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September 30, 2015Financial Statements
Canadian Friends of Tel Aviv University Inc. / Les Amis Canadiens de L'Universite de Tel Aviv, Inc.
L E S A M I S C A N A D I E N S
F R I E N D S C A N A D I A N
Canadian Friends of Tel Aviv UniversityInc. / Les Amis Canadiens de L'Universitede Tel Aviv, Inc.
Financial Statements
September 30, 2015
PMT 905 522 6555 F 905 522 6574 6th Floor, One James Street South Hamilton ON L8P 4R5
March 21, 2016
Independent Auditor's Report
To the Members of Canadian Friends of Tel Aviv University Inc.
We have audited the accompanying financial statements of Canadian Friends of Tel Aviv University Inc.,which comprise the statement of financial position and statement of changes in net assets as atSeptember 30, 2015, the statements of financial activities for the operating fund and endowment fund and thestatement of cash flows for the year then ended, as well as summary of significant accounting policies andother explanatory information.
Management's Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements inaccordance with Canadian accounting standards for not-for-profit organizations, and for such internal controlas management determines is necessary to enable the preparation of financial statements that are free frommaterial misstatement, whether due to fraud or error.
Auditor's ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conductedour audit in accordance with Canadian generally accepted auditing standards. Those standards require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor's judgment, including the assessment ofthe risks of material misstatement of the financial statements, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal control relevant to the organization's preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the organization'sinternal control. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion.
PeTTINELLI MASTROLUISI llpCHARTERED ACCOUNTANTS
PMT 905 522 6555 F 905 522 6574 6th Floor, One James Street South Hamilton ON L8P 4R5
Independent Auditor's Report, continued
OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position ofCanadian Friends of Tel Aviv University Inc. as at September 30, 2015, and the results of its operationsand its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.
Other Matter
The statement of financial position and statement of changes in net assets as at September 30, 2014, andthe statements of financial activities and cash flows for the year ended September 30, 2014, were auditedby another firm of Chartered Professional Accountants.
L.L- r
Chartered Accountants
Licensed Public Accountants Hamilton, Ontario
Canadian Friends of Tel Aviv University Inc.
Statement of Financial Position
Assets
Current assets
Cash and cash equivalentsShort term investments (Note 3)GST/HST/QST public service bodies rebate receivableDonations receivable
Prepaid expensesRestricted cash - to be remitted to TAU (Note 4)
Restricted investments - endowment (Note 5)
Furniture, fixtures and computer equipment (Note 6)
Liabilities
Current liabilities
Accounts payable and accrued liabilitiesRestricted contributions - payable to TAU (Note 7)
Net assets
Endowment Fund (Note 5)Operating Fund
Lease commitments (Note 8)
Subsequent event (Note 9)
APPROVED BY THE BOARD:
September 302015 2014
(Note 2)
$ 289,53728,10819.64319.830
396.134
$ 339,18017,64912,068
1,664
109,228
753,252 479,789
314,222 304,693
2.568 2,715
$1,070,042 $ 787.197
$ 64,285 $ 30,166396.134
460.419
314.222295.401
609.623
30.166
304,693452.338
757,031
$1.070.042 $ 787.197
Director
Director
Canadian Friends of Tel Aviv University Inc.
Statement of changes in Net Assets
Balance, beginning of year
Impact of prior period adjustment
Balance, beginning of year - restated
Excess (deficiency) of donations overexpenses - Operating Fund
Excess of revenues over expenses- Endowment Fund
Investment in capital assets
Balance, end of year
Operating Fund Endowment
Fund
Year ended J
2015
September 30Invested in 2014
Capital Assets Unrestricted Restricted Total (Note 5) (Note 2)
$ 2,715 $ 340,395 $ 109,228 $ 452.338 $ 304,693 $ 757,031 $ 585,001
- - - - - 95,339
2.715 340.395 109,228 452,338 304,693 757.031 680,340
(712) (46,997) (109,228) (156,937) (156,937) 69,738
9,529 9,529 6,953
565 i5651
$ 2,568 $ 292,833 $ $ 295,401 $ 314,222 $ 609,623 $ 757,031
Canadian Friends of Tel Aviv University Inc.
