ANNUAL REPORT November 1, 2014 – October 31, 2015
TABLE OF CONTENTS
President’s Report Treasurer’s Report Audited Financial Statements Volunteer Committee Chair Reports
•
Legal + Governance Committee
•
Marketing + Communications Committee
•
Membership + Outreach Committee
•
Sourcing Committee
2 4 5 15
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PRESIDENT’S REPORT Dear fellow members of the Garden City Food Co-‐operative, The past year has been one of immense growth for the Garden City Food Co-‐op. As with any start-‐up business working toward the goal of opening its doors, we have had our share of obstacles and victories. From November 2014 to October 2015 our co-‐operative gained a total of 467 members, bringing more than halfway closer to our goal of 800 members needed to open the doors to the Garden City Food Co-‐ op. The success of this increase in membership speaks to the value of our vision, goals, and how important this idea is to our community. In January 2015 our Project Manager, Karrie Porter, completed her contract (funded by the Ontario Trillium Foundation) and helped with the transition into the next phase of growth for the co-‐op as part of the Board of Directors. Karrie’s contributions throughout the two years of her contract helped to lay the groundwork for the selection of the future home of the Garden City Food Co-‐op at 57 Carlisle Street, as well as provided the foundation for the business plan. Our second dedicated employee, Jill Mitchell – Membership and Volunteer Coordinator, was instrumental in welcoming our new members, volunteers and supporters. The Garden City Food Co-‐op has benefitted from Jill’s many skills, and determined that it was critical to continue to have a Membership and Volunteer Coordinator beyond the departure of our Project Manager and also the end of the Ontario Trillium Foundation funding for the position (ended in February 2015). Continuing on as the sole employee of the Garden City Food Co-‐op, the Membership and Volunteer Coordinator position gained importance as the connection between our volunteers, Board of Directors, and new members. With some increase in responsibility, Jill Mitchell has responded with great enthusiasm and continued our push for increasing community awareness and membership in the Garden City Food Co-‐op. Our volunteer committees have made many major achievements from hosting numerous events, including our “Big Reveal” future store location announcement at Gord’s in April 2015, to our trivia nights, as well as our very first Annual General Meeting held in January 2015. The level of collaboration between our committees, as well as independent progress made, is a testament to the determination of our community to make a conscious positive contribution to the long-‐term goals of opening a co-‐ operative store in downtown St. Catharines. The efforts of each of our volunteer committees is critical to the success of opening the Garden City Food Co-‐op and engaging both our membership as well as our local community and even the entire Niagara region. Meanwhile, our Board of Directors has been working diligently to address each challenge faced in our charge to bring the opening of the Garden City Food Co-‐op to fruition. After our first AGM in late January 2015, the Board of Directors saw four Board Members step down, while 3 more joined to replace them. The new Board was tasked with taking the next steps leading to the opening of the
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Garden City Food Co-‐op; namely completing and submitting our Offering Statement to the Financial Services Commission of Ontario (FSCO), launching the “Big Reveal” store site announcement, continuing our drive to our goal of 800 members, and eventually launching our crucial Capital Investment Campaign. The Board has faced several challenges to progress as well. Over the course of the past year the Board has seen two Board members step down to increasing work commitments and consequently was forced to divide the increased workload on fewer Board members as well as seek out Interim Board members. An additional challenge faced was the lengthy process of seeking approval for the Offering Statement application by FSCO, who required several amendments. Without approval for the Offering Statement, the Board has been required to postpone the Capital Investment Campaign until FSCO has officially signed off on the Offering Statement. Despite these challenges, the Garden City Food Co-‐op Board of Directors has made steady progress in achieving its two major goals of building its membership to 800 members, and beginning the Capital Investment Campaign. The most crucial days for the success of the Garden City Food Co-‐op are still ahead as we look forward to our goal with the Capital Investment Campaign. It will be of the utmost importance for our members, volunteers, and supporters to rally and help to “build the barn” as we pull together successfully complete the campaign. The success