FINANCIAL STATEMENTS. Nova Scotia Nature Trust March 31,2012

Transcription

1 FINANCIAL STATEMENTS Nova Scotia Nature Trust March 31,2012

2 CONTENTS Page Independent Auditor s Report Statement of Financial Position Statement of Operations Statement of Changes in Net Assets Notes to the Financial Statements

3 INDEPENDENT AUDITOR S REPORT To the Directors of Nova Scotia Nature Trust We have audited the accompanying financial statements of Nova Scotia Nature Trust which comprise the statement of financial position as at March 31, 2012 and 2011, and the statements of operations and changes in net assets 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, where 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 in our audits is sufficient and appropriate to provide a basis for our qualified audit opinion. (Continued on next page)

4 2 Independent Auditor s Report to the Directors of Nova Scotia Nature Trust Basis for Qualification In common with many charitable organizations, the Nature Trust derives revenue from certain fundraising projects, donations, ticket sales and other sources, the completeness of which are not susceptible of satisfactory audit verification. Accordingly, our verification of revenue from these sources was limited to the amounts recorded in the records of the Nature Trust. Therefore we, were not able to determine whether any adjustments might be necessary to the statement of operations for the years ended March 31, 2012 and 2011, statement of financial position as at March 31, 2012 and 2011, and net assets as at April 1 and March 31 for both the 2012 and 2011 years. Qualification In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of Nova Scotia Nature Trust as at March 31, 2012 and 2011, and the results of its operations and cash flows for the years then ended in accordance with Canadian generally accepted accounting principles. Dartmouth, Nova Scotia June 10, 2012 Chartered Accountants

5

6 NOVA SCOTIA NATURE TRUST STATEMENT OF OPERATIONS Year ended March 31 (With Comparative Amounts For The Two Month Period Ended March 31) Revenues Donations of conservation lands and easements Other donations, memberships and grants Fundraising events and activities Investment income Total revenues Expenses Conservationlands and easements acquired Purchased Donated Programs Land securement Land stewardship Education and outreach Special projects $ 400,000 $ 43, , , , ,414, , , , ,000 43, , , ,465 46,848 87,771 27, ,642 30,401 26, , ,185 Administration and fundraising Total expenses Excess of revenues over expenses Internal appropriation to stewardship endowment Internal appropriation to general endowment Net change in assets invested in property and equipment Net change in operating unrestricted net assets Operating unrestricted net assets, beginning of year Operating unrestricted net assets, end of year 158,381 26,097 1,327, ,282 86,714 (15,840) (35,000) (39,067) 561 1,397 13,208 (14,443) 208, ,568 $ 221,333 $ 208,125 (See accompanying notes to the financial statements)

7 NOVA SCOTIA NATURE TRUST STATEMENT OF CHANGES IN NET ASSETS Year end March 31 (With Comparative Amounts for the Two Month Period Ended March 31) Invested In Invested In Stewardship General Conservation Lands Property and Endowment Endowment and Easements Equipment Fund Fund Internally Restricted Operating Unrestricted Total Total Balance, beginning of year $5,567,956 $15,922 $661,118 $407,865 $90,000 $208,125 $6,950,986 $6,726,221 Excess of revenues over expenses (8,655) 95,369 86,714 (15,840) Endowment fund contributions 15,994 15, Unrealized losses on investments (19,273) (10,724) (29,997) 26,164 Investment income - endowment fund 13,327 9,368 22, Investment fees paid to BMO (6,344) (4,098) (10,442) (2,024) Acquisition of conservation lands and easements, net of reductions (Note 6) 525, , ,000 Internal alllocations from surplus 35,000 39,067 (74,067) Transfer of Conservation Land to Province under Lands and Legacies Conservation Partnership Agreement (Note 6) Acquisition of property and equipment (215,000) (215,000) 0 8,094 (8,094) Balance, end of year $5,877,956 $15,361 $699,822 $441,478 $90,000 $221,333 $7,345,950 $6,950,986 (See accompanying notes to the financial statements)

8 6 NOVA SCOTIA NATURE TRUST NOTES TO THE FINANCIAL STATEMENTS March 31, DESCRIPTION OF ORGANIZATION Nova Scotia Nature Trust is a society incorporated under the provisions of the Societies Act of Nova Scotia and is a registered charity under the provisions of the Income Tax Act. The Nature Trust is also a designated conservation organization under the Conservation Easements Act of Nova Scotia. The Nature Trust promotes the conservation of ecologically important lands in the Province of Nova Scotia through the acquisition of lands and conservation easements and entering into cooperative agreements with landowners. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared in accordance with Canadian generally accepted accounting principles and reflect the following policies: Revenue recognition The Nature Trust follows the deferral method of accounting for contributions. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Restricted contributions, other than endowment contributions, are recognized as revenue in the year in which the related expenses are incurred or property acquired. Endowment contributions are recognized as direct increases in endowment net assets. Contributions of conservation lands and easements are recognized as revenues when title or interest is transferred to the Nature Trust. Cash and cash equivalents Cash and cash equivalents represent cash in banks and short-term deposits with original maturities of less then 90 days or which are redeemable on notice. Allowance for doubtful accounts An allowance for doubtful accounts receivable is maintained for accounts where there is a reasonable doubt of ultimate collectability. Accounts are written off when there is no reasonable expectation of collection.