Statement of Financial Activities
Operating Fund
Year ended September 30,2015
Unrestricted Restricted Total
Year ended September 30,2014
Unrestricted Restricted Total
(Note 2)
Donations 90.888 $ 1,951.510 $ 2.042.398 $ 72.856 $ 1.529.412 $ 1.602.268
Expenses
Donations forwarded to TAU 11,899 2.056.490 2,068.389 3,754Salaries, wages and benefits 311.968 - 311,968 287.481Fundraising activities 76,174 - 76,174 39,261Rent and occupancy costs 30.070 - 30,070 28.416Travel and accommodation 23.032 4.248 27.280 45,985Office and general 24.463 - 24,463 38.400Professional fees 20.395 - 20,395 47.661Scholarships 15.622 - 15.622 6.610Advertising and promotion 10.614 - 10.614 10.845Telephone and internet 9.123 - 9.123 11.750Interest and bank charges 5.634 - 5.634 1,846Insurance 4,715 - 4.715 3.417Amortization 712 - 712 829
Interest income (147) - (147) (176)Gain on foreign exchange (8.349) - (8.349) (29.705)Recovery of expenses (397.328) - (397.328) (384.028)
138.597 2.060.738 2.199.335 112.346
1.420.184
1.420.184
1,423.938287.481
39,26128,41645.98538.40047,661
6.61010.84511.750
1,8463.417
829
(176)(29.705)
(384.028)
1.532.530
Excess (deficiency) of donationsover expenses for the year (47.709) $ (109,228) $ (156.937) $ (39.490) $ 109.228 $ 69.738
Canadian Friends of Tei Aviv University Inc.
Statement of Financial Activities
Endowment Fund
Investment revenue
Change in unrealized gains on investmentsInterest and investment income
(Loss) gain on sale of investments
ExpensesRemitted to Tel Aviv University for scholarships
Excess of revenue over expenses
Year ended September 302015 2014
$ 12,974 $ 25,1681.763 2.399
(5.208) 9,386
9.529 36,953
_
$
(30,000)
$ 9,529 6,953
Canadian Friends of Tel Aviv University Inc.
Statement of Cash Flows
Cash flows from (used in) operating activitiesExcess (deficiency) of donations over expenses - Operating FundExcess of revenue over expenses - Endowment FundItems not involving cash
Amortization
Loss (gain) on disposition of investmentsUnrealized gain on change in fair value of investments
Net change in non-cash working capital balances relating tooperationsDecrease (increase) in public service bodies rebate receivableIncrease in donations receivable
Decrease (increase) in prepaid expensesIncrease (decrease) in accounts payable and accrued liabilitiesIncrease (decrease) in restricted contributions - payable to TAU
Cash flows from (used in) investing activitiesPurchase of equipmentProceeds on disposal of investmentsPurchase of investments
Net increase (decrease) in cash during the year
Cash at beginning of the year
Cash at end of the year
Cash consists of
Cash and cash equivalentsRestricted cash - to be remitted to TAU
Year ended September 302015 2014
$ (156,937) $ 69,7389,529 6,953
712 829
5,280 (9,386)(12.974) (25.168)
(154.390) 42.966
(7,575) 6,078(19,830) -
1,664 (1,664)34,119 (17,125)
396,134 (354,568)
404.512 (367.279)
250,122 (324.313)
(565) (2,265)15,951 45,698(28,245) (18.223)
(12.859) 25.210
237,263 (299,103)
448.408 747.511
$ 685,671 $ 448,408
$ 289,537 $ 339,180396,134 109.228
$ 685.671 $ 448.408
Canadian Friends of Tel Aviv University Inc. Page 1
Notes to Financial Statements
September 30, 2015
Nature of operations
Canadian Friends of Tel Aviv University Inc. (the "Organization") was incorporated under Part II of theCanada Corporations Actand is a registered not-for-profit organization and a registered charity and thus isexempt from income taxes under the Income Tax Act.
