Post on 20-Mar-2018
LOUIS RIEL CAPITAL CORPORATION
Non-Consolidated Financial Statements
Year Ended March 31, 2016
LOUIS RIEL CAPITAL CORPORATION
Index to Non-Consolidated Financial Statements
Year Ended March 31, 2016
INDEPENDENT AUDITOR'S REPORT
NON-CONSOLIDATED FINANCIAL STATEMENTS
Non-Consolidated Statement of Financial Position
Non-Consolidated Statement of Revenues and Expenditures
Non-Consolidated Expenses (Schedule 1)
Non-Consolidated Statement of Changes in Net Assets
Non-Consolidated Statement of Cash Flow
Notes to Non-Consolidated Financial Statements
Non-Consolidated Program Delivery Partner (Schedule 2)
Non-Consolidated Schedule of Supplementary Information (Schedule 3)
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l-LPChartered Professional
Accountants
INDEPENDENT AUDITOR'S REPORT
To the Members of Louis Riel Capital Corporation
^^l^auS -t!'e-_a:cco.n1panying non:consolidated financial statements of Louis Riel Capitali, which comprise the non-consolidatecf statement of financial position as at'March'31" 2016
and tiie non-consolidated statements of revenues and expenditures, changes"in'net~assetsandcash7ow,J^2Tar then erld8d' and a summary of significant accounting policies a'nd"othe7 expi'ana'tory
Management's Responsibility for the Non-consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these non-consolidated financialstatements-m accorda"ce with Canadian accounting standards for not-for-profit organiza'tions, 'a'nd'forsuch-, intemaL. contr01 as mana9ement determines" is necessary to enable the' preparation' of" ~nor\-consolidated financial statements that are free from material missta'tement, whether dueTo'fraud or'erro'r
Auditor's Responsibility
Our responsibility is to express an opinion on these non-consolidated financial statements based on our^ud_it, -vv,e conclucted our audit in accordance with Canadian generally accepted auditing standards. Thosestandards require that we comply with ethical requirements and plan and perform The "audit "to obtainreasonable assurance about whether the non-consolidated financial statements are free'from'mate'rialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in!?fi. nJ^C<^!OILda_ted_fm_£lncial statements- The procedures selected depend on the auditor's judgment,including the assessment of the risks of material misstatement of the non-consolidatedI financialstatements, whether due to fraud or error. In making those risk assessments, the "audito7 considersinternal control relevant to the entity's preparation and "fair presentation of the non-consolidated'financiaistatements in order to design audit procedures that are appropriate in the circumstances, 'but'not'for'thepurpose of expressing an opinion on the effectiveness' of the entity's internal control. ' An'audit'aisoincludes evaluating the appropriateness of accounting policies used and the reasonabFeness-"ofaccounting estimates made by management, as well as "evaluating the overall presentation~of"the~non-consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
300-309 McDermot Avenue, Winnipeg, Manitoba R3A 1T3Telephone: (204)942-0300 Fax: (204)957-5611 Website: www. lazergrant. ca
(continues)
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Independent Auditor's Report to the Members of Louis Riel Capital Corporation (continued)
Opinion
Iin, oonuLopmS^he, no^nso^ated^ancialstateme^ present falriy. i" a" material respects, the^n^l^^^LO^R^£api^c^^rationasatMarc^. 20^'and^res^^itT^^^^^^^an.djtejash-flowfor the year then endedi in accordancewithCanadian~accountin'g'sta^a'rdsoforn ^o'r0
IT orQsnizations.
