Pride Toronto Audited Financials 2010 Final

8/7/2019 Pride Toronto Audited Financials 2010 Final

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PRIDE TORONTO

Financial Statements

Year ended July 31, 2010

Adams & Miles LLP

Chartered Accountan


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PRIDE TORONTO

Index to Financial Statements

July 31,2010

PAGE

AUDITORS' REPORT.................................................................................................. 1

STATEMENT OF FINANCIAL POSITION......................................................................... 2

STATEMENT OF CHANGES IN NET ASSETS................................................................. 3

STATEMENT OF OPERATIONS........ 4

STATEMENT OF CASH FLOWS................................................................................... 5

NOTES TO FINANCIAL STATEMENTS........................................................................... 6 - 11

Adams & Miles LLP

Chartered Accountan


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ADAMS & MILES LLPChartered Accountants

AUDITORS' REPORT

To the Board of Directors ofPride Toronto

501-2550 Victoria Park Ave.

Toronto, ON M2J 5A9

Tel 416 502.2201

Fax 416 502.2210

200-195 County Court Blvd.

Brampton, ON L6W 4P7

Tel 905 459.5605

Fax 905 459.2893

We have audited the statement of financial position of Pride Toronto as at

July 31, 2010 and the statements of changes in net assets, operations and

cash flows for the year then ended. These financial statements are the

responsibility of the Organization's management and its Directors. Our

responsibility is to express an opinion on these financial statements based on

our audit.

Except as noted in the following paragraph, we conducted our audit in

accordance with Canadian generally accepted auditing standards. Those

standards require that we plan and perform an audit to obtain reasonable

assurance whether the financial statements are free of material misstatement.

An audit includes examining, on a test basis, evidence supporting the

amounts and disclosures in the financial statements. An audit also includes

assessing the accounting principles used and significant estimates made

by the Organization's management and its Directors, as well as evaluating the

overall financial statement presentation.

In common with many not-for-profit organizations, the Organization derives

revenue from donations and fundraising. In addition, the Organization derives

revenue from beverage sales. The completeness of this revenue is not

susceptible to satisfactory audit verification. Accordingly, verification of this

revenue was limited to the amounts recorded in the records of the

Organization and we were not able to determine whether any adjustmentsmight be necessary to donation and fundraising revenue, beverage sales,

excess of revenue over expenditures, assets, liabilities and net assets.

In our opinion, except for the effect of adjustments, if any, which we might

have determined to be necessary had we been able to satisfy ourselves

concerning the completeness of donations referred to above, these financial

statements present fairly, in all material respects, the financial position of the

Organization as at July 31, 2010 and the results of its operations and its cash

flows for the year then ended in accordance with Canadian generally accepted

accounting principles.

jIaams 6 Z 9difes (]'

Chartered Accountants

Licensed Public Accountants

Toronto, Canada

October 14,2010

www.adamsmiles.com

An independent firm associated

with AGN International Ltd.
http://www.adamsmiles.com/http://www.adamsmiles.com/


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PRIDE TORONTO

Statement of Financial Position

July 31,2010

2010 2009

Assets

Current

Cash and cash equivalents (Note 3) $ $ 219,296

Accounts receivable 267,081 452,988

Inventory 28,266

Prepaid expenditures 68,476 28,503

335,557 729,053

Capital assets (Note 4) 70,207 27,198

405,764 756,251

Liabilities

Current

Bank indebtedness (Note 3) 155,232

Accounts payable and accrued 317,311 433,844

Current portion of capital lease obligations (Note 5) 17,027

489,570 433,844

Capital lease obligations (Note 5) 25,595

515,165 433,844

Net assets (deficit) $ (109,401) $ 322,407

Net Assets (Deficit) Represented by

Operating fund (deficit) $ (136,986) $ 295,209

Capital fund (Note 6) 27,585 27,198

$ (109,401) $ 322,407

Approved on behalf of the Board:

___________ Director

Director-----------

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PRIDE TORONTO

Statement of Changes in Net Assets

Year ended July 31,2010

Operating Capital fund Total Total

fund (deficit) (Note 6) 2010 2009

Balance, beginning of year $ 295,209 $ 27,198 $ 322,407 $ 461,012

Excess of expenditures over

revenue (414,171) (17,637) (431,808) (138,605)

