2003 Annual Report

ANNUAL REPORT 2003 SPECIAL BULLETIN NO. 55 SEPTEMBER 2004 COMMUNIQUÉ NO. 55 SEPTEMBRE 2004 CHAIR OF THE BOARD AND PRESIDENT AND CEO’S REPORT Marnie Spears and Roger Wheelock Royal Botanical Gardens’ mix of natural lands, display gardens, interpreted collections, and rare and endangered plant and animal species spread over 1,100 hectares makes it a highly complex organization. We are classified as a botanical garden, a nature reserve, a farm, a cultural agency, a charity, a museum, an educational institution, and a scientific organization to name just a few of our labels. Our mandate is legislated by the province of Ontario and is as broad as the diversity of our lands. It states that we are to be responsible stewards of our gardens, collections and natural lands, and to generate knowledge for the benefit of future generations. However, while adhering to our mandate, we must pay attention to cash flow, which, for us is as essential as breathing. Unanticipated challenges don’t foundation for an expanded special events program. And, help the bottom line. In 2003 we felt the impact of SARS, RBG Centre will transform into the enterprises “hub” of West Nile virus, and difficult Canada/US border relations, The Gardens with a convention and conference centre, creating a substantial negative impact on our revenues. improved retail and food services, a science and education centre, and The Gardens’ administration. The Gardens depends on revenues from admissions, facility rental fees, retail, food and beverage, trail donations, Over the next few years, visitors will begin to see a shift to a program registrations and other services. With limited “best-in-class” experience, appealing to a broader government funding, it is clear that increasing visitation is audience throughout 12 months of the year, with a focus the key to increasing our sustainability. And it is for these on showcasing a “collection of gardens” rather than a BOARD OF DIRECTORS 2003/2004 reasons that in 2003 Royal Botanical Gardens created a “garden of collections.” The board of directors and staff are team, made up of senior management and members of the excited about the enhancements that the Strategic Vision Appointed by Council, Appointed by the Lieutenant- Representing RBG Auxiliary board, to address our challenges and to develop a new, and capital expansion will bring to Ontario’s Royal City of Hamilton Governor-in-Council, Duncan Ross, President innovative Strategic Vision that presents a clear roadmap Botanical Gardens, and look forward to implementing Councillor Marvin Caplan Province of Ontario for a prosperous future for The Gardens. dynamic programming, services and events at our new Councillor Russ Powers Alan Goddard RBG Board Appointments world-class facility. Mark Rizzo one vacancy Ted Boswell Creating year-round programs, display gardens, and events Brian Henley David Howell is the foundation on which the Strategic Vision and our As much as these were exciting times, by the end of 2003, Warren Pitton Additional Members in Place Roger Couldrey capital expansion plan (announced in late 2002) are the financial picture for 2004 began to unfold. And, Kathy Renwald of Appointments by Governor- Rick Kington based. The key components of phase one of this 25-year although not many details were known by year’s end, it General-in-Council, Canada Marnie Spears Vision include a conservatory and rental garden at Hendrie became clear that the proposed expansion plans and the Appointed by Council, Bill Bennett Grant Walsh Park Gardens with new signature gardens and food general financial situation of The Gardens would be facing Regional Municipality Andrew Nizielski Owen Shewfelt services. Construction of a major conservatory at the a whole new set of very serious challenges in 2004. of Halton Roger Wheelock Arboretum, which will house a new gift shop and book Mayor Robert MacIsaac Representing one vacancy store, food services and rental facilities, and signature, Councillor Kevin Flynn McMaster University demonstration and heritage gardens, and will enhance Ruth Lee Dr. Peter George, President RBG Auxiliary Liaison existing services like the nature centre, and provide a Patricia Arndt 1 FINANCIAL STATEMENTS To the Members of Royal Botanical Gardens We have audited the statement of financial position of Royal Botanical Gardens as at December 31, 2003 and the statements of operations, changes in net assets and cash flows for the year then ended. These financial statements are the responsibility of the organization's management. 