Move Ontario Trust Financial Statements For the period ended September 30, 2017

Transcription

1 Financial Statements For the period ended September 30, 2017 Contents Independent Auditor's Report 2 Financial Statements Balance Sheet 3 Statement of Capital 4 Statement of Operations 5 Statement of Cash Flows 6 Notes to Financial Statements 7-9

2 Tel: Fax: Toll-free: BDO Canada LLP 1 City Centre Drive, Suite 1700 Mississauga ON L5B 1M2 Canada Independent Auditor's Report To the Trustees of Move Ontario Trust We have audited the accompanying financial statements of Move Ontario Trust which comprise the balance sheet as at September 30, 2017 and the statements of capital, operations and cash flows for the period 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 private enterprises, 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 judgement, 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 Move Ontario Trust as at September 30, 2017 and the results of its operations and its cash flows for the period then ended in accordance with Canadian accounting standards for private enterprises. Chartered Professional Accountants, Licensed Public Accountants Mississauga, Ontario October 1, BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms

3 Balance Sheet September 30 December Assets Cash $ - $ 104,522 Accrued interest Prepaid expenses - 123,099 Advances to TYSSE (Note 2) - 10,148,526 Investments (Note 3) - 1,184,669 $ - $ 11,561,110 Liabilities and Capital Accounts payable and accrued liabilities $ - $ 17,422 Capital - 11,543,688 $ - $ 11,561,110 Approved by the Trustees: Roberto Rossini Oct 3, :48:00 EDT Trustee Trustee Bill Hughes Oct 04, 2017 The accompanying notes are an integral part of these financial statements. 3

4 Statement of Capital For the period ended September Since Inception (with comparative amounts for the year ended December 31, 2016) Capital, beginning of period $ 11,543,688 $209,210,398 $ - Net income (loss) (208,855) 772, ,330,528 Contributions Government of Canada ,000,000 Province of Ontario ,000,000 Settlor Distributions relating to project costs - income distributions (Note 4) 208,855 (772,451) (163,330,528) - capital distributions (11,543,688) (197,666,710) (944,579,555) Capital expenditures - - (420,455) Capital, end of period $ - $ 11,543,688 $ - The accompanying notes are an integral part of these financial statements. 4

5 Statement of Operations For the period ended September Since Inception (with comparative amounts for the year ended December 31, 2016) Interest and investment income $ - $ 1,296,750 $ 170,767,761 Expenses Investment management fees 11, ,260 5,754,614 Harmonized sales tax 20,157 59, ,035 Professional fees 90, , ,483 Insurance 71,197 23, ,147 Webhosting and maintenance 14,962 4,489 50,373 Supplies , ,299 7,437,233 Net income (loss) for the period $ (208,855) $ 772,451 $ 163,330,528 The accompanying notes are an integral part of these financial statements. 5

6 Statement of Cash Flows For the period ended September (with comparative amounts for the year ended December 31, 2016) Cash provided by (used in) Operating activities Net income (loss) for the period $ (208,855) $ 772,451 Adjustments required to reconcile net income (loss) with net cash provided by operating activities Realized loss on sale of investments - 962,215 Changes in non-cash working capital balances Accrued interest 274 1,488,967 Prepaid expenses 123,099 (113,499) Accounts payable and accrued liabilities (17,422) (108,996) (102,904) 3,001,138 Investing activities Purchase of investments - (749,784,073) Proceeds on sale of investments 1,184, ,718,067 1,184, ,933,994 Financing activity Distribution relating to project costs (net) (1,186,287) (243,934,904) Increase (decrease) in cash during the period (104,522) 228 Cash, beginning of period 104, ,294 Cash, end of period $ - $ 104,522 The accompanying notes are an integral part of these financial statements. 6

