Wcri 2007 Annual General Meeting Notice And Financial Statements

FALL 2007 ANNUAL GENERAL MEETING AGENDA WATERLOO CO-oPERATIVE RESIDENCE INCORPORATED Sunday, November 25 th, 2007, 7:00 PM, Weavers' Arms

WATERLOO CO-OPERATIVE RESIDENCE INC.

1.

ADOPTION OF AGENDA Kris Vervoort

2.

NEW BUSINESS a) Financial statement

3.

READING AND APPROVAL OF MINUTES Leah Evans

4.

ELECTION OF DIRECTORS a) Close of nominations b) Speeches by candidates c) Voting by secret ballot

5.

REPORTS OF OFFICERS AND COUNCILS a) President b) General Manager c) Interdivisional Council d) Interdivisional Social Council

6.

NEW BUSINESS: Other Kris Vervoort

7.

OPEN FORUM

Sunday, November 25th, 2007 7pm, Weavers' Arms

Come out to get the latest news on WeRl! Vote for your Board of Directors! Enjoy refreshments! Win prizes!

Members + Involvement

= WCRI

See www.wcri.coop/generalmeeting for AGM reports and more info.

IMPORTANT NOTES Several PRIZES will be drawn through out the meeting. A main prize of a Nintendo Wii will be drawn at the end of the meeting. You must be in attendance to win, FREE FOOD will be provided to all attendees. Members INTERESTED IN RUNNING FOR THE POSITION OF DIRECTOR should contact the President ([email protected]). There will be four one year positions available. More information can be obtained from the general manager in the office or from any director. Members must present VALID PHOTO IDENTIFICATION (drivers'license, student card, passport, etc.) in order to vote in the election of directors. New business NOT MENTIONED IN THIS AGENDA must be submitted to the president by November 19th • To protect those members who do not attend the meeting, only unimportant business will be added to the agenda in this manner.

Waterloo Co-operative Residence Incorporated Financial Statements For the year ended April 30, 2007

Contents

Auditors'Report

2

Financial.Statements Statement of Rnancial Position

3

Statement of Operations and Changes in Fund Balances

4

Statement of Cash Flows

5

Summary of Significant Accounting Policies

6

Notes to Financial Statements

8

Auditors' Comments on Supplementary Financial Information

13

Supplementary Financial Information Schedule of Division Expenses

14

Scheduie of Administrative Expenses

15

Waterloo Co-operative Residence Incorporated Notes to Financial Statements April 30, 2007

6.

Long-term Debt (continued)

Principal repayments are as follows: Amount

Year

2008 2009 2010 2011 2012 Thereafter

7.

$

409,701 425,772 450,664 477,004 504,125 5,716,404

$

7,983,670

Contingency

In the ordinary course of business, a lawsuit has been filed against the Co-operative. In the opinion of management and legal counsel, the outcome of the lawsuit, now pending, will involve amounts that would not have a material adverse effect on the position of theC~ operative. Should any loss result from the resolution of these claims, such loss would be charged against income in the period in which the claim is settled.

10

Waterloo Co-operative Residence Incorporated Notes to Financial Statements April 30, 2007

8.

Schedule of Other Funds Redevelopment Reserve Fund

Emergency Reserve Fund

Capital Replacement Fund

Invesbnents

$

153,588

$

423,263

$

Fund balance, beginning of year

$

110,281

$

330,846

$

Interest income Interfund transfer (Note 9) Fund balance, end of year

$

5,807

17,417

37,500

75,000

153,588

$

423,263

37,500

-

2007

$

614,351

$

441,127

$

441,127

$

359,042

37,500

$

37,500

2006 Total

Total

$

23,224

7,085

150,000

75,000

614,351

$

441,127

11

Waterloo Co-operative Residence Incorporated Notes to Financial Statements April 30, 2007 9.

Interfund Transfers Capital Fund Purchase of capital assets with unrestricted funds Repayment of long-term debt with unrestricted funds Interest on long-term debt paid with unrestricted funds . Net change in accounts payable Proceeds of long-term debt

Redevelopment Reserve Fund Transfer of temporary investments from General Fund

$

185,546 3,058,359 533,053 (12,538) (2,850,000)

$

914,420

$

37,500

Emergency Reserve Fund Transfer of temporary investments from General Fund

75,000

Capital Replacement Reserve Fund Transfer of temporary investments from General Fund

37,500

$

150,000

10. Statutory Note - Non-Member Revenue The revenue for business transacted with non-members did not amount to 20% of the total revenue earned as defined in the Co-operative Corporations Act.

