Financial Statements of SPORT NOVA SCOTIA. March 31, 2015

Transcription

1 Financial Statements of SPORT NOVA SCOTIA

2 INDEPENDENT AUDITOR S REPORT To the Board of Directors of Sport Nova Scotia Deloitte LLP 1969 Upper Water Street Suite 1500 Purdy's Wharf Tower II Halifax NS B3J 3R7 Canada Tel: Fax: We have audited the accompanying financial statements of Sport Nova Scotia, which comprise the statement of financial position as at, and the statements of revenues and expenses, 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. 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 organization'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 organization'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 audit 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 Sport Nova Scotia 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. Chartered Accountants Halifax, Nova Scotia June 15, 2015

3 Table of contents Statement of financial position 1 Statement of revenues and expenses 2 Statement of changes in net assets 3 Statement of cash flows 4 Notes to the financial statements 5-10 Schedule 1 Schedule of revenues 11 Schedule 2 Schedule of operating expenses 12 Schedule 3 Schedule of programs expenses 13

4 Statement of financial position As at $ $ ASSETS Current assets Cash and cash equivalents (Note 4) 3,299,910 11,727,022 Short-term investments (Note 5) 7,656,623 26,040 Accounts receivable 704, ,630 Deferred rent receivable 17,312 36,820 Prepaid expenses and inventory 42,644 39,444 11,720,855 12,666,955 Capital assets (Note 6) 1,064, ,925 12,785,551 13,589,880 LIABILITIES Current liabilities Accounts payable and accrued liabilities 338, ,940 Government remittances payable 112, ,920 Deferred revenue (Note 14) 9,131,572 9,732,751 9,582,824 10,326,611 NET ASSETS Unrestricted 786, ,383 Internally restricted (Note 3) 1,351,138 1,526,964 Net investment in capital assets 1,064, ,922 3,202,727 3,263,269 12,785,551 13,589,880 Commitments (Note 8) ON BEHALF OF THE BOARD... Director Page 1 of 13

5 Statement of revenues and expenses Year ended $ $ Revenues Operating (Schedule 1) 1,146,545 1,209,827 Programs (Schedule 1) 6,234,217 6,258,869 7,380,762 7,468,696 Expenses Operating (Schedule 2) 1,268,873 1,300,077 Programs (Schedule 3) 6,058,770 6,103,412 7,327,643 7,403,489 Excess of revenues over expenses before amortization 53,119 65,207 Amortization 113,661 94,648 (Deficiency) excess of revenues over expenses (60,542) (29,441) Page 2 of 13

6 Statement of changes in net assets Year ended Net Investment in Internally March 31, 2014 Capital Assets Restricted Unrestricted Total Total $ $ $ $ Beginning balance 922,922 1,526, ,383 3,263,269 3,292,710 (Deficiency) excess of revenues over expenses (113,661) 172,034 (118,915) (60,542) (29,441) Investment in capital assets 255,432 (197,281) (58,151) - - Interfund transfers Transfer Building Fund to General Fund - (310,000) 310, Rental revenue paid from General Fund to Building Fund - 180,656 (180,656) - - Building management fee - (21,235) 21, Closing balance 1,064,693 1,351, ,896 3,202,727 3,263,269 Page 3 of 13

7 Statement of cash flows Year ended $ $ Operating activities Deficiency of revenues over expenses (60,542) (29,441) Item not affecting cash Amortization 113,661 94,648 Changes in non-cash working capital items (Note 10) (594,216) 592,362 (541,097) 657,569 Investing activities Acquisition of capital assets (255,432) (83,148) Acquisition of short-term investments (7,630,583) 572,791 (7,886,015) 489,643 Net cash (outflow) inflow (8,427,112) 1,147,212 Cash, beginning of year 11,727,022 10,579,810 Cash, end of year 3,299,910 11,727,022 Page 4 of 13

8 Notes to the financial statements 1. BASIS OF PRESENTATION Sport Nova Scotia (the Organization ) is a non-profit organization incorporated to assist and promote amateur sport in Nova Scotia. 2. ACCOUNTING POLICIES The financial statements were 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: Fund accounting The Organization maintains its accounts in accordance with the fund accounting method. This method observes limitations, if any, on the use of organization resources by maintaining separate accounts for each fund. Fund accounts are further classified as either unrestricted or restricted funds. Unrestricted funds are available to be used in their entirety at the discretion of the Organization. Restricted funds consist of those for which a specified application has been defined or upon which expenditure conditions have been set. The Sport Fund, KidSport Fund, the Building Fund and Canada Games Fund were segregated as separate funds with their own bank accounts and reported as internally restricted funds. Revenue recognition Revenue is recognized in accordance with the deferral method. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when they are received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Cash and cash equivalents Cash and cash equivalents comprise of cash and short-term investments with a term to maturity of three months or less at the date of acquisition. Page 5 of 12

