FINANCIAL STATEMENTS IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS AND OMB CIRCULARA-133 DECEMBER 31, 2011 TOGETHER WITH INDEPENDENT AUDITOR'S REpORT PLANET AID, INC. CONTENTS DECEMBER 31, 2011 PAGES UNQUALIFIED OPINION ON FINANClAL STATEMENT S AND SUPPLEMENTARY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS - NOT-FOR-PROFIT ORGANIZATION ............................................................ l-lA FINANClAL STATEMENTS: Statement ofFinancial Position ................................................................................................. .. 2 Statement of Activities and Changes in Net Assets ................................................................... .. 3 Statement of Cash Flows ........................................................................................................... .. 4 Statement ofFunctional Expenses .............................................................................................. . 5 Notes to Financial Statements .................................................................................................... . 6 - 13 SUPPLEMENTARY SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS NOT-FOR-PROFIT ORGANIZATION ............................................................................... .. 14 REPORT ON INTERNAL CONTROL OVER FINANClAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANClAL STATEMENT S PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ....................................................................... .. 15 - 16 REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERlAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 ........................................................................................................ .. 17 - 18 SCHEDULE OF FINDINGS AND QUESTIONED COSTS .................................................... . 19 Alexander, Aronson, Firming & Co., P.C. 21 East Main Street, Westborough, MA 01581-1461 (508) 366-9100 Boston, MA (617) 205-9100 Wellesley, MA (781) 965-9100 www.aafcpa.com FAX (S08) 366-9789 info@aafcpa.com CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS Where Every Client Is A Valued Client UNQUALIFIED OPINION ON FINANClAL STATEMENT S AND SUPPLlEMENTARY SCHEDULE OF EXPENDITURES OF FEDERAL AW ARDS NOT-FOR·PROFIT ORGANIZATION Independent Auditor's Report To the Board ofDireetors of Planet Aid, Inc.: We have audited the aceompanying statement offinaneial position ofPlanet Aid, Ine. (a Massachusetts corporation, not for profit) (the Organization) as ofDecember 31,2011, and the related statements of activities, cash flows, and functional expenses for the year then ended. These financial statements are the responsibiIity ofthe Organization's management. Our responsibility is to express an opinion on these financial statements based on our audit. We eonducted our audit in aeeordance with auditing standards generally aeeepted in the United States af America and the standards applicable to financial audits eontained in Government Auditing Standards, is sue d by the Comptroller General ofthe United States. Those standards require that we plan and perfonn the audit to obtain reasonable assurance about whether the financial statements are free of materiaI mis statement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the aecounting principles used and the significant estimates made by management, as well as evaluating the overall fmaneial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to ab ove present fairly, in all material respects, the financial position of Planet Aid, Ine. as of December 31, 2011, and the ehanges in its net assets and its eash flows for the year then ended in confonnity with accounting prineiples generally aceepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our repart dated April 19, 2012, on our consideration af Planet Aid, Inc.' s intern al control over financial repOliing and 011 our tests of its compliance with certaill provisions of Iaws, regulations, contracts, and grant agreements and other matters. The purpose of that rep Oli is to describe the scope of our testing af intern al control over financial repOliing and compliance and the results ofthat testing, and not to provide an opinion an the internal control over financial reporting 01' on compliance. That repoli is an integral pmi af an audit performed in accordance with Government Auditing Standards and should be eonsidered in assessing the results af our audit. -1- The Board ofDireetors of Planet Aid, Ine. Page II Our audit was conducted for the purpose af forming an opinion on the financial statements as a whole. The accompanying supplementary schedule of expenditures offederal awards not-for-profit organization is presented for purposes af additional analysis as required by the U.S. Office ofManagement and Budget Circular A-133, Audits ofStates, Loeal Governments, and Non-Profit Organizations, and is not a required part ofthe financial statements. Such information is the responsibility ofmanagement and was