Saskatchewan Chamber of Commerce Inc


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Saskatchewan Chamber of Commerce Inc. Financial Statements December 31, 2017

Saskatchewan Chamber of Commerce Inc. Financial Statements December 31, 2017 Page Independent Auditors' Report

3

Statement of Operations

4

Statement of Changes in Net Assets

5

Statement of Financial Position

6

Statement of Cash Flows

7

Notes to the Financial Statements

8 - 14

2

Crowe MacKay LLP Member Crowe Horwath International

202, 2022 Cornwall Street Regina, SK S4P 2K5 +1.306.347.2244 Tel +1.306.347.2247 Fax www.crowemackay.ca

Independent Auditors' Report To the Board of Directors of Saskatchewan Chamber of Commerce Inc. We have audited the accompanying financial statements of Saskatchewan Chamber of Commerce Inc., which comprise the statement of financial position as at December 31, 2017, and the statements of operations, 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. Auditors' 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 auditors' 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 auditors consider internal control relevant to the organization'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 organization'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 Saskatchewan Chamber of Commerce Inc. as at December 31, 2017, and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-forprofit organizations.

Regina, Canada March 14, 2018

Chartered Professional Accountants

3

Saskatchewan Chamber of Commerce Inc. Statement of Operations For the year ended December 31, Revenues Business memberships ABEX Awards Chamber group insurance Member services Local chamber memberships Conference Political Forum Interest income General administration revenue Publications Summer student grants Loss on disposal of equipment

2017 $

Expenditures ABEX Awards Amortization of equipment Amortization of intangible assets Committees Communication Conference Member services Office and administration Political Forum Professional fees Rent Salaries and related benefits Telephone and utilities Travel

Excess of revenues over expenditures

$

560,974 249,605 208,506 80,942 35,910 25,200 23,875 15,912 13,161 7,740 3,284 -

2016 $

603,258 276,465 181,093 76,002 37,550 28,923 18,125 15,276 12,129 13,050 21,642 (2,489)

1,225,109

1,281,024

132,926 5,697 1,827 69,696 11,269 8,760 42,814 57,890 11,466 42,939 90,025 703,122 12,005 23,385

149,776 11,791 1,827 73,072 5,717 15,755 70,678 63,805 7,280 34,964 88,973 686,503 9,958 29,683

1,213,821

1,249,782

11,288

$

31,242

4

Saskatchewan Chamber of Commerce Inc. Statement of Changes in Net Assets Excess of Balance, revenues 2017 beginning of over Balance, end year expenditures of year Internally restricted funds

$

Unrestricted funds

300,000

$

274,090 $

574,090

11,288

$

11,288

Balance, Excess of beginning of revenues over year expenditures Internally restricted funds

$

Unrestricted funds

300,000

$

242,848 $

542,848

$

-

285,378 $

31,242

585,378

2016 Balance, end of year $

31,242 $

300,000

300,000 274,090

$

574,090

5

Saskatchewan Chamber of Commerce Inc. Statement of Financial Position December 31,

2017

2016

Assets Current Cash (note 3) Short term investments (note 4) Accounts receivable Government remittances receivable Prepaid expenses Due from related party (note 8)

$

Equipment (note 5) Intangible asset (note 6)

157,128 671,816 85,441 2,983 1,692 5,996

$

48,294 812,851 44,989 3,552 8,475 -

925,056

918,161

19,458 4,567

22,824 6,394

$

949,081

$

947,379

$

103,483 260,220 -

$

73,608 298,007 1,674

Liabilities Current Accounts payable and accrued liabilities Deferred revenue (note 7) Due to related party (note 8)

363,703

373,289

300,000 285,378

300,000 274,090

585,378

574,090

Net Assets Internally restricted funds (note 9) Unrestricted funds

$

949,081

$

947,379

Non-consolidated controlled entity (note 10) Commitments (note 11) Approved on behalf of the board: Member

Member

6

Saskatchewan Chamber of Commerce Inc. Statement of Cash Flows For the year ended December 31, Operating activities Cash received from customers Cash received from (paid to) a related party Cash paid to suppliers Cash paid to employees and equivalents Interest received

2017 $ 1,112,727 (2,670) (461,320) (694,520) 16,862

Investing activities Proceeds on redemption of short term investments Purchase of short term investments Purchase of equipment

Increase (decrease) in cash Cash, beginning of year Cash, end of year

$

2016 $ 1,248,130 12,376 (515,614) (674,914) 13,944

(28,921)

83,922

140,086 (2,331)

(135,000) (5,753)

137,755

(140,753)

108,834

(56,831)

48,294

105,125

157,128

$

48,294

Non-monetary transactions (note 11)

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Saskatchewan Chamber of Commerce Inc. Notes to the Financial Statements December 31, 2017 1.