The Organization's purpose is to raise funds on behalf of Tel Aviv University in Israel.
1. Significant accounting policies
These financial statements are prepared in accordance with Canadian accounting standards fornot-for-profit organizations. The significant policies are detailed as follows:
Cash and cash equivalents
Cash and cash equivalents include balances with banks, net of outstanding cheques and short-term investments with maturities of 120 days or less.
Short term/restricted investments
Investments consist of mutual funds and GIC's which are measured at fair value.
Furniture, fixtures and computer equipment
Furniture, fixtures and computer equipment are recorded at cost. The Organization provides foramortization using the declining balance method at rates designed to amortize the cost of thefurniture, fixtures and computer equipment over their estimated useful lives. The annualamortization rates are as follows:
Furniture and fixtures 20%Computer equipment 30%
Expenditures for repairs and maintenance are charged to income.
Revenue recognition
The Organization follows the deferral method of accounting for contributions. Restrictedcontributions are recognized as revenue of the Restricted Operating Fund in the year in which therelated expenses are incurred. Unrestricted contributions are recognized as revenue of theUnrestricted Operating Fund when received or receivable if the amount to be received can bereasonably estimated and collection is reasonably assured.
Investment income earned on endowment contributions is recognized as revenue of theEndowment Fund in the year in which it is earned. Investment income earned on unrestrictedcontributions is recorded as revenue of the Unrestricted Operating Fund in the year in which it isearned.
Canadian Friends of Tel Aviv University Inc. Page 2
Notes to Financial Statements
September 30, 2015
1. Significant accounting policies, continued
Operating Fund
Revenue and expenses related to the day-to-day activities of the Organization are reported in theUnrestricted Operating Fund.
Restricted Operating Fund
Donations received in which have been designated for a specific purpose are reported in theRestricted Operating Fund.
Endowment Fund
An endowmentfund was created to hold funds that were contributed to the Organization bywayofbequests or designated donations. Investment income earned by the fund is to be spent inaccordance with the donors restrictions.
Foreign currency transactions
These financial statements have been presented in Canadian dollars, the principal currencyof theOrganization's operating.
Transaction amounts denominated in foreign currencies are translated into their Canadian dollarequivalents at the exchange rates prevailing at the transactions dates. Carrying values ofmonetary assets and monetary liabilities reflect the exchange rates at the statement of financialposition date. Gains and losses on translation or settlement are included in the determination ofexcess of revenues over expenses for the current period.
Contributed property and services
Contributions of materials and services are recognized in the financial statements at fair value atthe date of contribution, but only when a fair value can be reasonably estimated and when thematerials and services are used in the normal course of operations, and would otherwise havebeen purchased.
Volunteers contributed time to assist the Organization in carryingout its purpose. Because of thedifficulty of determining their fair value, volunteer services are not recognized in the financialstatements.
Use of estimates
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 thereported amounts of assets and liabilities and disclosure of contingent assets and liabilities at thebalance sheet date and the reported amounts of revenues and expenses during the year. Actualresults could differ from those estimates.
Canadian Friends of Tel Aviv University Inc. Page 3
Notes to Financial Statements
September 30, 2015
1. Significant accounting policies, continued
Financial instruments
Measurement of financial instruments
The Organization initially measures its financial assets and liabilities at fair value,.
The Organization subsequently measures all its financial assets and financial liabilities at cost oramortized cost, except for investments in equity instruments that are quoted in an active marketwhich are measured at fair value. Changes in fair value are recognized in excess (deficiency) ofdonations over expenses in the period incurred.