9 Notes to the financial statements 2. ACCOUNTING POLICIES (continued) Capital assets Capital assets are recorded at cost and donated equipment is recorded at fair value. Capital assets are being amortized on the straight-line basis over their estimated useful lives as follows: Building Furniture and fixtures Medical equipment Computer hardware and software 25 years 10 years 5 years 3 years Use of estimates The preparation of financial statements in accordance 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 and disclosure of contingent assets and liabilities at the reporting date and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates. Significant financial statement items that require the use of estimates are as follows: amortization of capital assets, deferred revenue and accrued liabilities. These estimates are reviewed periodically and adjustments are made, as appropriate, in the statement of operations in the year they become known. Impairment of long-lived assets Long-lived assets are tested for recoverability whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized when their carrying value exceeds the total undiscounted cash flows expected from their use and eventual disposition. The amount of the impairment loss is determined as the excess of the carrying value of the asset over its fair value. Financial instruments The Organization initially measures its financial assets and financial liabilities at fair value. It subsequently measures all its financial assets and financial liabilities at amortized cost. Page 6 of 12

10 Notes to the financial statements 3. INTERNALLY RESTRICTED NET ASSETS $ $ Building fund 333, ,689 KidSport fund 253, ,479 Sport fund 737, ,703 Capital asset replacement fund 27,093 27,093 1,351,138 1,526,964 Internally restricted funds represent board of directors approved appropriations from unrestricted net assets. The Organization may not use these internally restricted amounts for any other purpose without the approval of the board of directors. 4. CASH AND CASH EQUIVALENTS The Organization administers bank accounts for KidSport Canada (Nova Scotia Chapter) and Sports & Recreation payroll. These bank accounts are held in the name of Sport Nova Scotia, but do not belong to the Organization and, therefore, these accounts are not included in these financial statements. 5. SHORT-TERM INVESTMENTS Short-term investments consist of GIC s with a combined principal amount of $7,656,623 ( $26,040). The current year GIC earns interest at 1.75% and matures on July 1, Investment income for each of the funds is reported within the total revenue of the respective funds on schedule 1. Page 7 of 12

11 Notes to the financial statements 6. CAPITAL ASSETS 2014 Accumulated Net Book Net Book Cost amortization value value $ $ $ $ Land 300, , ,000 Building 1,852,837 1,476, , ,105 Furniture and fixtures 989, , , ,511 Medical equipment 1, ,227 - Computer hardware and software 184, ,218 5,244 10,309 3,328,804 2,264,108 1,064, , INCOME TAXES The Organization is registered under the Societies Act of the Province of Nova Scotia and is exempt from income tax on its operations. 8. COMMITMENTS The Organization leases office equipment under operating leases that expire in June Future lease payments aggregate $46,001 and are payable over the next 27 months. 9. CONTRIBUTED GOODS AND SERVICES During the year, the Organization recorded $494,305 ( $454,049) in donated goods and services. The majority of these contributions relate to public awareness campaigns, program promotion, Canada Games and fundraising. These contributions have been recorded at their fair value on the date of contribution. Page 8 of 12

12 Notes to the financial statements 10. CHANGES IN NON-CASH WORKING CAPITAL ITEMS March 31, March 31, $ $ Decrease in accounts receivable 133, ,577 Decrease in deferred rent receivable 19,508 7,047 (Increase) / decrease in prepaid expenses and inventory (3,200) 79,837 Decrease in HST receivable (Decrease) / increase in accounts payable and accrued liabilities (124,248) 15,918 (Decrease) / increase in government remittances payable (18,361) 108,016 (Decrease) / increase in deferred revenue (601,179) 206,717 (594,216) 592, RELATED PARTY TRANSACTIONS The Organization is a member of the Canadian Council of Provincial and Territorial Sport Federations Inc.. As such, the Organization administers the Nova Scotia Amateur Sport Fund, a provincial fund established under the National Sport Trust Fund. Sport Nova Scotia is a licensee of KidSport Canada and as such administers a provincial fund. 12. CONTINGENT LOSS NPO status review The Organization is currently being reviewed by the Canada Revenue Agency to assess its eligibility to continue to have its earnings from its real estate property held under the Building Fund considered to be non-taxable. The outcome of this review remains uncertain as at the date of the financial statements, and as such was not provided for as at. Harmonized Sales Tax audit The Organization filed a notice of objection with Revenue Canada on June 13, 2014 appealing the reassessment amount of $100,878 in HST input tax credits. Results of the appeal are still pending. Page 9 of 12