of the campaign is critical to progressing to the next steps of securing additional loans, beginning renovations to our future home at 57 Carlisle Street, and building the Garden City Food Co-‐op into the store that we have collectively envisioned. We have accomplished a great deal on primarily volunteer labour. Now is the time for all hands to come on deck. We need a bigger, stronger Board of Directors -‐ please consider volunteering or nominating before March 1 and contributing to the Capital Investment Campaign as an investor and/or Ambassador. Current Board Members: Mark Shantz, President, Board Liaison for Sourcing Committee, Building Committee Sandra Booker, Secretary, Board Liaison for Legal & Governance Committee Susan Gammage, Board Liaison for Marketing & Communications Committee Kayla Krasnor, Interim Board Member, Board Liaison for Membership Committee Jen Chrysler, Interim Board Member Board Members who left the Board this past year: Lionel Tupman Karrie Porter Mark Allaart In cooperation, Mark Shantz, GCFC Board President
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TREASURER’S REPORT A challenging year has come to an end. Over the past year we ended the start-‐up funding from the Ontario Trillium Foundation through Start Me Up Niagara, the Project Manager position came to an end and we continued our search for a replacement for the Treasurer's role. We also faced a learning curve with Financial Services Commission Ontario (FSCO), which resulted in delays in the launch of our Capital Investment Campaign. There have been some highlights as well. We continue to hold an offer to lease for our future home at 57 Carlisle, we have secured an agreement with our lawyer to act as our escrow agent for the investment campaign and we have received and are actively following up on leads for a new bookkeeper. In the meantime I have been filling in a Treasurer in addition to carrying out the function of volunteer bookkeeper. To follow are the audited financial statements for the fiscal year ending October 31, 2015. Not surprisingly we continue to operate in a deficit as we work toward launching the Capital Investment Campaign. A representative from Grant Thornton will present the financials at our Annual General Meeting. I look forward to seeing you all there. Cooperatively yours, Sandra Booker
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Financial Statements Garden City Food Co-operative Inc. October 31, 2015
Garden City Food Co-operative Inc.
Contents
Page Independent Auditor's Report
1-2
Statements of Loss and Deficit
3
Balance Sheets
4
Statements of Cash Flows
5
Notes to the Financial Statements
6-8
Independent Auditor's Report Grant Thornton LLP 80 King Street Suite 200 St. Catharines, ON L2R 7G1 T +1 905 682 8363 F +1 905 682 2191 www.GrantThornton.ca
To the Members of Garden City Food Co-operative Inc. We have audited the accompanying financial statements of Garden City Food Co-operative Inc., which comprise the balance sheets as at October 31, 2015, and the statements of loss and deficit and cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information. Management's responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for private enterprises, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibility
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 comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Co-operative's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Co-operative's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Audit • Tax • Advisory Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd
1
Independent Auditor's Report (continued) Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of Garden City Food Co-operative Inc. as at October 31, 2015, and the results of its operations and its cash flows for the years then ended in accordance with Canadian accounting standards for private enterprises.
St. Catharines, Canada November 30, 2015
Audit • Tax • Advisory Grant Thornton LLP. A Canadian Member of Grant Thornton International Ltd
Chartered Professional Accountants Licensed Public Accountants
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Garden City Food Co-operative Inc. Statements of Loss and Deficit Years ended October 31 Revenue Grants Donations Events
2015
$
Expenses Office salaries and benefits Rent Consulting fees Advertising and promotion Audit Insurance Architect Telephone and utilities Dues and subscriptions Interest and bank charges Office Legal fees Memberships Research and development Repairs and maintenance Donations
23,571 2,579 1,024
2014
$
48,791 3,480 1,769
27,174
54,040
36,534 12,790 7,687 5,254 2,500 2,397 2,851 1,133 1,028 838 350 -
46,786 2,588 1,005 7,647 3,200 124 1,026 583 1,809 1,388 1,000 987 391 131 60
73,362
68,725
Net loss
$
(46,188)
$
(14,685)
(Deficit) retained earnings, beginning of year
$
(11,958)
$
2,727
Net loss
(46,188)
(Deficit) retained earnings, end of year
$
(58,146)
See accompanying notes to the financial statements.
