AUDITORS' REPORT

 

 

 

To the Board of

Catholic World Youth Days 2002 Council/Le Conseil

des Journées Mondiales de la Jeunesse de l'Église

Catholique 2002 Inc.

 

We have audited the balance sheet of Catholic World Youth Days 2002 Council/Le Conseil des Journées Mondiales de la Jeunesse de l'Église Catholique 2002 Inc. as at December 31, 2002 and the statements of operations and deficit and changes in net deficit for the year then ended. These financial statements are the responsibility of the Council's management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

Except as explained in the following paragraph, 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 non-profit organizations, the Council derives revenue from donations, the completeness of which is not susceptible of satisfactory audit verification. Accordingly, we were unable to determine whether any adjustments for unrecorded revenue might be necessary to donations, excess (deficiency) of revenue over expenses for the year and accumulated deficit.

 

In 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 revenue referred to in the preceding paragraph, these financial statements present fairly, in all material respects, the financial position of the Council as at December 31, 2002 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

 

 

ERNST & YOUNG

Chartered Accountants

 

Toronto, Canada,

February 28, 2003.


 

 

Catholic World Youth Days 2002 Council

 

BALANCE SHEET

 

 

As at December 31

 

 

                         2002

                            $

                          2001

                              $

ASSETS

 

 

Current

 

 

Cash

1,339,238

1,046,698

Accounts receivable

1,556,115

33,092

Inventory

---

115,000

Prepaid expenses

---

802,516

Total current assets

2,895,353

1,997,306

Capital assets, net [note 3]

---

40,530

 

2,895,353

2,037,836

LIABILITIES AND NET DEFICIT

 

 

Liabilities

 

 

Accounts payable

582,005

160,112

Due to Canadian episcopal corporations

43,100

---

Due to Concacan Inc. [note 4]

2,270,248

394,644

Deferred grant revenue [note 5]

---

177,400

Deferred sponsorships

---

365,257

Deferred registration revenue

---

1,753,557

Deferred solidarity revenue

---

126,411

Loan payable [note 6]

---

375,000

Total liabilities

2,895,353

3,352,381

Commitments and contingencies [note 7]

 

 

Net deficit

 

 

Accumulated deficit

---

(1,355,075)

Invested in capital assets

---

40,530

Total net deficit

---

(1,314,545)

 

2,895,353

2,037,836

 

See accompanying notes


 

 

Catholic World Youth Days 2002 Council

 

STATEMENT OF OPERATIONS AND DEFICIT

 

 

Year ended December 31

 

                     2002

                         $

                     2001

                         $

REVENUE

 

 

Grants [note 5]

3,078,711

1,369,789

Donations

5,288,331

384,033

Corporate sponsorship

722,320

---

Registration fees

32,029,195

---

Solidarity

1,139,086

---

Event revenues

2,110,343

---

Promotions

13,500

154,000

Interest

167,042

2,421

 

44,548,528

1,910,243

EXPENSES

 

 

Wages and salaries

4,947,186

1,474,701

General and administrative [schedule 1]

6,919,734

1,668,007

Event expenses [schedule 2]

66,749,154

---

Amortization

40,530

44,991

 

78,656,604

3,187,699

Deficiency of revenue over expenses for the year

(34,108,076)

(1,277,456)

Contributions from Canadian episcopal corporations

35,422,621

---

 

1,314,545

(1,277,456)

Deficit, beginning of year

(1,314,545)

(37,089)

Deficit, end of year

---

(1,314,545)

 

See accompanying notes


 

 

Catholic World Youth Days 2002 Council

 

STATEMENT OF CHANGES IN NET DEFICIT

 

 

Year ended December 31

 

2002

 

         Invested

       in capital

           assets

               $

 

  Accumulated

           deficit

               $

 

 

        Total

            $

Net deficit, beginning of year

40,530

(1,355,075)

(1,314,545)

Excess of revenue over expenses for the year

---

1,314,545

1,314,545

Change in net assets invested in capital assets [note 3]

(40,530)

40,530

---

Net deficit; end of year

---

---

---

 

 

 

 

 

2001

 

         Invested

       in capital

           assets

               $

 

  Accumulated

           deficit

               $

 

 

        Total

            $

Net deficit, beginning of year

22,312

(59,401)

(37,089)

Deficiency of revenue over expenses for the year

---

(1,277,456)

(1,277,456)

Change in net assets invested in capital assets [note 3]

18,218

(18,218)

---

Net deficit, end of year

40,530

(1,355,075)

(1,314,545)

 

See accompanying notes


 

 

Catholic World Youth Days 2002 Council                            Schedule 1

SCHEDULE OF GENERAL ADMINISTRATIVE EXPENSES

 

 

Year ended December 31

 

               2002

                  $

               2001

                  $

GENERAL AND ADMINISTRATIVE

Professional services

Engineering

Project management

IT consulting

Other

 

 

 

239,816

144,100

498,680

406,148

 

 

 

---

87,420

99,567

22,165

 

1,288,744

209,152

Accommodations and guarantees to hotels

Legal

Office equipment and supplies

Rent

Advertising and promotions

Insurance

Travel

Communications

Interest

Other

693,054

586,438

495,759

939,913

838,099

433,014

592,809

278,322

196,162

577,420

101,903

7,380

65,633

282,836

406,009

91,955

248,416

59,715

---

195,008

 

6,919,734

1,668,007

 

See accompanying notes


 

 

