Description
PetSmart Charities of Canada ("Organization") is a registered charity incorporated under letters patent under the Canada Corporations Act in 1987 and is exempt from tax under the provisions of the Income Tax Act (Canada).
Financial Statements and
Independent Auditor’s Report
PetSmart Charities of Canada
February 2, 2014 and February 3, 2013
Contents
Page
Independent Auditor’s Report 3
Statements of Financial osition !
Statements of "perations and C#an$es in %et Assets &
Statements of Cas# Flo's (
%otes to Financial Statements )
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
3
Grant Thornton LLP
2398 E. Camelback Road
Suite !!
"hoeni#$ %& 8'!(
T !2.)*).3)!!
+ !2.*)*.3)2(
,,,.GrantThornton.com
Independent Auditor’s Report
*embers
etSmart C#arities of Canada
+e #a,e audited t#e accompanyin$ financial statements of etSmart C#arities of Canada, '#ic# comprise
t#e statements of financial position as at February 2, 2014 and February 3, 2013, and t#e statements of
operations and c#an$es in net assets, and cas# flo's for t#e years ended February 2, 2014 and February 3,
2013, and a summary of si$nificant accountin$ policies and ot#er e-planatory information.
Management’s responsibility for the financial statements
*ana$ement is responsible for t#e preparation and fair presentation of t#ese financial statements in
accordance 'it# Canadian accountin$ standards for not/for/profit or$ani0ations, and for suc# internal
control as mana$ement determines is necessary to enable t#e preparation of financial statements t#at are
free from material misstatement, '#et#er due to fraud or error.
Auditor’s responsibility
"ur responsibility is to e-press an opinion on t#ese financial statements based on our audits. +e conducted
our audits in accordance 'it# Canadian $enerally accepted auditin$ standards. 1#ose standards re2uire t#at
'e comply 'it# et#ical re2uirements and plan and perform t#e audit to obtain reasonable assurance about
'#et#er t#e financial statements are free from material misstatement.
An audit in,ol,es performin$ procedures to obtain audit e,idence about t#e amounts and disclosures in
t#e financial statements. 1#e procedures selected depend on t#e auditor’s 3ud$ment, includin$ t#e
assessment of t#e ris4s of material misstatement of t#e financial statements, '#et#er due to fraud or error.
In ma4in$ t#ose ris4 assessments, t#e auditor considers internal control rele,ant to t#e entity’s preparation
and fair presentation of t#e financial statements in order to desi$n audit procedures t#at are appropriate in
t#e circumstances, but not for t#e purpose of e-pressin$ an opinion on t#e effecti,eness of t#e entity’s
internal control. An audit also includes e,aluatin$ t#e appropriateness of accountin$ policies used and t#e
reasonableness of accountin$ estimates made by mana$ement, as 'ell as e,aluatin$ t#e o,erall presentation
of t#e financial statements.
+e belie,e t#at t#e audit e,idence 'e #a,e obtained in our audits is sufficient and appropriate to pro,ide
a basis for our audit opinion.
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
4
Opinion
In our opinion, t#e financial statements present fairly, in all material respects, t#e financial position of
etSmart C#arities of Canada as at February 2, 2014 and February 3, 2013, and t#e results of its operations
and its cas# flo's for t#e years ended February 2, 2014 and February 3, 2013, in accordance 'it# Canadian
accountin$ standards for non/for/profit or$ani0ations.
#oeni-, Ari0ona
5uly ), 2014
ASSETS
2014 2013
CURRENT ASSETS
Cash 1,753,948 $ 1,162,827 $
Receivable f!" #e$S"a$, %&c' 238,000 241,295
Receivable f!" #e$S"a$ Chai$ies, %&c' 1,230 1,443
($he eceivables 1,760 )
#e*ai+ e,*e&ses ) 2,352
T(TA- CURRENT ASSETS 1,994,938 1,407,917
($he asse$s, &e$ 254,202 323,529
T(TA- ASSETS 2,249,140 $ 1,731,446 $
-%A.%-%T%ES AN/ NET ASSETS
CURRENT -%A.%-%T%ES
Acc!0&$s *a1able a&+ acc0als 332,551 $ 42,053 $
#a1able $! #e$S"a$ Chai$ies, %&c' 65,694 31,095
#a1able $! #e$S"a$, %&c' 25,748 110,674
T(TA- CURRENT -%A.%-%T%ES 423,993 183,822
NET ASSETS
(*ea$i&2 f0&+ ) 0&es$ic$e+ 1,825,147 1,547,624