Winnipeg, MBJune 15, 2016
.rf&ze^C^-m^ L. LP
CHARTERED PROFESSIONAL ACCOUNTANTS
LOUIS RIEL CAPITAL CORPORATION
Non-Consolidated Statement of Financial Position
March 31, 2016
ASSETSCURRENT
Cash
Accounts receivable (Note 7)Interest receivable (Note 5)Pre aid ex enses
CAPITAL ASSETS (Note 4)
LOANS RECEIVABLE (Note 5)
LONG TERM INVESTMENTS (Note 6)DUE FROM RELATED PARTIES Note 7
LIABILITIES AND NET ASSETSCURRENT
Accounts payable and accrued liabilities (Note 8)Undisbursed contributions (Note 9)Deferred contribution Note 10
DEFERRED CAPITAL GRANT Note 11
NET ASSETS
CONTINGENT LIABILITY (Note 12)
LEASE COMMITMENTS (Note 13)
2016
525,045592,389350, 906
8642
1,476,982
6, 174
4, 275, 136
4, 803
1 822 043
7 585 138
2015
$ 1, 721, 482113, 184250, 960
6898
2, 092, 524
14, 017
3, 925, 165
4, 803
1 797 043
$ 7, 833 552
72,692 $221, 296102289
396, 277
396, 277
7188861
90,495764, 937
855, 432
2, 696
858, 128
6 975 424
$ 7585138 $ 7833,552
ON E ALF OF THE ARD
\ CL'^Director
Directot
LOUIS RIEL CAPITAL CORPORATION
Non-Consolidated Statement of Revenues and Expenditures
For the Year Ended March 31, 2016
REVENUESNational Aborigina^Capital Corporations Association - PDP EquityInterest (Notes 5, 7)National Aboriginal Capital Corporations Association - PDP
OperatingNational Aboriginal Capital Corporations AssociationExpense recovery (Note 7)Metis Employment & Training - Training subsidyLoan feesOtherManagement fees (Note 7)Bad debt recoveryAboriginal Business CanadaDeferred to subse uent ears Note 10
EXPENSES Schedule 1
EXCESS OF REVENUES OVER EXPENSES FROMOPERATIONS
OTHER INCOME (EXPENSES)Dividend income (Note 7)Legal settlementLoss on dis osal of ca ital assets
EXCESS OF REVENUES OVER EXPENSES
2016
$ 1,414,771380,171
232,018178,325137,85367,64653,63243,72313, 140
6, 191
102289
2,425,181
2 242 744
182437
19,00012,000
31000
$ 213437 $
2015
1,443, 596402,249
237, 105123,246
17, 584
66, 80530, 41513, 14031, 225
5, 542
2, 370, 907
2 248, 334
122, 573
10,0002300
7700
130273
LOUIS RIEL CAPITAL CORPORATION
Non-Consolidated Expenses (Schedule 1)
For the Year Ended March 31, 2016
AdministrationAdvertising and promotionAllocation of PDP equity fundingAmortizationBad debts
Computer software and equipmentConsultantsCredit searchesDirectors' honorariaDirectors' trainingDirectors' travelDonationsInsurance
Interest and bank chargesManagement oversightMembershipsNational Aboriginal Capital Corporations Association costsOfficeProfessional feesRent (Note 7)Repairs and maintenanceStaff travelTelephoneTrainingWa es and em lo ee benefits
2016
10,50033,613
1,265,0757,843
121,98120, 89549, 500
5, 11119,638
22,9301, 1288, 1751, 298
24,00011, 730
3, 26719, 15522,99042, 47123, 16813,0894,4876,415
504 285
2015
9, 00029, 763
1,454,23911,54355, 96316, 58891, 347
3, 45925, 150
3, 21523, 050
3287, 5831,257
23, 00014, 166
4, 67212, 22323, 84649, 08425, 04818, 303
5, 8692, 110
337 528
$ 2242744 $ 2, 248334
LOUIS RIEL CAPITAL CORPORATION
Non-Consolidated Statement of Changes in Net AssetsYear Ended March 31, 2016
2016 2015
NET ASSETS - BEGINNING OF YEARExcess of revenues over ex enses
NET ASSETS - END OF YEAR
$ 6, 975,424 $ 6, 845, 151213437 130, 273
$ 7, 188861 $ 6, 975, 424
LOUIS RIEL CAPITAL CORPORATION
Non-Consolidated Statement of Cash Flow
Year Ended March 31, 2016
OPERATING ACTIVITIESExcess of revenues over expensesItems not affecting cash:
Amortization
Loss on disposal of capital assetsAmortization of deferred ca ital rant
Changes in non-cash working capital:Accounts receivableInterest receivableAccounts payable and accrued liabilitiesDeferred contributionPrepaid expensesUndisbursed contributions
Cash flow from used b o eratin activities
INVESTING ACTIVITIESRepayment of loans and notes receivableAddition to loans and notes receivableAdvances to related arties
Cash flow used b investin activities
DECREASE IN CASH
Cash - be innin of ear
CASH - END OF YEAR
CASH FLOW SUPPLEMENTARY INFORMATIONInterest received
Dividends received
2016
$ 213, 437
7,843
2696
218 584
(479, 205)(99, 946)(17, 803)102,289
(1, 744)543 641
1 040 050
821 466
1,730,911(2, 080,882)
25000
374 971
(1, 196, 437)
1 721 482
$ 525 045
2015reclassed
$ 130,273
11,5432, 3005391
138725
(2, 535)(19, 850)61, 867
