Financial Statements of SPORT NOVA SCOTIA. March 31, 2016

Transcription

1 Financial Statements of SPORT NOVA SCOTIA

2 Deloitte LLP 1969 Upper Water Street Suite 1500 Purdy's Wharf Tower II Halifax NS B3J 3R7 Canada Independent Auditor s Report Tel: Fax: To the Board of Directors of Sport Nova Scotia We have audited the accompanying financial statements of Sport Nova Scotia, which comprise the statement of financial position as at, and the statements of revenues and expenses, and 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 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 audit 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 Sport Nova Scotia as at, 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. Chartered Accountants Halifax, Nova Scotia June 10, 2016

3 Table of contents Statement of financial position 1 Statement of revenues and expenses 2 Statement of changes in net assets 3 Statement of cash flows 4 Notes to the financial statements 5-10 Schedule 1 Schedule of revenues 11 Schedule 2 Schedule of operating expenses 12 Schedule 3 Schedule of programs expenses 13

4 Statement of financial position As at $ $ ASSETS Current assets Cash and cash equivalents (Note 4) 4,152,271 3,299,910 Short-term investments (Note 5) 7,783,324 7,656,623 Accounts receivable 794, ,366 Deferred rent receivable 48,978 17,312 Prepaid expenses and inventory 47,324 42,644 12,826,449 11,720,855 Capital assets (Note 6) 1,026,386 1,064,696 13,852,835 12,785,551 LIABILITIES Current liabilities Accounts payable and accrued liabilities 286, ,692 Government remittances payable 153, ,560 Deferred revenue (Note 14) 10,106,546 9,131,572 10,546,583 9,582,824 NET ASSETS Unrestricted 820, ,896 Internally restricted (Note 3) 1,459,786 1,351,138 Net investment in capital assets 1,026,383 1,064,693 3,306,252 3,202,727 13,852,835 12,785,551 Commitments (Note 8 ) ON BEHALF OF THE BOARD... Director Page 1 of 13

5 Statement of revenues and expenses Year ended $ $ Revenues Operating (Schedule 1) 1,244,219 1,146,545 Programs (Schedule 1) 5,864,591 6,234,217 7,108,810 7,380,762 Expenses Operating (Schedule 2) 1,210,308 1,268,873 Programs (Schedule 3) 5,678,897 6,058,770 6,889,205 7,327,643 Excess of revenues over expenses before amortization 219,605 53,119 Amortization 116, ,661 ( eficiency) of revenues over expenses 103,525 (60,542) Page 2 of 13

6 Statement of changes in net assets Year ended Net Investment in Internally March 31, 2015 Capital Assets Restricted Unrestricted Total Total $ $ $ $ Beginning balance 1,064,693 1,351, ,896 3,202,727 3,263,269 (Deficiency) excess of revenues over expenses (116,080) 309,920 (90,315) 103,525 (60,542) Investment in capital assets 77,770 (59,241) (18,529) - - Interfund transfers Transfer Building Fund to General Fund - (305,000) 305, Rental revenue paid from General Fund to Building Fund - 186,244 (186,244) - - Building management fee - (23,275) 23, Closing balance 1,026,383 1,459, ,083 3,306,252 3,202,727 Page 3 of 13

7 Statement of cash flows Year ended $ $ Operating activities eficiency of revenues over expenses 103,525 (60,542) Item not affecting cash Amortization 116, ,661 Changes in non-cash working capital items (Note 10) 837,227 (594,216) 1,056,832 (541,097) Investing activities Acquisition of capital assets (77,770) (255,432) Acquisition of short-term investments (126,701) (7,630,583) (204,471) (7,886,015) Net cash (outflow) 852,361 (8,427,112) Cash, beginning of year 3,299,910 11,727,022 Cash, end of year 4,152,271 3,299,910 Page 4 of 13

