Financial Statements. Burlington Chamber of Commerce. December 31, 2010

Transcription

1 Financial Statements Burlington Chamber of Commerce December 31, 2010

2 Contents Page Auditors Report 1 Statements of Revenue and Expenses 3 Statements of Changes in Net Assets 4 Statements of Financial Position 5 Statement of Cash Flows 6 Notes to the Financial Statements 7-10 Schedule of General and Administrative Expenses 11

3 Auditors Report To the Members of Burlington Chamber of Commerce Grant Thornton LLP 3600 Dundas St. Suite 300 Burlington, ON L7M 4B8 T (289) F (289) We have audited the accompanying financial statements of the Burlington Chamber of Commerce ( the Organization ), which comprise the statement of financial position as at December 31, 2010, 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 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 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 the Burlington Chamber of Commerce as at December 31, 2010, and its financial performance and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. Audit Tax Advisory Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd

4 Other Matter The financial statements of the Burlington Chamber of Commerce for the year ended December 31, 2009 were audited by another auditor who expressed an unmodified opinion on those statements on January 11, Hamilton, Canada February 23, 2011 Chartered Accountants Licensed Public Accountants Audit Tax Advisory Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd

5 Statements of Revenues and Expenses For the Year Ended December Revenues Membership fees $ 344,087 $ 362,005 Programmes 190, ,128 Magazine 11,482 16,971 Group insurance administrative fee 59,190 54,135 Membership directory 60,748 67,802 Website 7,608 6,137 Miscellaneous 10,926 9, , ,486 Expenses Membership 13,784 13,839 Programmes 110, ,947 Magazine 20,988 22,196 Directory 51,919 60,008 Committees 1,583 2,230 Strategic plan 1,700 - Amortization 3,095 4,587 General and administrative (Schedule 1) 466, , , ,767 Excess of operating revenues over expenses for the year 15,131 13,719 Interest income reserve funds 1,297 2,541 Excess of revenues over expenses for the year $ 16,428 $ 16,260 See accompanying notes to the financial statements. 3

6 Statement of Changes in Net Assets For the Year Ended December 31, 2010 Investment in General Capital Capital Assets Reserve Fund Reserve Fund Unrestricted Total Total Balance, beginning of year $ 11,963 $ 211,101 $ 49,132 $ 57,160 $ 329,356 $ 313,096 Excess (deficiency) of operating revenues over expenses for the year (3,095) ,226 15,131 13,719 Excess of reserve fund revenues over expenses for the year Interest income - 1, ,297 2,541 Transfers Excess of revenues over expenses for the year - 12,321 4,107 (16,428) - - Balance, end of year $ 8,868 $ 224,472 $ 53,486 $ 58,958 $ 345,784 $ 329,356 4

7 Statement of Financial Position as at December Assets Current assets Cash $ 69,374 $ 27,831 Accounts receivable 60,030 56,717 Prepaid expenses 7,550 6, ,954 91,122 General reserve fund (Note 3) 224, ,101 Capital reserve fund (Note 3) 53,486 49,132 Capital assets (Note 4) 8,868 11,963 $ 423,780 $ 363,318 Liabilities Current liabilities Accounts payable and accrued liabilities $ 49,725 $ 20,571 Deferred revenue 28,271 13,391 77,996 33,962 Net assets Investment in capital assets 8,868 11,963 Restricted general reserve fund 224, ,101 Restricted capital reserve fund 53,486 49,132 Unrestricted net assets 58,958 57, , ,356 $ 423,780 $ 363,318 Approved by: Director Director See accompanying notes to the financial statements. 5

8 Statement of Cash Flows For the Year Ended December Excess of revenues over expenses $ 16,428 $ 16,260 Operating Item not affecting cash amortization 3,095 4,587 Changes in non-cash working capital items Accounts receivable (3,313) (7,770) Prepaid expenses (976) 1,356 Accounts payable and accrued liabilities 29,154 (9,464) Deferred revenue 14,880 (11,448) 59,268 (6,479) Financing Investment in reserve funds (17,725) (14,888) Net increase (decrease) in cash and cash equivalents 41,543 (21,367) Cash and cash equivalents Beginning of year 27,831 49,198 End of year $ 69,374 $ 27,831 Supplemental disclosure of cash flows Bank charges $ 5,880 $ 5,281 See accompanying notes to the financial statements. 6