Interfund transfers (18,024) 18,024

Balance, end of year $ (136,986) $ 27,585 $ (109,401) $ 322,407

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PRIDE TORONTO

Statement of Operations


2010 2009

Revenue

Sponsorship $ 1,469,027 $ 1,225,044

Grants (Note 8) 709,025 971,800

Permits and fees 261,213 238,523

Beverage sales 249,194 337,611

Donations and fund raising 192,672 184,359

Media and guide advertising sales 92,499 56,138

Interest and other 6,544 6,037

2,980,174 3,019,512

Expenditures

Media and promotion 1,159,040 985,388

Salaries and benefits 529,666 423,139

Festival infrastructure 391,823 485,789

Office and administration 355,211 278,317

Entertainment and events 263,964 322,527

Beverage cost of sales 184,817 226,321

Community outreach, fundraising and bursaries 183,235 149,846

Occupancy 135,048 82,674

Volunteer costs 107,868 63,428

Communications and security 58,532 67,695Insurance 28,993 65,124

Amortization 13,785 7,869

3,411,982 3,158,117

Excess of expenditures over revenue $ (431,808) $ (138,605)



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Statement of Cash Flows


2010 2009

Cash provided by (used in)

Operating activities

Excess of expenditures over revenue $ (431,808) $ (138,605)

Amortization 13,785 7,869

(418,023) (130,736)

Changes in

Accounts receivable 185,907 (106,669)

Inventory 28,266 (28,266)

Prepaid expenditures (39,973) (7,729)

Accounts payable and accrued (116,533) 204,507

(360,356) (68,893)

Financing activities

Bank indebtedness 155,232

Repayment of capital lease obligations (12,677)

Proceeds of capital lease obligations 55,299

197,854

Investing activities

Purchase of capital assets (56,794) (6,575)

Change in cash position (219,296) (75,468)

Cash, beginning of year 219,296 294,764

Cash, end of year $ $ 219,296

Cash and cash equivalents consist of:

Cash $ $ 135,697

Short-term investments 53,518

Term deposits 30,081

$ $ 219,296

Other information

Interest paid (received) $ 3,131 $ (898)



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PRIDE TORONTO

Notes to Financial Statements


1. Nature of organization and going concern

Pride Toronto was incorporated as a not-for-profit organization without share capitalunder the laws of Ontario to promote the LGBTTIQQ2SA (Lesbian, Gay, Bisexual,

Transsexual, Transgender, Intersex, Queer/Questioning, 2Spirited, Allies) communities.

The Organization is exempt from income tax in Canada as a not-for-profit organization

under Section 149(1 )(L) of the Income Tax Act (Canada).

These financial statements have been prepared on a going concern basis which

contemplates the realization of assets and the payment of liabilities in the ordinary

course of business. Should the Organization be unable to continue as a going concern,it may be unable to realize the carrying value of its assets and to meet its liabilities as

they become due.

As a result of the deficit accumulated in the last two years, the Organization's ability to

realize its assets and discharge its liabilities depends on continued ability to refinance its

credit line, which amounts to $90,000 and is due on demand. To improve future cashflows, management and the Directors have adopted a plan to eliminate the deficit to

address this issue by reducing costs and increasing revenues, and are confident of

continued financing from its lending institution.

The accompanying financial statements do not include any adjustments relating to the

recoverability of assets and to the reclassification of asset and liability amounts that

might be necessary should the Organization be unable to continue its operations.

2. Summary of significant accounting policies

The preparation of financial statements in accordance with Canadian generally acceptedaccounting principles requires the Organization's management and its Directors to make

estimates and assumptions that affect the reporting amount of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financial statements and

the reported amount of revenue and expenditures during the year. These estimates arereviewed periodically, and, as adjustments become necessary, they are reported in the

result of operations in the year in which they become known.

Accrual basis of accounting

Revenue and expenditures are recorded on the accrual basis of accounting under whichthey are recorded in the financial statements in the year they are earned or incurred

respectively, whether or not such transactions have been settled by the receipt or

payment of money.



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PRIDE TORONTO



2. Summary of significant accounting policies - cont'd

Fund accounting

The accounts of the Organization are maintained in accordance with the principles of

fund accounting and accordingly the resources are classified for accounting and

reporting purposes into funds determined by the purpose for which those funds are held.

The types of funds held are:

Operating Fund - This fund includes unrestricted revenue sources received from various

federal, provincial and municipal level grants, festival revenue, fundraising revenue and

day-to-day expenditures.

Capital Fund - This fund reports the net assets of the Organization invested in capital

assets.

Capital assets

Capital assets are recorded at cost and are being amortized over their estimated useful

lives on the following basis. The annual amortization rates and methods are as follows:

Equipment

Furniture and fixturesComputer equipment

Equipment under capital leases -

computers

20% declining balance20% declining balance

20% declining balance

20% declining balance

Capital assets individually in excess of $1,000 are capitalized by the Organization.

Revenue recognition

Revenue is recognized when received or receivable if the amount to be received can be

reasonably estimated and collection is reasonably assured.