Nature of operations Saskatchewan Chamber of Commerce Inc. (the organization) is a not-for-profit organization incorporated under the Non-Profit Corporations Act of Saskatchewan. The organization was formed to be the voice of Saskatchewan business, making Saskatchewan a better place to live, work, and invest. The organization is not subject to income taxes under the Income Tax Act.

2.

Significant accounting policies These financial statements are prepared in accordance with Canadian accounting standards for not-for-profit organizations. The significant policies are detailed as follows: (a) Revenue recognition The organization 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. 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. Investment income includes dividends and interest income recorded on the accrual basis, as well as realized investment gains and losses and unrealized gains and losses on financial instruments subsequently measured at fair value. Investment income is included in the statement of operations, deferred or reported directly in net assets depending on the nature of any external restrictions imposed on the investment income. Business and local chamber memberships are recognized as revenue proportionately over the period to which they relate. (b) Equipment Equipment is recorded at cost. The organization provides for amortization using the declining balance method at rates designed to amortize the cost of the assets over their estimated useful lives, as set out in note 5. One half of the year's amortization is recorded in the year of acquisition. No amortization is recorded in the year of disposal. (c) Intangible assets Intangible assets are recorded at cost. The organization provides for amortization using the straight-line method at rates designed to amortize the cost of the intangible assets over their estimated useful lives, as set out in note 5.

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Saskatchewan Chamber of Commerce Inc. Notes to the Financial Statements December 31, 2017 2.

Significant accounting policies (continued) (d) Financial instruments Financial assets originated or acquired or financial liabilities issued or assumed in an arm's length transaction are initially measured at their fair value. In the case of a financial asset or financial liability not subsequently measured at its fair value, the initial fair value is adjusted for financing fees and transaction costs that are directly attributable to its origination, acquisition, issuance or assumption. Such fees and costs in respect of financial assets and liabilities subsequently measured at fair value are expensed. Subsequent measurement: Financial assets measured at amortized cost include cash, accounts receivable, and due from related party. Financial liabilities measured at amortized cost include accounts payable and accrued liabilities. The organization subsequently measures short term investments at fair value, without adjustment for transaction costs and with changes in fair value recognized in operations in the period in which they occur. At the end of each reporting period, management assesses whether there are any indications that financial assets measured at cost or amortized cost may be impaired. If there is an indication of impairment, management determines whether a significant adverse change has occurred in the expected timing or the amount of future cash flows from the asset, in which case the asset's carrying amount is reduced to the highest expected value that is recoverable by either holding the asset, selling the asset or by exercising the right to any collateral. The carrying amount of the asset is reduced directly or through the use of an allowance account and the amount of the reduction is recognized as an impairment loss in operations. Previously recognized impairment losses may be reversed to the extent of any improvement. The amount of the reversal, to a maximum of the related accumulated impairment charges recorded in respect of the particular asset, is recognized in operations. (e) Use of estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known.

3.

Cash Cash includes $45,400 (2016 - $nil) restricted by management for amounts owed to other Chamber organizations, included in accounts payable, on account of commissions earned on sale of Citslinc trip packages.

9

Saskatchewan Chamber of Commerce Inc. Notes to the Financial Statements December 31, 2017 4.

Short term investments Description

Maturity

MCAN Mortgage Corp GIC Peace Hills Trust Concentra Financial GIC Equitable Bank Access Credit Union GIC Home Trust GIC Access Credit Union GIC Access Credit Union GIC Access Credit Union GIC Peoples Trust Access Credit Union GIC Access Credit Union GIC

5.

05/01/17 10/06/17 10/19/17 10/30/17 04/17/18 05/17/18 06/11/18 09/22/18 10/05/18 05/04/20 10/06/21 10/30/21

2.15% 2.25% 1.86% 1.85% 2.25% 2.25% 2.25% 1.85% 1.85% 1.90% 2.45% 2.60%

2017

2016

$

182,863 76,054 96,189 85,431 60,265 20,251 75,331 75,432

$

71,007 75,397 90,334 75,328 182,855 76,051 96,185 85,430 60,264 -

$

671,816

$

812,851

Equipment

Rate Furniture and fixtures Leasehold improvements Computer equipment

20%

Cost $

20% 30-55%

178,417

Accumulated amortization $

37,206 19,893 $

6.

Interest

235,516

165,706

2017

2016

Net book value

Net book value

$

12,711

31,841 18,511 $

216,058

$

5,365 1,382 $

19,458

13,266 6,706 2,852

$

22,824

Intangible asset

Cost Website

$

7,307

Accumulated amortization $

2,740

2017

2016

Net book value

Net book value

$

4,567

$

6,394

The website is amortized using the straight-line method over five years.