87, 89592, 932
34, 445
173 170
1,285, 049(1, 467, 799)
304 659
487,409
(314, 239)
2, 035 721
$ 1, 721482
$ 380171 $ 402249
$ 19000 $
LOUIS RIEL CAPITAL CORPORATION
Notes to Non-Consolidated Financial Statements
Year Ended March 31, 2016
1. DESCRIPTION OF BUSINESS
The organizationwas incorporated without share capital August 21, 1992 under the laws of thep^vinc!.. of. M_an.itoba\an_dcommenced °Perations October f, 1992asa~not-for'-profit Corporation
<as-suchjs_exempt from income taxes_The Corporation was initially funded'by the'Governmentu.nder. itscanadia,rl Abori9inal Economic Development Strategy (CAEDS). "The mandate
Ls. to.-make certain loans and.. guarantees for the start-up, acquisition, or expansion of commercialowned and controlled by the Metis people of Manitoba.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of resentation
The non-consotidated financial statements were prepared in accordance with Canadian accountirstandards for not-for-profit organizations (ASNFPO).
Measurement uncertain
The. pre_paration. of financial statements in conformity with Canadian accounting standards for not-for-profiLorganizations recluires .mana9.emerlt to make estimates and assumptions" That affect' thereported amount of assets and liabilities, disclosure of contingent assets and I'iabilitiesatthedate'oftohe-^in-a-r^i.aLS!atements £lnd. the rePortecf amounts of revenues and expenses during the period.Such^estimates are periodically reviewed and any adjustments necessary are reportediTi eamingsTnthe period in which they become known. Actual results could differ from these estimates^Financial instruments olic
?-a»n.<51 -lrLEltr.um<^ts a^e ,recorded at fair value when acquired or issued. In subsequent periods,flnancial-assets withactivelytraded "labels are reported at fair value, with'any Linreaiizedgalns'andiosses reported in income- All other financial instruments are reported at amortized'cost, Ynd" tested
impairment at each reporting date. Transaction costs on the acquisition, sale, or issue offinanaalinstruments are expensed when incurred.
Ln-vestmentsJor. w,hich there is not an active marl<et are carried at amortized cost except when it is^!t-a-^h^, !haLtheir. value. 's, impaired. lrT1P. airment l°sses, or reversal of previously" recognizimpairment losses, are reported as part of net income.
Provision for otentiall uncollectible loans
^!?fme^t. in.it-ially. d^termines a 5% provision.. for potentiaiiy uncollectible loans for every loanbalance^ Subsequently, management individually identifies loans thaYshou1d"be"allocated"an?-d-d!t!?n^l^visi?n:. PI'ovisions are reviewed and approved at every board meeting for'theTmostrecent month-end period. Management has justified all provision calculations which can"range between 5% and 100% for any given account.
(continues)
LOUIS RIEL CAPITAL CORPORATION
Notes to Non-Consolidated Financial Statements
Year Ended March 31, 2016
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)Capital assets
SpiSLasse,ts-are:statedat_cost or.deemed cost less accumulated amortization. Capital assets areamortized over their estimated useful lives at the following rates and method's"
Furniture and fixturesLeasehold improvementsOffice equipmentOffice equipment
20% declining balance method10% declining balance method33% declining balance method
3 years straight-line method
The organization regularly reviews its capital assets to eliminate obsolete items.
£ap'taLassets £lcquired durin9the year but not P'aced into use are not amortized until they are placed
One-half the normal rate of amortization is recorded in the year of acquisition.Revenue recognition
The organization follows the deferral method of accounting for grants and donations.
con. tribut. ions, re!ated. to exPenses of future periods are deferred and recognized as revenue in thein which the related expenses are incurred.
Loan interest and other revenues are recognized when the amount to be received can beestimated and collection is reasonably assured.
3. FINANCIAL INSTRUMENTS
The. _ol'ganization . is exPosed to _ various risks through its financial instruments and has a^omp. rehenslye :rlsl<_management framework to monitor" evaluate and mana'ge 'these "risks.