8 Notes to the financial statements 1. BASIS OF PRESENTATION Sport Nova Scotia (the Organization ) is a non-profit organization incorporated to assist and promote amateur sport in Nova Scotia. 2. ACCOUNTING POLICIES The financial statements were prepared in accordance with Canadian accounting standards for not-for-profit organizations in Part III of the CPA Canada Handbook and include the following significant accounting policies: Fund accounting The Organization maintains its accounts in accordance with the fund accounting method. This method observes limitations, if any, on the use of organization resources by maintaining separate accounts for each fund. Fund accounts are classified as either unrestricted or restricted funds. Unrestricted funds are available to be used in their entirety at the discretion of the Organization. Restricted funds consist of those for which a specified application has been defined or upon which expenditure conditions have been set. The Sport Fund, KidSport Fund, the Building Fund and Canada Games Fund were segregated as separate funds with their own bank accounts and reported as internally restricted funds. Revenue recognition Revenue is recognized in accordance with the deferral method. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when they are received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Cash and cash equivalents Cash and cash equivalents comprise of cash and short-term investments with a term to maturity of three months or less at the date of acquisition. Page 5 of 13

9 Notes to the financial statements 2. ACCOUNTING POLICIES (continued) Capital assets Capital assets are recorded at cost and donated equipment is recorded at fair value. Capital assets are being amortized on the straight-line basis over their estimated useful lives as follows: Building Furniture and fixtures Medical equipment Computer hardware and software 25 years 10 years 5 years 3 years 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 and disclosure of contingent assets and liabilities at the reporting date and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates. Significant financial statement items that require the use of estimates are as follows: amortization of capital assets, deferred revenue and accrued liabilities. These estimates are reviewed periodically and adjustments are made, as appropriate, in the statement of operations in the year they become known. Impairment of long-lived assets Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized when their carrying value exceeds the total undiscounted cash flows expected from their use and eventual disposition. The amount of the impairment loss is determined as the excess of the carrying value of the asset over its fair value. Financial instruments The Organization initially measures its financial assets and financial liabilities at fair value. It subsequently measures all its financial assets and financial liabilities at amortized cost. Page 6 of 13

10 Notes to the financial statements 3. INTERNALLY RESTRICTED NET ASSETS $ $ Building Fund 325, ,424 KidSport Fund 274, ,468 Sport Fund 832, ,153 Capital Asset Replacement Fund 27,093 27,093 1,459,786 1,351,138 Internally restricted funds represent board of directors approved appropriations from unrestricted net assets. The Organization may not use these internally restricted amounts for any other purpose without the approval of the board of directors. 4. CASH AND CASH EQUIVALENTS The Organization administers bank accounts for KidSport Canada (Nova Scotia Chapter) and Sports & Recreation payroll. These bank accounts are held in the name of Sport Nova Scotia, but do not belong to the Organization and, therefore, these accounts are not included in these financial statements. 5. SHORT-TERM INVESTMENTS Short-term investments consist of GIC s with a combined principal amount of $7,783,324 ( $7,656,623). Current year GIC s consist of $7,756,602 earning interest between 1.5% and 1.61% maturing on January 13, 2017 and $26,722 earning interest at.85% maturing on April 16, Investment income for each of the funds is reported within the total revenue of the respective funds on chedule 1. Page 7 of 13

11 Notes to the financial statements 6. CAPITAL ASSETS March 31, Cost Accumulated Amotization Net Book Value Net Book Value $ $ $ $ Land 300, , ,000 Building 1,857,040 1,522, , ,100 Furniture and Fixtures 1,055, , , ,125 Medical Equipment 1, ,227 Computer Hardware and Software 269, ,178 7,011 5,244 3,483,583 2,457,197 1,026,386 1,064, INCOME TAXES The Organization is registered under the Societies Act of the Province of Nova Scotia and is exempt from income tax on its operations. 8. COMMITMENTS The Organization leases office equipment under operating leases that expire in June Future lease payments aggregate $25,556 and are payable over the next 15 months. 9. CONTRIBUTED GOODS AND SERVICES During the year, the Organization recorded $375,860 ( $494,305) in donated goods and services. The majority of these contributions relate to public awareness campaigns, program promotion, Canada Games and fundraising. These contributions have been recorded at their fair value on the date of contribution. Page 8 of 13