10

Saskatchewan Chamber of Commerce Inc. Notes to the Financial Statements December 31, 2017 7.

Deferred revenue 2017 Business memberships Political Forum ABEX Awards

8.

2016

$

252,220 5,000 3,000

$

266,882 19,125 12,000

$

260,220

$

298,007

Related party transactions The organization controls the Saskatchewan Chamber of Commerce Foundation Inc. (the "foundation") by virtue of its ability to appoint the foundation's Board of Directors. During the year, the organization had the following transactions with the foundation: 2017 (a) Revenue Research services Administrative fee

2016

$

5,250

$

7,202 3,500

$

5,250

$

10,702

These transactions are in the normal course of operations and have been valued in these financial statements at the exchange amount which is the amount of consideration established and agreed to by the related parties. (b) Related party balance Due from (to) Saskatchewan Chamber of Commerce Foundation Inc.

$

5,996

$

(1,674)

The balance due from (to) Saskatchewan Chamber of Commerce Foundation Inc. is unsecured, bears no interest, and has no specific terms of repayment. 9.

Internally restricted funds The Board of Directors have internally restricted $300,000 (2016 - $300,000) for future operating needs. The amount is not available for other purposes without the approval of the Board of Directors.

11

Saskatchewan Chamber of Commerce Inc. Notes to the Financial Statements December 31, 2017 10.

Non-consolidated controlled entity The organization controls the Saskatchewan Chamber of Commerce Foundation Inc. The foundation performs research and advocates on issues related to economic development and education. The Foundation is incorporated under the Non-Profit Corporations Act of Saskatchewan and is a registered charity under the Income Tax Act. The organization appoints the foundation's Board of Directors. The foundation has not been consolidated in the organization's financial statements. Financial statements of the Foundation are available upon request. Financial summaries of this unconsolidated entity as at December 31, 2017 and 2016 and for the years then ended are as follows: Saskatchewan Chamber of Commerce Foundation Inc. Financial Position 2017

2016

Total assets

$

12,823

$

24,245

Total liabilities Total net assets

$

5,996 6,827

$

24,245

$

12,823

$

24,245

Results of Operations 2017

2016

Total revenues

$

35,245

$

7,865

Total expenses

$

52,663

$

16,328

Deficiency of revenues over expenditures

$

(17,418)

$

(8,463)

Cash Flows 2017

2016

Cash from (used in) operations

$

12,418

$

(8,463)

Cash from (used in) a financing activity

$

2,670

$

(1,674)

Decrease in cash

$

15,088

$

(10,137)

12

Saskatchewan Chamber of Commerce Inc. Notes to the Financial Statements December 31, 2017 11.

Commitments The organization has equipment and premises lease commitments that end the latest of June 7, 2021. The annual minimum lease payments are as follows: Premises 2018 2019 2020 2021

12.

Equipment

$

22,809 -

$

2,964 2,964 2,964 1,482

$

22,809

$

10,374

Non-monetary transactions During the year, the organization entered into multiple non-monetary transactions. The nonmonetary transactions were valued at the more readily determinable value of the service given up or the service received as part of the exchange. The non-monetary transactions during the year were as follows: (a) Exchanged a table at the ABEX awards and ad space in Action! Online magazine with Saskatchewan Polytechnic for recognition as a silver level sponsor at the Polytechnic's 2017 business and industry dinners. This transaction resulted in $1,240 in ABEX dinner ticket sales, $3,560 in publications revenue, and $4,800 in sponsorship expenses. (b) Exchanged four tickets at the ABEX awards and ad space in Action! Online magazine with Tourism Saskatchewan for recognition as the sponsor of the service excellence award at the Saskatchewan Tourism awards. This transaction resulted in $620 in ABEX dinner ticket sales, $880 in publications revenue, and $1,500 in sponsorship expenses. (c) Received contributed services from Handy Group of Companies as a sponsorship of the ABEX awards and for payment of their membership. This transaction resulted in $7,500 of ABEX Awards revenue and $7,500 of ABEX Awards expenses.

13

Saskatchewan Chamber of Commerce Inc. Notes to the Financial Statements December 31, 2017 13.

Financial instruments Transactions in and holding of financial instruments exposes the company to certain financial risks and uncertainties. These risks include: (a) Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The organization’s exposure to credit risk relates to accounts receivable and arises from the possibility that a debtor does not fulfil its obligations. Management believes this risk is minimized through detail monthly review of outstanding accounts. The organization performs continuous evaluation of its financial assets and records impairment in accordance with the stated policy.

14.

Comparative figures The financial statements have been reclassified, where applicable, to conform to the presentation used in the current year. The changes do not affect prior year earnings.

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