CANADIAN SUPPLY CHAIN SECTOR COUNCIL

Transcription

1 Financial statements of CANADIAN SUPPLY CHAIN SECTOR COUNCIL

2 INDEPENDENT AUDITORS' REPORT To the Members of CANADIAN SUPPLY CHAIN SECTOR COUNCIL We have audited the financial statements of the Canadian Supply Chain Sector Council which comprise the balance sheet as at, and the statement of revenue and expense and net assets and cash flow 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 the Canadian Supply Chain Sector Council as at, 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. TORONTO, Ontario June 16, 2014 Licensed Public Accountants

3 Balance Sheet As at March Assets Current Cash $ 77,675 $ 79,191 Accounts receivable 17,007 3,531 HST receivable - 5,510 Prepaid expenses - 9,651 $ 94,682 $ 97,883 Liabilities and Net Assets Current Accounts payable and accrued liabilities $ 4,357 $ 19,651 HST payable 2,081 - Due to HRSDC (note 5) 9,651 41,734 Deferred HRSDC operating contributions (note 3) 72,926 9,651 89,015 71,036 Net assets 5,667 26,847 Contingencies (note 6) $ 94,682 $ 97,883 See accompanying notes to financial statements. On behalf of the Board Director Director 2

4 Statement of Revenue and Expense and Net Assets Year ended March Revenue HRSDC contribution (note 6) $ 38,721 $ 668,656 Other contributions 27,582 19,787 Gain on disposal of capital assets 1,423 1,840 Amortization of deferred capital contributions (note 4) - 6,118 67, ,401 Expense Salaries and wages 60, ,885 Office 21,523 16,186 Professional fees 4,265 6,930 Communication 1,216 31,075 Bank charges 895 1,131 Travel ,269 HST expense 154 4,946 Occupancy - 70,088 Accounting and data support - 6,216 Amortization - 6,118 Project consultants - 1,950 Hospitality - 1,437 Translation - 1,421 Training and development , ,858 Excess (deficiency) of revenue over expense (21,180) 10,543 Net assets, beginning of year 26,847 16,304 Net assets, end of year $ 5,667 $ 26,847 See accompanying notes to financial statements. 3

5 Statement of Cash Flows Year ended March Cash provided by operations: Excess (deficiency) of revenue over expense $ (21,180) $ 10,543 Items not requiring an outlay of cash: Amortization of capital assets - 6,118 Amortization of deferred grants - (6,118) (21,180) 10,543 Net change in non-cash working capital balances: Accounts receivable (13,476) 4,279 HST receivable 7,591 7,144 Prepaid expenses 9,651 2,570 Due to HRSDC (32,083) 10,358 Deferred HRSDC operating contributions 63,275 (24,107) 19,664 (17,598) Net cash (used by) operations (1,516) (7,055) (Decrease) in cash (1,516) (7,055) Cash, beginning of year 79,191 $ 86,246 Cash, end of year $ 77,675 $ 79,191 See accompanying notes to financial statements. 4

6 Notes to Financial Statements 1 Organization The Canadian Supply Chain Sector Council ("the Council") is a non-profit organization incorporated in 2006 without share capital for the purpose of creating vision and leadership in improving the Canadian labour force and in assisting firms in meeting changing competitive demands. The Council is dependent on HRSDC funding. The Council is exempt from income taxes provided certain criteria are met. 2 Significant accounting policies These financial statements have been prepared by management in accordance with Canadian accounting standards for not-for-profit organizations and include the following significant accounting policies: (a) Deferral method of accounting The Council follows the deferral method of accounting for contributions which include donations and government grants. Designated donations received and restricted for the purchase of capital assets, are deferred and amortized into income at the same rate as the associated capital asset is amortized. The Council is funded primarily by HRSDC on a project basis. Project funding is recorded as revenue in the period to which it relates. Funding approved but not received at the end of an accounting period are accrued. Where a portion of project funding relates to a future period it is deferred and recognized in that subsequent period. These financial statements reflect project funding approved by HRSDC with respect to the year ended. (b) Cash Cash includes cash deposits with financial institutions. (c) Revenue recognition The Council follows the deferral method of accounting for contributions which include government grants and other contributions. Designated contributions received and restricted for the purchase of capital assets, are deferred and amortized into income at the same rate as the associated capital asset is amortized. The Council is funded primarily by the Government of Canada in accordance with budget arrangements established by the Human Resources and Social Development Canada (HRSDC). Operating grants are recorded as revenue in the period to which they relate. Grants approved but not received at the end of an accounting period are accrued. Where a portion of a grant relates to a future period it is deferred and recognized in that subsequent period. 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. (d) Contributed goods and services The value of goods and services is recorded as revenue and an expense in the financial statements when the fair value can be reasonably estimated and when the goods and services would otherwise be purchased if not donated. Volunteers provide invaluable donated services to the Council. Since volunteer time is not purchased, these contributed services are not recognized in the financial statements. Volunteers have committed to provide $307,400 of contributed services during the coming years. 5

