OUTSIDE LOOKING IN FINANCIAL STATEMENTS

Transcription

1 FINANCIAL STATEMENTS For the year ended June 30, 2018 Millards Chartered Professional Accountants

2 For the year ended June 30, 2018 INDEX Page INDEPENDENT AUDITORS' REPORT 1-2 FINANCIAL STATEMENTS Statement of Financial Position 3 Statement of Operations and Changes in Net Assets 4 Schedule of Expenses 5 Statement of Cash Flows 6 Notes to the Financial Statements 7-9

3 INDEPENDENT AUDITORS' REPORT To the Board of Directors of Outside Looking In We have audited the accompanying financial statements of Outside Looking In, which comprise the statement of financial position as at June 30, 2018 and the statements of operations 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. Auditors' 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 auditors' 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 qualified audit opinion. Basis for Qualified Opinion In common with many not-for-profit organizations, Outside Looking In derives revenue from the general public in the form of donations and other fundraising, the completeness of which is not susceptible to satisfactory audit verification. Accordingly, verification of these revenues was limited to the amounts recorded in the records of the organization. Therefore, we were not able to determine whether any adjustments might be necessary to assets and net assets as at June 30, 2018 and to revenue, excess of revenue over expenses and cash flows from operations for the year then ended. Our opinion on the financial statements for the year ended June 30, 2017 was also modified accordingly for the possible effects of this limitation in scope. Brantford Hagersville Simcoe Delhi Norwich Tillsonburg Port Dover 1

4 Qualified Opinion In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, these financial statements present fairly, in all material respects, the financial position of Outside Looking In as at June 30, 2018 and the results of its operations, changes in net assets and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations. October 13, 2018 Brantford, Ontario CHARTERED PROFESSIONAL ACCOUNTANTS Licensed Public Accountants 2

5 STATEMENT OF FINANCIAL POSITION As at June ASSETS Current Assets Cash and bank 250, HST recoverable 70,451 46,276 Accounts receivable 272,446 72,306 Prepaid expenses 100,000 5,000 Inventory 31,659 21, , ,751 Property, Plant and Equipment (Note 3) 7,552 6, , ,877 LIABILITIES Current Liabilities Bank overdraft - 63,276 Accounts payable and accrued liabilities 111,445 65,145 Government remittances payable 4,990 11,172 Deferred revenue (Note 5) 50, , ,593 NET ASSETS Unrestricted 565,810 11, , ,877 On behalf of the Board: Director Director See accompanying notes 3

6 STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS For the year ended June Revenue Sponsorship 360, ,965 In-Kind contributions 430, ,959 Government grants (Note 5) 1,285, ,125 Donations 144,670 61,736 Merchandise 19,539 6,725 Ticket sales 12,580 10,525 Other income 91 6,384 2,253,091 1,213,419 Expenses Program expenses (Page 5) 1,335, ,933 Administration expenses (Page 5) 363, ,617 1,698,565 1,242,550 Excess of Revenue over Expenses 554,526 (29,131) Net Assets, Beginning of Year 11,284 40,415 Net Assets, End of Year 565,810 11,284 See accompanying notes 4

7 SCHEDULE OF EXPENSES For the year ended June Program Expenses Production costs 926, ,974 In-kind production costs 409, ,959 1,335, ,933 Administration Expenses Wages and benefits 80, ,646 Rent 7,542 25,375 Professional fees 35,205 6,400 Subcontractor 70,074 46,172 Advertising and promotion 86,610 54,372 Insurance 4,716 3,118 Telephone and internet 5,316 4,882 Office and general 38,255 41,472 Travel 25,403 7,675 Interest and bank charges 3,700 3,266 Meals and entertainment 3,469 2,243 Amortization 2,229 1, , ,617 See accompanying notes 5

8 STATEMENT OF CASH FLOWS For the year ended June Cash Flows From Operating Activities Excess of revenue over expenses 554,526 (29,131) Charges (credits) to income not involving cash Amortization 2,229 1, ,755 (27,135) Changes in non-cash working capital balances related to operations: HST recoverable (24,175) (19,085) Inventory (10,550) (11,647) Accounts receivable (200,140) (32,306) Prepaid expenses (95,000) 3,250 Accounts payable and government remittances payable 40,118 48,059 Deferred revenue 50, ,278 (38,864) Cash Flows From Financing Activities (Decrease)/Increase in bank indebtedness (63,276) 39,802 Cash Flows From Investing Activities Purchase of property, plant and equipment (3,655) (1,631) Net Increase in Cash and Bank 250,347 (693) Opening Cash and Bank Closing Cash and Bank 250, See accompanying notes 6

