LOUIS RIEL CAPITAL CORPORATION - LRCC Financial Statements 2015-2016.pdf · LOUIS RIEL CAPITAL CORPORATION Index to Non-Consolidated Financial Statements Year Ended March 31, 2016

LOUIS RIEL CAPITAL CORPORATION

Non-Consolidated Financial Statements

Year Ended March 31, 2016


Index to Non-Consolidated Financial Statements


INDEPENDENT AUDITOR'S REPORT

NON-CONSOLIDATED FINANCIAL STATEMENTS

Non-Consolidated Statement of Financial Position

Non-Consolidated Statement of Revenues and Expenditures

Non-Consolidated Expenses (Schedule 1)

Non-Consolidated Statement of Changes in Net Assets

Non-Consolidated Statement of Cash Flow

Notes to Non-Consolidated Financial Statements

Non-Consolidated Program Delivery Partner (Schedule 2)

Non-Consolidated Schedule of Supplementary Information (Schedule 3)

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15

l-LPChartered Professional

Accountants

INDEPENDENT AUDITOR'S REPORT

To the Members of Louis Riel Capital Corporation

^^lâuS -t!'e-_a:cco.n1panying non:consolidated financial statements of Louis Riel Capitali, which comprise the non-consolidatecf statement of financial position as at'March'31" 2016

and tiie non-consolidated statements of revenues and expenditures, changes"in'net~assetsandcash7ow,J^2Tar then erld8d' and a summary of significant accounting policies a'nd"othe7 expi'ana'tory

Management's Responsibility for the Non-consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these non-consolidated financialstatements-m accorda"ce with Canadian accounting standards for not-for-profit organiza'tions, 'a'nd'forsuch-, intemaL. contr01 as mana9ement determines" is necessary to enable the' preparation' of" ~nor\-consolidated financial statements that are free from material missta'tement, whether dueTo'fraud or'erro'r

Auditor's Responsibility

Our responsibility is to express an opinion on these non-consolidated financial statements based on ourûd_it, -vv,e conclucted our audit in accordance with Canadian generally accepted auditing standards. Thosestandards require that we comply with ethical requirements and plan and perform The "audit "to obtainreasonable assurance about whether the non-consolidated financial statements are free'from'mate'rialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in!?fi. nJ^C<^!OILda_ted_fm_£lncial statements- The procedures selected depend on the auditor's judgment,including the assessment of the risks of material misstatement of the non-consolidatedI financialstatements, whether due to fraud or error. In making those risk assessments, the "audito7 considersinternal control relevant to the entity's preparation and "fair presentation of the non-consolidated'financiaistatements in order to design audit procedures that are appropriate in the circumstances, 'but'not'for'thepurpose of expressing an opinion on the effectiveness' of the entity's internal control. ' An'audit'aisoincludes evaluating the appropriateness of accounting policies used and the reasonabFeness-"ofaccounting estimates made by management, as well as "evaluating the overall presentation~of"the~non-consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

300-309 McDermot Avenue, Winnipeg, Manitoba R3A 1T3Telephone: (204)942-0300 Fax: (204)957-5611 Website: www. lazergrant. ca

(continues)

1

Independent Auditor's Report to the Members of Louis Riel Capital Corporation (continued)

Opinion

Iin, oonuLopmS^he, no^nsoâtedâncialstateme^ present falriy. i" a" material respects, the^n^l^^^LO^R^£api^c^^rationasatMarc^. 20^'and^res^îtT^^^^^^ân.djtejash-flowfor the year then endedi in accordancewithCanadian~accountin'g'staâ'rdsoforn ô'r0

IT orQsnizations.

