The Yukon Foundation
Financial Statements
September 30, 2009
Auditors'
Report
We have audited the statement of financial position of The Yukon Foundation as at September 30, 2009 and the statements of operations and changes in net assets for the year then ended. These financial statements are the responsibility of the Foundation'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 common with many charitable organizations, the Foundation derives fund balances from donations, the completeness of which is not susceptible to satisfactory audit verification. Accordingly, our verification of these revenues was limited to the amounts recorded in the records of the organization and we were not able to determine whether any adjustments might be necessary to fund balances and distributable income.
n 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 the donations referred to in the preceding paragraph, these financial statements present fairly, in all material respects, the financial position of the Foundation as at September 30, 2009 and the results of its operations for the year then ended in accordance with Canadian generally accepted accounting principles.
Whitehorse, Yukon
September 30, 2009 |
Chartered
Accountants |
The Yukon
Foundation
Statement of Operations
| For the year ended
September 30, |
2009 |
2008 |
Revenue
Investment |
195,145 |
129,106 |
| Administrative |
17,873 |
18,202 |
|
| |
213,018 |
147,308 |
| |
|
|
Expenditures
Advertising |
1,273 |
1,152 |
| Annual general meeting |
1,814 |
2,129 |
| Communications |
1,303 |
883 |
| Contracts |
43,961 |
22,286 |
| Office |
3,284 |
3,274 |
| Professional fees |
7,206 |
6,693 |
|
| |
58,841 |
36,417 |
| |
|
|
| Excess of revenue over expenditures before other income |
154,177 |
110,891 |
| |
|
|
Other income
unrealized gains on investments (note 5)
|
331,328 |
|
| |
|
|
| Excess of revenue over expenditures |
$485,505 |
$110,891 |
| |
|
|
The Yukon
Foundation
Notes to Financial Statements
September 30, 2009
1. Nature of Organization
The Yukon Foundation was incorporated under the Societies Ordinance of the Yukon and continued under the Yukon Foundation Act on May 3, 1995. The objects of the foundation are to promote educational advancement and scientific or medical research for the enhancement of human knowledge in the Yukon; to promote the cultural heritage of the Yukon; and to provide support intended to contribute to the mental, cultural and physical well being of the residents of the Yukon. The following is a summary of the significant accounting policies used by management in the preparation of these financial statements.
(a) Revenue recognition
The Foundation follows the deferral method of accounting for contributions. Restricted contributions are recognized as revenue in the year in which 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. Contributed principal fund contributions are recognized as direct increases in net assets.
(b) Bequests and grants
Bequests are recorded when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Grants are recorded when approved by the Foundation.
(c) Investment income
Interest income is accrued as earned.
(d) Investments
Investments are recorded at fair value based upon bid prices for publicly traded securities and quoted prices for fixed rate investments. Realized investment gains (losses) are recorded on a settlement date basis. Any unrealized gains or losses are reflected as changes or unrealized gains (losses) on investments in the statement of operations. The purchase premium or discount, if any, is charged to revenue and expenses over the life of the investment. Interest earned on investments is recorded on the accrual basis.
(e) Premiums and discounts on bonds
Premiums and discounts on bonds purchased by the Foundation are amortized on a straight-line basis over the remaining months until the maturity of the investment.
(f) Contributed services
Volunteers contribute significant time to assist in the Foundation in carrying out its objectives. Because of the difficulty of determining the fair value of this time, contributed services are not recognized in these financial statements
(g) Financial instruments
The Foundation’s financial instruments recognized in the balance sheet consist of cash, investments, accrued interest, accrued liabilities and grants payable. The carrying values approximate fair values given their short-term nature. The fair value of short-term and long-term investments is disclosed in note 5.
2. Change in Accounting Policies
Capital disclosures
Effective October 1, 2008, the Foundation adopted the new CICA Section 1535, Capital disclosures. The section establishes standards for disclosing information that enables users to financial statements to evaluate how an entity manages its capital structure, its objectives, policies and processes for managing its capital, quantitative data about what the Foundation regards as capital and whether the Foundation has complied with any capital requirements and, if it has not complied, the consequence of such non-compliance. As this section only addresses disclosure requirements, there is no impact on the Foundation’s Financial Statements.
