IDE INTERNATIONAL DEVELOPMENT ENTERPRISES ASSOCIATION INC. Financial Statements For the year ended December 31, 2013

Transcription

1 IDE INTERNATIONAL DEVELOPMENT ENTERPRISES Financial Statements

2 Financial Statements Contents Independent Auditor's Report 2 Financial Statements Statement of Financial Position 3 Statement of Changes in Net Assets 4 Statement of Operations 5 Statement of Cash Flows 6 Notes to Financial Statements 7 Supporting Schedules 15 CIDA Schedules 16

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5 Statement of Changes in Net Assets Donor Directed Investment in Internally Project WASH Capital Assets Restricted Fund Fund Unrestricted Total Net assets, January 1, 2012 $ 8,592 $ 124,599 $ - $ - $ 245,671 $ 378,862 Excess (deficiency) of revenue over expenses (2,861) - (25,294) - 54,480 26,325 Transfers ,685 - (176,685) - Net assets, December 31, , , , , ,187 Excess (deficiency) of revenue over expenses (2,865) - (151,391) 69,028 36,236 (48,992) Transfers (Note 7) (13,806) 13,806 - Net assets, December 31, 2013 $ 2,866 $ 124,599 $ - $ 55,222 $ 173,508 $ 356,195 The accompanying notes are an integral part of these financial statements. 4

6 Statement of Operations For the year ended December Revenue Donations $ 434,992 $ 615,637 Government grants (Page 15) 593, ,563 Interest and other 1, Program services 208, ,815 Sponsorships 62,500 31,300 1,301,462 1,169,936 Expenses International programs (Page 15) 1,125, ,498 Fundraising 119, ,298 General and administrative expenses 51,514 83,591 Public engagement and education 53,937 16,224 1,350,454 1,143,611 Excess (deficiency) of revenue over expenses $ (48,992) $ 26,325 The accompanying notes are an integral part of these financial statements. 5

7 Statement of Cash Flows For the year ended December Cash Flows from Operating Activities Excess (deficiency) of revenue over expenses $ (48,992) $ 26,325 Adjustment for Amortization of capital assets 2,865 2,865 (46,127) 29,190 Net change in non-cash working capital Accounts receivable 22,096 85,880 Project advances 88,350 (62,697) Loan receivable (159,540) - Prepaid expenses (6,370) - Accounts payable and accrued liabilities 11,497 10,761 Deferred revenue 538, ,195 Project payable 11, , ,329 Cash Flows from Financing Activities Proceeds from long-term debt 159,540 - Increase in cash and cash equivalents 619, ,329 Cash and cash equivalents, beginning of year 523, ,911 Cash and cash equivalents, end of year $ 1,142,651 $ 523,240 The accompanying notes are an integral part of these financial statements. 6

8 Notes to Financial Statements 1. Nature of Operations and Summary of Significant Accounting Policies Nature of Business The IDE International Development Enterprises Association Inc. is a not-for-profit organization without share capital, incorporated under the laws of Manitoba. The organization is a registered charity under the Income Tax Act. The organization is the Canadian arm of IDE. As part of IDE s global operations, the organization is responsible for the development and oversight of specific projects implemented through IDE field offices. IDE s consolidated global operations are reported on separately and only its Canadian operations are reflected in these financial statements. Basis of Accounting These financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations. Revenue Recognition The organization follows the deferral method of accounting for contributions. Revenue, primarily grant revenue, which contains conditions to its use, is deferred until the conditions are fulfilled. Donation revenue is recorded when received. Donation revenue received for specific campaigns is unrestricted and will be used at the discretion of the board. The board's practice is to allocate these funds as per the donor's request. See note regarding 'Donor Directed Project Fund' for further information. If response to an appeal exceeds the amount needed for the designated project or if a project cannot be completed, the excess or remaining funds will be used where most needed. Capital Assets Capital assets are stated at cost less accumulated amortization. Amortization based on the estimated useful life of the asset is calculated as follows: Computer equipment 5 year straight-line Internally Restricted Net Assets This reserve fund was established by the Board of Directors to provide continuity of operations in the event of future shortfalls in revenue over expenses. Donor Directed Project Fund This internally restricted reserve fund was established by the Board of Directors to set aside, at the discretion of the Board, donor funds received for use for projects in particular countries (Note 6). 7

