 280,200 $ 227,304 66, ,251 87,299 57, ,368 85,654 $ 321,143 $ 484,819 $ 400, INVESTMENTS Financial Institutions Term deposits Bonds Other Federal, provincial and municipal body Bonds Other Net Book April 1, Value ,662,282 $ 1,663,655 $ 354,002 $ 1,579, , , , ,259 49,524 54, , ,475 2,262,108 2,384,477 2,061,959 1,931,415 1,322,225 1,409,598 1,569, ,523 6,062,968 6,281,709 4,865,943 4,357,976 Current portion of investments 436, , , ,341 $ 5,626,598 $ 5,849,615 $ 4,747,413 $ 4,012,635 LIFE INSURANCE POLICIES The amount of $69,909 represents the fund value of the life insurance policies for which the Foundation is the beneficiary. The value of premiums upon death totals $1,300, INTANGIBLE ASSET Parking license April 1, Accumulated Net Book Net Book Net Book Cost Amortization Value Value Value $ 10,945,055 $ 3,967,582 $ 6,977,473 $ 7,524,726 $ 8,071,978

12 Notes to the Financial Statements March 31,2013 and 2012 and April 1, CAPITAL ASSETS April 1, Accumulated Net Book Net Book Net Book Cost Amortization Value Value Value Parking equipment Equipment $ 134,469 $ 68,808 $ 65,66t $ 125,992 $ 84,373 66,144 23,155 42,989 49,246 51,279 $ 200,613 $ 91,963 $ 108,650 $ 175,238 $ 135, ACCOUNTS PAYABLE AND ACCRUED LIABILITIES HSpital Montfort Other April 1, 20t $ 138,408 $ 180,738 $ 797, , , ,462 $ 309,693 $ 499,227 $ 948, LONG-TERM DEBT Parking License Variable rate loan converted to a flat rate loan at 4.74%, repayable in monthly instalments of $89,391, principal and interest, maturing in January 2021 Negative value of the interest rate swap MRI Variable rate loan, prime rate plus 0.11%, repayable in monthly instalments of $36,667, principal plus interest, repaid in April 2013 April 1, ,007,790 $ 7,729,649 $ 8,418, ,018 1,002, ,588 1,026,668 1,466,667 1,906,667 8,917,476 10,199,170 11,031,410 Current portion of long-term debt 1,783,496 1,161,859 1,128,506 Long-term debt principal repayments over the next five years are as follows: $ 7,133,980 $ 9,037,311 $ 9,902, $ $ $ $ $ 1,783, , , , ,487

13 Notes to the Financial Statements March 31,2013 and 2012 and April 1, INTERFUND TRANSFERS An amount of $100,000 was transferred from the General Fund - External Restrictions to the General Fund - Unrestricted in order to finance management of the parking by the Foundation s employees. An amount of $6,033 was also transferred from the Unrestricted Fund to the Special Purpose Fund - Internal Restrictions in order to adequately present the amortization of last year s capital assets. 14. FINANCIAL INSTRUMENTS 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 Foundation is exposed to interest rate risk on its fixed and floating interest rate financial instruments. Fixed-rate instruments subject the Foundation to a fair value risk while the floating-rate instruments subject it to a cash flow risk. The Foundation does not use derivative financial instruments to alter the effects of this risk. The Foundation s long-term debt bears a variable interest rate. Consequently, the Foundation s interest risk exposure is function of the changes of the prime rate. However, a variation of 1% of the prime rate would not have a significant effect on the net earnings and financial position of the Foundation. The interest rate swap agreement has a notional value equivalent to the long-term debt; it matures on January 4, 2021 and fixes the interest rate paid by the Foundation at 4.74%. Investments, which include related accrued interest, pay interest at rates appropriate to the market at the date of purchase. Investments bear interest ranging from 2.20% to 7.05% (2012: 2.75% to 8.90%), maturing at different dates until Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Foundation s main credit risks relate to its accounts receivable. The Foundation is not exposed to significant risk from a particular client or any other counterpart. t5. RELATED PARTY TRANSACTIONS The Foundation has an agreement with Sant6 Montfort concerning the management of H6pital Montfort s parking. The summary of the transactions concluded with this related party is as follows: Revenue received from Sant Montfort Recovery of parking operations expenses received from Sant~ Montfort $ 317,640 $ 269,790 $ 107,751 $ 88,576 Since the Foundation acts as an intermediary, these operations are not recorded in the Foundation s financial statements.

14 Notes to the Financial Statements March 31, 2013 and 2012 and April 1, t5. RELATED PARTY TRANSACTIONS (continued) Also, the Foundation s employees salaries are paid through the Hospital s payroll system. The Foundation reimburses the amounts periodically. The Foundation also made donations totalling $597,356 to the Hospital during the year (2012: $596,372). The Foundation participates in the Healthcare of Ontario Pension Plan (HOOPP), a defined benefit multi-employer pension plan. All full-time employees who have reached six months of continuous service have to join HOOPP. This pension is also available on a voluntary basis to part-time employees. As at March 31, 2013, contributions to the pension plan are recorded in the Foundation s expenses and total $34,138 (2012: $34,464). 16. COMPARATIVE FIGURES Certain comparative figures have been reclassified to be consistent with the current year s presentation.

15 Schedules March 31,2013 and Schedule A Statement of Financial Position as at April 1, 2011 Assets Investments Other assets Liabilities Long-term debt Other liabilities Fund balances Internal restrictions External restrictions U n restricted As per According to GAAP Changes the ASNFPO $ 4,012,635 $ $ 4,012,635 12,581,977-12,581,977 $ 16,594,612 $ - $ 16,594,612 $ 9,902,904 $ $ 9,902,904 2,076,668 2,076,668 11,979,572 11,979,572 (1,649,351) (1,649,351) 6,689,046 6,689,046 (424,655) (424,655) 4,615,040 4,615,040 $ 16,594,612 $ $ 16,594,612

16 Schedules March 31,2013 and Schedule B Reconciliation of excess of revenue over expenses presented in the financial statements as at March 31, 2012 Total Total Unrestricted Restricted Total Excess of revenue over expenses as at March 31, 2012 according to previous accounting standards Change in operations Change in fair value on investments Change in fair value on interest rate swap Restatement of prior period (Note 2) Excess of revenue over expenses as at March 31, 2012 according to new accounting standards $ (131,045) $ 2,136,518 $ 2,005,473 (100,000) 159, ,484 (296,266) (296,266) 100,000 $ (231,045) $ 2,099,736 $ 1,868,961

17 Schedules March 31,2013 and Schedule C Reconciliation of fund balances presented in the financial statements as at March 31, 2012 Net change in fund balances as at March 31, 2012 according to previous accounting standards Write-off of accumulated unrealized gains on investments recognized directly in fund balances as at March 31, 2012 Write-off of accumulated unrealized losses on interest rate swap recognized directly in fund balances as at March 31,2012 Change in excess of revenue over expenses as at March 31,2012 Net change in fund balances as at March 31,2012 according to new accounting standards Total Total Unrestricted Restricted Total $ (424,655) $ 5,039,695 $ 4,615,040 $ ~ (159,484) (159,484) 286, ,266 (126,782) (126,782) $ 5,039,695 $ 4,615,040