ARUSHA CENTRE SOCIETY Financial Statements Year Ended December 31, 2018 ARUSHA CENTRE SOCIETY Index to Financial Statements Year Ended December 31, 2018 Page INDEPENDENT AUDITOR'S REPORT 1 - 2 FINANCIAL STATEMENTS Statement of Financial Position 3 Statement of Revenues and Expenditures and Changes in Net Assets 4 - 5 Statement of Cash Flows 6 Notes to Financial Statements 7 - 11 103, 2308 CENTRE ST N CALGARY, ALBERTA T2E 2T7 T: 403-204-1544 F: 403-204-1545 MASONEANDCOMPANY.COM INDEPENDENT AUDITOR'S REPORT To the Members of Arusha Centre Society I have audited the accompanying financial statements of Arusha Centre Society, which comprise the statement of financial position as at December 31, 2018 and the statements of revenues and expenditures and changes in net assets and cash flows for the year 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 not-for-profit organizations, 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 My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I 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 judgment, 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. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements present fairly, in all material respects, the financial position of Arusha Centre Society as at December 31, 2018 and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations. (continues) [email protected] www.masoneandcompany.com 1 Independent Auditor's Report to the Members of Arusha Centre Society (continued) Calgary, AB ANTONIO MASONE PROFESSIONAL CORPORATION May 2, 2019 CHARTERED PROFESSIONAL ACCOUNTANT 2 ARUSHA CENTRE SOCIETY Statement of Revenues and Expenditures and Changes in Net Assets Year Ended December 31, 2018 Operating Open Streets TAG C$ FCSS Capital assets Total Total (Restated) 2018 2018 2018 2018 2018 2018 2018 2017 REVENUES Donations and grants $ 50,684 $ (212) $ 17,921 $ 59,114 $ 43,154 $ - $ 170,661 $ 154,152 Event services 7,234 39,189 - - - - 46,423 30,212 Rental revenues -programs 39,481 10 - 10 - - 39,501 18,689 Other Income - 100 - 10,750 - - 10,850 - Interest income 3,913 - - - - - 3,913 2,303 101,312 39,087 17,921 69,874 43,154 - 271,348 205,356 EXPENSES Salaries and benefits 35,100 9,499 4,500 32,383 14,104 - 95,586 115,176 Project administration 21,819 14,717 1,500 12,585 8,004 - 58,625 39,722 Events, projects and development 10,277 5,386 11,921 660 1,689 - 29,933 14,948 Consulting fees 113 5,377 - 20,721 18,095 - 44,306 9,644 Rent 12,973 - - - - - 12,973 12,919 Office expenses 6,984 1,663 - 1,718 915 - 11,280 14,848 Professional fees 4,500 - - - - - 4,500 5,738 Advertising and promotion - 857 - 1,667 347 - 2,871 679 Amortization - - - - - 2,197 2,197 3,110 Repairs and maintenance - 600 - - - - 600 - Bank charges 588 - - - - - 588 - Insurance - 416 - 140 - - 556 - Telephone and utilities - 522 - - - - 522 - Memberships - 50 - - - - 50 - 92,354 39,087 17,921 69,874 43,154 2,197 264,587 216,784 NET EXCESS (DEFICIENCY) OF REVENUES OVER EXPENSES 8,958 - - - - (2,197) 6,761 (11,428) NET ASSETS - BEGINNING OF YEAR 119,525 482 - - - 7,584 127,591 139,019 119,525 482 - - - 7,584 134,352 127,591 - - - - - - - - (continues) 4 ARUSHA CENTRE SOCIETY Statement of Revenues and Expenditures and Changes in Net Assets (continued) Year Ended December 31, 2018 Operating Open Streets TAG C$ FCSS Capital assets Total Total (Restated) 2018 2018 2018 2018 2018 2018 2018 2017 NET ASSETS - END OF YEAR $ 128,483 $ 482 $ - $ - $ - $ 5,387 $ 134,352 $ 127,591 5 ARUSHA CENTRE SOCIETY Statement of Cash Flows Year Ended December 31, 2018 Total Total (Restated) 2018 2017 OPERATING ACTIVITIES Excess (deficiency) of revenues $ 6,761 $ (428) Item not affecting cash: Amortization of capital assets 2,197 3,110 8,958 2,682 Changes in non-cash working capital: Accounts receivable (7,189) (2,013) Accounts payable (10,662) 8,276 Deferred income (8,779) 2,088 Prepaid expenses 693 24 Goods and services tax payable 29 223 (25,908) 8,598 Cash flow from operating activities (16,950) 11,280 INVESTING