12 Notes to the financial statements 10. CHANGES IN NON-CASH WORKING CAPITAL ITEMS March 31,2016 March 31,2015 $ $ (Increase) / decrease in accounts receivable (90,186) 133,264 (Increase) / decrease in deferred rent receivable (31,666) 19,508 (Increase) in prepaid expenses and inventory (4,680) (3,200) (Decrease) in accounts payable and accrued liabilities (52,551) (124,248) Increase / (decrease) in government remittances payable 41,336 (18,361) Increase / (decrease) in deferred revenue 974,974 (601,179) 837,227 (594,216) 11. RELATED PARTY TRANSACTIONS The Organization is a member of the Canadian Council of Provincial and Territorial Sport Federations Inc. As such, the Organization administers transactions for the Nova Scotia Amateur Sport Fund, a provincial fund established under the National Sport Trust Fund. Sport Nova Scotia is a licensee of KidSport Canada and as such administers transactions for a provincial fund. 12. CONTINGENT LOSS NPO status review The Organization is currently being reviewed by the Canada Revenue Agency to assess its eligibility to continue to have its earnings from its real estate property held under the Building Fund considered to be non-taxable. The outcome of this review remains uncertain as at the date of the financial statements, and as such was not provided for as at. Harmonized Sales Tax audit The Organization filed a notice of objection with Revenue Canada on June 13, 2014 appealing the reassessment amount of $100,878 in HST input tax credits. Results of the appeal are still pending. Page 9 of 13

13 Notes to the financial statements 13. FINANCIAL INSTRUMENTS The Organization is exposed to various risks through its financial instruments. Liquidity risk Liquidity risk is the risk that the Organization will not be able to meet its financial obligations as they become due. The Organization is exposed to liquidity risk in its ability to finance its working capital requirements and meet its cash flow needs. Given the Organization s currently available liquid resources, from both financial assets and on-going operations, as compared to its contractual obligations, management assesses the Organization s liquidity risk to be low. Credit risk Credit risk arises with uncertainties of predicting financial difficulties tenants may experience which could cause them to be unable to fulfil their lease requirements. The Organization mitigates this risk by having a diversified mix of tenants thereby limiting the exposure to a single tenant. Interest rate risk The Organization is exposed to interest rate risk on its fixed and floating interest rate financial instruments. Fixed-rate instruments subject the Organization to a fair value risk while the floating rate instruments subject it to a cash flow risk. The Organization is exposed to this type of risk as a result of investments in GIC s. However, the risk associated with investments is reduced to a minimum since these assets are invested in low interest instruments. 14. DEFERRED REVENUE General Kidsport Sport Fund Canada Games Building Total $ $ $ $ $ $ Balance, beginning of year 442,271 41,082 8,449, ,636 25,721 9,131,572 Less: amount recognized as revenue in the year (1,995,058) (818,467) (3,655,094) (56,953) (583,238) (7,108,810) Plus: amount received 2,049, ,325 4,478, , ,205 8,083,784 Balance, end of year 497,105 26,940 9,273, ,063 44,688 10,106, BUDGET FIGURES The Company s annual budget is approved by the Board of Directors and membership. The budget figures are not subject to audit procedures. Page 10 of 13

