Protected Areas Conservation Trust

Transcription

1 Cedric D. Flowers Certified Public Accountant Protected Areas Conservation Trust Financial Statements March 31, 2017 International Financial Reporting Standards (IFRSs)

2 Contents Page No. Independent Auditor's Report Statements of Financial Position Statements of Activities Statements of Changes in Fund Balances Statements of Cash Flows 1. General Information 2. Basis of Preparation 3. Significant Accounting Policies 4. Property, Plant, Equipment and Depreciation 5. Revenue Recognition 6. Financial Assets 7. Commitments and Contingencies 8. Development Contribution 9. Related Party Transactions 10. Key Management and Board Compensation 11. Appendix: Description of Independent Auditor's Responsibilities

3 Cedric D. Flowers Certified Public Accountant P.O. Box King Street Belize City Tel: (501) Fax: (501) cdflowers@btl.net INDEPENDENT AUDITOR'S REPORT To the Board of Directors of: Protected Areas Conservation Trust (PACT) Report on the Audit of the Financial Statements Opinion We have audited the financial statements of the Protected Areas Conservation Trust, which comprise the statement of financial position as of March 31, 2017, the statement of activities, statement of changes in fund balances and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Protected Areas Conservation Trust as of March 31, 2017, its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs). Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of PACT in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the financial statements in Belize, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other Matter The financial statements of the Protected Areas Conservation Trust for the year ended March 31, 2016 were audited by another auditor who expressed an unmodified opinion on those statements on June 30, The comparative information presented in the 2016 financial statements has been restated for prior year errors (see notes 4b and 6). MEMBER OF The Institute of Chartered Accountants of Belize (ICAB) American Institute of Certified Public Accountants (AICPA)

4 Cedric D. Flowers Certified Public Accountant Responsibilities of Management and the Directors for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRSs, 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. In preparing the financial statements, management is responsible for assessing PACT's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate PACT or to cease operations, or has no realistic alternative but to do so. The Directors are responsible for overseeing PACT's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to infiuence the economic decisions of users taken on the basis of these financial statements. (See Appendix, Page 18, Description of Independent Auditor's Responsibilities for the Audit of the Financial Statements). ) Certified Public Accountant Belize City, Belize July 20, Protected Areas Conservation Trust

5 Statements of Financial Position 31 March ASSETS Current Assets Cash and cash equivalents Short-term Investments Accounts receivable Notes $ $ 3 4a 5 5,698,561 8,517,518 2,000,000 1,779, ,341 1,543,520 Other receivables and prepayments (2016 restated) 6 359, ,503 Total current assets 8,548,558 12,294,704 Investment Property , ,000 Held-to-Maturity Investments (2016 restated) 4b 8,100,000 5,788,227 Net Property, Plant and Equipment 2.06, 8 567, ,971 TOT AL ASSETS 17,641,404 19,154,902 LIABILITIES & FUND BALANCES Current liabilities Accounts payable and accruals 359, ,280 Severance payable , ,667 Undisbursed grants 2,456,413 2,495,142 Evironmental Management Fund payable 15 2,876,615 Total current liabilities 2,949,460 5,671,704 Fund balances General Fund ,309,277 7,469,971 Endowment Fund Reserve ,157,667 5,788,227 Capital Grant 2.08, 11b 225, ,000 TOTAL LIABILITIES & FUND BALANCES 17,641,404 19,154,902 The accompanying notes form an integral part of these financial statements. of the Board and authorized for issue on Chairman Director JC 9 03 Protected Areas Conservation Trust

6 Statements of Activities Year ended 31 March Notes $ $ REVENUES AND RECEIPTS Conservation fees Commission fees Grant receipts Interest income Other income Gain on disposal of assets TOTAL REVENUES 7 2,804,244 2,950,425 2,118,789 2,626,134 2,500, , , , ,517 18,919 7,837,612 6,127,226 LESS: COST AND EXPENSES Collection administrative fee Programme expenses Operating expenses Directors allowances Interest and bank charges Depreciation Loss on disposal of fixed assets TOTAL EXPENSES NET SURPLUS , ,025 4,584,609 3,192,651 1,591,081 1,318,444 76,650 53,873 3,863 2, , ,788 3,991 6,510,420 4,934,894 1,327,192 1,192,332 The accompanying notes form an integral part of these financial statements. 04 Protected Areas Conservation Trust