Financial assets measured at amortized cost include cash and cash equivalents, GST/HST/QSTpublic service bodies rebate receivable and donations receivable.
Financial liabilities measured at amortized cost include accounts payable and accrued liabilitiesand restricted contributions - payable to TAU.
Financial assets measured at fair value include short term investments and restricted investments- endowment.
Impairment
For financial assets measured at cost or amortized cost, the Organization determines whetherthere are indications of possible impairment. When there is an indication of impairment and theOrganization determines that a significantadverse change has occurred during the period in theexpected timing or amount of future cash flows, a write-down is recognized in excess (deficiency)of donations over expenses. A previously recognized impairment loss may be reversed to theextent of the improvement. The carrying amount of the financial asset may not be greater than theamount that would have been reported at the date of the reversal had the impairment not beenrecognized previously. The amount of the reversal is recognized in excess (deficiency) ofdonations over expenses.
Transaction costs
Transaction costs related to financial instruments that will be subsequently measured at fair valueare recognized in net income in the period incurred. Transaction costs related to financialinstruments subsequently measured at amortized cost are included in the original cost of theasset or liability and recognized in net income over the lifeof the instrument using the straight-linemethod.
Canadian Friends of Tel Aviv University Inc. Page 4
Notes to Financial Statements
September 30.2015
2. Prior period adjustment
The comparative figures in the financial statements for September 30, 2014 have beencorrected due to consolidation of the financial results of the Tel Aviv University-OverseesStudent Program (OSP). During the current fiscal year management hired a legal consultant todetermine the Organizations legal relationship with OSP. The Legal consultant determined thatthere is no legal connection to OSP. As a result of the removal of OSP financial statements, thefollowing adjustments were made:
Changes to the statement of Financial Position as at September 30, 2014:
GST/HST/QST public servicebodies rebate receivable
Furniture, fixtures and computerequipment
Due to Tel Aviv University
Reported2014 Adjustment
Restated
2014
$ 17,163 $ (5,095) $ 12,068
2,807(106.980)
(92)106.980
2,715
Total increase in 2014 Net Assets $ 101.793
Changes to the statement of financial activities for the year ended September 30, 2014:
Reported Restated2014 Adjustment 2014
Interest Income $ 6,906 $ (6,730) $ 176Rent and occupancy costs (38,411) 9,995 (28,416)Professional fees (50,811) 3,150 (47,661)Amortization (868) 39 (829)
Total increase in 2014 excess of
donations over expenses $ 6.454
Changes to the statement of changes in Net Assets for the year ended September 30, 2014:
Reported Restated2014 Adjustment 2014
Opening equity adjustment $ 585,001 $ 95,339 $ 680,340Donations over expenses - Operating 63,284 6,454 69,738Revenue over expenses - Endowment 6.953 - 6.953
Total increase in 2014 Net Assets $ 655.238 $ 101.793 $ 757,031
Canadian Friends of Tel Aviv University Inc. Page 5
Notes to Financial Statements
September 30, 2015
3. Short term investments
As at September 30, 2015, short term investments consisted of:
September 302015 2014
GIC, bearing interest at 0.85%,maturing July 2016 $ 26,285 $ 15,826
State of Israel Bonds maturingDecember 2015 in the amountof $1,800 USD 1,823 1,823
$ 28,108 $ 17,649
4. Restricted cash - to be remitted to TAU
Restricted cash are donations that were received from the Organization's donors in which havebeen designed to be remitted to Tel Aviv University in Israel.
5. Endowment Fund
Contributions restricted for endowment consist of donations and bequests received by theOrganization where the principal is required to remain unspent. The investment income generatedfrom the endowments must be used in accordance with the purposes established by the donors.As of September 30, 2015 the endowment's investment income available for designed use is$44,222 (2014 - $34,693).