Winnipeg, MBJune 15, 2016

.rf&ze^C^-m^ L. LP

CHARTERED PROFESSIONAL ACCOUNTANTS


Non-Consolidated Statement of Financial Position

March 31, 2016

ASSETSCURRENT

Cash

Accounts receivable (Note 7)Interest receivable (Note 5)Pre aid ex enses

CAPITAL ASSETS (Note 4)

LOANS RECEIVABLE (Note 5)

LONG TERM INVESTMENTS (Note 6)DUE FROM RELATED PARTIES Note 7

LIABILITIES AND NET ASSETSCURRENT

Accounts payable and accrued liabilities (Note 8)Undisbursed contributions (Note 9)Deferred contribution Note 10

DEFERRED CAPITAL GRANT Note 11

NET ASSETS

CONTINGENT LIABILITY (Note 12)

LEASE COMMITMENTS (Note 13)

2016

525,045592,389350, 906

8642

1,476,982

6, 174

4, 275, 136

4, 803

1 822 043

7 585 138

2015

$ 1, 721, 482113, 184250, 960

6898

2, 092, 524

14, 017

3, 925, 165

4, 803

1 797 043

$ 7, 833 552

72,692 $221, 296102289

396, 277

396, 277

7188861

90,495764, 937

855, 432

2, 696

858, 128

6 975 424

$ 7585138 $ 7833,552

ON E ALF OF THE ARD

\ CL'^Director

Directot


Non-Consolidated Statement of Revenues and Expenditures

For the Year Ended March 31, 2016

REVENUESNational Aborigina^Capital Corporations Association - PDP EquityInterest (Notes 5, 7)National Aboriginal Capital Corporations Association - PDP

OperatingNational Aboriginal Capital Corporations AssociationExpense recovery (Note 7)Metis Employment & Training - Training subsidyLoan feesOtherManagement fees (Note 7)Bad debt recoveryAboriginal Business CanadaDeferred to subse uent ears Note 10

EXPENSES Schedule 1

EXCESS OF REVENUES OVER EXPENSES FROMOPERATIONS

OTHER INCOME (EXPENSES)Dividend income (Note 7)Legal settlementLoss on dis osal of ca ital assets

EXCESS OF REVENUES OVER EXPENSES

2016

$ 1,414,771380,171

232,018178,325137,85367,64653,63243,72313, 140

6, 191

102289

2,425,181

2 242 744

182437

19,00012,000

31000

$ 213437 $

2015

1,443, 596402,249

237, 105123,246

17, 584

66, 80530, 41513, 14031, 225

5, 542

2, 370, 907

2 248, 334

122, 573

10,0002300

7700

130273


Non-Consolidated Expenses (Schedule 1)

For the Year Ended March 31, 2016

AdministrationAdvertising and promotionAllocation of PDP equity fundingAmortizationBad debts

Computer software and equipmentConsultantsCredit searchesDirectors' honorariaDirectors' trainingDirectors' travelDonationsInsurance

Interest and bank chargesManagement oversightMembershipsNational Aboriginal Capital Corporations Association costsOfficeProfessional feesRent (Note 7)Repairs and maintenanceStaff travelTelephoneTrainingWa es and em lo ee benefits

2016

10,50033,613

1,265,0757,843

121,98120, 89549, 500

5, 11119,638

22,9301, 1288, 1751, 298

24,00011, 730

3, 26719, 15522,99042, 47123, 16813,0894,4876,415

504 285

2015

9, 00029, 763

1,454,23911,54355, 96316, 58891, 347

3, 45925, 150

3, 21523, 050

3287, 5831,257

23, 00014, 166

4, 67212, 22323, 84649, 08425, 04818, 303

5, 8692, 110

337 528

$ 2242744 $ 2, 248334


Non-Consolidated Statement of Changes in Net AssetsYear Ended March 31, 2016

2016 2015

NET ASSETS - BEGINNING OF YEARExcess of revenues over ex enses

NET ASSETS - END OF YEAR

$ 6, 975,424 $ 6, 845, 151213437 130, 273

$ 7, 188861 $ 6, 975, 424


Non-Consolidated Statement of Cash Flow


OPERATING ACTIVITIESExcess of revenues over expensesItems not affecting cash:

Amortization

Loss on disposal of capital assetsAmortization of deferred ca ital rant

Changes in non-cash working capital:Accounts receivableInterest receivableAccounts payable and accrued liabilitiesDeferred contributionPrepaid expensesUndisbursed contributions

Cash flow from used b o eratin activities

INVESTING ACTIVITIESRepayment of loans and notes receivableAddition to loans and notes receivableAdvances to related arties