11. Commitments The Co-operative leases equipment under operating leases expiring in October 2011 and October 2013. Future minimum lease payments are as follows: Year 2008 2009 2010 2011 2012 Thereafter

Amount

$

19,509 20,949 20,949 20,949 13,354 4,318

$

100,028

12

IBDO

305 King Street West· Suite 401

BDO Dunwoody LLP Chartered Accountants and Advisors

Kitchener Ontario canada' N2G 189 Telephone, (519) 576·5220 Fa" (519) 576-5471

www.bdo.ca

Auditors' Comments on Supplementary Financial Information

To the Members of Waterloo co-operative Residence Incorporated The audited financial statements of the Co-operative as at April 30, 2007 and our report thereon dated July 13, 2007 are presented in the preceding section of this annual report. The financial information presented hereinafter was derived from the accounting records tested by us as part of the auditing procedures followed in our examination of the financial statements and, in our opinion, it is fairly presented in all materiai respects in relation to the financial statements taken as a whole.

Chartered Accountants, Licensed Public Accountants Kitchener, Ontario July 13, 2007

13

BDO Dunwoody

LLP

is a Limited Liability Partnersflip registered in Ontario

Waterloo Co-operative Residence Incorporated Schedule of Division Expenses For the year ended April 30 2007 Budget (Unaudited)

General Fund

Capital Fund

2007

2006

Total

Total

Variable Kitchen Food Supplies Wages and benefits

$

.

$

-

-

$

13,832

13,832

198,682 9,693 135,511

241,553

13,832

13,832

343,886

117,982 53,110

84,969 48,494

84,969 48,494

60,398 53,283

171,092

133,463

133,463

113,681

59,250 140,765

39,561 143,749

39,561 143,749

41,225 161,745

200,015

183,310

183,310

202,970

473,600

485,071

485,071

470,361

$ 1,086,260 $

815,676

$

815,676

$ 1,130,898

$

503,916

$ .348,276

226,496

226,496

223,015

127,851

127,851 195,027

171,412 274,439

858,263

$ 1,053,290

$ 1,017,142

$

Operating Cleaning, laundry, supplies and waste disposal Wages and benefits

Maintenance General Wages and benefits

Utilities

162,000 11,335 68,218

$

-

$

Fixed Amortization-buildings Amortization-building improvements Amortization-equipment, furniture and appliances Municipal taxes

$

345,000

$

-

$

228,000 174,000 252,000

$

999,000

503;916

195,027

$

195,027

$

14

Waterloo Co-operative Residence Incorporated Schedule of Administrative Expenses For the year ended April 30 2007 Budget (Unaudited)

General Fund

Capital Fund

2007

2006

Total

Total

Variable Bad debt $ Bank charges and interest Conferences Employee benefits Equipment leasing Hiring expense Office expenses Professional services Staff training Telephone Wages

14,000 30,000 6,000 58,657 30,380 3,000 23,090 60,660 .4,000 13,230 248,217

$

2,550 36,543 5,899 50,998 26,655 504 15,572 59,107 2,083 12,576 227,175

$

.

$

491,234

$

439,662

$

-$

Insurance $ Interest on long-term debt

31,200 466,200

$

28,679

$

$

497,400

$

28,679

$

7,500 9,000 7,500 17,670 1,200

$

4,767 5,550 5,795 8,649 898

$

2,550 36,543 5,899 50,998 26,655 504 15,572 . 59,107 2,083 12,576 227,175

$

4,474 29,549 4,677 55,535 28,993 5,915 15,848 64,941 822 16,397 281,396

439,662

$

508,547

$

28,679 533,053

$

31,578 325,235

533,053

$

561,732

$

356,B13

-

$

4,767 5,550 5,795 8,649 898

$

5,992 3,900 3,544 10,546 552

$

Fixed

533,053

Co-operative Development Board retreat $ Double room referral DRIP purchases Education and orientation External Co-op Affairs Fees, dues and memberships Marketing Meetings Social and event expense Toadlane

11,400 38,200 14,025 10,500 4,800

$

121,795

7,149 17,489 10,135 7,967 4,022

$

72,421

7,149 17,489 10,135 7,967 4,022

$

-

$

72,421

9,143 19,956 11,843 7,971 2,152 $

75,599

15

IBDO

BOO Dunwoody UP

Chartered Accountants and Advisors

305 King Street West Suite 401 Kitchener Ontario Canada N2G 189

Telephone, {5191 576-5220 Fax, (519)576-5471 WlVW.bdo.al

Auditors' Report

To the Members of Waterloo Co-operative Residence Incorporated We have audited the statement of financial position of Waterloo Co-operative Residence Incorporated- as at April 30, 2007 and the statements of operations and changes in fund balances and cash flows for the year then ended. These financial statements are the responsibility of the cooperative'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 co-operative as at April 30, 2007 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. As required by the Co-operative Corporations Act, we report tha~ in our opinion, these principles have been applied on a basis consistent with that of the preceding year.