T(TA- -%A.%-%T%ES AN/ NET ASSETS 2,249,140 $ 1,731,446 $
PetSmart Charities of Canada
STATEMENTS OF FINANCIAL POSITION
February 2, 20! and February ", 20"
The acc!"*a&1i&2 &!$es ae a& i&$e2al *a$ !f $hese fi&a&cial s$a$e"e&$s'
5
2014 2013
RE3ENUES
%&+ivi+0al c!&$ib0$i!&s 2,614,881 $ 1,604,320 $
#e$S"a$, %&c' c!&$ib0$i!&s 4i&cl0+i&2 c!&$ib0$e+
e&$, 2!!+s a&+ sevices a&+ !1al$1 i&c!"e5 975,482 885,060
S*ecial eve&$ 172,066 145,113
C!*!a$e a&+ ve&+! c!&$ib0$i!&s 35,000 35,000
%&$ees$ 8,975 4,233
T!$al eve&0e 3,806,404 2,673,726
E6#ENSES
#!2a" sevices7
A&i"al 8elfae !2a&i9a$i!& 2a&$s 1,722,213 735,998
($he *!2a" e,*e&ses 1,327,352 1,009,360
T!$al *!2a" sevices 3,049,565 1,745,358
S0**!$i&2 sevices7
:0&+aisi&2 276,141 97,972
;a&a2e"e&$ a&+ a+"i&is$a$i!& 203,175 75,143
T!$al s0**!$i&2 sevices 479,316 173,115
T(TA- E6#ENSES 3,528,881 1,918,473
E,cess !f eve&0e !ve e,*e&ses 277,523 755,253
NET ASSETS, .E<%NN%N<
=EAR 1,547,624 792,371
NET ASSETS, EN/ =EAR 1,825,147 $ 1,547,624 $
STATEMENTS OF OPE#ATIONS AN$ C%AN&ES IN NET ASSETS
For the 'ears Ended February 2, 20! and February ", 20"
PetSmart Charities of Canada
The acc!"*a&1i&2 &!$es ae a& i&$e2al *a$ !f $hese fi&a&cial s$a$e"e&$s'
6
2014 2013
Cash fl!8s f!" !*ea$i&2 ac$ivi$ies
E,cess !f eve&0e !ve e,*e&+i$0es 277,523 $ 755,253 $
A"!$i9a$i!& !f lice&se a2ee"e&$ 69,327 23,109
Cha&2es i& !*ea$i&2 asse$s a&+ liabili$ies
/ecease 4i&cease5 i&7
Receivable f!" #e$S"a$, %&c' 3,295 4225,4455
Receivable f!" #e$S"a$ Chai$ies, %&c' 213 43895
($he eceivables 41,7605 3,200
#e*ai+ e,*e&ses 2,352 41,3275
($he asse$s ) 4346,6385
%&cease 4+ecease5 i&7
Acc!0&$s *a1able a&+ acc0als 290,498 5,173
#a1able $! #e$S"a$ Chai$ies, %&c' 34,599 5,901
#a1able $! #e$S"a$, %&c' 484,9265 110,674
/efee+ eve&0e ) )
Ne$ cash *!vi+e+ b1 !*ea$i&2 ac$ivi$ies 591,121 329,511
Cash, be2i&&i&2 !f 1ea 1,162,827 833,316
Cash, e&+ !f 1ea 1,753,948 $ 1,162,827 $
N!&)cash $a&sac$i!&s
C!&$ib0$e+ e&$, 2!!+s a&+ sevices 889,639 $ 820,877 $
PetSmart Charities of Canada
STATEMENTS OF CAS% FLO(S
For the 'ears Ended February 2, 20! and February ", 20"
The acc!"*a&1i&2 &!$es ae a& i&$e2al *a$ !f $hese fi&a&cial s$a$e"e&$s'
7
PetSmart Charities of Canada
NOTES TO FINANCIAL STATEMENTS
February 2, 2!" and February #, 2!#
)
NOTE ! 6 NAT$%E OF ACTI&ITIES AN' S$MMA%( OF SI)NIFICANT ACCO$NTIN)
POLICIES
Nature of a*ti+ities 6 etSmart C#arities of Canada 78"r$ani0ation9: is a re$istered c#arity incorporated
under letters patent under t#e Canada Corporations Act in 1
( and is e-empt from ta- under t#e
pro,isions of t#e Income 1a- Act 7Canada:. In t#e current fiscal year t#e "r$ani0ation completed a le$al
reor$ani0ation to comply 'it# t#e Canada %ot/for/profit Corporations Act. As a result t#e "r$ani0ation
establis#ed one member, etSmart C#arities, Inc., a related party, as its sole member.
1#e "r$ani0ation’s mission is to impro,e t#e 2uality of life for all companion animals by creatin$ and
supportin$ pro$rams t#at sa,e t#e li,es of #omeless pets and promote #ealt#y relations#ips bet'een
people and pets.
Summary of Signifi*ant A**ounting Po,i*ies
-asis of re.orting 6 1#e "r$ani0ation #as prepared t#ese financial statements in accordance 'it#
Canadian Accountin$ Standards for %ot/for/rofit "r$ani0ations 78AS%"9:, '#ic# are a part of
Canadian $enerally accepted accountin$ principles 78<AA9:. 1#ese financial statements reflect t#e
assets, liabilities, sources of financin$ and e-penditures of t#e "peratin$ Fund and use t#e deferral met#od
of accountin$ for contributions. All amounts are stated in Canadian dollars.
Fis*a, year 6 1#e "r$ani0ation’s fiscal year ends on t#e Sunday nearest 5anuary 31st. 1#e fiscal years
ended in 2014 and 2013 comprised !2 and !3 'ee4s, respecti,ely.
%e+enue and e/.ense re*ognition 0 =nrestricted $eneral donations are reco$ni0ed as re,enue of t#e
"peratin$ Fund in t#e year recei,ed. >onor contributions, '#ic# #a,e e-ternally imposed restrictions
suc# t#at t#ey must be used for e-penses of a future period, are deferred and recorded as re,enue of t#e
"peratin$ Fund as t#e related e-penses are reco$ni0ed. =nrestricted interest and ot#er in,estment income
are reco$ni0ed as re,enue '#en earned.