9 Notes to Financial Statements 1. Nature of Operations and Summary of Significant Accounting Policies (continued) WASH Fund This internally restricted fund was established by the Board of Directors to support the work of IDE in the areas of water, sanitation and hygiene (Note 7). Foreign Currency Translation Foreign currency accounts are translated into Canadian dollars as follows: At the transaction date, each asset, liability, revenue and expense is translated into Canadian dollars by the use of the exchange rate in effect at that date. At the year end date, monetary assets and liabilities are translated into Canadian dollars by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in income in the current period. Financial instruments Financial instruments are recorded at fair value when acquired or issued. In subsequent periods, financial assets in actively traded markets are reported at fair value, with any unrealized gains and losses reported in income. All other financial instruments are reported at cost or amortized cost less impairment, if applicable. Financial assets are tested for impairment when changes in circumstances indicate the asset could be impaired. Transaction costs are the acquisition, sale or issue of financial instruments are expensed for those items remeasured at fair value at each statement of financial position date and charged to the financial instrument for those measured at amortized cost. 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 at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from management's best estimates as additional information becomes available in the future. 8

10 Notes to Financial Statements 2. Loan Receivable Hydrologic Social Enterprise Co. Ltd., with interest at 5.00% receivable on a semi-annual basis beginning on March 31, 2014 and then on the last day of December and June in subsequent years, requiring semi-annual principal payments of $25,000 USD, maturing December 31, $ 159,540 $ - Less: Current portion of loan receivable - - $ 159,540 $ - Principal repayments of the loan receivable for the next five years are as follows: 2014 $ , , ,180 $ 159, Capital Assets Accumulated Accumulated Cost) Amortization Cost Amortization Computer equipment and software $ 14,326 $ 11,460 $ 14,326 $ 8,595 Net book value $ 2,866 $ 5,731 9

11 Notes to Financial Statements 4. Deferred Revenue Deferred contributions include designated government grants and contributions which remain unspent to December 31, 2013, as set out in the following table: Opening Accrued Recognized Closing Canadian International Development Agency Cambodia $ 16,783 $ 257,113 $ (213,900) $ 59,996 Ethiopia 57, ,159 (171,406) 74,997 Canadian Support 35, ,922 (127,966) 15,795 Ghana 96, ,686 (119,274) 94, , ,880 (632,546) 245,049 Manitoba Council for International Cooperation Mozambique 12,555 15,000 (27,172) 383 Contributions Grand Challenge - 500, ,000 Ethiopia - 12,000-12, , ,000 $ 219,270 $ 1,197,880 $ (659,718) $ 757,432 Deferred contributions recognized as revenue are included in the designated government grants on the statement of operations. 10

12 Notes to Financial Statements 5. Long-term Debt Heb2 Holding Ltd., with interest at 5.00% payable on a semi-annual basis beginning December 31, 2013, requiring semi-annual principal payments of $8,333 USD, unsecured, maturing December 31, $ 53,180 $ - Frank DeFehr Holding, with interest at 5.00% payable on a semi-annual basis beginning December 31, 2013, requiring semi-annual principal payments of $8,333 USD, unsecured, maturing December 31, ,180 - M&W Holdings Ltd., with interest at 5.00% payable on a semi-annual basis beginning December 31, 2013, requiring semi-annual principal payments of $8,333 USD, unsecured, maturing December 31, , ,540 - Current portion of long-term debt - - $ 159,540 $ - The purpose of the loans are to support the Hydrologic Social Enterprise Co. Ltd. (Hydrologic) of Phnom Penh, Cambodia. The organization may repay the loans at any time without penalty. The organization retains the right to forgo repayment to the three lenders if Hydrologic does not meet its obligation to the organization. Principal repayments for the next five years and thereafter are as follows: 2014 $ , , ,360 $ 159,540 11

13 Notes to Financial Statements 6. Donor Directed Project Fund In 2012, the organization established a reserve fund to set aside, at the discretion of the Board, donor funds received for use for projects in particular countries. During the year, $151,391 ($25,294 in 2012) was withdrawn from the fund. 7. WASH Fund During the year, the organization established a fund to support the work of IDE in the areas of water, sanitation and hygiene, at the discretion of the Board. During the year, $69,028 was raised and allocated to the WASH fund. In addition, an amount of $13,806 was withdrawn from the fund for administration which resulted in the 2013 ending fund balance of $55, International Programs In 2013, international programs consisted primarily of: a) The development of private extension services, improved access to farm inputs and supporting the introduction of high value crops to smallholder farmers in Cambodia, Asia. b) The development of improved access to farm inputs and supporting the introduction of high value crops to smallholder farmers in Ghana, Africa. c) Increase access to surface and near-surface water resources, and open new product and market opportunities, meet local demand for higher-value horticultural products in Zambia, Africa. d) The development of micro-irrigation technology and input supply chains, providing extension services and improving market access for smallholder farmers in Ethiopia, Africa. e) The development and marketing of micro-irrigation well-drilling technologies in Mozambique, Africa. Throughout the year, the organization provided funding to IDE entities of $1,125,532 ($932,498 in 2012). As at December 31, 2013, a payable of $11,803 (receivable of $88,350 in 2012) was due to IDE field offices, these amounts are non-interest bearing and have no terms of repayment. 12

