THEATRE ONTARIO Financial Statements December 31, 2017

Transcription

1 Financial Statements December 31, 2017

2 Index to Financial Statements INDEPENDENT AUDITOR'S REPORT 1 Page FINANCIAL STATEMENTS Statement of Financial Position 2 Statement of Operations and Deficit 3 Statement of Cash Flows 4 Notes to Financial Statements 5-7

3 INDEPENDENT AUDITOR S REPORT To the Directors of Theatre Ontario We have audited the accompanying financial statements of Theatre Ontario, which comprise the statement of financial position as at December 31, 2017 and the statements of operations and deficit 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 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 Theatre Ontario as at December 31, 2017 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. Hogg, Shain & Scheck PC Toronto, Ontario April 20, 2018 Authorized to practise public accounting by the Chartered Professional Accountants of Ontario 1

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5 Statement of Operations and Deficit REVENUES Government grants (Note 6) $ 247,951 $ 261,288 Memberships 70,230 72,582 Summer courses and other training 36,694 43,976 Showcase, festival and other programming 27,839 23,618 Donations and sponsorships 17,179 18,559 Interest and other 5,561 3,713 Rental (Note 7) 9,150 7, , ,536 EXPENSES Salaries, contract fees and benefits 187, ,120 Professional and youth theatre training grants 114, ,092 Occupancy (Note 7) 39,560 35,891 Summer courses and other training 26,882 31,177 General and administration 18,359 32,598 Showcase, festival and other programming 18,846 21,291 Communications 9,781 8,866 Board of Directors and Committees 4,593 2,322 Amortization of capital assets , ,890 DEFICIENCY OF REVENUES OVER EXPENSES (5,892) (9,354) DEFICIT - BEGINNING OF YEAR (36,306) (26,952) DEFICIT - END OF YEAR $ (42,198) $ (36,306) See the accompanying notes to these financial statements 3

6 Statement of Cash Flows OPERATING ACTIVITIES Deficiency of revenues over expenses $ (5,892) $ (9,354) Items not affecting cash: Amortization of capital assets Amortization of deferred grants for capital asset purchases (534) (533) (5,892) (9,354) Changes in non-cash working capital items: Accounts receivable (2,853) 4,307 Harmonized Sales Tax recoverable 5,137 1,914 Prepaid expenses (4,621) 6,168 Accounts payable and accrued liabilities (9,248) 3,475 Professional and youth theatre training grants payable 7,336 (9,373) Deferred government grants 1,955 (9,199) Deferred memberships and program revenues 6,360 (1,024) 4,066 (3,732) DECREASE IN CASH (1,826) (13,086) CASH - BEGINNING OF YEAR 58,454 71,540 CASH - END OF YEAR $ 56,628 $ 58,454 See the accompanying notes to these financial statements 4

7 Notes to Financial Statements 1. NATURE AND PURPOSE OF THE ORGANIZATION Theatre Ontario is an association of community, educational and professional theatre organizations and individuals who are dedicated to the development and maintenance of high quality theatre in Ontario that is accessible to all and reflects all segments of society. Theatre Ontario was incorporated without share capital under the laws of the Province of Ontario in 1971, and is registered with Canada Revenue Agency as a charitable organization. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These financial statements are the representation of management and have been 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. Revenue recognition Theatre Ontario follows the deferral method of accounting for government grants, training courses, programs, and membership fees. Revenues are recognized in the year in which the activity takes place or benefits rendered and related expenses are incurred. Donations and sponsorships are recognized as revenues when received. Financial instruments Theatre Ontario initially measures its financial assets and financial liabilities at fair value. It subsequently measures all its financial assets and financial liabilities at amortized cost. The financial assets subsequently measured at amortized cost include cash and accounts receivable. The financial liabilities measured at amortized cost include accounts payable. Capital assets Tangible capital assets are recorded at cost. Amortization is provided on a straight-line basis over the estimated useful lives of five years. Government grants received to finance the purchase of tangible capital assets are initially deferred on the statement of financial position, and then amortized to revenues on the same basis as the related capital asset costs are amortized. Measurement uncertainty The preparation of financial statements in conformity with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Such estimates are periodically reviewed and any adjustments necessary are reported in deficiency of revenues over expenses in the year in which they become known. Actual results could differ from these estimates. 5

8 Notes to Financial Statements 3. FINANCIAL INSTRUMENTS Cash consists of cash on hand and bank deposits residing in interest-bearing accounts at a major Canadian financial institution. Theatre Ontario also has overdraft facilities of $25,000 on an unsecured basis. Cash balances and overdraft facilities are sufficient to cover accounts payable as they come due. Amounts receivable consist principally of government funding. Accounts payable and accrued liabilities include government remittances payable of $2,353 ( $3,574). The fair value of Theatre Ontario s financial instruments approximates their fair value due to the short term to maturity of the instruments. It is management s opinion that Theatre Ontario is not exposed to significant credit, market or liquidity risks on its financial instruments. 4. CAPITAL ASSETS Accumulated Net book Net book Cost amortization value value Computer equipment $ 2,666 $ 2,133 $ 533 $ 1,067 Capital assets consist of $2,666 in computer equipment purchased in 2013 and funded by a capital asset grant from Ontario Trillium Foundation (see Notes 5 and 6). Amortization of the capital asset cost and related capital asset grant commenced in 2014 when the equipment was placed into service. 5. DEFERRED GOVERNMENT GRANTS Deferred government grants at December 31 are as follows: For operations and projects: Ontario Arts Council operating grant $ 31,561 $ 29,606 31,561 29,606 For capital asset purchases: Ontario Trillium Foundation: Computer equipment 533 1,067 $ 32,094 $ 30,673 6

9 Notes to Financial Statements 6. GOVERNMENT GRANTS REVENUES Revenues from government grants recognized in the year are as follows: Ontario Arts Council: Operating grant $ 61,167 $ 64,435 Professional and youth theatre training grants 114, ,000 Toronto Arts Council operating grant 12,500 12,500 Ontario Trillium Foundation: Amortization of capital grant for capital assets City of Toronto Investing in Neighbourhoods employment grant 59,750 62,970 Ontario Summer Experience employment grant - 2,875 PASO program grant - 3,975 $ 247,951 $ 261, COMMITMENTS Theatre Ontario is party to an operating lease for office premises as co-tenant with two other third parties. Total annual rentals under the lease, expiring in December 31, 2018, is $110,000 in 2018, of which Theatre Ontario s one-third share, as agreed with the other co-tenants, is approximately $37,000. For the year ended December 31, 2017, Theatre Ontario recorded $2,026 ( $2,074) in municipal property tax rebates, which are reflected in the statement of operations and deficit as a reduction of occupancy costs. Theatre Ontario subleases part of its office space to third parties and received $9,150 ( $7,800) in rental income. 8. COMPARATIVE FIGURES Some of the comparative figures have been reclassified to conform to the current year's presentation. 7