9 NOVA SCOTIA NATURE TRUST NOTES TO THE FINANCIAL STATEMENTS March 31, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Investments Investments are recorded at market value. Equity investments have been classified as held for trading, however they are restricted endowment assets. Unrealized gains and losses related to the equity investments are included in the statement of changes in net assets for the year. Conservation lands and easements Purchased conservation lands and easements are recorded at cost when title or interest is transferred to the Nature Trust. The purchases are recorded as an expense, offset an increase to net assets invested in conservation lands and easements. Contributed conservation lands and easements are recorded at fair value when title or interest is transferred to the Nature Trust. The contributions are recorded as revenue and expenses and also as an asset, offset by net assets invested in conservation lands and easements. The fair market value of contributed conservation lands and easements is subject to review by regulatory authorities and may be adjusted. The value of conservation lands and easements recorded on the statement of financial position is changed to reflect any adjustments, offset by a change in the net assets invested in conservation lands and easements balance. Conservation lands transferred to other parties are recorded as a reduction of net assets invested in conservation lands and easements. Property and equipment Purchased property and equipment is recorded at cost. Contributed property and equipment is recorded at the fair value at the date of contribution. Amortization is provided on a straight-line basis using rates disclosed in Note 7. Contributed services Volunteers contribute their time to assist the Nature Trust in carrying out its activities. Because of the difficulty in determining their fair value, contributed services are not recognized in the financial statements. Human resources Salaries and benefits are allocated on the statement of operations between program, administrative and fundraising expenses based on management s estimate of the portion of each employee s time spent on activities in each area.

10 8 NOVA SCOTIA NATURE TRUST NOTES TO THE FINANCIAL STATEMENTS March 31, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Significant items subject to such estimates and assumptions include valuation of accounts receivable, conservation lands and easements and the estimated useful life of furniture and equipment. Actual results could differ from those estimates. Future accounting pronouncements On April 1, 2012, the Association will be required to adopt the CICA Handbook Part III - Accounting Standards for Not-For-Profit Organizations. Management does not anticipate any material changes from how the financial statements are currently presented, nor do they anticipate any transitional adjustments to amounts previously presented. 3. CASH AND CASH EQUIVALENTS Cash - unrestricted Cash - restricted for stewardship endowment funds Cash - restricted for general endowment funds $ 118,949 $ 418,521 26,656 84,828 6,757 5,853 $ 152,362 $ 509, ACCOUNTS RECEIVABLE Accounts receivable- unrestricted $ 409,613 $ 787,733 Accounts receivable - restricted for stewardship endowment funds 2,390 1,765 Accounts receivable - restricted for general endowment funds 1, $ 413,014 $ 789,650

11 9 NOVA SCOTIA NATURE TRUST NOTES TO THE FINANCIAL STATEMENTS March 31, INVESTMENTS Stewardship endowment - (Cost $623,740, $512,517) General endowment - (Cost $388,265; $337,087) Unrestricted investments - (Cost $668,578, 2011 $Nil.) $ 670,776 $ 576, , , ,543 - $t,773,029 $ 978, CONSERVATION LANDS AND EASEMENTS Lands $4,300,656 $4,390,656 Easements 1,577,300 1,177,300 $5,877,956 $5,567,956 Conservation lands are properties owned by the Nature Trust. Conservation easements are legal agreements entered into between the Nature Trust and landowners under which restrictions are placed upon lands in order to help conserve the land and its natural features. During the period, the Nature Trust purchased one property for $125,000. Further, the Nature Trust transferred the deed to a property valued at $215,000 to the Province for permanent conservation as a protected area under the Lands and Legacies Conservation Partnership Agreement. = PROPERTY ANDEQUIPMENT Cost Accumulated Net Book Net Book Amortization Value Value Rates Furniture Office equipment $ 9,560 67,798 $ 77,358 $ 9,508 $ 52 $ yrs s.i. 52,489 15,309 15,702 3 or 5 yrs s.i. $ 61,997 $ 15,361 $ 15,922

12

13 11 NOVA SCOTIA NATURE TRUST NOTES TO THE FINANCIAL STATEMENTS March 31, ENDOWMENT FUNDS Endowment funds are subject to externally imposed restrictions stipulating that the capital be maintained permanently and the investment income to be used towards specific purposes. The Stewardship Fund is to contribute to the cost of stewarding conservation properties; the General Fund is to assist in providing long-term funding for the Nature Trust s operations. 11. COMMITMENTS The Nature Trust has an operating lease for premises with annual commitments as follows. It is assumed that the common area rate paid during 2012 will remain the same for the remainder of the lease term. While the lease term ends.september 30, 2016, it is assumed that it will be renewed at the current rate $ 41, , , , ,375 $ 206, CASH FLOW STATEMENT Due to the nature of the entity s operations, management has not prepared a statement of cash flow as it is considered not to provide any additional useful information to the users of the financial statements that is not readily determinable from other financial information provided. 13. OTHER INFORMATION The Nature Trust considers its capital to be the balance maintained in its Net Assets. The primary objective of the organization is to invest its Capital in a manner that will allow it to continue as a going concern and comply with its stated objectives. Capital is invested under the direction of the Board of Directors of the organization with the objective of providing a reasonable rate of return, minimizing risk and ensuring adequate liquid investments are on hand for current cash flow requirements.