Cash flow used b investin activities

DECREASE IN CASH

Cash - be innin of ear

CASH - END OF YEAR

CASH FLOW SUPPLEMENTARY INFORMATIONInterest received

Dividends received

2016

$ 213, 437

7,843

2696

218 584

(479, 205)(99, 946)(17, 803)102,289

(1, 744)543 641

1 040 050

821 466

1,730,911(2, 080,882)

25000

374 971

(1, 196, 437)

1 721 482

$ 525 045

2015reclassed

$ 130,273

11,5432, 3005391

138725

(2, 535)(19, 850)61, 867

87, 89592, 932

34, 445

173 170

1,285, 049(1, 467, 799)

304 659

487,409

(314, 239)

2, 035 721

$ 1, 721482

$ 380171 $ 402249

$ 19000 $




1. DESCRIPTION OF BUSINESS

The organizationwas incorporated without share capital August 21, 1992 under the laws of thep^vinc!.. of. M_an.itoba\an_dcommenced °Perations October f, 1992asa~not-for'-profit Corporation

<as-suchjs_exempt from income taxes_The Corporation was initially funded'by the'Governmentu.nder. itscanadia,rl Abori9inal Economic Development Strategy (CAEDS). "The mandate

Ls. to.-make certain loans and.. guarantees for the start-up, acquisition, or expansion of commercialowned and controlled by the Metis people of Manitoba.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of resentation

The non-consotidated financial statements were prepared in accordance with Canadian accountirstandards for not-for-profit organizations (ASNFPO).

Measurement uncertain

The. pre_paration. of financial statements in conformity with Canadian accounting standards for not-for-profiLorganizations recluires .mana9.emerlt to make estimates and assumptions" That affect' thereported amount of assets and liabilities, disclosure of contingent assets and I'iabilitiesatthedate'oftohe-în-a-rî.aLS!atements £lnd. the rePortecf amounts of revenues and expenses during the period.Suchêstimates are periodically reviewed and any adjustments necessary are reportediTi eamingsTnthe period in which they become known. Actual results could differ from these estimates^Financial instruments olic

?-a»n.<51 -lrLEltr.um<^ts aê ,recorded at fair value when acquired or issued. In subsequent periods,flnancial-assets withactivelytraded "labels are reported at fair value, with'any Linreaiizedgalns'andiosses reported in income- All other financial instruments are reported at amortized'cost, Ynd" tested

impairment at each reporting date. Transaction costs on the acquisition, sale, or issue offinanaalinstruments are expensed when incurred.

Ln-vestmentsJor. w,hich there is not an active marl<et are carried at amortized cost except when it is^!t-a-^h^, !haLtheir. value. 's, impaired. lrT1P. airment l°sses, or reversal of previously" recognizimpairment losses, are reported as part of net income.

Provision for otentiall uncollectible loans

^!?fme^t. in.it-ially. d^termines a 5% provision.. for potentiaiiy uncollectible loans for every loanbalance^ Subsequently, management individually identifies loans thaYshou1d"be"allocated"an?-d-d!t!?n^l^visi?n:. PI'ovisions are reviewed and approved at every board meeting for'theTmostrecent month-end period. Management has justified all provision calculations which can"range between 5% and 100% for any given account.

(continues)




2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)Capital assets

SpiSLasse,ts-are:statedat_cost or.deemed cost less accumulated amortization. Capital assets areamortized over their estimated useful lives at the following rates and method's"

Furniture and fixturesLeasehold improvementsOffice equipmentOffice equipment

20% declining balance method10% declining balance method33% declining balance method

3 years straight-line method

The organization regularly reviews its capital assets to eliminate obsolete items.

£ap'taLassets £lcquired durin9the year but not P'aced into use are not amortized until they are placed

One-half the normal rate of amortization is recorded in the year of acquisition.Revenue recognition

The organization follows the deferral method of accounting for grants and donations.

con. tribut. ions, re!ated. to exPenses of future periods are deferred and recognized as revenue in thein which the related expenses are incurred.

Loan interest and other revenues are recognized when the amount to be received can beestimated and collection is reasonably assured.

3. FINANCIAL INSTRUMENTS

The. _ol'ganization . is exPosed to _ various risks through its financial instruments and has aômp. rehenslye :rlsl<_management framework to monitor" evaluate and mana'ge 'these "risks.