9 NOTES TO THE FINANCIAL STATEMENTS For the year ended June 30, PURPOSE AND STATUS OF THE ORGANIZATION Outside Looking In (the "Organization") is continued under the Canada Not For Profit Corporations Act. The purpose of the Organization is to empower Indigenous youth through the arts and to educate Canadians on Indigenous people through their performances. The Organization is a registered charity exempt from income tax under the Income Tax Act. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations and include the following significant accounting policies. (a) (b) (c) (d) (e) (f) Use of Estimates The preparation of financial statements in conformity with Canadian accounting standards for notfor-profit organizations requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates relate to the value of in-kind contributions. Actual results could differ from those estimates. Revenue Recognition Outside Looking In follows the deferral method of accounting for contributions. Unrestricted contributions are recognized as revenue when the amount is measurable and ultimate collection is reasonably assured. Restricted contributions are deferred until the period in which the related expenses are incurred. In-Kind Contributions The Organization receives sponsorships in-kind from various contributors throughout the year. Inkind contributions are valued by the contributor and market value is agreed to by the Organization, based on the sponsorship provided, and included at the agreed upon rate on the statement of operations and changes in net assets. Contributed Services Volunteers contribute time to assist the Organization in carrying out its art program. Because of the difficulty of determining their fair value, contributed services are not recognized in the financial statements. Inventory Inventory, primarily consisting of finished goods, is valued at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. Cash and bank overdraft Cash and bank overdraft consist of cash on hand, and cheques issued and outstanding. 7

10 NOTES TO THE FINANCIAL STATEMENTS For the year ended June 30, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (g) Property, Plant and Equipment Property, plant and equipment is stated at cost. Amortization is provided for in the accounts as follows: Furniture and fixtures Computer equipment 20% declining balance 30% declining balance In the year of acquisition, amortization is provided for at one-half of the above rates. amortization is provided for in the year of disposal. No 3. PROPERTY, PLANT Accumulated AND EQUIPMENT Cost Amortization Furniture and fixtures 5,319 4,063 1,256 1,570 Computer equipment 22,478 16,182 6,296 4,556 27,797 20,245 7,552 6, CREDIT FACILITY The Organization has a credit facility with TD Canada Trust with a maximum limit of $10,000. Interest is charged by the lender at prime plus 4.25% per annum. 5. GRANTS Canada Employment Insurance Commission 250,000 - Ontario Arts Council 25,674 48,625 Toronto Cultural Advisory - 15,000 Canadian Heritage 110,005 - Department of Indian Affairs and Northern Development 785, ,500 Government of Ontario 150,000-1,320, ,125 Current year grant revenue deferred (25,270) - Prior year grant revenue not to be received (9,504) - 1,285, ,125 Deferred revenue is comprised of deferred grant revenue of $25,270 ( nil) and program fees for fiscal 2019 of $25,000 ( nil). 8

11 NOTES TO THE FINANCIAL STATEMENTS For the year ended June 30, FINANCIAL INSTRUMENTS The Organization is exposed to various risks through its financial instruments. The following analysis provides a measure of the Organization's risk exposures and concentrations at June 30, Liquidity Risk Liquidity Risk is the risk that the Organization will encounter difficulty in meeting its obligations associated with financial liabilities. The Organization is, therefore, exposed to liquidity risk with respect to its cash and outstanding cheques, accounts payable and bank indebtedness. The Organization's ability to meet obligations depends on receipt of funds from various sources. In the opinion of management, the liquidity risk exposure to the Organization is not significant due to the increase in government funding acquired during the year. Credit Risk Credit risk arises as a result of the potential non-performance by counterparties of contract obligations which could lead to a financial loss to the Organization. The Organization's credit risk relates to its amounts receivable. In the opinion of management, the credit risk exposure to the Organization is not significant due to the nature of the amounts receivable. 7. COMPARATIVE FIGURES Certain of the prior year's figures, provided for purposes of comparison, have been reclassified to conform with the current year's presentation. 9