derived from and relates direetly to the underlyiIlg accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit ofthe financial statements and certain other procedures, inc1uding comparing and reconciling such infonnation directly to the underlying accounting and other records used to prepare the financial statements Ol' to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary schedule of expenditures offederal awards - not-for-profit organization is faidy stated in allmaterial respects in relation to the financial statements as a whole. '1 ( V I !" ~ /}J4}1JAJ I " ' (," • Wes 5rougll, Massachusetts April 19, 2012 ) I I - lA- PLANET Am, INC. STATEMENT OF FINANClAL POSITION DECEMBER 31, 20n ASSETS CURRENT ASSETS: Cash and cash equivalents: Unrestricted cash and cash equivalents Restricted cash and cash equivalents $ 2,278,804 3,610,368 5,889,172 Total cash and cash equivalents Accounts receivable clothing and other goods, net of allowance for doubtful accounts of$50,000 Inventories Prepaid expenses and other 960,150 356,965 741,230 7,947,517 Total current assets 130,313 SECURITY DEPOSITS PROPERTY AND EQUIPMENT, net 6,194,667 $ 14,272,497 Total assets LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Current portion ofnote8 payable Current portion of capitallease obligations Accounts payable Accrued expenses and other Grant payable Deferred rent Deferred revenue $ 213,862 994,335 758,182 417,270 975,000 139,119 Total cunent liabilities 7,134,260 NOTES PAYABLE, net of current portion 1,125,733 CAPITAL LEASE OBLIGATIONS, net of current portion Totalliabilities NET ASSETS: Unrestricted: Operating Property and equipment 1,703,366 3,501,930 Total unrestricted net assets Totalliabilities and net assets The accompanying notes are an integral part ojthese statements. -2- PLANET AID, INC. STATEMENT OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED DECEMBER 31,2011 OPERATING REVENUE: Sales of donated clothing and other goods Contracts - Federal Other contributions Interest and other revenue Totaloperating revelme $ 31,431,821 5,346,995 659,508 409,197 37,847,521 OPERATING EXPENSES: Program services General and administrative Fundraising and development 31,009,123 3,231,828 2,739,428 Totaloperating expenses 36,980,379 Changes in unrestricted net assets from operations 867,142 NON-OPERATING REVENUE: Foreign currency loss (111,381) Changes in unrestricted net assets 755,761 4,449,535 NET ASSETS, beginnillg ofyear $ 5,205,296 NET ASSETS, end of year The accompanying notes are an integral part af these statements. -3- PLANET AID, [NC. STATEMENT OF CASH FLOWS FOR TRE YEAR ENDED DECEMBER 31, 20U CASH FLOWS FROM OPERA TING ACTIVITIES: Cllanges in unrestricted net assets $ Adjustments to rcconcile changes in net assets to net cash provided by operating activities: Depreciation Bad debts Net gain on sales and disposals ofproperty and equipment Changes in operating assets and liabilities: Accounts receivable - c10thing and other goods Accounts receivable - commodities Inventories Prepaid expenses and other Security depasits Accounts payablc Accrued expenses and other Grant payable Deferred rent Deferred revenue 755,761 1,087,630 10,679 (11,767) (186,466) 1,856,250 (3,699) (313,027) (538) 47,623 (375,201) 975,000 78,585 1,441,451 Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVlTIES: Proceeds from sales of property and equipment Acquisition ofproperty and equipment 16,380 (322,635) (306,255) Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from notes payable Principal payments on notes payable Principal payments on capitallease obligations 608,301 (68,908) (1,185,095) Net cash used in financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS 4,410,324 CASH AND CASH EQUIVALENTS, bcginning ofyear 1,478,848 CASH AND CASH EQUIVALENTS, end ofyear $ 5,889,172 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for interest SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS: Cost basis of property and equipment disposed Purchase of propcrty and equipmcnt financed with notes payable obligations $ Purchase af property and equipment financed with capitallease obligations $ 1,027,233 Soy and wheat products received from USDA grants The accol1lpanying notes are an illtegral part ofthese statements. -4- 800,202 PLANET AID, INe. STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR El\~ED DECEMBER 31,2011 PROGRAM SERVICES U.S. CLOTHING INTERNATIONAL TRAININGAND COLLECTION ANDHABITAT CAPACITY INTERNATIONAL PROTECTION BUILDING AID INTERNATIONAL AND LOCAL AID $ 122,842 $ $ 9,858,683 TOTAL PROGRAM SERVICES $ 9,981,525 GENERAL AND ADMINISTRATIVE FUNDR4.ISING AND DEVELOPMEl"lT ~981,525 $ $ TOTAL CLOTHING COLLECTION AND RECYCLING: Vehicle costs Contractor transportation Collection container costs Other clothing collection costs Site finding costs 3,207,723 1,609,866 451,738 274,399 70,865 3,207,723 1,609,866 451,738 274,399 70,865 ~867 3,263,093 1,609,866 903,475 274,399 141.732 Total c10thing collection and recyc1il1g 5,614,591 5,614,591 577,974 _ _6_,192,565 PERSONNEL AL~D RELATED: Payroll Employee benefits Payroll taxes Contract labor 7,506,419 878,969 763,169 146,659 Total personnel and related OTHER: Occupancy Shipping and bailing Depreciation Sales conul1issions Repairs and maintenance Membership fees Professional services Office Trave] and lodging Insurance Interest Telephone Bank charges Miscellaneous Advertising Bad debts Totalother Totaloperating expenses 88,289 55,370 451,737 9,518 26,469 7,594,708 878,969 772,687 173,128 1,215,470 208,588 110,665 10,002 1,037,489 67,563 107,665 152,531 9,847,667 1,155,120 991,017 335,661 9,295,216 124,276 9,419,492 1,544,725 1,365,248 ]2,329,465 1,550,060 1,064,579 550,228 917,157 470,114 15,502 1,565,562 1,217,004 550,228 1,086,657 470,114 61,236 16,742 121,780 415,622 1,643,540 1,217,004 1,087,630 1,086,657 659,079 623,357 581,51 404,121 316,940 295,820 229,124 204,843 78,478 19,879 18,162 10,679 141,531 167,917 233,130 170,830 111,529 177,503 9,072 19,204 12,657 10,679 152,425 169,500 15,403 21,969 2 6,951 3,579 94 1,900 141,531 183,320 255,099 170,830 111,531 184,454 12,651 19,298 14,557 10,679 188,965 623,357 439,980 196,976 50,333 103,008 6,149 15,616 65,827 518 2,323 23,825 11,508 21,982 111,444 4,773 63 1,282 5,606,190 61,821 325,504 5,993,515 1,687,103 ~206 8,476,824 $ 20,638,839 $ 186,097 $ 10,184,187 $ 31,009,123 $ 3,231,828 $ 2,739,428 $ 36,980,379 The accompanying notes are an integral part of these statements. -5- PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2011 (1) OPERATIONS, NONPROFIT STATUS AND SIGNIFICANT ACCOUNTING POLICIES OPERATIONS AND NONPROFIT STATUS Planet Aid, Ine. (the Organization) supports development projeets throughout the world, promotes intemational exehange and education, suppOlis reeyeling and habhat proteetion, and supports emergeney and disaster relief programs. The Organization's reveJmes are derived from used elothing eontributions, govemment eontraets, corporate grants, and private eontributions. The Organization is exempt from Federal income taxes as an organization (not a private foundation) fonned for charitable purposes under Section SOl(e)(3) ofthe Intemal Revenue Code. The Organization is also exempt from state ineome taxes. Donors may deduct eontributions made to the Organization within Intemal Revenue Code requirements. SIGNIFICANT ACCOUNTING POLICIES The Organization prepares Hs financial statements in aeeordanee with generally aeeepted accounting standards and principles established by the Financial Accounting Standards Board (FASB). References to D.S. GAAP in these footnotes are to the FASB Aeeounting Standards Codification. Revenue Reeognition and Deferred Revenue The Organization reeognizes sales of donated clothing and other goods when the risks and rewards of ownership have transferred to the eustomer, whieh is generally eonsidered to have oeeurred upon reeeipt of goods by the eustomer. The Organization recognizes eontraet revenue when the proeeeds ofthe sales of certain commodities under eontracts with the United States Department of Agriculture (USDA) (see Note 3) have been dis1ributed to organizations that perfonn HN/AIDS edueation and awareness programs, the training of rural primary sehool teachers, and agrieultural and nutrition training in Mozambique and Malawi. Deferred revenue represents amounts reeeived from the sales of commodities in excess of amounts expended for programs that extelld beyond the end of the Organization's fiscal year. Deferred revenue will be recogrJized as income as expenditures are ineurred. Unrestrieted grants and contributions, including used clothing and other goods, are reeorded as revenue when reeeived or unconditionally pledged. Restrieted grants and eontributions are reeorded as temporarily restricted revenues and net assets when reeeived ar uneonditionally pledged. Transfers are made to unrestrieted net assets as eosts are ineurred Ol' time restrietions or program restrictions have lapsed. Donor restrieted grants reeeived and satisfied in the same period are included in unrestrieted net assets. All other revenues are reeorded when they are eamed. The preparation offmaneial statements in aeeordanee with D.S. GAAP requires management to make estimates and assumptions that affeet the reported amounts of assets and liabilities and disclosure of eontingent assets and liabilities at the date ofthe frnaneial statements and the reported amounts of revenues and expenses during the reportil1g period. Aetual results eould differ from those estimates. -6- PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 20U (Continued) (1) OPERATIONS, NONPROFIT STATUS AND SIGNIFICANT ACCOUNTING POLlCIES (Continued) SIGNIFICANT ACCOUNTING POLICIES (Continued) Unrestricted net assets are those net resources that bear 110 extemal restrictions and are generally available for use by the Organization. The Organization has grouped its unrestricted net assets into the following categories: Operating net assets represent net assets which are available for operations