7 September 30, 2017 Move Ontario Trust Notes to Financial Statements 1. Significant Accounting Policies General Move Ontario Trust ("Trust") was settled under a Declaration of Trust ("Declaration") by the Province of Ontario as Settlor by the payment of an Initial Contribution on March 24, Further Contributions in the amount of $870 and $75 million were subsequently made to the Trust by the Province and the Government of Canada, respectively. Both contributions, and any Additional Contributions, as defined by the Trust indenture, are irrevocable and shall not be distributed to or revert to the Province of Ontario. The Trust was established to fund distributions in respect of capital investments in a heavy rail inter-regional public transit infrastructure expansion project in the City of Toronto ("Toronto") and The Regional Municipality of York ("York"), Beneficiaries of the Trust. Each of Toronto and York have nominated a Trustee to act on their behalf in administering the Trust in accordance with the declaration. The third Trustee is an appointee by the Province of Ontario. Pursuant to the terms of the Declaration, the Trust has determined that Trust Assets are allocated to the Beneficiaries in the ratio of percent to Toronto and percent to York for the use in the extension of the Spadina/University subway to Vaughan Corporate Centre. Should the project not proceed or meet established progress milestones, the Declaration provides for the Trust Assets to be distributed to certain Eligible Municipalities to be used for transit purposes. The Trust will be dissolved on September 30, 2017, the date that the Trust Assets are fully utilized. Basis of Presentation The preparation of the financial statements in conformity with Canadian accounting standards for private enterprises requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent 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 those estimates. Revenue Recognition Interest and investment income is recorded as it is earned and includes adjustments to market value. Financial Instruments Upon initial recognition, financial instruments are measured at fair value. At each reporting date, the Trust will measure all financial instruments at cost or amortized cost less impairment, if applicable, except for investments in debt instruments which are subsequently measured at fair value with changes recognized in the statement of operations. Transaction costs related to debt instruments are expensed as incurred and charged to the financial instruments for those measured at amortized cost. 7

8 September 30, 2017 Move Ontario Trust Notes to Financial Statements 2. Advances/Due to TYSSE As part of the Toronto-York Spadina Subway Extension ("TYSSE") project governance structure, the Executive Task Force ("ETF") was established to provide oversight of the project. The ETF is comprised of three executives from the Regional Municipality of York, and three executives from the City of Toronto, both organizations being beneficiaries of the Trust. The ETF provides direction to the project manager, with respect to the project's scope and budget, and requests funding for project expenditures and working capital on behalf of the beneficiaries in accordance with a Disbursement Policy developed in 2008 to assist the Trustees in regard to their fiduciary responsibilities. The Trust and the ETF are related since the ETF is controlled by beneficiaries of the Trust. During the period, the Trust provided project funding as requested by the ETF in the amount of $1,186,287 ( $243,934,904). The amount due to/from TYSSE is non-interest bearing, unsecured and has no terms of repayment. 3. Investments The market values of investments are summarized as follows: Short-term investment $ - $ 1,184,669 The investment policy authorizes that Move Ontario Trust's funds be invested in bonds, debentures, promissory notes or other indebtedness issued or guaranteed by the Government of Canada, a Canadian province, a Canadian municipality, an agency of the Government of Canada or a Canadian province, the Ontario Strategic Infrastructure Financing Authority, any Financing Authority including those comprised of municipalities, owned or guaranteed by a Province and schedule 1 banks with credit ratings of "AA", with maturity of not more than five years. The investments have a weighted average return of Nil ( %) net of fees. The Trust's cash balances and investments generated $170,767,761 of interest and investment income from the inception of the Trust on March 24, 2006 to September 30, 2017, resulting in a weighted average annual return of 2.43% net of fees of $6,084,511 including HST. 8

9 September 30, 2017 Move Ontario Trust Notes to Financial Statements 4. Distributions Pursuant to the Declaration, the Trust is required to allocate, distribute and make payable to the Beneficiaries all of the income (loss) of the Trust earned in a taxation year. Capital distributions include costs of the Trust which are not incurred to earn income and hence are not deductible for income tax purposes. These costs were charged against the capital of the Trust. Distributions (allocations) of the Trust are summarized as follows: Net income (loss) $ (208,855) $ 772,451 Distributions (allocations) to beneficiaries 208,855 (772,451) Undistributed net income $ - $ - 9