ZION EVANGELICAL LUTHERAN CHURCH

FINANCIAL STATEMENT

HERGOTT DUVAL STACK LLP

INDEPENDENT AUDITOR’S REPORT

To the Members ofZion Evangelical Lutheran Church

n~v~ ~uu.t~u the accompanyi.~ ~..,..~,,.~ ~,comprise the statement of financ~ai position as at August 3 i.~ 20i i, and the statements of receipts andexpenditures, changes in fund balances, cash flows and other 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-~%r-profit organizations, and for such111 L~111¢1.1

control as management determines is necessary to enable the preparation of financial statements that arefree from materi!l misstatement, whether due to fraud or error°

Audi~or~ ResponsibilityO~ar respov~s~b~!~ is to express a~ opinion on these financiai statements based on o~r a~dit. Weconducted our audit in accordance with Canadian generally accepted a~diting standards. Those standardsrequire that we comply with eth~ca! req~firements and pla~ a~d perform the a~d~ to obta~n reasonable

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. !n making .those risk assessments, the n~ditar co_n_sJders internal control relevant to theorganizations preparation and fair presentation of the ~nancia! statements in order to desi~ auditprocedures that are appropriate in the circumstances, but not for the pu~ose of expressing an opinion onthe effectiveness of the organization’s intemai control Anaumt’~ a~so .........~ ......~ ....=-- ~~V~lU~tlll~

appropriateness of accounting-~:~: ...... ~ ~ *~ ........ ’’ ..... ~ ......... ,; .... ~;~~ ~.4~ bymanagement, as well as evaluating the overall presentation of the ~nancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

in common with many charitable organizations, the congregation derives revenues from donations, thecompleteness of which is not susceptible to satisfactory audit verification. Accordingly, our verificationof these revenues was limited to the amounts recorded in the records of the congregation and we were notable to determine whether any adjustments might be necessary to revenue, deficiency of receipts overexpenditures, assets and fund balances.

INDEPENDENT AUDITOR’S REPORT (continued~

Qualified OpinionIn our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinionparagraph, the financial statements present fairly, in all material respects, the financial position of ZionEvangelical Lutheran Church as at August 31, 2011, and the results of its operations and its cash flowsfor the year then ended in accordance with Canadian generally accepted accounting principles.

SASKATOON, SASKATCHEWAN

February 8, 2012 Chartered Accountants

ZION EVANGELICAL LUTHERAN CHURCH

STATEMENT OF FINANCIAL POSITION

AUGUST 31, 2, 011

ASSETS

Current AssetsTerm deposits and short-term investmentsEndowment investmentLTS endowment investmentAccounts receivableGST receivablePrepaid expenses

Capital AssetsLandt~UlldingFurniture and equipmentParking lot

LIABILITIES

Current LiabilitiesBank indebtedness (Note 4)Accounts payableDemand operating loan (Note 5)Imerl;an,~ balance

FUND BALANCES

GeneralRestricted for endowment purposes (Note 6)Special gifts (Note 7)Invested in capital assets (Note 8)

Approved by the Council:

General SpecialFund ~ft 17nnd

$ 13,266 $ 61,566 $0 ii,6i70 5, i98

! ,747 01,680 0

0 0

2011Total

74,832ii,6i7

1,747! ,680

0

16,693 78,381 95,074

150,000 01,0i9,33Z !3286,586 0

~,968 o

$ !,534,779 $ 78,381

12,389 $ 014,137 4,94530,292 0

5,990 (5,990)

62,808 (1,045)

(31,398) 00 !6,5740 62,852

1,503,369 0

1,471,971 79,426

$ 1,534,779 $ 78,381

150,0001 ,U

286,5861,968

$ 1,613,160

12,38919,08230,292

61,763

(31,398)!6,57462,852

1,503,369

1,551,397

$ 1,613,160

2010Tota!

74,832ii,97i5,4652,0201,2942,409

97,991

150,0001,13/Z,/O/

286,5861,968

$ 1,609,312.