ACTIVITY Long term Investments (40,031) 31 Cash flow from (used by) investing activity (40,031) 31 INCREASE (DECREASE) IN CASH FLOW (56,981) 11,311 Cash - beginning of year 199,038 187,727 CASH - END OF YEAR 142,057 199,038 CASH CONSISTS OF: Cash $ 142,057 $ 159,007 Term deposits - 40,031 $ 142,057 $ 199,038 6 ARUSHA CENTRE SOCIETY Notes to Financial Statements Year Ended December 31, 2018 1. PURPOSE OF THE ORGANIZATION The Arusha Center Society (the "Society") is a not-for-profit organization dedicated to the public understanding of issues of social justice and how they relate to the choices we take in our community and community-based programming. The Society is registered as a charitable organization under the Income Tax and as such is exempt from income taxes. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The financial statements were prepared in accordance with Canadian accounting standards for not- for-profit organizations (ASNFPO). Fund accounting Arusha Centre Society reports operations by programs as follows: Operating - reports activity related to general program delivery and administrative activities. Open Streets - reports activity related to the Open Streets program. Calgary Dollars / FCSS - reports activity related to the Calgary Dollar program funded specifically by FCSS. Calgary Dollars - reports activity related to the Calgary Dollar program funded by CIP, the Calgary Foundation, and the Seaview Fund. TAG - reports activity related to Take Action Program funded by the Calgary Foundation. Financial instruments policy Financial instruments are recorded at fair value when acquired or issued. In subsequent periods, financial assets with actively traded markets are reported at fair value, with any unrealized gains and losses reported in income. All other financial instruments are reported at amortized cost and tested for impairment at each reporting date. Transaction costs on the acquisition, sale, or issue of financial instruments are expensed when incurred. Cash and cash equivalents Cash and cash equivalents consist of cash on hand, in bank balances and in short term deposits convertible to cash within ninety days. All are denominated in Canadian dollars and are held with the Society's financial institutions. (continues) 7 ARUSHA CENTRE SOCIETY Notes to Financial Statements Year Ended December 31, 2018 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Capital assets Capital assets are stated at cost or deemed cost less accumulated amortization. Capital assets are amortized over their estimated useful lives on a declining balance basis at the following rates and methods: Furniture and fixtures 20% declining balance method Computer equipment 30%-50% declining balance method The Society regularly reviews its capital assets to eliminate obsolete items. Capital assets acquired during the year but not placed into use are not amortized until they are placed into use. Revenue recognition Arusha Centre Society follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Endowment contribution are recognized as direct increases in net assets. Restricted investment income is recognized as revenue in the year in which the related expenses are incurred. Unrestricted investment income is recognized as revenue when earned. Fees and charges are recognized as revenue on accrual basis. Allocation of expenses Direct expenses are recorded to the programs directly; salaries and benefits, project administration are allocated to the programs based on the time spent. The Society's fundraising costs are included in event, project and development costs. All general expenses are included in office and general expense. Measurement uncertainty The preparation of financial statements in conformity with Canadian accounting standards for not-for- profit organizations requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Such estimates are periodically reviewed and any adjustments necessary are reported in earnings in the period in which they become known.