'

'"The»is provides information about the organization's risk exposure and concentration as'of

(a) Credit risk

cred^nskarisesfrom_the potentialthat a counter Party will fail to perform its obligations. Theorganization is exposed to credit risk from customers, ' In order to reduce its credit* risk, theorganization reviews a new customer's credit history before extending credit and conducts'review of^ its existing customers' credit performance. An allowance for doubtful-accoun;?s'Ts

.d based uponjactors surrounding the credit risk of specific accountsVhisto^caTtr'endsother information. The organization has a significant number of customers'which'minimizes

concentration of credit risk.

unlessotherwise rloted', it is management's opinion that the organization is not exposed to signifother price risks arising from these financial instruments.

4, CAPITAL ASSETS

Furniture and fixturesLeasehold improvementsOffice e ui ment

Net book value




Cost

2016Accumulatedamortization

45,990 $15, 37462448

42, 682 $12,84962107

123812 $ 117638 $

$ 6174

2015

Cost

45, 99015, 37462448

Accumulatedamortization

$ 41, 28311, 48857024

123, 812 $ 109795

$ 14, 017

5. LOANS RECEIVABLE

2016 2015

Loans receivable

Allowance for doubtful loans receivable$ 4, 810, 137 $ 4, 347, 482

535001 422, 317

$ 4275136 $ 3925, 165

The above loans were made at the normal terms and rates (7 1/4 to 14 1/4%) of the organization.

^3aetdM$ITC5h333'4 (22°01165. i"S)ceivable from e"""e8 that are rela'ed 'hrough c°mmon dlrec'OT8

?1s8^8M4a9c6h(23il 5201$6', ^6?4n4d)'n9 loans to entities that are related throu9h common directors totaled

Dinng !!l,yT^ded_March. 31' ,2016' the entity recognized interest income from entities that arerelated through common directors totaling $140, 109 (2015 - $127, 84^.'

Iheslloans were made at the normalterms and rates of the organization and are included in loans

6. LONG TERM INVESTMENTS

5785066 Manitoba Ltd,(100 Class A voting common shares)

Metis Entrepreneurial Fund Inc.,(100 Class A voting common shares plus additionalcontributions)

Louis Riel Capital Investments Inc.,(100 Class A voting common shares)

6106111 ManitobaLtd.50 Class A votin common shares

2016

100 $

4,643

10

50

4803 $

2015

100

4, 643

10

50

4, 803

10




RELATED PARTIES

Related arties

5785066 Manitoba Ltd.(a wholly owned subsidiary)Accounts receivable

Expense recovery income

6106111 Manitoba Ltd.(a company jointly and equally owned by the organization and

another entity)Accounts receivableManagement fee income

Manitoba Metis Federation Inc.(an entity related through common directors)Accounts receivableInterest incomeRent and common area expenses

Metis Entrepreneurial Fund Inc.(a company jointly and equally owned by the organization and

two other entities)Dividend income

2016 2015

$ 20,864 $121,053

26, 280 $ 26, 28013,140 13, 140

1,537 $1,528

42,471 49, 084

$ 19,000 $

These transactions are in the normal course of operations and are measured at theamount, which is the amount of consideration established and agreed to by theVelated parties.'

As.at.March^1' 2016' accounts receivable are due from related parties and are subject to normalterms. These amounts are included in accounts receivable.

Due from related arties

2016 2015

Long term portion due from related parties5785066 Manitoba Ltd. (a wholly owned subsidiary)6106111 Manitoba Ltd (a company jointly and equally

owned by the organization and another entity)Louis Riel Capital Investments Inc. (a wholly owned

subsidia

$ 1, 578, 771 $ 1, 578, 771

196,817 196, 817

46 455 21 455

$ 1822043 $ 1, 797043

AdvancesA0 related Parties. are unsecured and have no specified interest or repayment terms. The

organization has postponed the right to demand repayment in the next yea/'and'accordina'lv theadvances have been classified as long-term.

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

lrêdJrLaccounts payable and accrued liabilities are government remittances payable of $Nil', \j\j^y).

11




9. UNDISBURSED CONTRIBUTIONS

^s-RleLcapital corPoration entered into an agreement with the Minister of Indian Affairs and.