(14,685) $
(11,958)
3
Garden City Food Co-operative Inc. Statements of Cash Flows Years ended October 31
2015
2014
Increase (decrease) in cash and cash equivalents Operating Net loss Change in non-cash working capital items Accounts receivable Prepaid expenses Government remittances payable (receivable) Accounts payable and accrued liabilities Deferred revenue
$
Financing Issuance of member shares (Decrease) increase in cash Cash Beginning of years End of years
$
(46,188)
$
(14,685)
12,091 (9,533) (1,226) 368 (6,980)
(13,133) 526 4,489 31,980
(51,468)
9,177
30,360
40,080
(21,108)
49,257
51,759
2,502
30,651
See accompanying notes to the financial statements.
$
51,759
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Garden City Food Co-operative Inc. Notes to the Financial Statements October 31, 2015 1.
Nature of operations
Garden City Food Co-operative Inc. is primarily engaged in fundraising for the opening of a local grocery store. It is incorporated under the Co-operative Corporations Act of Ontario.
2.
Significant accounting policies
These financial statements are prepared in accordance with Canadian accounting standards for private enterprises. The significant policies are detailed as follows: Grant revenues The Co-operative recognizes grant revenues toward current expenses in the statement of earnings. When grant revenues relates to future expenses, the company defers the revenue and recognizes it in the statement of earnings as the related expenses are incurred. Financial instruments Measurement The entity initially measures its financial assets and liabilities at fair value, except for certain nonarm's length transactions. Financial assets or liabilities obtained in related party transactions with a person or entity whose sole relationship with the Co-operative is in the capacity of management are accounted for in accordance with financial instruments. The entity subsequently measures all its financial assets and liabilities at amortized cost. Financial assets and liabilities measured at amortized cost include accounts receivable, accounts payable and accrued liabilities and government remittances payable. Impairment Financial assets measured at cost are tested for impairment when there are indicators of impairment. Previously recognized impairment losses may be reversed to the extent of the improvement provided the asset is not carried at an amount, at the date of the reversal, greater than the amount that would have been the carrying amount had no impairment loss been recognized previously. The amounts of any write-downs or reversals are recognized in net income.
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Garden City Food Co-operative Inc. Notes to the Financial Statements October 31, 2015 3.
Commitment
The Co-operative's total future minimum lease payments under operating lease commitments over the next five years are as follows: Estimated principal repayments are as follows: 2016 2017 2018 2019 Nov 2019 - March 2020
$
70,882 70,882 70,882 70,882 29,534
$
313,062
In addition to the above noted minimum lease payments the Co-operative is also obligated to pay their share of operating costs, which flutuate year to year.
4.
Accounts receivable 2015
Grant receivable Member shares receivable Other
5.
2014
$
602 190 250
$
13,133 -
$
1,042
$
13,133
Deferred revenue Deferred Government & Grant Related Deferred Grant Industry Expenses Grant Revenue 2014 Funding 2015 2015 Revenue 2015
Co-operators Foundation Start Me Up Niagara
$
25,000 6,980
$
16,591
$
23,571
$
25,000 -
$
31,980
$
16,591
$
23,571
$
25,000
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Garden City Food Co-operative Inc. Notes to the Financial Statements October 31, 2015 6.
Member shares
Authorized 10,000 Voting, non-retractable, non-redeemable member shares with stated value of $120 900 Class A non-voting, retractable, redeemable, preference shares with an annual cumulative dividend of 4% 4,300 Class B non-voting, retractable, redeemable, preference shares with an annual cumulative dividend of 2.9%
Issued 2015 587 members shares (2014 - 334)
7.
$
70,440
2014 $
40,080
Financial instruments
The Co-operative is exposed to various risks through its financial instruments. The following analysis provides a measure of the Co-operative’s risk exposures and concentrations at October 31, 2015. Liquidity risk Liquidity risk is the risk that the Co-operative will encounter difficulty in meeting the obligations associated with its financial liabilities. The Co-operative is exposed to this risk mainly in respect of its accounts payable, accrued liabilities and government remittances payable. Market risk Market risk is the risk that the fair value or expected future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. The Co-operative is not exposed to any market risks.