14 Notes to Financial Statements 9. Allocation of Expenses Salaries and benefits totaling $314,616 ($292,721 in 2012) have been allocated between the various programs as follows: General and administrative expenses $ 32,406 $ 55,718 Fundraising 52,762 67,941 Public engagement and education 36,890 4,824 International programs 192, ,238 Total $ 314,616 $ 292, Related Parties Disclosures The following table summarizes the organization's related party transactions for the year: General and administrative expenses - Rent and utilities services received from a Director's 100% owned company. $ 10,250 $ 7,687 These transactions are in the normal course of operations, measured at the exchange amount, which is the amount agreed upon by the two parties. The amounts due to related parties at year end are as follows: Directors loans for Hydrologic Loan $ 106,360 $ - The amount due to directors is related to an interest bearing loan payable (Note 5). 13

15 Notes to Financial Statements 11. Financial Instrument Risk The organization, through its financial assets and liabilities, is exposed to various risks in the normal course of operations. The organization's objective in risk management is to optimize the risk return trade-off, within set limits, by applying integrated risk management and control strategies, policies and procedures throughout the organization's activities. The following analysis provides a measurement of these risks at December 31, (a) Credit Risk and Market Risk Credit risk is the risk that one party to a financial instrument fails to discharge an obligation and causes financial loss to another party. Financial instruments which potentially subject the organization to credit risk consist principally of accounts receivable and project advances. The organization limits its exposure to credit risk and market risk by maintaining a diversified portfolio and by investing in high quality investments. The organization's maximum exposure to credit risk without taking account of any collateral or other credit enhancements is as follows: Accounts receivable $ 1,822 $ 23,918 Project advances - 88,350 (b) Foreign Exchange Risk Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. (c) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. Financial instruments which potentially subject the organization to interest risk consist of long-term debt. 14

16 Supporting Schedules For the year ended December Detailed Schedule of Government Grants Canadian International Development Agency Cambodia $ 213,900 $ 118,895 Canadian costs 61,810 - Ethiopia 171, ,674 Ghana 104,188 - Manitoba Council for International Cooperation 42,258 56,994 $ 593,562 $ 362,563 Detailed Schedule of International Program Expenses Cambodia $ 285,200 $ 158,526 Cambodia - Hydrologic 1,875 - Central America 6,440 - Ethiopia 228, ,926 Ghana 143,352 92,171 International support 250, ,675 Mozambique 58,172 63,122 Vietnam - 16,472 Zambia 151, ,606 $ 1,125,532 $ 932,498 15

17 CIDA Schedules Schedule A - Summary Statement of Revenue CIDA Funded Non-CIDA Activities Total Government Revenue CIDA NGO/ICD division $ 617,999 $ - $ - $ 617,999 Provincial government - 42,257-42,257 Private Revenue Canadian matchable 206, , ,913 Interest income Other (program service sales) , ,877 Total revenue $ 824,206 $ 371,170 $ 106,086 $ 1,301,462 Schedule B - Restricted Funds Received But Not Disbursed by Year End Liability and/or fund account(s) (1) deferred revenue $ 757,432 Not disbursed by year-end (3) $ 757,432 Summary of total restricted funds received but not disbursed by year-end: Previous Year Current Year CIDA funds $ 206,715 $ 730,785 Other Contributions Manitoba government matching grant program 12,555 14,647 Private funder - 12,000 Total restricted funds but not disbursed by year-end (4) $ 219,270 $ 757,432 Schedule C - Summary of CIDA Funding, Disbursements and Transfer of Funds Organization's Funding Project/ Project/ CIDA Funding CIDA Funds Funds Channel Program No. Program Name Received Disbursed Disbursed NGO/ICD S Innovation for Rural Prosperity - Ghana, Ethiopia and Cambodia $ 641,529 $ 617,999 $ 206,000 Grand Challenges Canada Nepal Sanitation Marketing Scale-up Project 500, NGO/ICD division total (cash basis) 1,141,529 $ 617,999 $ 206,000 Less reconciling revenue amount (523,530) Add accrued holdback S Total NGO/ICD division funding (accrual basis) (5) $ 617,999 16