14 Schedule of revenues Year ended SCHEDULE 1 Programs and Administrative management centre Total Budget (unaudited) $ $ $ $ Operating Grant - Province of Nova Scotia 227, , , ,000 Building 583, , ,340 Membership 9,350 9,300 18,650 18,650 Rent income 19,625 32,193 51,818 51,695 NSTF - Student Wage Grant 7,002-7,002 - Other income 9,077-9,077 - Amortization of deferred capital grant Interest 17,332-17,332 18, , ,595 1,244,219 1,242,685 Programs Sport fund 3,655,094-3,655,094 3,790,900 KidSport 818, , ,280 Canada games 56,953-56, ,000 Advocacy sponsorship 122, , ,160 Provincial government funding - sport fair 20,000-20,000 20,000 Sport fair 75,934-75,934 97,700 Sportscape 67,224-67,224 78,280 Sunsweep 77,171-77, ,280 RICOH awards 93,215-93,215 88,560 Provincial government funding - sport futures 446, , ,000 Postage/courier - 27,115 27,115 34,000 Printing/supplies - 21,519 21,519 23,000 PSO contribution administrative support 40,750-40,750 48,000 Network services ,829 44,669 43,000 Telecommunications - 18,111 18,111 18,000 Sponsorship 23,306-23,306 19,850 Dragon oat 10,000-10,000 10,000 PSO sponsor program 9,000-9,000 9,000 Athlete & volunteer recognition 3,500-3,500 5,300 Prov. gov't funding - PSO professional development (11) - (11) 1,600 PSO Professional Development Day 2,072-2,072 - Merchandise sales Prov. gov't. funding - PSO development initiatives 39,944-39,944 20,000 Funding sport development Contracted services 35,754 45,901 81,655 87,980 Corporate games 109, ,296 99,060 5,708, ,475 5,864,591 6,234,950 Page 11 of 13

15 Schedule of operating expenses Year ended SCHEDULE 2 Programs and Administrative Management Centre Total Budget (unaudited) $ $ $ $ Salaries 440, , , ,485 Benefits 70,159 31, , ,750 Building 390, , ,420 Office supplies 5,408 2,891 8,299 9,300 Professional fees 9,446 3,700 13,146 12,700 Advertising and public relations 2,456-2,456 2,750 Annual meeting/reports 3,890-3,890 6,000 Professional development ,000 Board travel/meetings 7,807-7,807 8,000 Travel/meetings 4, ,635 6,700 Telecommunications 4,930-4,930 5,200 Parking 2,379-2,379 2,291 Postage/courier ,850 Temporary help 23, ,536 4,878 Printing 1,354 1,102 2,456 2,750 Interest and bank charges 1,314-1,314 1,850 Membership fees 2,070-2,070 2,800 PSO meetings CCPTSF administrative expenses Donations Bad debts Insurance 1,000-1,000 - Unrecoverable HST - Apr to Mar ,001 5,301 20,302 5, , ,914 1,210,308 1,285,674 Page 12 of 13

16 SCHEDULE 3 Schedule of programs expenses Year ended Programs and Administrative Management Centre Total Budget (unaudited) $ $ $ $ Sport fund 3,557,693-3,557,693 3,703,900 KidSport 797, , ,280 Canada Games 56,953-56, ,000 Advocacy 107, , ,120 Sport futures 446, , ,000 Sport fair 74,713-74,713 93,890 PSO administrative staff support 40,750-40,750 48,000 PSO Professional Development 2,078-2,078 1,600 Sportscape 58,551-58,551 67,720 Sunsweep 67,143-67, ,740 RICOH awards 93,346-93,346 88,330 Sport quarterly 66,359-66,359 71,330 Printing/supplies - 42,105 42,105 49,000 Postage/courier - 27,142 27,142 34,000 Management information system 1,560 50,424 51,984 48,500 Telecommunications - 17,160 17,160 18,000 Sponsor/member servicing 15,912-15,912 16,850 Dragon oat 10,000-10,000 10,000 PSO sponsor program 4,000-4,000 9,000 East coast classic Athlete recognition 1,807-1,807 4,000 Merchandise cost of sales Volunteer recognition awards PSO development initiatives 39,944-39,944 20,000 Health and safety program Corporate games 98,821-98,821 74,590 5,541, ,980-5,678,897 6,080,950 Page 13 of 13