Chartered Accountants, Licensed Public Accountants Kitchener, Ontario July 13, 2007

2 BOO Dunwoody LLP is a Limited Liability Partner'ihip registered in Ontario

Waterloo Co-operative Residence Incorporated Statement of Financial Position April 30 Other Funds (Note 8)

Capital Fund

General Fund Assets Current Cash (Note 1) Temporary investments (Note 2) Accounts receivable (Note 3) Prepaid expenses

$ 1,174,410 394,924 40,692 34,104 1,644,130

Capital (Note 4) Investments

$

$

$ 614,351

614,351 10,519,930

2006

Total

Total

1,174,410 1,009,275 40,692 34,104 2,258,481

$

10,519,930 7,250

7,250

$ 1,651,380

2007

$ 10,519,930

$

44,702

$

614,351

567,558 483,806 81,253 23,986 1,156,603 11,192,646 7,250

$

12,785,661

$

12,356.499

$

$

72,806 705,065 3,055,743

Liabilities and Fund Balances Current Accounts payable and accrued liabilities (Note 5) Deposits and unearned fees Current portion of long-term debt (Note 6)

$

936,913

454,403 7,573,969

118,576 863,039 409,701 1,391,316 7,573,969

936,913

8,028,372

8,965,285

8,969,900

614,351

2,491,558 614,351 714,467

2,968,454 441,127 (22,982)

614,351

3,820,376

3,386,599

73,874 863,039

$

409,701

Long-term debt (Note 6)

3,833,614 5,136,286

Contingency (Note 7) Fund balances invested in capital assets Internally restricted Unrestricted

2,491,558 714,467 2,491,558

714,467

$ 1,651,380

Approved by the Board:

$

10,519,930

Director

The accompanying summary of significant accounting policies and notes are an Integral part of these flnanclal statements.

$

614,351

$

12,785,661

$

12,356.499

Director

3

Waterloo Co-operative Residence Incorporated Statement of Operations and Changes in Fund Balances For the year ended April 30 2007 Budget (Unaudited) Revenue Accommodation, meals Utilities Parking, laundry and miscellaneous Other Income

$ 3,321,783

Total revenue' Division expenses Variable Fixed Administrative expenses Variable Fixed Co-operative development

Total expenses Operating surplus (deficit) other Item Gain on disposal of capital assets Excess of revenue over expenses for the year

General Fund $

$

other Funds (Note 8) $

$

2006

Total

Total

3,201,513

$ 3,200,564

55,000 30,000

96,966 54,855

23,224

96,966 78,079

83,160 ,107,014

3,406,783

3,353,334

23,224

3,376,558

3,390,738

1,086,260 999,000 2,085,260

815,676 195,027 1,010,703

858,263

815;676 1,053,290

1,130,898 1,017,142

858,263

1,868,966

2,148,040

491,234 49,7,400 121,795

439,662 28,679 72,421

533,053

439,662 561,732 72,421

508,547 356,813 75,599

1,110,429

540,762

533,053

1,073,815

940,959

3,195,689

1,551,465

1,391,316

2,942,781

3,088,999

211,094

1,801,869

(1,391,316)

433,777

301,739

23,224

6,926 $

211,094

Fund balance, beginnin9 of year Interfund transfers (Note 9) Fund balance, end of year

3,201,513

Capital Fund

2007

$

1,801,869

(1,391,316)

23,224

433,777

308,665

(22,982) (1,064,420)

2,968,454 914,420

441,127 150,000

3,386,599

3,077,934

614,351

$ 3,820,376

$ 3,386,599

714,467

$

2,491,558

$

The accompanying summary of significant accounting policies and notes are an integral part of these financial statements.

4

Waterloo Co-operative Residence Incorporated Statement of Cash Flows For the year ended April 30 Cash flows from operating activities Excess of revenue over expenses for the year Item not involving cash Amortization Gain on disposal of capital assets

Changes in non-eash working capital balances Accounts receivable Prepaid expenses Accounts payable and accrued liabilities Deposits and unearned fees

2006

2007

$ . 433,777

$

1,292,040

742,703 (6,926) 1,044,442

40,561 (10,118) 45,770 157,974

(62,612) 4,465 (253,744) 7,734

858,263

1,526,227 Cash flows from investing activities Purchase of capital assets Proceeds on sale of capital assets Purchase of temporary investments Proceeds on sale of temporary investments

Cash flows from financing activities Repayment of long-term debt Proceeds of long-term debt Member loans donated to organization

308,665

740,285

(185,547)

(2,727,698) 9,100 (297,153) 581,139

(525,469) (711,016)

(2,434,612)

(3,058,359) 2,850,000

(666,742) 2,850,000 (45,267)

(208,359)

2,137,991

Increase in cash during the year

606,852

443,664

Cash, beginning of year

567,558

123,894

Cash, end of year

$ 1,174,410

$

567,558

The accompanying summary of significant accounting policies and notes are an integral part of these financial statements

5

Waterloo Co-operative Residence Incorporated Summary of Significant Accounting Policies April 3D, 2007 Nature of Business

Waterloo Co-operative Residence Incorporated is incorporated without share capital and qualifies for tax purposes as a tax exempt, non-profit organization according to section 149(1)(1) of the Income Tax Act. The organization provides student housing in Waterloo, Ontario.