7 Staten1ents of Changes in Fund Balances Year ended 31 March,<"",} ' : $ $ GENERAL FUND UNRESTRICTED Beginning of year balance Add: Net surplus from activities Less: Prior period adjustment Mandatory transfer to Endowment Fund Additional transfer to Endowment Fund Other adjustments Ending balance, March 31, 7,469,972 1,327,192 (206,523) (284,909) (84,531) 88,076 8,309,277 6,329,966 1,192,332 (52,326) 7,469,972 ENDOWMENT FUND RESTRICTED Beginning of year balance Plus: Mandatory Contribution by PACT Additional Contribution by PACT Other Contributions Ending balance, March 31, 5,788, ,909 84,531 6,157,667 5,581, ,523 5,788,227 CAPITAL GRANT FUND RESTRICTED Beginning of year balance Plus: New capital grants Less: Capital grant amortized Ending balance, March 31, 225, , , ,000 The accompanying notes form an integral part of these financial statements. 05 Protected Areas Conservation Trust

8 Statements of Cash Flo\Vs Year ended 31 March $ $ CASH FLOWS FROM OPERA TING ACTIVITIES Net Surplus Adjustments for: Depreciation Interest income Loss (gain) on disposal of fixed assets Provision for uncollectible fees Pre-construction costs written off Changes in working capital components: Decrease (Increase) in accounts receivable and prepayments Increase in accounts payable and accruals Increase (decrease) in grants payable Increase (decrease) in EMF payable Prior period adjustments Net cash provided (used) by operating activities 1,327,192 1,192, , ,787 (300,247) (287,231) 3,991 (18,919) 226,823 33, ,203 (321,244) 193, ,994 (38,729) 1,397,326 (2,876,615) 666,394 (118,447) (52,326) (489,183) 2,824,112 CASH FLOWS FROM INVESTING ACTIVITIES Interest received Purchase of investments Proceeds from sale of assets Acquisition of assets Net cash used by investing activities Net increse (decrease) in cash Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period 300, ,231 (2,532,610) 1,751 53,750 (99,162) (483,174) (2,329,774) (142,193) (2,818,957) 2,681,919 8,517,518 5,835,599 5,698,561 8,517,518 The accompanying notes form an integral part of these financial statements 06 Protected Areas Conservation Trust

9 Notes to Financial Statements f-<or the years ended March 31, 2017 and 2016 (expressed in Beli =-;, e Dollars) 1. STATUS 1.01 General Information Protected Areas Conservation Trust (PACT) is a statutory corporation which was established in 1995 and is governed by the provisions of the Protected Areas Conservation Trust Act, Chapter 218 of the Substantive Laws of Belize, Revised Edition 2003 (the Act) and Protected Areas Conservation Trust (Amendment) Act, In accordance with Section 16(1) of the Act, Functions of the Trust, the general functions of PACT shall be to contribute to the sustainable management and development of Belize's natural and cultural assets for the benefit of Belizeans and the global community, both now and for future generations. PACT's registered office is No. 3 Mango Street, Belmopan City, Cayo District Governance PACT is controlled by an eleven-member Board of Directors composed of representatives of various organizations, as outlined in the provisions of the Act, Section 4. The Board has executive control and management of the affairs of PACT and exercises and performs functions, powers and duties of PACT on its behalf, and is responsible for its effective and efficient administration. At March 31, 2017, PACT had a staff complement of 16 employees, including an Executive Director who has responsibility for the day to day affairs of the organization Activities During the year ended March 31, 2017, PACT derived the substantive portion of its operating revenues from the collection of conservation and commission fees which are imposed on travellers to Belize and visitors to protected sites. PACT was primarily engaged in administering its Grants Programme (described in greater details below). PACT has been accredited as the National Implementing Entity for Belize (NIE) by the Adaptation Fund, an international fund that finances projects and programs aimed at helping developing countries to adapt to the harmful effects of climate change. During the fiscal year, PACT served as the NIE and Fiduciary Managers for Projects financed by the World Bank, namely: Management and Protection of Key Biodiversity Areas in Belize (KBA) and Marine Conservation and Climate Adaptation Project (MCCAP). PACT also provided fiduciary and administrative services to the Meso American Reef Fund (MAR Fund), the Belize Nature Conservation Foundation (BNCF), and the National Protected Areas System Secretariat (NPASS). 07 Protected Areas Conservation Trust