5,108!.7,53117,265

0

39,904

(3,670)t6,42062,602

1,494,056

1,569,408

$ 1,609,312

(signed) (signed)

Hergott Duva! Stack LLP

ZION EVANGELICAL LUTHE~N CHURCH - GENERAL FUND

STATEMENT OF RECEIPTS AND EXPENDITURES

FOR THE YEAR ENDING AUGUST 31~

ReceiptsPledged envelope offeringsUnpledged envelope offeringsFestival offeringsPlate cash

Facility rent and otherParking lot rentalinterest

ExpendituresMission Outreach

ELCICOutreach CommitteesCamp KinasaoLCBIOther ministriesCLBINative Minist~Lutheran Care SocietyLutheran Theological SeminaryFriendship InnSaskatoon Food BankSaskatoon Conference

(Note 3)Budget2012

Actual2011

(Note 3)Budget Actual2011 2010

185,265 $ 169,304 $ 180,650 $ 215,11090,000 80,391 100,000 43,8645,000 4,722 5,000 3,4183,500 2,366 3,000 2,886!,000 858 ! ,070 1,094

22,8i2 2i,478 i9,700 i5,20238,280 42,848 38,280 41,740

500 106 300 I,11~.) ""

$ 346,357 $ 322,073

$ 24,0000

1,285!,250

06OO

04503503OO250165

Interest on operating line

Staff and MinistrySalmries and benefits

24,0008,8001,285

2,00O600

01,000

350300250165

$ 348,000 $ 324,439

$ 22,000 $ 24,0008,800 8,8001,285 1,285!,250 !,2504,000 0

600 600550 550450 450~ 50.,.,0 3300 300250 250165 165

40,000 28,650 40,000 38,000

2,000 1,163 2,000 974

237,771200,772 230,615 217,513

b,~RGOTT DUVAL STACK LLP

ZION EVANGELICAL LUTHEtL~q. CHURCH- GENERAL FUND

STATEMENT OF RECEIPTS AN~ EXPENDITURES CONT/NUED

FOR THE YEAR ENDING AUGUST 31 2011

(Note 3)Budget2012

Actual2011

(Note 3)Budget2011

Actual2010

AdministrationPostage and suppliesOffice equipment and repairsAdvertisingTelephoneBank chargesMemberships!Congregationa! retreat

$ 2,5005,0002,0002,400

400500

13,250

$ 3,i413,3891,2682,027

30430

4~I

10,610

$ 3,000 $ 3,2635,000 4,6062,500 5262,600 1,864

600 264700 38

15,200 10,899

Committees- ProgramWorshipParish EducationParish LifeMissionsWheels for WorshipStewardshipYouth and Family

14,625 11,635 13,600 10,3784,800 3,367 5,100 2,893

0 0 0 0400 0 400 0600 942 600 376800 568 800 586

~ 175 7ztz~ a !0a 94824,400 17,25(} 23,601) 15,181

Congregational nurtureConventions and conferences 2,500 2,774 2,500 3,474

FacilitiesCleaning suppliesUtilitiesInsuranceRepairs and maintenanceTaxes

1,500 1,226 1,500 1,20627,000 17,533 27,400 17,2679,500 11,720 9,000 3,9126,000 4,780 5,000 4,931

100 70 100- 70

44,100 35,329 43,000

Parking lotTaxesMaintenanceElectricity

Tota! expenditures

Excess (deficiency)of receipts over expenditnres

5,200 5,418 4,000 5,1873,000 1,353 3,000 1,1171,000 809 1,000 702

9,200 7,580 8,000 7,006341,133 320,433

10,135 (19,060) (16,915) 4,006

Less transfers to special fundsDebt retirementCapital assetsMaintenance reserveOffice equipment reserve

General Fund Cash Flows

( 3,355) ( ,902) (2,000) (523)0 (6,765) 0 0

(3,000) 0 (3,000) (2,500)(3,000) 0 ( ,000) ( ,000)

$ (9,220) $ (27,727) $ (22,915) $ (17)

HERGOTT DUVAL STACK LLP

ZION EVANGELICAL LUTHERAN CHURCH

STATEMENT OF CHANGES IN FUND BALANCES

FOR THE YEAR ENDED AUGUST 31 20~0_~11

SpecialGeneral Gift EndowmentFund Fund Fund

Fund balances, beginning of year $(3,670)

Excess (deficiency) ofrecdpts (19,060)over expenditures

$ 62,602 $ 16,420

Investedin Capital

Assets

1,494,056

895 154 0

August 31,201!Total

1,569,408

(18,011)

August 31,2010Total

1,5(;3,769

$ 5,639 .