13 Notes to the financial statements 13. FINANCIAL INSTRUMENTS Liquidity risk Liquidity risk is the risk that the Organization will not be able to meet its financial obligations as they become due. The Organization is exposed to liquidity risk in its ability to finance its working capital requirements and meet its cash flow needs. Given the Organization s currently available liquid resources, from both financial assets and on-going operations, as compared to its contractual obligations, management assesses the Organization s liquidity risk to be low. Credit risk Credit risk arises with uncertainties of predicting financial difficulties tenants may experience which could cause them to be unable to fulfil their lease requirements. The Organization mitigates this risk by having a diversified mix of tenants thereby limiting the exposure to a single tenant. 14. DEFERRED REVENUE Canada General KidSport Sport Fund Games Building Total $ $ $ $ $ $ Balance, beginning of year 467,070 70,015 8,895, ,617 6,219 9,732,752 Less: amount recognized as revenue in the year (2,586,977) (740,610) (3,593,404) (431,312) (28,457) (7,380,760) Plus: amount received 2,562, ,677 3,147, ,331 47,959 6,779,580 Balance, end of year 442,271 41,082 8,449, ,636 25,721 9,131, COMPARATIVE FIGURES Certain comparative figures have been reclassified to conform to the current year s presentation. Page 10 of 12

14 Schedule of revenues Year ended SCHEDULE 1 Programs and Administrative management centre Total Budget (unaudited) $ $ $ $ Operating Grant - Province of Nova Scotia 227, , , ,000 Building 503, , ,810 Membership 9,150 9,501 18,651 18,500 Rent income 18,119 30,806 48,925 48,370 Other income Amortization of deferred capital grant Interest 18,226-18,226 15, , ,415 1,146,545 1,286,180 Programs Sport fund 3,593,404-3,593,404 3,734,500 KidSport 740, , ,400 Canada games 431, , ,000 Advocacy sponsorship 156, , ,175 Dept. of health & wellness - sport fair 20,000-20,000 20,000 Sport fair 89,141-89,141 86,000 Sportscape 81,916-81,916 82,320 Sunsweep 105, , ,820 RICOH awards 97,684-97,684 94,500 Provincial government funding - sport futures 496, , ,000 Postage/courier - 30,955 30,955 32,000 Printing/supplies - 17,734 17,734 20,000 PSO contribution administrative support 33,006-33,006 40,000 Network services ,715 42,435 39,200 Telecommunications - 19,609 19,609 18,000 Sponsorship 20,330-20,330 21,850 Dragon boat 10,000-10,000 10,000 PSO sponsor program 10,000-10,000 10,000 Athlete & volunteer recognition ,300 DHW funding PSO professional development ,600 Merchandise sales 1,273-1,273 - DHW funding - PSO development initiatives 39,243-39,243 20,000 Funding sport development Contracted services 37,425 50,566 87,991 92,300 Corporate games 107, , ,560 6,073, ,579 6,234,217 6,269,525 Page 11 of 13

15 Schedule of operating expenses Year ended SCHEDULE 2 Programs and Administrative Management Centre Total Budget (unaudited) $ $ $ $ Salaries 463, , , ,130 Benefits 59,224 30,045 89, ,410 Building 423, , ,330 Office supplies 6,041 2,911 8,952 9,300 Professional fees 22,086 3,500 25,586 21,500 Advertising and public relations 7,503-7,503 7,250 Annual meeting/reports 5,424-5,424 6,000 Professional development 1, ,429 11,000 Board travel/meetings 7,887-7,887 7,500 Travel/meetings 5, ,550 6,400 Telecommunications 4,579-4,579 5,420 Parking 2,087-2,087 2,100 Postage/courier ,261 2,100 Temporary help 3, ,929 4,215 Printing 1, ,537 1,850 Interest and bank charges 1,324-1,324 1,850 Membership Fee 2,000-2,000 2,800 PSO meetings CCPTSF administrative expenses Donations ,300 Bad debts 3,486-3,486 - Abuse and harassment training ,000 Unrecoverable HST - Apr to Mar ,356 5,971 24,327 9,000 1,039, ,739 1,268,873 1,236,905 Page 12 of 13

16 SCHEDULE 3 Schedule of programs expenses Year ended Programs and Administrative Management Centre Total Budget (unaudited) $ $ $ $ Sport fund 3,488,762-3,488,762 3,656,500 KidSport 751, , ,400 Canada Games 431, , ,000 Advocacy 144, , ,345 Sport futures 495, , ,000 Sport fair 85,881-85,881 93,130 PSO administrative staff support 33,006-33,006 40,000 Youth leadership program Sportscape 70,108-70,108 72,365 Sunsweep 89,144-89, ,570 RICOH awards 95,539-95,539 90,185 Sport quarterly 69,204-69,204 71,240 Printing/supplies - 48,904 48,904 45,000 Postage/courier - 30,946 30,946 32,000 Management information system 1,228 44,393 45,621 47,200 Telecommunications - 19,667 19,667 18,000 Sponsor/member servicing 19,464-19,464 21,550 Dragon boat 10,000-10,000 10,000 PSO sponsor program 4,500-4,500 10,000 East coast classic Athlete recognition ,000 PSO professional development ,600 Merchandise cost of sales 1,274-1,274 - Volunteer recognition awards PSO development initiatives 39,243-39,243 20,000 Health and safety program Corporate games 83,064-83,064 81,210 5,914, ,955 6,058,770 6,129,395 Page 13 of 13