?-penses are reco$ni0ed '#en an e-penditure or pre,iously reco$ni0ed asset does not #a,e future
economic benefit, t#ere is an appropriate basis of measurement and a reasonable estimate of t#e amount
in,ol,ed can be made. 1#e costs of pro,idin$ t#e ,arious pro$rams and ot#er acti,ities of t#e
"r$ani0ation #a,e been summari0ed on a functional basis. Accordin$ly, certain costs #a,e been allocated
amon$ t#e pro$rams and supportin$ ser,ices benefited based on personnel acti,ity and ot#er appropriate
allocation met#ods.
1#e "r$ani0ation earns royalty income from certain campai$ns in '#ic# intellectual property of t#e
"r$ani0ation is licensed and reco$ni0ed as re,enue as t#ey accrue in accordance 'it# t#e terms of t#e
rele,ant a$reement.
Contributed ser+i*es and in12ind donations 0 1#e fair ,alue of contributed materials, ser,ices and
store space t#at 'ould ot#er'ise #a,e to be purc#ased is reco$ni0ed as re,enue 'it# a correspondin$
e-penditure. 1#e "r$ani0ation recorded appro-imately @);0,000 and @)21,000 for t#e years ended
February 2, 2014, and February 3, 2013, respecti,ely, of contributed rent, ot#er $oods and ser,ices,
supplies, office space, utilities, and mana$ement personnel 7see %ote 2:.
PetSmart Charities of Canada
NOTES TO FINANCIAL STATEMENTS 1 CONTIN$E'
February 2, 2!" and February #, 2!#
;
NOTE ! 0 NAT$%E OF ACTI&ITIES AN' S$MMA%( OF SI)NIFICANT ACCO$NTIN)
POLICIES 3*ontinued4
Cash 6 Cas# includes cas# deposits in ban4s. 1#e Canadian >eposit Insurance Corporation 78C>IC9:
insures all deposits #eld in Canadian ban4s up to @100,000. Any amount abo,e t#is 'ould be uninsured
and sub3ect to ris4. 1#ere 'as appro-imately @1,1(!,000 of uninsured deposits as of February 2, 2014.
1#e "r$ani0ation’s cas# accounts 'ere placed 'it# #i$#/credit/2uality financial institutions, and
accordin$ly, t#e "r$ani0ation does not e-pect to e-perience non/performance.
Other assets 6 "t#er assets are comprised of a licensin$ a$reement, '#ic# is carried at cost, net of any
related amorti0ation. Amorti0ation is bein$ reco$ni0ed o,er t#e fi,e/year a$reement term 7see %ote 2:.
Finan*ia, instruments 1 re*ognition and measurement
Initial measurement
1#e "r$ani0ation’s financial instruments are measured at fair ,alue '#en issued or ac2uired. For financial
instruments subse2uently measured at cost or amorti0ed cost, fair ,alue is ad3usted by t#e amount of t#e
related financin$ fees and transaction costs. 1ransaction costs and financin$ fees relatin$ to financial
instruments t#at are measured subse2uently at fair ,alue are reco$ni0ed in operations in t#e year in '#ic#
t#ey are incurred.
Subsequent measurement
At eac# reportin$ date, t#e "r$ani0ation measures its financial assets and liabilities at cost or amorti0ed
cost 7less impairment in t#e case of financial assets:. 1#e financial instruments measured at cost are cas#,
accounts payable, and accruals and amounts due to and from related parties.
For financial assets measured at cost or amorti0ed cost, t#e "r$ani0ation re$ularly assesses '#et#er t#ere
are any indications of impairment. If t#ere is an indication of impairment, and t#e "r$ani0ation determines
t#at t#ere is a si$nificant ad,erse c#an$e in t#e e-pected timin$ or amount of future cas# flo's from t#e
financial asset, it reco$ni0es an impairment loss in t#e statement of operations. Any re,ersals of pre,iously
reco$ni0ed impairment losses are reco$ni0ed in operations in t#e year t#e re,ersal occurs.
$se of estimates 6 1#e preparation of t#e "r$ani0ation’s financial statements re2uires mana$ement to
ma4e estimates and assumptions. 1#ese estimates and assumptions affect t#e reported amounts of assets
and liabilities and t#e disclosure of contin$ent assets and liabilities at t#e date of t#e financial statements
and t#e reported amounts of re,enues and e-penses durin$ t#e reportin$ period. Actual results could
differ from t#ose estimates.