Capital assets (6,765) 0 0 6,765Maintenance r~erve 0 0 0 0O~ce eoj~ipment reserve 0 0 0 0r~b* retirement (1,903) (645) 0 -~ ~ao

Fund balances, end of year $ (31~398) $ 62,852 1,503,369 $ 1,551,397 $ 1,569,408$ 16,574

HERGOTT DUWAL STACK LLP

ZION EVANGELICAL LUTHERAN CHURCH

STATEMENT OF SPECIAL FUND RECEIPTS AND EXPENDITURES

FOR THE YEAR ENDING AUGU~ 2011

DESIGNATED LOCAL FUNDSMemorialOrganMaintenance reserveMusic cooordinatorDebt retirementSunday School outreachWorship/PianoWorship miscellaneousOffice equipment reserveWheels for WorshipKitchen

DESIGNATED OUTREACHLocal Funds

Student aidKingsao campershipChurch Council directedChrismaas hamper fundYouth fundraiser

Sask Synod - ELCICCanadian Lutheran World ReliefLutheran Care Society.FriendshipInterval HouseCanadian missions and other ministriesEvangelical Lutheran WomenOther ministriesSaskatoon Food BankSaskatoon Native MinistryWorld ~ssion

Balance

$ 15,899 $ 375 $ 8992,713 100 07,622 2,600 2,887

835 50 00 645 0

50, 0 o2,053 0 03,391 1,787 6412,039 0 0

11 895 9061,875 250 74

623 1,503 2,100407 !,488 1,!30

0 i,235 1,2358,291 3,269 8112,(;!)2 !. 4,! 97 13,304

Transfersto Investedin Capital

$ 00

0(645)

000000

00

Transfers11 ~Jlli

General

0 !,340 1,340 0 00 7,072 7,072 0 00 104 104 0 00 600 600 0 00 5 5 0 00 75 75 0 00 249 249 0 00 i,071 i,071 0 00 !50 150 0 00 200 200 0 00 655 655 0 00 11,521 !1,521 0 0

$ (642) $

Endowment FundsSeierstad bursar)"Olson bursaryLTS Student bursary

$ 62,61)2 $ 25,718 $ 24,825

5,037 166 0 06,352 202 380 05,031 !66 0 0

$ 534 $ 380

Balance

$ 16,420

0 $ 15,3750 2,8130 7,3350 8850 00 500 2,0530 4,5370 2,0390 00 2,051

00000o’

26765

010,749

62,850

oooooooooooo

0 $ 62,850

0 5,2030 6,!740 5,197

0 $ 0 $ 16,574

HERGOTT DUVAL STACK LLP

ZION EVANGELICAL LUTHERAN CHURCH

STATEMENT OF CASH FLOWS

YEAR ENDED AUGUST 31~

Cash flows from operating activitiesExcess of receipts over expendituresNet change in non-cash worsting capital balances

relating to operations

Accounts receivableGST receJvabiePrepaid expensesAccounts payable

Cash flows from investing activitiesPurchase of capital assetsDecrease (increase) in endowment investmentsIncrease in term deposits

2011 2010

(18,011) $ 5,639

273 (20)

2,409 2,752!,55! 8,305

(14,164) i6,073

(6,765) (7,090)621 (869)

- (6,215)(6,144) (14,174)

Cash flows from financing activitiesincrease (decrease) in loan

Net (decrease) increase in cash during the yearBank indebtedness, beginning of year

Bank indebtedness, end of year

13,627 (1,373)

(7,281) 526(5,108) (5,634)

(12,389) $ (5,108)

~RGOTT DUVAL STACK LLP

ZION EVANGELICAL LUTHERAN CHURCH

NOTES TO FINANCIAL STATEMENTS

A U GU S T_3_1~_2_0 l_!_l

2~

Description of the organizationZion Evangelical Lutheran Church is a member church of the Evangelical Lutheran Church inCanada. it is incorporated " ""un~r~--- ~’~-~~’* ’~ ...... ÷: ^,.+ ¯ 7;~,,,Evangelical Lutheran Congregation, but operates under the name Zion Evangelical LutheranChurch ("Zion"). It is a registered charity under the Income Tax Act.