and beat' no external restrictions. Property and equipment net assets represent amounts expended and resources available for propeliy and equipment, net af related debt. Expense Allocation Expenses related directly to a program are distributed to that program, while other expenses are allocated to programs based upon management's estimate ofthe percentage attributable to each function. During fiscal year 2011 the Organization modified its methodology for allocating indirect costs. The Organization follows the Accounting for Uncertainty in lncome Taxes standard, which requires the Organization to report uncertain tax positions, related interest and penalties, and to adjust its assets and liabilities related to unrecognized tax benefits and accrued interest and penalties accordingly. As of December 31, 2011, the Organization determined that there are no material unrecognized tax benefits to report. Inf011l1ation retu11lS filed for the past three years remain subject to examination by the Inte11lal Revenue Service and the Commonwealth ofMassachusetls. For the purpose ofthe statement of cash flows, management considers all highly liquid investments with an initial maturity of three months or less to be cash equivalents. Cash and cash equivalents include checking, savings, money market accounts, and an ove11light sweep account. Restricted cash and cash equivalents includes 401 Mozambican Meticals ($12 USD), 327,545,471 Malawi Kwachas ($2,000,259 USD), and $1,610,097, which are segregated and restricted for use in accordance with the USDA contract agreements (see Note 3). The Organization recognizes grants expense at the tinle the Board ofDirectors approves the awards and all significant conditions are met. At December 31, 2011, there was $975,000 of grants that had been awarded but not yet paid. -7- PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 20U (Continued) (1) OPERATIONS, NON PROFIT STATUS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) SIGNIFICANT ACCOUNTING POLICIES (Continued) Accounts receivable - c10thing and other goods are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is based on management's best estimate of probable credit losses in accounts receivable - clothing and other goods. The allowance is based on specific identification of probable losses and an estimate of additional10sses based 011 write-off experience. Management reviews the allowance for doubtful accounts weekly. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. Inventories Inventories consist ofused cIothing, shoes, books and household goods. These inventories are accounted for at the lower of cost (as determined by the first-in, first-out (FIFO) method) Ol' market. Propertv and Eguipment and Depreciation Purchased property and equipment are recorded at cost (see Note 2). Donated property and equipment are recorded at fair market value at the time of donation. Renewals and betterments are capitalized, while repair and maintenance are expensed as they are incurred. Depreciation is computed using the straight-line method (mid-month convention for additions) over the following estimated useful lives: Collection boxes Fumiture, fixtures and equipment Computers and vehicles Leasehold improvements 10 years 3 - 5 years 3 years 5 years The Organization expenses advertising costs as incurred. F oreign Currency Losses Transactions denominated in foreign currencies are translated to D.s. dollars using actual exchange rates at the time ofthe trans action, while assets and liabilities are translated at the exchange rate in effect at the repOliing date. The effect of change in exchange rates between the designated functional currency and the currency in which a transaction is denominated is recorded as a foreign currency 10ss on the accompanying statement of activities and changes in net assets. -8- PLANET AID, INe. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2011 (Continued) (1) OPERATIONS, NONPROFIT STATUS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) SIGNIFICANT ACCOUNTING POLICIES (Continued) ° The Organization receives contributed use ofland for its col1ection boxes. These services are reflected in the accompanying financiaI statements based upon the estimated value of $0. 1 per pound of clothing and other goods colIected, net of any payments made for the use ofthe space. The value recorded for the year ende d December 31, 2011, was $442,767. This amount is included in other contributions in the accompanying statement of activities and changes in net assets. Fair Value Measurements The Organization follows the Fair Value Measurements and Diselosures standards. These standards define fair value, establish a fraInework for measuring fair value under U.S. GAAP, and mandate disclosures about fair value measurements. This policy establishes a fair value hierarchy that prioritizes the inputs and assumptions used to measure fair value. The Organization values its qualifYing assets and liabilities using Level I inputs. Level I inputs reflect