PetSmart Charities of Canada
NOTES TO FINANCIAL STATEMENTS 1 CONTIN$E'
February 2, 2!" and February #, 2!#
10
NOTE 2 0 T%ANSACTIONS 5IT6 PETSMA%T, INC7 AN' PETSMA%T C6A%ITIES, INC7
1#e follo'in$ re,enue amounts 'ere recei,ed from etSmart, Inc. and are included in total re,enue in
t#e accompanyin$ statements of operations and c#an$es in net assetsA
February 2,
2014
February 3,
2013
Contributed rent, ot#er $oods and ser,ices, supplies,
office space, utilities, and mana$ement personnel
@ ))!,&3;
@ )20,)((
Contributed product and supplies 4,000 /
Royalty income )!,)43 &4,1)3
@ ;(!,4)2
@ ))!,0&0
Contributed rent, ot#er $oods and ser,ices, supplies, and utilities for pet adoption centers 'ere recei,ed
from etSmart, Inc. Be$innin$ in fiscal year ended 2014, amounts for office space and mana$ement
personnel #a,e also been included in t#e contributions recei,ed from etSmart, Inc. Contributions #a,e
been included in t#e accompanyin$ statements of operations and c#an$es in net assets based on t#e type
of support recei,ed from etSmart, Inc.A
February 2,
2014
February 3,
2013
"t#er pro$ram e-penses
@ )3!,&11
@ )20,)((
Fundraisin$ 3),(0( /
*ana$ement and administration 11,321 /
@ ))!,&3;
@ )20,)((
1#e "r$ani0ation is #i$#ly dependent upon t#e ,iability of etSmart, Inc. as t#is is t#e primary source of
donated re,enue recei,ed in t#e stores from customers and from etSmart, Inc. employees. Royalty
income is $enerated on specific campai$ns '#ere t#e "r$ani0ation recei,es a percenta$e of t#e purc#ase
price on selected merc#andise items sold in etSmart, Inc. stores t#at bear its trademar4 durin$ a certain
timeframe. 1#ese transactions occurred at rates as mutually a$reed and 'ere recorded at fair mar4et ,alue.
In fiscal year ended 2013, t#e "r$ani0ation entered into a license a$reement 'it# etSmart, Inc. for t#e
usa$e of its pin pad system. 1#e transaction 'as measured at t#e e-c#an$e amount paid by t#e
"r$ani0ation, '#ic# is recorded in ot#er assets on t#e statements of financial position. 1#is asset is carried
at cost, net of any related amorti0ation. Amorti0ation is bein$ reco$ni0ed o,er t#e fi,e/year term of t#e
a$reement.
February 2,
2014
February 3,
2013
Cicense a$reement
@ 323,!2;
@ 34&,&3)
Cess accumulated amorti0ation 7&;,32 723,10;:
@ 2!4,202
@ 323,!2;
PetSmart Charities of Canada
NOTES TO FINANCIAL STATEMENTS 1 CONTIN$E'
February 2, 2!" and February #, 2!#
11
NOTE 2 0 T%ANSACTIONS 5IT6 PETSMA%T, INC7 AN' PETSMA%T C6A%ITIES, INC7
3Continued4
1#e amounts due from etSmart, Inc. are unsecured, non/interest bearin$, currently due and represent
employee donations, store bo- re,enue, pin pad, and etSmart donations, '#ic# 'ere not remitted to t#e
"r$ani0ation at year/end.
In fiscal year ended 2014, t#e "r$ani0ation entered into a mana$ement ser,ices a$reement 'it# etSmart,
Inc. to cost/effecti,ely outsource certain business and administrati,e mana$ement ser,ices. 1#e fees paid
to etSmart are capped annually and t#e ,alue of contributed rent, ot#er $oods and ser,ices, supplies,
office space, utilities, and mana$ement personnel recei,ed by t#e "r$ani0ation under t#e a$reement
e-ceeds t#e payments made to etSmart, Inc. 1#e "r$ani0ation incurred @11!,&00 of e-penses for t#e
year ended February 4, 2014, recorded to ot#er pro$ram e-penses and fundraisin$ totalin$ @(1,(0; and
@43,;!1, respecti,ely. 1#ese ser,ices 'ere measured at t#e fair ,alue of t#e outsourced ser,ices and
allocated based on personnel acti,ity.
In fiscal year ended 2014, t#e "r$ani0ation entered into a mana$ement ser,ices a$reement 'it# etSmart
C#arities, Inc., a =.S. c#aritable or$ani0ation related t#rou$# common mana$ement. 1#e a$reement
documents prior practice '#ereby etSmart C#arities, Inc. pro,ided certain mana$ement ser,ices at cost
to t#e "r$ani0ation. 1#e "r$ani0ation recorded mana$ement fees of appro-imately @1!;,000 and @&&,000
for t#e years ended February 2, 2014, and February 3, 2013, respecti,ely, to etSmart C#arities, Inc. 1#e
transactions occurred at mutually a$reed rates and 'ere recorded at t#e respecti,e e-c#an$e amounts
t#rou$#out t#e year.
Recei,ables from etSmart C#arities, Inc. of @1,230 at February 2, 2014, and @1,443 at February 3, 2013,
represent employee donations and sponsors#ips, respecti,ely, recei,ed by etSmart C#arities, Inc. on
be#alf of t#e "r$ani0ation and $enerally, are paid one 2uarter in arrears.
1#e amounts payable to etSmart, Inc. and etSmart C#arities, Inc. are unsecured, non/interest bearin$
and recorded as current. Amounts payable to etSmart, Inc. are $enerally remitted one mont# in arrears
and amounts payable to etSmart C#arities, Inc. are $enerally remitted one 2uarter in arrears.
NOTE # 0 COMMITMENTS AN' CONTIN)ENCIES
1#e "r$ani0ation ma4es commitments to certain c#aritable or$ani0ations for future $rants, '#ic# are
contin$ent future installments of a current year. 1#e $rants are contin$ent upon t#e continued fulfillment
of t#e ori$inal conditions in t#e $rant re2uest. As of February 2, 2014, t#e "r$ani0ation #as appro-imately
@144,1(0 in commitments for future contin$ent $rants.
doc_364033044.pdf
PetSmart Charities of Canada ("Organization") is a registered charity incorporated under letters patent under the Canada Corporations Act in 1987 and is exempt from tax under the provisions of the Income Tax Act (Canada).