Fund Accounting

The General Fund accounts for the co-operative's ongoing operations. The Capital Fund reports the assets, liabilities, revenues and expenses related to the co-operative's capital assets. The Redevelopment Reserve Fund is used solely for the funding of a major redevelopment of existing properties or the construction of new properties. The Emergency Reserve Fund is used solely in circumstances that require immediate use of cash to prevent insolvency or the risk thereof. The Capital Replacement Fund is used solely for the funding of repair and replacement of existing capital assets as necessary.

Revenue Recognition

Waterloo Co-operative Residence Incorporated follows the deferral method of accounting for revenue. . Revenue is recognized in the appropriate fund When received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Investment income is recognized as revenue of the approprlate fund when earned.

Financial Instruments

Unless otherwise noted, it is management's opinion that the organization is not exposed to significant interest, currency or credit risks arising from its financial instruments. The 'fair values of these financial instruments approximate their carrying values, unless otherwise noted.

Temporary Investments

Temporary investments are recorded at cost plus accrued interest.

6

Waterloo Co-operative Residence Incorporated Summary of Significant Accounting Policies April 3D, 2007 Capital Assets

Capital assets are recorded at cost. The buildings are amortized as follows: 268 Phillip Street

280 Phillip Street 139 University Avenue

30 years using the annuity method which provides that the total amortization and related mortgage interest expense be equally apportioned over the life of the buildings. 50 years annuity method 20 years straight line

Amortization of other capital assets is based on the estimated useful life of the asset as follows: Fumiture, equipment and appliances Exterior building improvements Interior building improvements Vehicle Paving

- 2, 5, 7 and 10 years straight line - straight line to 2012 - 20 years straight line - 5 years straight line - 20 years straight line

For all capital assets, amortization commences the year following the year of acquisition. Investments

Investments are recorded at cost.

Contributed Services

Volunteers contribute hours to assist the co-operative in carrying out its services. Because of the difficUlty of determining their fair value, contributed services are not recognized in the financial statements.

Use of Estimates

The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilitie,s at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management's best estimates as additional information becomes available in the future.

7

Waterloo Co-operative Residence Incorporated Notes to Financial Statements April 30, 2007

1.

Cash The organization's bank accounts are held at two chartered banks. The accounts are noninterest bearing. . The organization is authorized to borrow a maximum of $100,000 under an operating loan agreement. The loan bears interest at prime plus 1.75% and is due on demand. At April 30, 2007, the unused credit capacity was $100,000.

2.

Temporary Investments The temporary investments consist of money market funds earning interest at market rates.

3.

Accounts Receivable 2007 Trade Less: Allowance for doubtful accounts

2006

$

47,692 $ (7,000)

$

40,692

$

92,353 (11,100) 81,253

Amortization expense totalled $858,263 (2006 - $742,703) and was charged to the capital fund. Included in furniture, equipment and appliances is $102,284 of' kitchen equipment with accumulated amortization of $91,756 that is no longer being used by the organization. The organization is holding the assets as kitchen facilities may re-open in the future.

8

Waterloo Co-operative Residence Incorporated Notes to Financial Statements April 3D, 2007 5.

Accounts Payable and Accrued Liabilities 2007 Trade accounts payable Accrued liabilities

6.

2006

$

72,973 45,603

$

49,794 23,012

$

118,576

$

72,806

Long-term Debt

6-3/8% mortgage, payable in semi-annual instalments of $73,403 principal and interest, secured by the 280 Phillip Street property, maturing March 2019

$

5.45% mortgage, payable in monthly instalments of $40,929 principal and interest, secured by a first mortgage on the 268 Phillip Street property, a collateral mortgage on the 139 University Avenue property and an assignment of rents, maturing September 2015 0% loan, payable $743 per month, secured by vehicle, maturing February 2008

2007

2006

1,218,380

$ 1,284,345

3,907,859

4,180,354

7,431

16,349

Prime piUS 1.5% construction loan, repaid during the year

2,710,981

6.257% mortgage, payable in monthly instalments of $18,672 principal and interest, secured by a first mortgage on 139 University Avenue property and assignment of rents; maturing April 2012 Less current portion

$

2,850,000 7,983,670

8,192,029

409,701

3,055,743

7,573,969

S 5: 136,286

Interest expense on the above debt totalled $533,053 (2006 - $417,292).

9