9 Notes to the Financial Statements December 31, Nature of operations The Burlington Chamber of Commerce (the Organization ) is a not-for-profit organization which was established in 1947 to promote civic, commercial, and industrial progress in the Burlington area. 2. Summary of significant accounting policies Use of estimates The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent 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 these estimates. Cash and cash equivalents Cash and cash equivalents include cash and short term investments with maturities of three months or less from the date of acquisition. Financial instruments Financial assets and financial liabilities are initially recognized at fair value and their subsequent measurement is dependent on their classification described below. Their classification depends on the purpose, for which the financial instruments were acquired or issued, their characteristics and the Organization s designation for such instruments. Settlement date accounting is used. The organization has classified its financial instruments as follows: Classification Cash Short term investments Reserve investments Accounts receivable Accounts payable and accrued liabilities Held for trading Held for trading Held for trading Loans and receivables Other liabilities The Organization has chosen to continue to apply the requirements of Section 3861, Financial Instruments Presentation and Disclosure in place of application of Sections 3862, Financial Instruments Disclosures and 3863, Financial Instruments Presentation. 7

10 Notes to the Financial Statements December 31, Summary of significant accounting policies (continued) Capital assets Capital assets are recorded at cost. Amortization is based on their estimated useful life on a diminishing balance basis at the following rates: Furniture and fixtures 20% Computer hardware 45% Computer software 100% Revenue recognition The Organization follows the deferral method of accounting for contributions. Revenues received in advance for advertising and special events are deferred and are recognized in the year when services are provided or the event takes place. Annual membership fee revenues are recognized into income in the month the fees are due. Other forms of revenue are recognized as they are earned. Reserve funds The general reserve fund has been established to provide funding for future requirements of the Organization. The capital reserve fund has been established to provide funding for future capital purchase requirements of the Organization. Reserve fund investments consist of cashable and non-cashable guaranteed investment certificates with banks, and are carried at fair value. 8

11 Notes to the Financial Statements December 31, Reserve funds General reserve fund Cash $ 22,032 $ 9,643 Guaranteed income certificates, bearing interest at 0.40%, 0.50%, 0.97%, and 1.07%, maturing January and February , ,458 $ 224,472 $ 211,101 Capital reserve fund Cash $ 7,051 $ 2,919 Guaranteed income certificates, bearing interest at 0.40% and 0.95% maturing January and February ,435 46,213 $ 53,486 $ 49, Capital assets Accumulated Net Net Cost Depreciation Book Value Book Value Furniture and fixtures $ 39,461 $ 32,140 $ 7,321 $ 9,154 Computer hardware 11,692 10,145 1,547 2,809 Computer software 2,449 2, $ 53,602 $ 44,734 $ 8,868 $ 11, Financial instruments Fair value of financial instruments The carrying value of cash and cash equivalents, accounts receivable, prepaid expenses, reserve fund investments, payables and accruals and deferred revenue reflected in the statement of financial position approximate their respective fair value due to the relatively short term maturities of these instruments. Interest rate risk The interest rate risk is the risk that arises from fluctuations in interest rates and the degree of volatility of these rates. The Organization does not use derivative instruments to reduce its exposure to interest rate risk. 9

12 Notes to the Financial Statements December 31, Financial instruments (continued) Liquidity risk Liquidity risk is the risk that the organization cannot meet a demand for cash of fund obligations as they come due. Liquidity risk also includes the risk of not being able to liquidate assets in a timely manner at a reasonable price. Management manages liquidity risk and monitors the cash and funding needed on a regular basis. 6. Commitments The Organization has an operating lease for its premises at $4,986 per month that expires in The Organization also has an operating lease for its equipment. The equipment is leased at $365 per month until Future lease payments aggregate $165,151 and include the following amounts payable over the next three years $ 64, , ,727 $ 165,151 10

13 Schedule of General and Administrative Expenses December 31, 2010 Schedule 1 Expenses Advertising and promotion $ 5,830 $ 10,721 Bank charges 5,880 5,281 Christmas Open House Computer 9,198 4,887 Conventions 9,913 10,769 Courier and postage 2,689 5,088 Equipment 9,410 8,743 Insurance 4,091 3,974 Miscellaneous and web expenses Office supplies and subscriptions 4,742 5,962 Professional fees 3,160 4,510 Rent 61,500 62,128 Salaries and wages 341, ,172 Telephone 1,223 1,230 Training 1,687 1,946 Travel and entertainment 4,411 5,116 $ 466,049 $ 472,960 11