Financial Statements and
Independent Auditor’s Report
PetSmart Charities of Canada
February 2, 2014 and February 3, 2013
Contents
Page
Independent Auditor’s Report 3
Statements of Financial osition !
Statements of "perations and C#an$es in %et Assets &
Statements of Cas# Flo's (
%otes to Financial Statements )
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
3
Grant Thornton LLP
2398 E. Camelback Road
Suite !!
"hoeni#$ %& 8'!(
T !2.)*).3)!!
+ !2.*)*.3)2(
,,,.GrantThornton.com
Independent Auditor’s Report
*embers
etSmart C#arities of Canada
+e #a,e audited t#e accompanyin$ financial statements of etSmart C#arities of Canada, '#ic# comprise
t#e statements of financial position as at February 2, 2014 and February 3, 2013, and t#e statements of
operations and c#an$es in net assets, and cas# flo's for t#e years ended February 2, 2014 and February 3,
2013, and a summary of si$nificant accountin$ policies and ot#er e-planatory information.
Management’s responsibility for the financial statements
*ana$ement is responsible for t#e preparation and fair presentation of t#ese financial statements in
accordance 'it# Canadian accountin$ standards for not/for/profit or$ani0ations, and for suc# internal
control as mana$ement determines is necessary to enable t#e preparation of financial statements t#at are
free from material misstatement, '#et#er due to fraud or error.
Auditor’s responsibility
"ur responsibility is to e-press an opinion on t#ese financial statements based on our audits. +e conducted
our audits in accordance 'it# Canadian $enerally accepted auditin$ standards. 1#ose standards re2uire t#at
'e comply 'it# et#ical re2uirements and plan and perform t#e audit to obtain reasonable assurance about
'#et#er t#e financial statements are free from material misstatement.
An audit in,ol,es performin$ procedures to obtain audit e,idence about t#e amounts and disclosures in
t#e financial statements. 1#e procedures selected depend on t#e auditor’s 3ud$ment, includin$ t#e
assessment of t#e ris4s of material misstatement of t#e financial statements, '#et#er due to fraud or error.
In ma4in$ t#ose ris4 assessments, t#e auditor considers internal control rele,ant to t#e entity’s preparation
and fair presentation of t#e financial statements in order to desi$n audit procedures t#at are appropriate in
t#e circumstances, but not for t#e purpose of e-pressin$ an opinion on t#e effecti,eness of t#e entity’s
internal control. An audit also includes e,aluatin$ t#e appropriateness of accountin$ policies used and t#e
reasonableness of accountin$ estimates made by mana$ement, as 'ell as e,aluatin$ t#e o,erall presentation
of t#e financial statements.
+e belie,e t#at t#e audit e,idence 'e #a,e obtained in our audits is sufficient and appropriate to pro,ide
a basis for our audit opinion.
Grant Thornton LLP
U.S. member firm of Grant Thornton International Ltd
4
Opinion
In our opinion, t#e financial statements present fairly, in all material respects, t#e financial position of
etSmart C#arities of Canada as at February 2, 2014 and February 3, 2013, and t#e results of its operations
and its cas# flo's for t#e years ended February 2, 2014 and February 3, 2013, in accordance 'it# Canadian
accountin$ standards for non/for/profit or$ani0ations.
#oeni-, Ari0ona
5uly ), 2014
ASSETS
2014 2013
CURRENT ASSETS
Cash 1,753,948 $ 1,162,827 $
Receivable f!" #e$S"a$, %&c' 238,000 241,295
Receivable f!" #e$S"a$ Chai$ies, %&c' 1,230 1,443
($he eceivables 1,760 )
#e*ai+ e,*e&ses ) 2,352
T(TA- CURRENT ASSETS 1,994,938 1,407,917
($he asse$s, &e$ 254,202 323,529
T(TA- ASSETS 2,249,140 $ 1,731,446 $
-%A.%-%T%ES AN/ NET ASSETS
CURRENT -%A.%-%T%ES
Acc!0&$s *a1able a&+ acc0als 332,551 $ 42,053 $
#a1able $! #e$S"a$ Chai$ies, %&c' 65,694 31,095
#a1able $! #e$S"a$, %&c' 25,748 110,674
T(TA- CURRENT -%A.%-%T%ES 423,993 183,822
NET ASSETS
(*ea$i&2 f0&+ ) 0&es$ic$e+ 1,825,147 1,547,624
T(TA- -%A.%-%T%ES AN/ NET ASSETS 2,249,140 $ 1,731,446 $
PetSmart Charities of Canada
STATEMENTS OF FINANCIAL POSITION