'
'"The»is provides information about the organization's risk exposure and concentration as'of
(a) Credit risk
cred^nskarisesfrom_the potentialthat a counter Party will fail to perform its obligations. Theorganization is exposed to credit risk from customers, ' In order to reduce its credit* risk, theorganization reviews a new customer's credit history before extending credit and conducts'review of^ its existing customers' credit performance. An allowance for doubtful-accoun;?s'Ts
.d based uponjactors surrounding the credit risk of specific accountsVhisto^caTtr'endsother information. The organization has a significant number of customers'which'minimizes
concentration of credit risk.
unlessotherwise rloted', it is management's opinion that the organization is not exposed to signifother price risks arising from these financial instruments.
4, CAPITAL ASSETS
Furniture and fixturesLeasehold improvementsOffice e ui ment
Net book value
LOUIS RIEL CAPITAL CORPORATION
Notes to Non-Consolidated Financial Statements
Year Ended March 31, 2016
Cost
2016Accumulatedamortization
45,990 $15, 37462448
42, 682 $12,84962107
123812 $ 117638 $
$ 6174
2015
Cost
45, 99015, 37462448
Accumulatedamortization
$ 41, 28311, 48857024
123, 812 $ 109795
$ 14, 017
5. LOANS RECEIVABLE
2016 2015
Loans receivable
Allowance for doubtful loans receivable$ 4, 810, 137 $ 4, 347, 482
535001 422, 317
$ 4275136 $ 3925, 165
The above loans were made at the normal terms and rates (7 1/4 to 14 1/4%) of the organization.
^3aetdM$ITC5h333'4 (22°01165. i"S)ceivable from e"""e8 that are rela'ed 'hrough c°mmon dlrec'OT8
?1s8^8M4a9c6h(23il 5201$6', ^6?4n4d)'n9 loans to entities that are related throu9h common directors totaled
Dinng !!l,yT^ded_March. 31' ,2016' the entity recognized interest income from entities that arerelated through common directors totaling $140, 109 (2015 - $127, 84^.'
Iheslloans were made at the normalterms and rates of the organization and are included in loans
6. LONG TERM INVESTMENTS
5785066 Manitoba Ltd,(100 Class A voting common shares)
Metis Entrepreneurial Fund Inc.,(100 Class A voting common shares plus additionalcontributions)
Louis Riel Capital Investments Inc.,(100 Class A voting common shares)
6106111 ManitobaLtd.50 Class A votin common shares
2016
100 $
4,643
10
50
4803 $
2015
100
4, 643
10
50
4, 803
10
LOUIS RIEL CAPITAL CORPORATION
Notes to Non-Consolidated Financial Statements
Year Ended March 31, 2016
RELATED PARTIES
Related arties
5785066 Manitoba Ltd.(a wholly owned subsidiary)Accounts receivable
Expense recovery income
6106111 Manitoba Ltd.(a company jointly and equally owned by the organization and
another entity)Accounts receivableManagement fee income
Manitoba Metis Federation Inc.(an entity related through common directors)Accounts receivableInterest incomeRent and common area expenses
Metis Entrepreneurial Fund Inc.(a company jointly and equally owned by the organization and
two other entities)Dividend income
2016 2015
$ 20,864 $121,053
26, 280 $ 26, 28013,140 13, 140
1,537 $1,528
42,471 49, 084
$ 19,000 $
These transactions are in the normal course of operations and are measured at theamount, which is the amount of consideration established and agreed to by theVelated parties.'
As.at.March^1' 2016' accounts receivable are due from related parties and are subject to normalterms. These amounts are included in accounts receivable.
Due from related arties
2016 2015
Long term portion due from related parties5785066 Manitoba Ltd. (a wholly owned subsidiary)6106111 Manitoba Ltd (a company jointly and equally
owned by the organization and another entity)Louis Riel Capital Investments Inc. (a wholly owned
subsidia
$ 1, 578, 771 $ 1, 578, 771
196,817 196, 817
46 455 21 455
$ 1822043 $ 1, 797043
AdvancesA0 related Parties. are unsecured and have no specified interest or repayment terms. The
organization has postponed the right to demand repayment in the next yea/'and'accordina'lv theadvances have been classified as long-term.
8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
lr^edJrLaccounts payable and accrued liabilities are government remittances payable of $Nil', \j\j^y).