Catholic World Youth Days 2002 Council                            Schedule 2

SCHEDULE OF EVENT EXPENSES

 

 

Year ended December 31

 

               2002

                  $

EVENT

Downsview Lands infrastructure

Power

Stages and towers

Sound and lighting

Road, fences and barricades

Equipment, machinery and tools

Utilities

Tents

Vestments

 

 

3,506,366

5,281,828

4,786,874

2,137,377

855,013

550,505

534,929

407,213

 

18,060,105

Meal plan

Pilgrim transportation

Communications, two way radios and cell phones

Pilgrim bags and contents

Sanitation services

Accommodations

Design expenses

Exhibition Place infrastructure

GST net of rebate

Security

Liturgical

Pilgrim health plan

Media centers

Volunteer training and coordination

Registration

Way of the Cross

Other

10,075,651

7,300,791

5,388,511

5,182,354

3,947,017

2,870,598

2,465,221

2,205,377

2,246,998

2,033,035

783,927

950,731

916,779

824,779

586,050

575,449

335,781

 

66,749,154

 

See accompanying notes


 

 

Catholic World Youth Days 2002 Council

NOTES TO FINANCIAL STATEMENTS

 

 

December 31, 2002

1. PURPOSE OF THE ORGANIZATION

Catholic World Youth Days 2002 Council/Le Conseil des Journées Mondiales de la Jeunesse de l'Église Catholique 2002 Inc. [the "Council"] was formed on May 10, 1999 and commenced active operations in early 2000. The Council administers funds and delegate registration fees which have been donated to the Council for the benefit of World Youth Day 2002. Every two or three years, World Youth Day becomes an international gathering held in a different country. The event has previously been held in various cities throughout the world including Rome, Paris, Manila and Denver. In July of 2002, the event was held in Toronto. Youth from around the world experienced Canadian culture and heritage as part of the event. The Council was established specifically for the planning and implementation of the event.

 

The Council is a charitable organization registered under the Income Tax Act (Canada) and, as

such, is exempt from income taxes and is able to issue donation receipts for income tax purposes.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements include the assets and liabilities arising from the general operations of the Council and have been prepared in accordance with Canadian generally accepted accounting principles applied within the framework of the significant accounting policies summarized below:

Capital assets

Purchased capital assets are recorded at cost. The Council records amortization on a straight-line basis over the remaining period of the Council's existence.

Revenue recognition

The Council follows the deferral method of accounting for revenue. Externally restricted donations are deferred and recognized as revenue in the year in which the related expenses are incurred. Unrestricted donations are recognized as revenue when received. Pledges are not recorded as revenue since they are not legally enforceable claims.

 

Grants for restricted purposes are recognized as revenue in the year in which the related expenses are incurred. Grants for unrestricted purposes are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured.

 

Restricted sponsorships are deferred and recognized as revenue in the year in which the related

expenses are incurred.

 

Registration and solidarity, revenue which was previously deferred was recognized as revenue in 2002 when the event was held.

Contributed goods and services

 

Volunteers contributed an indeterminable number of hours per year. In addition, government agencies, corporations, individuals and other agencies donated various goods and services. Because of the difficulty in determining their fair value, contributed goods and services are not recognized in these financial statements.


 

 

Catholic World Youth Days 2002 Council

NOTES TO FINANCIAL STATEMENTS

 

 

December 31, 2002

3. CAPITAL ASSETS

 

 

2002

 

2001

 

 

Cost

$

Accumulated

amortization

$

 

 

Cost

$

Accumulated

amortization

$

Furniture and equipment

89,983

89,983

 

89,983

49,453

Net book value

---

 

40,530

 

The change in the net book value of capital assets is due to the following:

 

 

2002

$

2001

$

Purchase of capital assets

---

63,209

Amortization of capital assets

(40,530)

(44,991)

Change in net assets invested in capital assets

(40,530)

18,218

4. DUE TO CONCACAN INC.

Concacan Inc., an independent organization, has had certain transactions with the Council during 2002. A majority of the directors of the Council are associated in the activities of Concacan Inc. As at December 31, 2002, the amounts due to Concacan Inc. are non-interest bearing and have no fixed terms of repayment. The transactions are recorded at fair market value according to the agreements signed between the parties.

5. GRANTS

Grants consist of the following:

 

 

                  2002

                     $

                  2001

                     $

Federal Government

1,333,333

731,667

Government of Ontario

1,245,378

802,022

The Ontario Trillium Foundation

500,000

---

City of Toronto

---

13,500

 

3,078,711

1,547,189

Less deferred grant revenue

---

177,400

 

3,078,711

1,369,789

 


 

 

Catholic World Youth Days 2002 Council

NOTES TO FINANCIAL STATEMENTS

 

 

December 31, 2002

6. LOAN PAYABLE

The City of Toronto provided a non-interest bearing loan of $375,000 to the Council, which was fully repaid during 2002.

7. COMMITMENTS AND CONTINGENCIES

The Council is a defendant or a potential defendant in certain legal claims in relation to the event. It is not presently possible to predict with a reasonable degree of assurance the results of these claims and the ultimate amount, if any, net of the insurance coverage, the Council may have to pay. Therefore, no loss or liability has been provided for in these financial statements regarding these claims.

 

The Council intends to vigorously defend its position in these matters.

8. STATEMENT OF CASH FLOWS

A separate statement of cash flows has not been presented since cash flows from operating, investing and financing activities are readily apparent from the other financial statements.