February 2, 20! and February ", 20"
The acc!"*a&1i&2 &!$es ae a& i&$e2al *a$ !f $hese fi&a&cial s$a$e"e&$s'
5
2014 2013
RE3ENUES
%&+ivi+0al c!&$ib0$i!&s 2,614,881 $ 1,604,320 $
#e$S"a$, %&c' c!&$ib0$i!&s 4i&cl0+i&2 c!&$ib0$e+
e&$, 2!!+s a&+ sevices a&+ !1al$1 i&c!"e5 975,482 885,060
S*ecial eve&$ 172,066 145,113
C!*!a$e a&+ ve&+! c!&$ib0$i!&s 35,000 35,000
%&$ees$ 8,975 4,233
T!$al eve&0e 3,806,404 2,673,726
E6#ENSES
#!2a" sevices7
A&i"al 8elfae !2a&i9a$i!& 2a&$s 1,722,213 735,998
($he *!2a" e,*e&ses 1,327,352 1,009,360
T!$al *!2a" sevices 3,049,565 1,745,358
S0**!$i&2 sevices7
:0&+aisi&2 276,141 97,972
;a&a2e"e&$ a&+ a+"i&is$a$i!& 203,175 75,143
T!$al s0**!$i&2 sevices 479,316 173,115
T(TA- E6#ENSES 3,528,881 1,918,473
E,cess !f eve&0e !ve e,*e&ses 277,523 755,253
NET ASSETS, .E<%NN%N<
=EAR 1,547,624 792,371 NET ASSETS, EN/
=EAR 1,825,147 $ 1,547,624 $ STATEMENTS OF OPE#ATIONS AN$ C%AN&ES IN NET ASSETS
For the 'ears Ended February 2, 20! and February ", 20"
PetSmart Charities of Canada
The acc!"*a&1i&2 &!$es ae a& i&$e2al *a$ !f $hese fi&a&cial s$a$e"e&$s'
6
2014 2013
Cash fl!8s f!" !*ea$i&2 ac$ivi$ies
E,cess !f eve&0e !ve e,*e&+i$0es 277,523 $ 755,253 $
A"!$i9a$i!& !f lice&se a2ee"e&$ 69,327 23,109
Cha&2es i& !*ea$i&2 asse$s a&+ liabili$ies
/ecease 4i&cease5 i&7
Receivable f!" #e$S"a$, %&c' 3,295 4225,4455
Receivable f!" #e$S"a$ Chai$ies, %&c' 213 43895
($he eceivables 41,7605 3,200
#e*ai+ e,*e&ses 2,352 41,3275
($he asse$s ) 4346,6385
%&cease 4+ecease5 i&7
Acc!0&$s *a1able a&+ acc0als 290,498 5,173
#a1able $! #e$S"a$ Chai$ies, %&c' 34,599 5,901
#a1able $! #e$S"a$, %&c' 484,9265 110,674
/efee+ eve&0e ) )
Ne$ cash *!vi+e+ b1 !*ea$i&2 ac$ivi$ies 591,121 329,511
Cash, be2i&&i&2 !f 1ea 1,162,827 833,316
Cash, e&+ !f 1ea 1,753,948 $ 1,162,827 $
N!&)cash $a&sac$i!&s
C!&$ib0$e+ e&$, 2!!+s a&+ sevices 889,639 $ 820,877 $
PetSmart Charities of Canada
STATEMENTS OF CAS% FLO(S
For the 'ears Ended February 2, 20! and February ", 20"
The acc!"*a&1i&2 &!$es ae a& i&$e2al *a$ !f $hese fi&a&cial s$a$e"e&$s'
7
PetSmart Charities of Canada
NOTES TO FINANCIAL STATEMENTS
February 2, 2!" and February #, 2!#
)
NOTE ! 6 NAT$%E OF ACTI&ITIES AN' S$MMA%( OF SI)NIFICANT ACCO$NTIN)
POLICIES
Nature of a*ti+ities 6 etSmart C#arities of Canada 78"r$ani0ation9: is a re$istered c#arity incorporated
under letters patent under t#e Canada Corporations Act in 1
( and is e-empt from ta- under t#e pro,isions of t#e Income 1a- Act 7Canada:. In t#e current fiscal year t#e "r$ani0ation completed a le$al
reor$ani0ation to comply 'it# t#e Canada %ot/for/profit Corporations Act. As a result t#e "r$ani0ation
establis#ed one member, etSmart C#arities, Inc., a related party, as its sole member.
1#e "r$ani0ation’s mission is to impro,e t#e 2uality of life for all companion animals by creatin$ and
supportin$ pro$rams t#at sa,e t#e li,es of #omeless pets and promote #ealt#y relations#ips bet'een
people and pets.
Summary of Signifi*ant A**ounting Po,i*ies
-asis of re.orting 6 1#e "r$ani0ation #as prepared t#ese financial statements in accordance 'it#
Canadian Accountin$ Standards for %ot/for/rofit "r$ani0ations 78AS%"9:, '#ic# are a part of
Canadian $enerally accepted accountin$ principles 78<AA9:. 1#ese financial statements reflect t#e
assets, liabilities, sources of financin$ and e-penditures of t#e "peratin$ Fund and use t#e deferral met#od
of accountin$ for contributions. All amounts are stated in Canadian dollars.
Fis*a, year 6 1#e "r$ani0ation’s fiscal year ends on t#e Sunday nearest 5anuary 31st. 1#e fiscal years
ended in 2014 and 2013 comprised !2 and !3 'ee4s, respecti,ely.
%e+enue and e/.ense re*ognition 0 =nrestricted $eneral donations are reco$ni0ed as re,enue of t#e
"peratin$ Fund in t#e year recei,ed. >onor contributions, '#ic# #a,e e-ternally imposed restrictions
suc# t#at t#ey must be used for e-penses of a future period, are deferred and recorded as re,enue of t#e
"peratin$ Fund as t#e related e-penses are reco$ni0ed. =nrestricted interest and ot#er in,estment income
are reco$ni0ed as re,enue '#en earned.