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VOLUNTEER COMMITTEE CHAIR REPORTS Legal + Governance Committee The Mandate of the L+G Committee can be reviewed on the L+G Committee page under Volunteer Committees on the website. Our committee meets monthly. We develop policy and present it to the Board of Directors for their approval. 2014/15 was a busy year for us as we laid the governance policy groundwork for GCFC following the previous year’s focus on By-‐laws. We also developed the first Board Orientation training, however, it was not delivered until after the end of the fiscal year. We created a Governance page on the website under the About tab, and all policies can be found there. The Board approved the following policies in 2014/15: Board Policies Board of Directors Responsibilities Board of Directors Code of Conduct Board of Directors Confidentiality Policy In Camera Policy Corporate Policies (i.e. governing Board, Committees and/or other Volunteers) Volunteer Confidentiality and Waiver of Liability Conflict of Interest Legal + Governance Committee Members for 2014/15 Sandra Booker (Board Liaison), Nicole Cardin, Elizabeth Chitty (Chair), Pamela Cline Howley, Martin Howley, Paul Miller, Maureen Shantz
Marketing + Communications Committee The Marketing + Communications Committee was on hiatus through parts of 2014/15 and met only to work on major projects and events (e.g.: involvement in Strutt Wearable Art Show and our Big Reveal location announcement party). The M+C Committee resumed in November 2015 with Sandy Middleton as Chair with a renewed focus on social media, the website, and overall communications strategies. Therefore, there is no report for the 2014/15 period.
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Membership + Outreach Committee The Membership + Outreach Committee has had a busy year! A milestone has been the huge support the GCFC has seen through a significant increase in membership numbers. At the time of writing, we are happy to say that we now have over 630 members in our community that are committed to help make the vision of a store a reality in 2016. We are a small but passionate group, committed to the goal at hand. I would like to take this opportunity to thank committee members for their dedication and enthusiasm. Some of the initiatives we were able to deliver in 2015 include: •
Annual General Meeting planning and logistics
•
Fall All-‐Committee Meeting
•
Weekend membership sales tent at the St. Catharines Farmers’ Market and elsewhere
•
Summer member and volunteer potluck lunch at Montebello Park
•
Each One Reach One membership campaign
•
Trivia Night at Gord’s Place -‐ great fun and fundraiser success!
•
GCFC lawn signs -‐ showed our solidarity in Niagara
•
The creation of an annual planning calendar
•
Holiday Open House + Meet ‘n Greet event (December 2015)
•
Sponsor a Member campaign with Bethlehem Housing and Support Services (December 2015)
Membership Committee Members for 2014/15 Lesley Bell, Jean Bridge, Allison Barr (Chair), David Carmichael, Hisham Hassan, Kayla Krasnor (Board Liaison), Jill Mitchell-‐Holmes (Staff), Julia Simioni, Vivienne Tries
Sourcing Committee The overall goal of the Sourcing Committee is to have an inventory list, a range of possible vetted/proven suppliers, and some initial contact with possible suppliers in place for the general manager when hired. The committee meets every second Wednesday (less in the summer). Highlight of achievements in chronological order:
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•
Visited the Mustard Seed co-‐op in Hamilton
•
Focussed our time and attention on understanding and operationalizing the GCFC sourcing principles.
•
Developed a draft decision tool to assist us in the future when we have to choose between producer/suppliers. Identified a tentative first inventory based on the Mustard Seed Food Co-‐op and data previously collected by GCFC from members’ surveys. This inventory will be validated against new members preference information collected in January.
•
Drafted a touch-‐base member survey to provide directional information to the committee in developing the inventory.
•
Worked through several databases of suppliers to identify possible local suppliers – including producer/suppliers who contacted the GCFC directly.
Sourcing Committee Members for 2014/15 Ashlie Brownlee, Dorothy Buchanan (Chair), Joe D'Agostino, Colin Ferguson, Mike Gionet, Jane Hanlon, Hisham Hassan, Sarah Jarvis, Mark Shantz (Board Liaison), Arden Vaughn, Sandra Watson, Trixie Wood, Janice Yungblut
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