unadjusted quoted prices in active markets for identical assets 01' liabilities at the measurement date. A qualifYing asset or liability's level within the framework is based upon the lowest levelof any input that is significant to the fair value measurement. Subseguent Events Subsequent events have been evaluated through April 19, 2012, which is the date the fmancial statements were available to be issued (see Notes 3 and 12). (2) PROPERTY AND EQUIPMENT Property and eq uipment consist of the folIowing as of December 31, 2011: Collection boxes Fumiture, fixtures and equipment Computers and vehicles Leasehold improvements Less - accumulated depreciation $10,438,963 1,155,929 757,189 82,888 12,434,969 6,240,302 $ 6 194,667 (3) COMMODITIES The Organization received 10,000 metric tons ofwheat in 2011 n'om the USDA. The commodities were sold to distributors and Malawi under sales contracts whereby the distributors have already identified purchasers ofthe commodities. All sales were invoiced and payments received during 20 Il and no amounts were inc1uded as accounts receivable at December 31, 20 ll. -9- PLANET AID 9 INe. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2011 (Continued) (3) COMMODITIES (Continued) In 2011, the Organization recognized contract reveIlUe of$935,811 from the USDA to cover general and administrative expenses under a negotiable indirect cost reimbursement contract agreement. The Organization was awarded 93.8 metric tons of she1f-stable prepackaged food under a contract from United States Agency for International Development (USAlD). This food was transported and distributed to vulnerable populations in Zimbabwe in 2011. The food was valued at $233,000 on the date ofreceipt. The Organization was also awarded up to $125,000 from USAID to cover the related transportation and distribution costs. These amounts were recognized in fiscal year 2011, when the commodities were delivered to the recipients. The Organization was awarded an additional 112.56 metric tons of shelf-stable prepackaged food under a contract from USAID. This food is to be transported and distributed to vulnerable populations in Zimbabwe in2012. The food was valued at $279,599 on the date ofreceipt. The Organization was also awarded $124,998 from USAID to cover the related transportation and distribution costs. These amounts are expected to be recognized in fiscal year 2012, when the commodities are expected to be delivered to the recipients. Subsequent to year-end, the Organization received a commitment letter for a three-year commodity contract with the USDA for 4,200 metric tons of a com soy blend (CSB) valued at approximately $20 million dollars. The CSB will be used in conjunction with a school meal program in Mozambique administered by ADPP Mozambique. These contracts are subject to possibie audit by the appropriate government agencies. In the opinion of management, the results of such audits, if any, willnot have a material effect on the financial position of the Organization as of December 31, 2011, or on its assets for the year then ended. (4) LINE OF CREDIT The Organization has a line of credit with a bank that allows for bOlTowing up to $500,000 for short-tenn working capital, primarily to fmance eligible biIled receivables as described in the loan agreement. The line of credit bears interest at the bank's prime lending rate (3.25% at December 31,2011), plus 1.5%. The interest is payable monthly and all outstanding principal is due on demand. The line of credit expires on August 31,2012, and is renewable annuaIly. This note is secured by substantially all business assets of the Organization and is cross-collateralized and cross-defaulted with the $3,200,000 equipment note payable (see Note 5). There was no outstanding balance under this agreement at December 31, 20 ll. (5) NOTES P AYABLE The Organization has an equipment note payable with a bank. This note payable aIlows the Organization to borrow up to $3,200,000 for purchases ofup to 4,000 clothing collection bins. The balance drawn at December 31,2011, was $891,194. The note bears interest at the fixed rate of 5.75%. Interest only is payable monthly from June, 2011, through June, 2012, after which all unpaid principal and interest are due in sixty equal monthly payments through June, 20 l 7. The note is secured by substantially all business assets ofthe Organization and is cross-collateralized and cross-defaulted with the line ofcredit (see Note 4). The Organization must meet certain financial and non-financial covenants as specified in the agreement. All covenants have been met at December 31, 2011. 