Development under. a Pr°9ram delivery approach called Program ~Delivery"Partner:"u^deLthe-program. Louis, Riel caPital .Corporation will receive" funds "and" make nonêfundablecontrlbut!ons to el.i,9ible. Aboriginal businesses that have viable'business'" 30^1^5^'a'deTn'ed9e.ographicarea: The Minister of Indian Affairs and Northern DevelopmenTalsoprovIdes fun^n'a"tocover expenses to operate the program.

u;nd.'sbu/sedcontributionsJr1_the amount $221. 296 (2015 - $764, 937) have been approved but notby year-encf. These amounts are expected to be disbursed by the end"of'the~subsequent

yssr.

10. DEFERRED CONTRIBUTION

Balance, beginning of yearDeferred to subse uent ears

2016

$ - $102 289

$ 102 289 $

2015

11 DEFERRED CAPITAL GRANTS

^-granLwas ̂ eceived in 2012 towards office equipment from Aboriginal Affairs and NorthernCanada under Community Economic Opportunities program and is beingamortized'at

same rate as the office equipment.

2016 2015

Balance, beginning of yearAmortization

$

$

2, 6962696

8, 0875391

2, 696

12. CONTINGENT LIABILITY

Thôrgar'l-zat, ion. guaranteed amort9a9e taken by 6106111 Manitoba Ltd., a company jointly andequally owned by the organization and another entity, to a maximum of-$250ô6o. "Asi atM'arch"31"2016 the mortgage had an outstanding balance of $857, 430 (2015 -$895, 918).

12




13. LEASE COMMITMENTS

Th^^r9amzatio-n-hasa, lon9 term lease with respect to its Premises with an entity relatedcommon. direct?rs-. The lease contains renewal options and provides for payment'o'f utilities"

maintenance costs. Future minimum lease payments as at March 3l720'16"ar'eas follows'20172018201920202021Thereafter

$ 31, 24431,24431,24431, 24431, 24436451

$ 192, 671

14 COMPARATIVE FIGURES

Some of the comparative figures have been reclassified to conform to the current year's presentation.

15. SCHEDULE TO THE FINANCIAL STATEMENTS

Theâccompanying schedule 2 to the financial statements is presented unaudited and is included forinformational purposes only.

13


Non-Consolidated Program Delivery Partner (Schedule 2)Year Ended March 31, 2016

(Unaudited)2016

(Unaudited)2015

REVENUE

rational Aboriginal Capital Corporations Association - PDP EquityNational Aboriginal Capital Corporations Association - PDP

OperatingInterestDeferred to subse uent ears

Equity FundAllocation of PDP e uit funcfin

EXPENSESAdministration

Advertising and promotionComputer software and equipmentConsultantsDirectors' travelInsurance

Interest and bank chargesManagement oversightOfficeProfessional feesRentStaff travelTrainingWa es and em lo ee benefits

INCOME LOSS FROM OPERATIONS

$ 1,414, 771 $ 1, 443, 596

232,018536

102289

1 545 036

1 265 075

10,5008,008

20,89538,810

5,9282,500

11624,000

3,0756,000

15,0005,398

53891 703

232 471

47490

237, 1051, 783

1, 682, 484

1,454239

9, 0006, 044

16, 58891. 347

9623, 000

5, 00015, 00014, 101

40070, 245

250, 821

22, 576

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LOUIS RIEL CAPITAL CORPORATIONNon-Consolidated Schedule of Supplementary Information (Schedule 3)


ACCOUNTS RECEIVABLERelated partiesOther receivables

INTEREST RECEIVABLEEntities with common directorsOther interest receivable

EXPENSE RECOVERY5785066 Manitoba Ltd.Manitoba Economic Develo ment Fund Inc.

2016

$ 48,681 $543 708

$ 592 389 $

215,334135572

2015

26, 28086904

113184

113, 720137,240

$ 350906 $ 250, 960

$ 121,053 $16800 17584

$ 137853 $ 17584

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Documents

LOUIS RIEL CAPITAL CORPORATION - LRCC Financial Statements 2015-2016.pdf · LOUIS RIEL CAPITAL CORPORATION Index to Non-Consolidated Financial Statements Year Ended March 31, 2016