Financial Instruments
Effective October 1, 2008, the Foundation adopted the new CICA Handbook Sections 3862, Financial Instruments – Disclosures and 3863, Financial Instruments – Presentation. These Sections required the disclosure of information with regards to the significance of financial instruments for the Foundation’s financial position and operations, the nature and extent of risks arising form the financial instruments to which the Foundation is exposed during the period, and at the balance sheet date, and how the Foundation manages those risks. These Sections replace CICA Handbook Section 3861 “Financial Instruments – Disclosure and Presentation”. The additional disclosures required as a result of adopting these standards are included in note 5.
These standards have been implemented prospectively.
3. Capital management
The Foundation’s capital consists of accumulated surplus of revenues over expenses. Management manages the capital through investment policies that seek to achieve a conservative balance of capital preservation and long-term capital appreciation. The objective is to ensure adequate capital is on hand to meet current and future grant commitments with the objectives of the Foundation.
4. Consolidated Trust Fund
The Consolidated Trust Fund comprises those assets over which the Foundation exercises discretionary investment control within the guidelines established by the Board of Directors. Once the funds are allocated, the income on the dedicated funds is restricted to the purpose of the fund.
5. Investments
As at September 30, 2009, market values reflect increases or decreases from cost due to current interest rates differing from contractual rates and unrealized gains or losses on certain investments. The net unrealized gain of $331,328 was recognized in the statement of operation at year end.
Not withstanding the designation of the investments as Held for Trading, it is not the intention of the Foundation to actively engage in the purchase and sale of securities on a short-term basis, but primarily to meet liquidity needs if and when they may arise. Effective October 1, 2008, the investment policy specifies maximum levels of direct equity market exposure, in addition to fixed and variable rate investments. The policy addresses issues of diversification, asset allocation, investment concentration and minimum credit ratings. Investment decisions are made in close consultation with an experienced professional portfolio advisor.
2009
| |
2009 |
2008 |
| |
cost |
market |
cost |
| Common shares |
193,456 |
256,073 |
$88,808 |
| Cash and mutual funds |
566,048 |
589,752 |
357,708 |
| Fixed
Income |
3,949,932 |
4,194,938 |
3,708,041 |
|
| |
4,709,436 |
5,040,763 |
$4,154,557 |
| |
|
|
|
| Consolidated trust fund assets |
4,540,220 |
4,871,547 |
$4,110,327 |
| Cash
and short-term investments |
169,216 |
169,216 |
44,230 |
|
| |
4,709,436 |
5,040,763 |
$4,154,557 |
Investments yield to maturity is 3.05% to 10.25% per annum (2008 – 3.41% to 10.25%). Investment income of $195,145 (2008 - $129,106) was earned during the year.
The Foundation investment activities expose it to a variety of financial risks;
(a) Interest Rate risk
Interest rate risk arises from holding fixed interest rate investments, where the value of the interest-bearing financial instruments will fluctuate due to changes in the prevailing levels of market interest rates. (b) Credit risk
Credit risk arises from the potential for an investee to fail. Credit risk is managed by the Foundation’s Board of Directors in accordance with their investment policy.
6. Life Insurance
Six donors pay monthly premiums for life insurance policies where the Yukon Foundation is the beneficiary. Total benefits payable to the Foundation upon death of a donor, based on the current policies, would be $56,666, $68,106, $15,000, $15,000, $25,000 and $18,445 respectively. The donors are issued charitable donation receipts in the amount of the premium they pay for their policy in the given year. The total cost to the donors of $7,242 is not recorded in the accompanying financial statements.
In addition there are two life insurance policies on which premiums are being paid out of the surrender value of the policy and for which no donation receipt has been issued. These have a total benefit payable to the foundation of $34,675.
7. Statement of Cash Flows
A statement of cash flows has not been presented as management does not consider it meaningful in the circumstances.