2003 Annual report
AUDITOR'S REPORT TO THE MEMBERS, INTER PARES
We have audited the statement of financial position of Inter Pares as at December 31, 2003 and the statement of revenue and expense and changes in net assets 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.
Ottawa, Ontario
February 26, 2004
Ouseley Hanvey Clipsham Deep LLP
Chartered Accountants
Statement of Financial Position as at December 31, 2003
| 2003 | 2002 | |
| ASSETS | ||
| CURRENT | ||
| Cash | $ 644,790 | $ 566,498 |
| Accounts receivable | 67,257 | 60,838 |
| 712,047 | 627,336 | |
| INVESTMENTS (note 1) | 356,350 | 415,112 |
| CAPITAL ASSETS (note 2) | 781,767 | 819,646 |
| DEFERRED CHARGE (note 3) | 8,000 | 28,000 |
| $ 1,858,164 | $ 1,890,094 | |
| LIABILITIES | ||
| CURRENT | ||
| Advances on projects | $ 512,796 | $ 492,657 |
| Accounts payable and accrued liabilities | 52,086 | 109,412 |
| Current portion of mortgage payable (note 4) | 15,815 | 10,968 |
| 580,697 | 613,037 | |
| SEVERANCE PLAN PAYABLE (note 3) | 83,342 | 77,897 |
| MORTGAGE PAYABLE (note 4) | 403,503 | 469,666 |
| 1,067,542 | 1,160,600 | |
| NET ASSETS | ||
| Unrestricted | (50,360) | (72,804) |
| Invested in capital assets | 362,449 | 339,012 |
| Reserve fund (note 5) | 297,725 | 289,990 |
| Endowment fund (note 6) | 180,808 | 173,296 |
| 790,622 | 729,494 | |
| $ 1,858,164 | $ 1,890,094 |
Statement of Changes in Net Assets for the Year Ended December 31, 2003
| 2003 | 2002 | |
| UNRESTRICTED | ||
| Balance beginning of year | $ (72,804) | $ 16,181 |
| Excess (deficiency) of revenue over expense for the year | 61,128 | (7,479) |
| Transfer from (to) reserve fund | (7,735) | 229,965 |
| Designated to endowment fund | (7,512) | (2,678) |
| Investment in capital assets | (23,437) | (308,793) |
| Balance end of year | $ (50,360) | $ (72,804) |
| INVESTED IN CAPITAL ASSETS | ||
| Balance beginning of year | $ 339,012 | $ 30,219 |
| Purchase of capital assets | 9,504 | 838,600 |
| Disposition of capital assets | (17,760) | - |
| Amortization of capital assets | (29,623) | (49,173) |
| Mortgage payable | - | (480,634) |
| Principal repayment of mortgage | 61,316 | - |
| Balance end of year | $ 362,449 | $ 339,012 |
| RESERVE FUND | ||
| Balance beginning of year | $ 289,990 | $ 519,955 |
| Transfer to unrestricted net assets for building purchase | - | (250,000) |
| Allocated interest | 7,735 | 20,035 |
| Balance end of year | $ 297,725 | $ 289,990 |
| ENDOWMENT FUND | ||
| Balance beginning of year | $ 173,296 | $ 170,618 |
| Designated endowment gifts | 50 | 350 |
| Allocated interest | 7,462 | 2,328 |
| Balance end of year | $ 180,808 | $ 173,296 |
Statement of Revenue and Expense for the Year Ended December 31, 2003
| 2003 | 2002 | |
| REVENUE | ||
| Donations | $ 1,275,771 | $ 1,286,804 |
| CIDA - VSD | 1,053,323 | 1,366,836 |
| CIDA - other projects | 3,679,685 | 3,812,501 |
| Project generated grants | 200,057 | 194,619 |
| Interest and other | 31,572 | 46,570 |
| 6,240,408 | 6,707,330 | |
| EXPENSE | ||
| Program | ||
| Projects | 4,588,973 | 5,162,892 |
| Operations | 974,488 | 868,160 |
| 5,563,461 | 6,031,052 | |
| Administration | 323,386 | 334,741 |
| Fundraising | 292,433 | 349,016 |
| 6,179,280 | 6,714,809 | |
| EXCESS (DEFICIENCY) OF REVENUE OVER EXPENSE FOR THE YEAR | $ 61,128 | $ (7,479) |
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 2003
1. SIGNIFICANT ACCOUNTING POLICIES
a) Organization: Inter Pares works overseas and in Canada in support of self-help development groups, and in the promotion of understanding about the causes, effects and solutions to under-development and poverty. Inter Pares was incorporated without share capital under Part II of the Canada Business Corporations Act. The Corporation is a registered charity under Section 149(1)(c) of the Income Tax Act and as a result is not subject to income taxes.
b) Revenue Recognition: Inter Pares follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Donations are recorded as revenue when received.
c) Investments: Investments consist primarily of government bonds and other loans receivable and are recorded at cost which approximates market value.
d) Capital Assets: Capital assets are recorded at cost. Amortization is provided on a straight line basis over 5 years for office equipment and vehicle. Computer equipment is amortized 50% in the first year and 25% in the remaining 2 years. The building is amortized on a straight line basis over 40 years.
2. CAPITAL ASSETS
| 2003 | 2002 | |||
| Cost | Accumulated Depreciation | Net | Net | |
| Land | $200,000 | $ - | $ 200,000 | $ 200,000 |
| Building | 582,230 | 22,250 | 559,980 | 574,730 |
| Vehicle | - | - | - | 14,208 |
| Computer & office equipment | 140,118 | 118,331 | 21,787 | 30,708 |
| $ 922,348 | $ 140,581 | $ 781,767 | $819,646 |
During the year, depreciation of capital assets amounted to $29,623 (2002 - $49,173)
3. PENSION AND SEVERANCE PLAN
During 1998 a pension plan was implemented to contribute to staff Retirement Savings Plans. In addition, an institutional staff severance plan was established. The cost to establish these plans was estimated to be $128,000. This cost is being amortized over a seven year period. During the year the amount amortized to expense was $20,000 (2002 - $20,000).
4. MORTGAGE PAYABLE
| 2003 | 2002 | |
| Royal Bank of Canada - mortgage payable at $3,945 monthly including interest at 7.75%, due July 1, 2007, secured by 221 Laurier Avenue East. | $ 419,318 | $ 480,634 |
| Less current portion | 15,815 | 10,968 |
| $ 403,503 | $ 469,666 |
5. RESERVE FUND
Inter Pares maintains an unrestricted operational reserve to assure that obligations are honoured in the event of unanticipated changes in external funding.
6. ENDOWMENT FUND
The Margaret McKay Endowment Fund was created to receive gifts whose principal will be invested and held for a minimum of ten years. In addition to such externally restricted gifts, the Endowment Fund contains transfers from Inter Pares which are subject to the same restrictions. As at the year end, the Endowment Fund includes $70,600 (2002 - $70,550) in externally restricted gifts.
| Reviewed June 1, 2004 |  |
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