The Organization follows the deferral method of revenue recognition. Under the deferralmethod, grants received in the year for expenditures to be incurred in the following year

are recorded as deferred revenue.

Non-monetary exchanges of goods and services are recorded at fair market ofconsideration received, as agreed-upon by the Organization and its vendors. The valueof voluntary services donated by individuals is not recognized in these financial

statements.

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Chartered Accountan


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3 . Cash and cash equivalents (bank indebtedness)

2010 2009

Bank $ 12,957 $ 135,697

Short-term investments 53,518

Term deposits 30,081

Operating loan (90,000)

Cheques issued in excess of funds held (78,189)

Total cash and cash eguivalents (bank indebtedness) $ (155,232) $ 219,296

The Organization has available a demand revolving line of credit in the amount of

$250,000 bearing interest at the bank prime rate plus 2.50%. This credit facility is

secured by a general security agreement. The bank covenant includes a certain

minimum net assets level to be maintained, as well as restrictions on assuming of newdebts. At year-end, the Organization was in violation of the bank covenant regarding its

net assets requirement.

4 . Capital assets

2010 2009

Accumulated Net Book Net Book

Cost Amortization Value Value

Equipment $ 24,662 $ 10,932 $ 13,730 $ 15,358

Furniture and fixtures 7,719 3,037 4,682 5,852

Computer equipment 14,825 10,034 4,791 5,988

47,206 24,003 23,203 27,198

Equipment under capital

leases - computers 55,299 8,295 47,004

$ 102,505 $ 32,298 $ 70,207 $ 27,198

Amortization in the amount of $8,295 (2009 - $Nil) on assets recorded as capital leases

is included in amortization.

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5. Capital lease obligations

The capital leases are recorded at an amount equal to the present value of the lease

payments using the interest rate implicit in the leases. The implicit interest rate of theseobligations is 13.00% and they mature from October 2012 to December 2012. The

following is a schedule of future minimum lease payments under capital leases.

2011

20122013

Total future minimum lease payments

Less amount representing interest

Present value of minimum net lease payments

Less current portion

$

$

21,49221,492

6,405

49,389(6,767)

42,622(17,027)

25,595

Interest in the amount of $3,852 (2009 - $NiI) was paid on capital leases during the year.

The obligations under capital leases are secured by liens on the computer equipment

leased.

6 . Capital fund

2010 2009

Capital assets $ 70,207 $ 27,198

Capital lease obligation (42,622)

Capital fund balance $ 27,585 $ 27,198

Expenditures during the year include amortization of $13,785 (2009 - $7,869) and

interest on the lease obligation of $3,852 (2009 - $NiI).

7. Related party transactions

During the year, the Organization paid $40,317 in consulting fees to an individual relatedto the Executive Director and a corporation controlled by the individual, for website

updating and newsletter services.

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Chartered Accountan


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8. Grants

Grants recognized in the year were as follows:

2010 2009

The Government of Canada

Canadian Heritage $ 165,900 $

Canada Council for the Arts 100 32,200

Marquee Tourism Events Program (13,782) 360,000Service Canada 5,320

The Province of Ontario

Ontario Ministry of Tourism - Tourism Development

Fund 300,000

Ontario Ministry of Tourism - Celebrate Ontario 300,000

Ontario Cultural Attractions Fund 51,000

Ontario Tourism Marketing Partnership Corporation 50,000

The Ontario Trillium Foundation 78,000

The City of TorontoEconomic Development / Major Cultural

Organization Grant 123,807 121,380

Tourism Toronto 50,000 46,900

World Pride Grant 5,000

Access, Equity and Human Rights Grant 5,000

$ 709,025 $ 971,800

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9. Commitments

The Organization has entered into a lease agreement to rent its office space until March

31, 2015 and a lease for an office photocopier. Lease payments in the next five years

are as follows:

2011

2012

2013

2014

2015

$ 125,371

134,371

141,121

147,121

98,405

The Organization has entered into a contract to designate CTV and CP24 as exclusive

broadcast media sponsors of the Organization for 2010 and 2011 Pride Toronto events,

in return for media support to be provided to the Organization.

10. Financial instruments

The Organization's financial instruments consist of bank indebtedness, accounts

receivable and accounts payable and accrued. It is management's opinion that the

Organization is not exposed to significant currency or credit risks arising from these

financial instruments. The fair value of these financial instruments approximates their

carrying values, unless otherwise noted.

Interest rate riskThe Organization is exposed to interest rate risk on its floating rate borrowings, as the

required cash flows to service the debt will fluctuate as a result of changes in market

rates.

11. Comparative amounts

Certain comparative amounts have been reclassified to conform to the current year's

financial statement presentation.

11Adams & Miles LLP

Documents

Pride Toronto Audited Financials 2010 Final