?-penses are reco$ni0ed '#en an e-penditure or pre,iously reco$ni0ed asset does not #a,e future
economic benefit, t#ere is an appropriate basis of measurement and a reasonable estimate of t#e amount
in,ol,ed can be made. 1#e costs of pro,idin$ t#e ,arious pro$rams and ot#er acti,ities of t#e
"r$ani0ation #a,e been summari0ed on a functional basis. Accordin$ly, certain costs #a,e been allocated
amon$ t#e pro$rams and supportin$ ser,ices benefited based on personnel acti,ity and ot#er appropriate
allocation met#ods.
1#e "r$ani0ation earns royalty income from certain campai$ns in '#ic# intellectual property of t#e
"r$ani0ation is licensed and reco$ni0ed as re,enue as t#ey accrue in accordance 'it# t#e terms of t#e
rele,ant a$reement.
Contributed ser+i*es and in12ind donations 0 1#e fair ,alue of contributed materials, ser,ices and
store space t#at 'ould ot#er'ise #a,e to be purc#ased is reco$ni0ed as re,enue 'it# a correspondin$
e-penditure. 1#e "r$ani0ation recorded appro-imately @);0,000 and @)21,000 for t#e years ended
February 2, 2014, and February 3, 2013, respecti,ely, of contributed rent, ot#er $oods and ser,ices,
supplies, office space, utilities, and mana$ement personnel 7see %ote 2:.
PetSmart Charities of Canada
NOTES TO FINANCIAL STATEMENTS 1 CONTIN$E'
February 2, 2!" and February #, 2!#
;
NOTE ! 0 NAT$%E OF ACTI&ITIES AN' S$MMA%( OF SI)NIFICANT ACCO$NTIN)
POLICIES 3*ontinued4
Cash 6 Cas# includes cas# deposits in ban4s. 1#e Canadian >eposit Insurance Corporation 78C>IC9:
insures all deposits #eld in Canadian ban4s up to @100,000. Any amount abo,e t#is 'ould be uninsured
and sub3ect to ris4. 1#ere 'as appro-imately @1,1(!,000 of uninsured deposits as of February 2, 2014.
1#e "r$ani0ation’s cas# accounts 'ere placed 'it# #i$#/credit/2uality financial institutions, and
accordin$ly, t#e "r$ani0ation does not e-pect to e-perience non/performance.
Other assets 6 "t#er assets are comprised of a licensin$ a$reement, '#ic# is carried at cost, net of any
related amorti0ation. Amorti0ation is bein$ reco$ni0ed o,er t#e fi,e/year a$reement term 7see %ote 2:.
Finan*ia, instruments 1 re*ognition and measurement
Initial measurement
1#e "r$ani0ation’s financial instruments are measured at fair ,alue '#en issued or ac2uired. For financial
instruments subse2uently measured at cost or amorti0ed cost, fair ,alue is ad3usted by t#e amount of t#e
related financin$ fees and transaction costs. 1ransaction costs and financin$ fees relatin$ to financial
instruments t#at are measured subse2uently at fair ,alue are reco$ni0ed in operations in t#e year in '#ic#
t#ey are incurred.
Subsequent measurement
At eac# reportin$ date, t#e "r$ani0ation measures its financial assets and liabilities at cost or amorti0ed
cost 7less impairment in t#e case of financial assets:. 1#e financial instruments measured at cost are cas#,
accounts payable, and accruals and amounts due to and from related parties.
For financial assets measured at cost or amorti0ed cost, t#e "r$ani0ation re$ularly assesses '#et#er t#ere
are any indications of impairment. If t#ere is an indication of impairment, and t#e "r$ani0ation determines
t#at t#ere is a si$nificant ad,erse c#an$e in t#e e-pected timin$ or amount of future cas# flo's from t#e
financial asset, it reco$ni0es an impairment loss in t#e statement of operations. Any re,ersals of pre,iously
reco$ni0ed impairment losses are reco$ni0ed in operations in t#e year t#e re,ersal occurs.
$se of estimates 6 1#e preparation of t#e "r$ani0ation’s financial statements re2uires mana$ement to
ma4e estimates and assumptions. 1#ese estimates and assumptions affect t#e reported amounts of assets
and liabilities and t#e disclosure of contin$ent assets and liabilities at t#e date of t#e financial statements
and t#e reported amounts of re,enues and e-penses durin$ t#e reportin$ period. Actual results could
differ from t#ose estimates.