2015 2014
Principal $ 270,000 $ 270,000Investment income 44,222 34,693
$ 314,222 $ 304,693
Canadian Friends of Tel Aviv University Inc.
Notes to Financial Statements
September 30, 2015
6. Furniture, fixtures and computer equipment
Page 6
Furniture and fixtures
Computer equipment
Cost
September 302015 2014
(Note 2)Accumulated Net Book Net BookAmortization Value Value
$ 11,350 $ 9,848 $ 1,502 $ 1,87883716,729 15.663 1,066
$ 28,079 $ 25,511 $ 2,568 $ 2,715
Restricted contributions - payable to TAU
These amounts are collections from donors which have been designed by the donor to be paid toTAU for various different programs. The amount payable for each location is as follows:
Montreal office
Toronto office
2015
$ 235,422160,712
$ 396,134
Lease commitments
The Organization's total commitments, under various operating leases and property leaseagreements for the Toronto and Montreal offices, exclusive of occupancy costs, are as follows:
2016
2017
2018
2019
2020
Subsequent years
$ 26,07627,85823,70620,94420,3503,392
$ 122,326
The Toronto officesubleases excess officespace with another organization on a month to monthbasis. The sublease rental income in the amount of $848/month is applied as a reduction to therent and occupancy costs on the statement of financial activities.
Canadian Friends of Tel Aviv University Inc. Page 7
Notes to Financial Statements
September 30, 2015
9. Subsequent events
Subsequent to the year end, the Organization terminated an executive director and was offered$100,000 in consideration for termination. This offer was accepted and has been paid in fullsubsequent to year end.
The termination and offer occurred after year end and as such no amount has been accrued inthese financial statements.
10. Pledges
As at September 30, 2015, the Organization had pledges receivable amounting to approximately$1,450,000 (2014 - $1,676,000). These pledges are not included in the financial statementsbecause their ultimate collection cannot be reasonably assured.
11. Financial instruments
Transactions in financial instruments may result in an entity assuming or transferring to anotherparty one or more of the financial risks. The required disclosures provide information that assistsusers of financial statements in assessing the extent of risk related to financial instruments.
Foreign exchange risk
The Organization is exposed to foreign exchange risk in United States dollars. Foreign exchangerisk is the risk that the exchange rate that was in effect on the date that an obligation in a foreigncurrency was made to the Organization by a donor, or that an obligation in a foreign currency wasmade to the Organization to a recipient, is different at the time of settlement than it was at timethat the obligation was determined. The Organization reduces its exposure to foreign exchangerisk by carefully monitoring exchange rates on obligations that are made to the Organization. TheOrganization does not utilize financial instruments to manage its foreign exchange risk. TheOrganization maintains adequate foreign currency balances in its bank provided by its donors.
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument willfluctuate because of changes in foreign exchange rates. At September 30, 2015 the Organizationheld cash and cash equivalents, including restricted cash, in USD at a value of of $132,768 CAD(2014-$89,818).
Market risk
Market risk is the risk that the value of a financial instrument will fluctuate as a result of changesin market prices, whether the factors are specific to the instrument or all instruments traded in themarket. This risk is mitigated as the Organization follows a capital preservation investmentstrategy and performs regular review and re-balancing of its investment portfolio.
Canadian Friends of Tel Aviv University Inc. Page 8
Notes to Financial Statements
September 30, 2015
11. Financial instruments, continued
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument might be adversely affected bya change in the interest rates. Changes in market interest rates may have an effect on the cashflows associated with some financial assets and liabilities, known as cash flow risk, and on the fairvalue of other financial assets or liabilities, known as price risk.
The Organization is exposed to interest rate cash flow risk with respect to fixed income securitiesheld. The Organization employs investment diversification to manage this risk.
12. Comparative figures
The financial statements have been reclassified, where applicable, to conform to the presentationused in the current year. Excluding the changes disclosed in Note 2, these reclassifications donot affect prior year earnings.