Accounting policiesThese financial stateme.n_ts have been_ prepared ~n accordance w~th generally accepted accountingprinciples to reflect the following significant accounting policies:

Term deposits and investmentsTerm deposits and investments are comprised of term deposits and other short-term investmentswhich are recorded at cost which approximates fair market value.

Unrestricted contributions are recognized as revenue in the General Fund ~n the year they arereceived. Restricted contributions are recognized as revenue in the Specia! Gift Fund in the yeart.hey are received.

Investment income earned on the funds ’Restricted for Endowment Purposes’ is recognized asrevenue of the Special Gift Fund and then transf~ed to the fcmd balance ’Restricted forEndowment Ptn-poses’o

C_~ital assets and depreciation_ _

The capital assets are stated at 1976 appraised values plus subsequent additions at cost. Capitalassets are not deprecia;~ed. Mortgage principal payments are charged to operations.

Pledges receivablePledges are not accrued in the financial statements of Zion.

Donated materials and servicesDonated materials and services are not recorded in the financial statements of Zion.

Donated capital assetsDonated capital assets are recorded in the financial statements of Zion at estimated fair value whenreceived.

Financial rep~ for not-for-~r_g.oanizationsThe Accounting Standards Board ("AcSB") has approved a new accounting framework for not-for-profit organizations that is based on existing generally accepted accounting principles andincorporates the Section 4400 series of standards which relate to situations unique to the not-for-

Institute of Chartered AccoLmtants ("CI~A") Handbook- Accounting, and are effective forreposing periods begi~ing on or aRer Januav 1, 2012. The impact of the changes on thecon~egation’s Nnancial statements has not yet been dete~ined.

H~aGO~ D~~ STACK LLP

ZION EVANGELICAL LUTHERAN CHURCH

NOTES TO FINANCIAL STATEMENTS

AUGUST 31~011

o

4~

Budgeted amountsThe budgeted amounts are unaudited and have been presented for im%rmation purposesomy.

Bank indebtednessBank indebtedness consists of cheques issued in excess of funds on deposit.

Demand operating loanThe demand operating loan is with Mennonite Trust Ltd. and is secured by mortgage bearinginterest at a 5.2% (floating) rate, repayab!e in vafiab!e monthly payments° The balance at Au~st3i, 20i i ~s $30,292 (20i0 - $i7,265).

Fund balances restricted for endowment purposesThe purpose of these endowments is to encourage persons who have the interest and scholastic

each ~nd includes the following amounts at August 31, 201 I"

Seierstad bursary $5,203Olson b,arsap/ 6, !74LTS Student bursary 5 1~{~97

Special gift fund balancesBoth externally-and internally-restricted contributions are recorded in this fund. In accordancewith Zion policy, externally restricted contributions are used as designated with the understandingthat when any given need has been met, designated gifts wi!! be used where needed most.!ntema!!y restricted f!ands are those restricted by Counci! motion°

Fund balances invested in capital assetsTNs fund records Zion’s capita! ~sets and any related debts. !nc!uded in the tota! balance is anaccumulation of donations that were specifically designated to the Building Fund or to a BuildingImprovement Fund and have been app!ied to the cost of the assets. These amounts carmot be asedfor any other purpose at the time of the donation or at any time in the future (2011 and 2010 -$629,298).

}~ERGOTr DUVAL STACK LLP

ZION EVANGELICAL LUTHERA~ CHURCH

NOTES TO FINANCIAL STATEMENTS

AUGUST

Financial instruments

The c~ing amount of the cu~ent financial assets and cu~ent financial liabilities approximatetheir fair value because of the sho~te~ maturities of these items.The demand loanapproximates fair value due to the variable ~terest rate a~ached to this loan.

Interest rate riskInterest rate risk is the risk that the furore cash flows Of a financia! instrument will fluctuatebecause of changes ~n market ~nterest rates° The ~mand loan bears ~nterest at a floating ra~e ofinterest. Term deposits bear interest at fixed and floating rates.

~RGOTT DUVAL STACK LLP