10 Notes to Financial Statements For the years ended March 31, 2017 and 2016 (expressed in Belize Dollars) 1.04 Grants Programme In accordance with Section 16 of the Act, PACT engages in the funding of activities which qualify for Trust funding under the Act, including the following Primary Activities: a. Protected Areas Management and Conservation; b. Protected Areas Promotion and Development; c. Environmental Education and Awareness; d. Community Development around Protected Areas. Funding of these primary activities is accomplished through PACT's Grants Programme which comprises the following broad categories: a. Environmental Support Grants-funding to community-based groups, organizations, associations and schools towards creation of summer camps and activities aimed at environmental education and awareness. Maximum funding allotment is $10,000; b. Capacity Building Grants - funding to enable administrative and technical staff of eligible organizations to attend short courses, conferences, workshops, and seminars which are designed to strengthen their capacities to more effectively and efficiently manage protected areas; c. Multiple Category Grants -funding for three or more combined applicants/co-managers with a central project aim. Maximum, $400,000; d. Single Category Grants -funding for a single applicant to a maximum of $100, Basis of Preparation The financial statements of PACT have been prepared in accordance with International Financial Reporting Standards (IFRSs) and with the significant accounting policies which follow. The preparation of the financial statements in conformity with I FRSs requires the use of estimates and assumptions which affect the amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Although these estimates are based on management's best knowledge of current events and circumstances, actual results may ultimately differ Changes in accounting standards There were no new standards, amendments to existing standards or interpretations which were effective for the first time during the year ended March 31, 2017 that have a material impact on PACT. At balance sheet date, there were a number of new standards and amendments to existing standards in issue but not yet effective. PACT has not early-adopted any of these new standards or amendments to existing standards and it will assess their full impact in due course. 08 Protected Areas Conservation Trust

11 Notes to Financial Statements For the years ended Manh 31, 2017 and 2016 (expressed in Belize Dollars) 2. SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared under the historical cost convention. Accordingly, the recorded amounts reflected on the balance sheets for assets are based on their original costs when acquired by PACT General Fund Section 20 (1) of the Act, Financial Provisions, established the Protected Areas Conservation Trust Fund which shall be the dedicated fund of PACT. The General Fund represents the operating fund (the Trust Fund) of PACT. All financial resources are accounted for in the General Fund. The operations are summarized by providing a separate set of self-balancing accounts which includes its assets, liabilities, fund balance, revenues and expenses Endowment Fund (Restricted) In accordance with Section 30 of the Act, the Board established an Endowment Fund in conjunction with the Trust (General) Fund; the Act provides for the Endowment Fund to receive no less than five percent of the total revenues derived from the Trust Fund during each fiscal year. Interest only from the earnings of the Endowment Fund shall be expended. The Endowment Fund shall be drawn only in emergencies, contingencies and for such purposes as the Board may determine and only upon unanimous agreement of the full Board Budgets and Budgetary Accounting The Board is required to prepare, at the beginning of each financial year, a budget which is divided into separate components as follows: a. The programme budget which includes the estimated amounts for project grants, loans, endowment contributions; and b. The operational budget which includes monitoring and evaluation, financial and investment assistance, capital expenditures and general operations. PACT adopts its annual approved budget prepared in accordance with the basic accounting utilized by the General Fund Basis of Accounting The modified accrual basis of accounting is used by PACT. Under the modified accrual basis of accounting, certain revenues are recognized (recorded) in the period they become "measurable" and "available". (Measurable means that the amount of the transaction can be determined; available means collectible within the current period or for a reasonable time thereafter to pay liabilities of the current period). Expenditures are generally recognized in the period the associated liability is incurred Currency Translation (i) Functional and presentation currency Items included in these financial statements are measured in Belize dollars, the functional currency of the economic environment in which PACT operates. (ii) Transactions and Balances Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Transactions in United States currency and balances at the balance sheet date have been converted at the rate of US $1.00 to BZ $2.00. Currency translation gains and losses, if any, are reflected in the statement of activities. 09 Protected Areas Conservation Trust