PetSmart Charities of Canada
NOTES TO FINANCIAL STATEMENTS 1 CONTIN$E'
February 2, 2!" and February #, 2!#
10
NOTE 2 0 T%ANSACTIONS 5IT6 PETSMA%T, INC7 AN' PETSMA%T C6A%ITIES, INC7
1#e follo'in$ re,enue amounts 'ere recei,ed from etSmart, Inc. and are included in total re,enue in
t#e accompanyin$ statements of operations and c#an$es in net assetsA
February 2,
2014
February 3,
2013
Contributed rent, ot#er $oods and ser,ices, supplies,
office space, utilities, and mana$ement personnel
@ ))!,&3;
@ )20,)((
Contributed product and supplies 4,000 /
Royalty income )!,)43 &4,1)3
@ ;(!,4)2
@ ))!,0&0
Contributed rent, ot#er $oods and ser,ices, supplies, and utilities for pet adoption centers 'ere recei,ed
from etSmart, Inc. Be$innin$ in fiscal year ended 2014, amounts for office space and mana$ement
personnel #a,e also been included in t#e contributions recei,ed from etSmart, Inc. Contributions #a,e
been included in t#e accompanyin$ statements of operations and c#an$es in net assets based on t#e type
of support recei,ed from etSmart, Inc.A
February 2,
2014
February 3,
2013
"t#er pro$ram e-penses
@ )3!,&11
@ )20,)((
Fundraisin$ 3),(0( /
*ana$ement and administration 11,321 /
@ ))!,&3;
@ )20,)((
1#e "r$ani0ation is #i$#ly dependent upon t#e ,iability of etSmart, Inc. as t#is is t#e primary source of
donated re,enue recei,ed in t#e stores from customers and from etSmart, Inc. employees. Royalty
income is $enerated on specific campai$ns '#ere t#e "r$ani0ation recei,es a percenta$e of t#e purc#ase
price on selected merc#andise items sold in etSmart, Inc. stores t#at bear its trademar4 durin$ a certain
timeframe. 1#ese transactions occurred at rates as mutually a$reed and 'ere recorded at fair mar4et ,alue.
In fiscal year ended 2013, t#e "r$ani0ation entered into a license a$reement 'it# etSmart, Inc. for t#e
usa$e of its pin pad system. 1#e transaction 'as measured at t#e e-c#an$e amount paid by t#e
"r$ani0ation, '#ic# is recorded in ot#er assets on t#e statements of financial position. 1#is asset is carried
at cost, net of any related amorti0ation. Amorti0ation is bein$ reco$ni0ed o,er t#e fi,e/year term of t#e
a$reement.
February 2,
2014
February 3,
2013
Cicense a$reement
@ 323,!2;
@ 34&,&3)
Cess accumulated amorti0ation 7&;,32
723,10;: @ 2!4,202
@ 323,!2;
PetSmart Charities of Canada
NOTES TO FINANCIAL STATEMENTS 1 CONTIN$E'
February 2, 2!" and February #, 2!#
11
NOTE 2 0 T%ANSACTIONS 5IT6 PETSMA%T, INC7 AN' PETSMA%T C6A%ITIES, INC7
3Continued4
1#e amounts due from etSmart, Inc. are unsecured, non/interest bearin$, currently due and represent
employee donations, store bo- re,enue, pin pad, and etSmart donations, '#ic# 'ere not remitted to t#e
"r$ani0ation at year/end.
In fiscal year ended 2014, t#e "r$ani0ation entered into a mana$ement ser,ices a$reement 'it# etSmart,
Inc. to cost/effecti,ely outsource certain business and administrati,e mana$ement ser,ices. 1#e fees paid
to etSmart are capped annually and t#e ,alue of contributed rent, ot#er $oods and ser,ices, supplies,
office space, utilities, and mana$ement personnel recei,ed by t#e "r$ani0ation under t#e a$reement
e-ceeds t#e payments made to etSmart, Inc. 1#e "r$ani0ation incurred @11!,&00 of e-penses for t#e
year ended February 4, 2014, recorded to ot#er pro$ram e-penses and fundraisin$ totalin$ @(1,(0; and
@43,;!1, respecti,ely. 1#ese ser,ices 'ere measured at t#e fair ,alue of t#e outsourced ser,ices and
allocated based on personnel acti,ity.
In fiscal year ended 2014, t#e "r$ani0ation entered into a mana$ement ser,ices a$reement 'it# etSmart
C#arities, Inc., a =.S. c#aritable or$ani0ation related t#rou$# common mana$ement. 1#e a$reement
documents prior practice '#ereby etSmart C#arities, Inc. pro,ided certain mana$ement ser,ices at cost
to t#e "r$ani0ation. 1#e "r$ani0ation recorded mana$ement fees of appro-imately @1!;,000 and @&&,000
for t#e years ended February 2, 2014, and February 3, 2013, respecti,ely, to etSmart C#arities, Inc. 1#e
transactions occurred at mutually a$reed rates and 'ere recorded at t#e respecti,e e-c#an$e amounts
t#rou$#out t#e year.
Recei,ables from etSmart C#arities, Inc. of @1,230 at February 2, 2014, and @1,443 at February 3, 2013,
represent employee donations and sponsors#ips, respecti,ely, recei,ed by etSmart C#arities, Inc. on
be#alf of t#e "r$ani0ation and $enerally, are paid one 2uarter in arrears.
1#e amounts payable to etSmart, Inc. and etSmart C#arities, Inc. are unsecured, non/interest bearin$
and recorded as current. Amounts payable to etSmart, Inc. are $enerally remitted one mont# in arrears
and amounts payable to etSmart C#arities, Inc. are $enerally remitted one 2uarter in arrears.
NOTE # 0 COMMITMENTS AN' CONTIN)ENCIES
1#e "r$ani0ation ma4es commitments to certain c#aritable or$ani0ations for future $rants, '#ic# are
contin$ent future installments of a current year. 1#e $rants are contin$ent upon t#e continued fulfillment
of t#e ori$inal conditions in t#e $rant re2uest. As of February 2, 2014, t#e "r$ani0ation #as appro-imately
@144,1(0 in commitments for future contin$ent $rants.
doc_364033044.pdf