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 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 management, as well as evaluating the overall financial statement presentation. In our opinion, these financial statements present fairly, in all material respects, the financial position of the organization as at December 31, 2003 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. Chartered Accountants Toronto, Canada, March 12, 2004. 2 3 STATEMENT OF FINANCIAL POSITION STATEMENT OF OPERATIONS As at December 31 Year ended December 31 2003 ($) 2002 ($) 2003($) 2002($) [restated – [restated – note 2] note 2] ASSETS REVENUE Current Operating grants Cash 163,390 751,591 Province of Ontario - Ministry of Culture 1,593,384 1,601,616 Invested with the City of Hamilton, at cost — 728,541 City of Hamilton 575,610 749,172 Investments, at cost [note 4] 2,826,758 3,271,471 Regional Municipality of Halton 544,460 370,900 Accounts receivable 385,478 484,611 2,713,454 2,721,688 Prepaid expenses 184,847 604,506 Amortization of deferred capital contributions [note 7] 621,166 775,061 Other assets [note 15] 314,746 314,746 Investment income [note 8] 205,899 19,556 Total current assets 3,875,219 6,155,466 Admissions 425,830 428,595 Investments, at cost [note 4] 10,332,356 9,208,165 Donation from the Auxiliary of the Royal Botanical Capital assets, net [note 5] 14,047,781 13,346,287 Gardens [note 12] 275,000 251,728 28,255,356 28,709,918 Membership fees and donations [note 8] 849,440 827,967 LIABILITIES AND NET ASSETS User fees and other income [note 8] 2,533,544 2,343,917 Current 7,624,333 7,368,512 Accounts payable 972,035 596,065 Deferred operating contributions [note 6] 3,131,618 2,924,827 EXPENSES Total current liabilities 4,103,653 3,520,892 Operations and maintenance Deferred capital contributions [note 7] 21,810,409 20,259,774 Gardens, parklands and sanctuaries 2,220,403 2,053,557 Total liabilities 25,914,062 23,780,666 Buildings and equipment 1,733,615 1,646,756 Amortization of capital assets [note 9] 669,752 877,482 Net assets 4,623,770 4,577,795 Unrestricted (423,956) — Scientific and research program 987,868 785,245 Investment in capital assets [note 9] 683,288 513,875 Educational program 609,848 489,766 Endowments [note 10] 1,886,440 1,780,803 Administration 1,138,797 739,031 Board restricted funds [note 11] 195,522 2,634,574 Development and membership 319,341 288,088 Total net assets 2,341,294 4,929,252 Other programs and projects 27,796 63,176 28,255,356 28,709,918 Marketing, admissions and sales 1,159,282 1,075,059 See accompanying notes Investment management fees 86,180 80,404 8,952,882 8,098,564 On behalf of the Board: Deficiency of revenue over expenses before the following (1,328,549) (730,052) Strategic studies and reorganization costs [note 16] (1,597,032) (555,064) Deficiency of revenue over expenses for the year (2,925,581) (1,285,116) Marnie Spears Richard Kington See accompanying notes Director Director 4 5 STATEMENT OF CHANGES IN NET ASSETS STATEMENT OF CASH FLOWS Year ended December 31 Year ended December 31 2003 2002 2003 ($) 2002 ($) Investment Board [restated – in capital restricted note 2] Unrestricted assets Endowments funds Total Total OPERATING ACTIVITIES $ $ $ $ $ $ Deficiency of revenue over expenses for the year (2,925,581) (1,285,116) [note 9] [note 10] [note 11] Add (deduct) non-cash items Net assets, beginning of year Amortization of capital assets 669,752 877,482 [restated - note 2] — 513,875 1,780,803 2,634,574 4,929,252 6,145,898 Amortization of deferred capital contributions (621,166) (775,061) Deficiency of revenue Deferred capital contributions recognized as revenue (321,450) (355,000) over expenses Deferred operating contributions recognized as revenue (931,363) (819,390) for the year (2,925,581) — — — (2,925,581) (1,285,116) (4,129,808) (2,357,085) Change in investment Net change in non-cash working capital balances in capital assets related to operations 1,623,303 (625,513) [note 9] (169,413) 169,413 — — — — Endowment contributions — — 242,283 — 242,283 50,079 Cash used in operating activities (2,506,505) (2,982,598) Canadian Botanical Conservation Network INVESTING AND FINANCING ACTIVITIES contributions — — — — — 18,391 Purchase of capital assets (1,371,246) (1,040,601) Interfund transfer 2,671,038 — (231,986) (2,439,052) — — Contributions restricted for capital Investment income allocations — — 95,340 — 95,340 — asset purchases and interest 2,493,251 3,749,717 Net

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