7 Notes to Financial Statements 2 Significant accounting policies (continued) (e) Financial instruments (i) Measurement The Council initially measures its financial assets and financial liabilities at fair value adjusted by, in the case of a financial instrument that will not be measured subsequently at fair value, the amount of transaction costs directly attributable to the instrument. The Council subsequently measures all its financial assets and financial liabilities at amortized cost. Changes in fair value are recognized in the statements of revenue and expense in the period incurred. Financial assets measured at amortized cost include cash and accounts receivable. Financial liabilities measured at amortized cost include accounts payable and accrued liabilities. The fair values of the investments are determined by reference to quoted market prices. (ii) Impairment At the end of each reporting period, the Council assesses whether there are any indications that a financial asset measured at amortized cost may be impaired. Objective evidence of impairment includes observable data that comes to the attention of the Council. When there is an indication of impairment, the Council determines whether a significant adverse change has occurred during the period in the expected timing or amount of future cash flows from the financial asset. When the Council identifies a significant adverse change in the expected timing or amount of future cash flows from a financial asset, it reduces the carrying amount of the asset to the highest of the following: i) the present value of the cash flows expected to be generated by holding the asset discounted using a current market rate of interest appropriate to the asset; ii) the amount that could be realized by selling the asset at the statement of financial position date; and iii) the amount the Council expects to realize by exercising its rights to any collateral held to secure repayment of the asset net of all costs necessary to exercise those rights. The carrying amount of the asset is reduced directly or through the use of an allowance account. The amount of the reduction is recognized as an impairment loss in the statements of revenue and expense. When the extent of impairment of a previously written-down asset decreases and the decrease can be related to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed to the extent of the improvement, directly or by adjusting the allowance account. The amount of the reversal is recognized in the statements of revenue and expense in the period the reversal occurs. (iii) Transaction costs Transaction costs are recognized in the statements of revenue and expense in the period incurred, except for financial instruments that will be subsequently measured at amortized cost. Transaction costs associated with the acquisition and disposal of fixed income investments are capitalized and are included in the acquisition costs or reduce proceeds on disposal. Any investment management fees are expensed as incurred. (f) Management estimates 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 amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the current period. Significant estimates include the impairment of accounts receivable. All estimates are reviewed periodically and adjustments are made to the statement of revenue and expense as appropriate in the year they become known. 6

8 Notes to Financial Statements 3 Deferred operating contributions Deferred operating contributions represent the unused HRSDC funds received for ongoing projects and prepaids as follows: As at March Balance, beginning of year $ 9,651 $ 33,758 HRSDC Funds received during the year 102, ,906 Less: HRSDC funds used in the year 39, ,013 Balance, end of year $ 72,926 $ 9,651 4 Deferred capital contributions Deferred capital contributions represent the unamortized and unspent amount of contributions received for furniture, computer equipment and software. As at March Balance, beginning of year $ - $ 6,118 Less: amounts amortized to revenue - (6,118) Balance, end of year $ - $ - 5 Due from/to HRSDC The Council is required to repay any unused project funding upon completion of the project. 6 Contingencies The Council receives significant funding from HRSDC and each project is subject to final review and approval by HRSDC. As at the date of these financial statements, funding to has not been subject to this review process for all projects. Any adjustments required as a result of this review will be accounted for in the year of settlement. 7 Human Resources and Skills Development Canada Funding Agreement The Human Resources and Skills Development Canada ("HRSDC") entered in to an agreement with the Council on February 4, 2014 to provide funding the Council over the next two years for the purpose of improving access to skill and knowledge upgrading opportunities related to the ever-increasing skills requirement in the sector that will allow Canada to remain competitive in the global marketplace. The HRSDC has committed to providing funding as follows: 2015 $ 622, ,183 $ 944,660 7

9 Notes to Financial Statements 8 Economic dependence The Council received $38,721 ( $668,656) of operating funding from the HRSDC which represents 57% ( %) of the total revenues of the Council. The Council is obliged during the Project Period, and for a period of six years thereafter, to grant representatives of Canada access to the books and records for the purpose of conducting an audit to verify compliance with their terms and conditions of the agreement and verify expenses claimed by the Council as eligible expenditures. 9 Financial instruments The Council is exposed to various risks through its financial instruments. The following analysis provides a measure of the Council's risk exposure and concentrations. The financial instruments and the nature of the risks to which they may be subject are as follows: Risks Market risk Financial instrument Credit Liquidity Currency Interest rate Other price Cash X X Accounts receivable X Accounts payable and accrued liabilities X Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Council is exposed to credit risk through its cash and accounts receivable. Receivables are unsecured. Other receivables are comprised of harmonized sales tax receivable which are secured by provincial and/or federal governments. The Council's bank account is held at one financial institution. Funds on deposit do not exceed the maximum amount insured and hence there is a mitigation of credit risk. Liquidity risk Liquidity risk is the risk that the Council will not be able to meet a demand for cash or fund its obligations as they come due. The Council meets its liquidity requirements by preparing and monitoring detailed forecasts of cash flows from operations and anticipating investing and financing activities. Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk is comprised of currency risk, interest rate risk and other price risk. Currency risk Currency risk reflects the risk that the Council's earnings will decline due to the fluctuations in foreign exchange rates. The Council has no financial instruments denominated in a foreign currency and therefore is note exposed to currency risk. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. 8

10 Notes to Financial Statements 9 Financial instruments (continued) Other price risk Other price risk refers to the risk that the fair value of financial instruments or future cash flows associated with the instruments will fluctuate because of changes in market prices (other than those arising from currency risk or interest rate risk), whether those changes are caused by factors specific to the individual instrument or its issuer or factors affecting all similar instruments in the market. The Council is not exposed to other price risk through any of its financial instruments. Changes in risk There have been no changes in the Council's risk exposures from the prior year. 9