12 Notes to Financial Statements For the years ended March 31, 2017 and 2016 (expressed in Beli z. e Dollars) 2.06 Property, Plant, Equipment and Depreciation Property, plant and equipment are recorded at acquisition cost and, with the exception of land, are depreciated on a straight-line basis to the statement of activities using the following maximum estimated useful lives: Buildings Office equipment Furniture and fixtures Motor vehicles 40 years; 3,10 years; 10 years; 4 years; The useful lives of the assets are reviewed for any indication of significant change since the last annual reporting date Revenue Recognition In accordance with the provisions of Section 21 (1) of the Act, the primary sources of revenues of PACT's Trust Fund include the following: a. Revenues derived from Conservation Fees; b. Commission fees from cruise ship passengers head tax; c. Commission fees on all recreation-related license fees and permit fees in conjunction with protected areas. Conservation fees and Commission fees Revenues from PACT's primary sources are not susceptible to accrual because, generally, they are either not measurable or available, and are therefore recorded in the accounts on a cash basis, i.e. when received by PACT. Interest income Interest income is recognized on an accrual basis using the effective interest method. Grant receipts Grant receipts represent amounts entrusted to PACT by the Ministry of Agriculture, Forestry, Fisheries, Environment, Sustainable Development and Immigration for disbursements relating to the Chiquibul Initiative Project. Receipts are recognized on a cash basis. Other income Income derived from fiduciary management services is recognized on an accrual basis Grants and Contributions Donations and grants (cash or in-kind) of depreciable assets are recorded as capital grants and are recognized as income in proportion to depreciation charged on those assets during each year. In-kind donations and grants are recorded at their market values at the time of acquisition. 10 Protected Areas Conservation Trust

13 Notes to Financial Statements For the years ended March 31, 2017 and 2016 (expressed in Beli :; e Dollars) 2.09 Financial Assets a. Accounts receivable and cash and cash equivalents These financial assets are initially measured and recorded at the transactional prices. Revenues collected on PACT's behalf are transacted on credit terms extended by PACT. Where there is objective evidence that the carrying amounts of receivables are not recoverable, an impairment loss is recognized on the statement of activities. b. Other short-term financial assets Other short-term financial assets comprise term deposit investments held for one year or less; they are initially recognized at transaction price. Due to the short-term maturity of these financial instruments, their carrying values are approximately equal to their market values. c. Held-to-maturity (HTM) investments HTM investments are initially measured, recorded and carried at transaction price. Where objective evidence exists that the value of the investments have been impaired, the carrying basis is adjusted and impairment losses are recorded on the statement of activities Financial Risk Management PACT controls its exposure to financial and operational risk and risk of impairment to assets by conducting its activities under policies approved by its Board of Directors. 11 Protected Areas Conservation Trust

14 Notes to Financial Statements ror the years ended March 31, 2017 and 2016 (expressed in Beli::;.,e Dollars) 3. CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise the following: $ $ Belize Bank - Grant Belize Bank - Operating Belize Bank - Payroll Belize Bank - Savings Heritage Bank Atlantic Bank Scotia Bank - Chiquibul Initiative Project (restricted) National Bank of Belize Petty Cash TOTAL 1,126, , , , , ,240 2,375,145 6,345,255 1,064,107 50, ,838 1,015, ,698,561 8,517, INVESTMENTS a. Short-term investment Short-term investment comprises a term deposit held with National Bank of Belize, $2m, 2.75% interest per annum, 1-year maturity. b. Held-to-Maturity investments (restricted)* HTM Investments comprise Government of Belize-issued Treasury Notes as follows: i. GOB Treasury Note, $6.1 m, 5.25% fixed interest per annum, 10-year term maturing July, 2026; ii. GOB Treasury Note, $2.0m, 4% fixed interest per annum, 5-year term maturing July, * A portion of the HTM investments, $6.1 m, represents investment of the Endowment Fund and is restricted from general use for PACT's actitivies upon maturity or conversion. 5. ACCOUNTS RECEIVABLE Conservation fees due Commission fees due Less: Allowance for doubtful collections NET ACCOUNTS RECEIVABLE 137, ,154 (226,823) 490, ,735 1,054,785 1,543, Protected Areas Conservation Trust