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LOUIS RIEL CAPITAL CORPORATION
Notes to Non-Consolidated Financial Statements
Year Ended March 31, 2016
9. UNDISBURSED CONTRIBUTIONS
^s-RleLcapital corPoration entered into an agreement with the Minister of Indian Affairs and.
Development under. a Pr°9ram delivery approach called Program ~Delivery"Partner:"u^deLthe-program. Louis, Riel caPital .Corporation will receive" funds "and" make non^efundablecontrlbut!ons to el.i,9ible. Aboriginal businesses that have viable'business'" 30^1^5^'a'deTn'ed9e.ographicarea: The Minister of Indian Affairs and Northern DevelopmenTalsoprovIdes fun^n'a"tocover expenses to operate the program.
u;nd.'sbu/sedcontributionsJr1_the amount $221. 296 (2015 - $764, 937) have been approved but notby year-encf. These amounts are expected to be disbursed by the end"of'the~subsequent
yssr.
10. DEFERRED CONTRIBUTION
Balance, beginning of yearDeferred to subse uent ears
2016
$ - $102 289
$ 102 289 $
2015
11 DEFERRED CAPITAL GRANTS
^-granLwas ̂ eceived in 2012 towards office equipment from Aboriginal Affairs and NorthernCanada under Community Economic Opportunities program and is beingamortized'at
same rate as the office equipment.
2016 2015
Balance, beginning of yearAmortization
$
$
2, 6962696
8, 0875391
2, 696
12. CONTINGENT LIABILITY
Th^orgar'l-zat, ion. guaranteed amort9a9e taken by 6106111 Manitoba Ltd., a company jointly andequally owned by the organization and another entity, to a maximum of-$250^o6o. "Asi atM'arch"31"2016 the mortgage had an outstanding balance of $857, 430 (2015 -$895, 918).
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LOUIS RIEL CAPITAL CORPORATION
Notes to Non-Consolidated Financial Statements
Year Ended March 31, 2016
13. LEASE COMMITMENTS
Th^^r9amzatio-n-hasa, lon9 term lease with respect to its Premises with an entity relatedcommon. direct?rs-. The lease contains renewal options and provides for payment'o'f utilities"
maintenance costs. Future minimum lease payments as at March 3l720'16"ar'eas follows'20172018201920202021Thereafter
$ 31, 24431,24431,24431, 24431, 24436451
$ 192, 671
14 COMPARATIVE FIGURES
Some of the comparative figures have been reclassified to conform to the current year's presentation.
15. SCHEDULE TO THE FINANCIAL STATEMENTS
The^accompanying schedule 2 to the financial statements is presented unaudited and is included forinformational purposes only.
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LOUIS RIEL CAPITAL CORPORATION
Non-Consolidated Program Delivery Partner (Schedule 2)Year Ended March 31, 2016
(Unaudited)2016
(Unaudited)2015
REVENUE
rational Aboriginal Capital Corporations Association - PDP EquityNational Aboriginal Capital Corporations Association - PDP
OperatingInterestDeferred to subse uent ears
Equity FundAllocation of PDP e uit funcfin
EXPENSESAdministration
Advertising and promotionComputer software and equipmentConsultantsDirectors' travelInsurance
Interest and bank chargesManagement oversightOfficeProfessional feesRentStaff travelTrainingWa es and em lo ee benefits
INCOME LOSS FROM OPERATIONS
$ 1,414, 771 $ 1, 443, 596
232,018536
102289
1 545 036
1 265 075
10,5008,008
20,89538,810
5,9282,500
11624,000
3,0756,000
15,0005,398
53891 703
232 471
47490
237, 1051, 783
1, 682, 484
1,454239
9, 0006, 044
16, 58891. 347
9623, 000
5, 00015, 00014, 101
40070, 245
250, 821
22, 576
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LOUIS RIEL CAPITAL CORPORATIONNon-Consolidated Schedule of Supplementary Information (Schedule 3)
Year Ended March 31, 2016
ACCOUNTS RECEIVABLERelated partiesOther receivables
INTEREST RECEIVABLEEntities with common directorsOther interest receivable
EXPENSE RECOVERY5785066 Manitoba Ltd.Manitoba Economic Develo ment Fund Inc.
2016
$ 48,681 $543 708
$ 592 389 $
215,334135572
2015
26, 28086904
113184
113, 720137,240
$ 350906 $ 250, 960
$ 121,053 $16800 17584
$ 137853 $ 17584
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