15 Notes to Financial Statements For the years ended March 31, 2017 and 2016 (expressed in Beli::;_e Dollars) $ $ 6. OTHER RECEIVABLES AND PREPAYMENTS Other receivables Employee Advances Prepayments and deposits TOTAL 322, ,459 9,739 7,100 27,300 27, , , OTHER INCOME MAR Fund Belize Nature Conservation Foundation Contributions MCCAP Project KBA Project TOTAL 20,638 55,361 11,683 24,040 2,011 85,116 60,000 60,000 20,000 20, , , PROPERTY, PLANT AND EQUIPMENT Land Buildings Motor Furn. Fixtures Totals Gross carrying amount Balance, April 1, 2016 Additions Disposals Reclassifications Balance, March 31, , ,298 37,148 (33,320) (200,000) 52, ,126 Vehicles & Eqpt. $ 400, ,456 1,441,256 9,032 52,982 99,162 (24,101) (57,421) (200,000) 409, ,337 1,282,997 Depreciation and impairment Balance, April 1, 2016 Disposals Depreciation Balance, March 31, 2017 Net carrying amount, March 31, 2017 Net carrying amount, March 31, 2016 (130,629) (10,829) (141,458) 52, , , ,669 (217,140) (246,515) (594,284) 18,359 18,359 (81,939) (46,458) (139,226) (299,079) (274,614) (715,151) 110, , , , , , Protected Areas Conservation Trust

16 Notes to Financial Statements l-'or the years ended March 31, 2017 and 2016 (expressed in Belize Dollars) $ $ 9. PROGRAMME EXPENSES Project Grants Networking Redlac/lUCN Capacity Building and Scholarships PACT Promotion and Awareness TOTAL 4,499,518 38,317 30,108 16,666 4,584,609 2,950, ,588 64,637 34,933 3,192, OPERATING EXPENSES Salaries & wages Uniforms & staff costs Social security Board meetings Vehicle repairs, fuel, insurance Office supplies Utilities Professional fees: accounting and legal Other professional fees Repairs & maintenance Equipment maintenance Cleaning Dues and subscriptions Advertising Travel & subsistence Insurance Security services Trust Advisory Council expenses Pre-construction costs written off Provision for doubtful collections Miscellaneous TOTAL 685, ,470 12,359 23,868 73,286 30,595 50,638 28,542 23,252 26,991 17,603 11,785 18,455 16,566 10,260 4,759 4,022 33, ,823 2,517 1,591, , ,829 12,503 23,431 61,181 50,950 47,927 57,842 24,874 36,268 1,245 10,789 20,606 22,355 10,740 4,300 3,670 3,192 13,359 1,318, Protected Areas Conservation Trust

17 Notes to Financial Statements For the years ended March 31, 2017 and 2016 (expressed in Beli _e Dollars) 11. INVESTMENT PROPERTY a. Botanical Garden property PACT purchased a plot of land which it has designated as the site for its future offices. The land is recorded in the accounts at the full transaction price of $200,000, which includes the unpaid balance of $50,000, pending perfection of title to the land in favour of PACT. b. Las Flores property (restricted) PACT received land valued at $225,000 as a grant from the Reconstruction and Development Corporation, Belmopan with certain conditions attached to the usage of the property. 12. COMMITMENTS AND CONTINGENCIES Contracts PACT was a party to contracts and business arrangements with various suppliers and other parties at March 31, Unless recognized as a provision in these financial statements, PACT had not yet received goods and/or services for which amounts had become due and payable at balance sheet date. Significant agreements included the following: Contract with International Financial Consulting Limited for consultancy services provided to PACT and also to the National Protected Areas System Secretariat. Contract value, $262,500. (See related party note 16) Legal Matters In the ordinary course of business, PACT is subject to threatened legal actions and proceedings. At March 31, 2017, there were no pending or threatened litigation matters against PACT which may have a material effect on its financial position. PACT has instituted legal proceedings, against collections agents, for the recovery of amounts due to PACT from collections of Commission Fees Employment Benefits PACT recognizes termination benefits in accordance with the Labour Act, Chapter 297 of the Laws of Belize. The Labour Act was revised in April, 2011 to require that employees who have been employed for (a) five to ten years be paid severance pay of one week's pay for each year of service upon termination and, (b) employees with more than ten years be paid, upon termination or resignation, severance pay of one week's pay for each year of service prior to April, 2011 and two week's pay for each year of service after April, Liabilities in relation to the provisions of the Labour Act are reflected in these financial statements as Severance Payable. 13. TAXATION In accordance with Sections 38 (1) and (2) of the Act, PACT is exempt from the payment of income tax, property tax and stamp duty. 15 Protected Areas Conservation Trust

18 Notes to Financial Statements l---or the years ended March 31, 2017 and 2016 (expressed in Beli ::;_ e Dollars) 14. DEVELOPMENT CONTRIBUTION On March 18, 2017, the Government of Belize enacted legislation, "Statutory Bodies (Development Contribution) Act, 2017, which imposes a ten percent levy on the revenues of certain statutory bodies, known as a "development contribution". The development contribution is payable by PACT into the Consolidated Revenue Fund of the Government of Belize, on a quarterly basis, starting with the quarter ending June 30, OTHER CONTRIBUTIONS Environmental Management Fund (EMF) The Environmental Protection (Amendment) Act, 2009 established the Environmental Management Fund which initially required PACT to contribute, into the Fund, twenty percent (20%) of its revenues derived from Conservation fees and Commission fees, in accordance with the newly created Section 68(9) of the Environmental Protection Act. In October, 2015, the Protected Areas Conservation Trust (Amendment) Act, 2015, repealed Section 68(9) of the Environmental Protection Act which mandated the contribution by PACT. Accordingly, as of October 24, 2015, PACT no longer made contributions to the EMF. 16. RELATED PARTY TRANSACTIONS PACT's related parties include an associate, a foundation, and the Ministry of Agriculture, Forestry, Fisheries, Environment, Sustainable Development and Immigration. Unless otherwise stated, none of the transactions with these entities incorporate special terms and conditions and no guarantees were given or received. Payments and balances are usually made in cash, although in-kind contributions were also made Transactions with associate PACT provides financial, administrative and other support to the National Protected Areas System Secretariat (NPASS), both in the form of cash and in-kind contributions. NPASS is a secretariat within the Ministry of Agriculture, Forestry, Fisheries, Environment, Sustainable Development and Immigration which was instituted in 2010 to coordinate the implementation of the National Protected Areas System Plan. The Secretariat serves as the primary liaison between GOB and protected areas stakeholders for implementation of the system plan. During the year ended March 31, 2017, PACT provided direct cash contributions of $87,244 to NPASS and had additional commitments of $95,346 for undisbursed grants. Non-cash contributions to NPASS amounted to $109,396 during the year Transactions with Foundation and Ministry PACT provides fiduciary management services to the Belize Nature Conservation Foundation (BNCF). The BNCF compensates PACT based on an agreed upon formula of 15% of projects funded by BNCF during each year. PACT has representation on the Board of Directors of the BNCF. During the year ended March 31, 2017, PACT received $11,683 in fiduciary management fees from the BNCF. PACT provides, without compensation, fiduciary management and grant administration services for the Chiquibul Initiative, which was established by the Ministry of Agriculture, Forestry, Fisheries, Environment, Sustainable Development and Immigration. During the year ended March 31, 2017, PACT was entrusted with $2.5m by the Ministry for grant disbursements designated exclusively for the Chiquibul Initiative. 16 Protected Areas Conservation Trust

19 Notes to Financial Statements For the years ended Mar c h 31, 2017 and 2016 (expressed in Belize Dollars) 17. KEY MANAGEMENT AND BOARD COMPENSATION Section (4) of the Act provides for a Board of Directors of PACT which shall be responsible for the policy and the general administration of the affairs of PACT The Board consisted of eleven members at March 31, Board members are compensated on a per meeting basis at the rate of $500 per meeting for the Chairman, and $350 each for other Directors The total combined monthly compensation of the Executive Director, the Accountant and the Project Accountant at March 31, 2017 was $14, Protected Areas Conservation Trust

20 APPENDIX

21 Cedric D. Flowers Certified Public Accountant Description of Independent Auditor's Responsibilities for the Audit of the Financial Statements As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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 PACT's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained, whether material uncertainty exists related to events or conditions that may cast significant doubt on PACT's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause PACT to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 18 Protected Areas Conservation Trust

22 Cedric D. Flowers Certified Public Accountant We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. Where required, we describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.!) Certified Public Accountant Belize City, Belize July 20, Protected Areas Conservation Trust