10 PLANET AID, INe. NOTES TO FINANClAL STATEMENTS DECEMBER 31,2011 (Continued) (S) NOTJ:<:S PAYABLE (Continued) The Organization has a note payable agreement with a foundation with an original principal balance of$517,309. The loan requires payments ofinterest only through July 1,2011. Monthly payments of$11,963 are due from July, 2011, through June, 2015. The interest amount for the first six instalIments will be calculated using a rate af 5.21 %. This rate will be adjusted each year to the Copenhagen Inter Bank Offered Rate (.9975% at December 31,2011), plus 4.0%. This note is unsecured. As of December 31, 2011, $448,40 l was outstanding under the agreement. Maturities of notes payable over the next five years are as follows: $213,862 $292,926 $309,408 $244,425 $194,546 2012 2013 2014 2015 2016 (6) CAPITAL LEASE OBLIGATIONS The Organization leases certain collection boxes and vehicles with an aggregate cost of $5,095,080 at December 31,2011, under capitallease agreements. Interest rates under these agreements range from approximately 4.9% to 12.5% per annum. The obligations mature on various dates through February, 2016. Future minimum lease payments under these agreements are as follows: $1,128,383 662,950 180,934 30,901 1,071 2012 2013 2014 2015 2016 Total future minimum payments Less amounts representing interest 2,004,239 202,696 Present value offuture minimum payments Less - current portion 1,801,543 994,335 $ 807208 For the year ende d December 31, 2011, depreciation expense on collection boxes and vehicles purchased under capitalleases was $535,823. At December 31,2011, accumulated depreciation on collection boxes and vehicles purchased under capitallease obligations was $1,915,433. - 11 - PLANET AID, INe. NOTES TO FINANClAL STATEMENTS DECEMBER 31,2011 (Continued) (7) LEASES The Organization rents facilities from third parties under operating lease agreements that expire at various dates through 2020. The Organization has the option to renew certain leases for additional periods of one to five years. The Organization also rents ce11ain facilities under tenant-at-will agreements. The Organization is required to pay monthly rent plus its pro-rata share of increases in property taxes and eommon area charges, where applicable. In accordance with the Accounting for Leases standards under U.S. GAAP, the Organization is recognizing rent expense on a straightline basis. Rent expense under these agreements for the year ended December 31, 20 Il, was $1,300,808, and is included in occupancy expense in the accompanying statement offllnctional expenses. As ofDecember 31,2011, accrued rent was $139,119 and is reflected as defelTed rent in the accompanying statement offmancial position. The Organization aIso rents vel1icles and equipment under operating lease agreements that expire at various dates through 2018. The agreements require the Organization to make minimum monthly payments of $64,760, plus mile age and other related charges. Rent expense under these agreements for the year ended December 31, 2011, was $777,116, and is included in vehicle costs, other clothing collections costs, and shipping and bailing in the accompanying statement offunctional expenses. Future minimum lease payments over the next five years, including the Organization's estimated share of operating expenses and real estate taxes, required under ce11ain non-cancelable operating leases, are as follows: 2012 2013 2014 2015 2016 (8) Facility Vehicles and Eguipment $957,939 $885,486 $762,476 $584,833 $400,271 $701,793 $651,536 $522,125 $360,888 $159,313 PENSION PLAN The Organization maintains a defmed contribution plan Cthe Plan) under Section 401(k) ofthe Intemal Revenue Code. The Plan covers substantially all eligible employees. Employees become eligible to participate after completing three months of service and attaining the age of 21. Employees may contribute up to 85% of eligible compensation, not to exceed Intemal Revenue Code lin1its. Employee contributions may be matched, at the discretion ofthe Board ofDirectors ofthe Organization. Employer contributions vest over a specific period as described in the Plan. The Organization elected not to match the employee's contributions that were made to the Plan during 2011. (9) AGENCY CONTRIBUTIONS Contributions provided by third parties that are required to be forwarded to other chafitable organizations specified by the dOllor are considered agency pass-through transactions and have not been recorded in the accompanying statement of activities and changes in net assets. - 12 - PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31,2011 (Continued) (9) AGENCY CONTRIBUTIONS (Continued) The Organization completed agency pas s-through contributions totaling $350,000 during fiscal year 20 ll. Agency pas s-through contributions received but not yet distributed to the respective charitable organization are recorded as unrestricted cash and cash equivalents and accounts payable on the accompanying statement offinancial position. These amounts totaled $249,826 as ofDecember 31, 2011. (10) CONCENTRATIONS The Organization maintains its cash and cash equivalents in several flnancial institutions. At various times throughout the year, the balances in these institutions exceeded the maximum amount of insurance provided by the Federal Deposit Insurance Carporation. Management monitors, on a regular basis, the financial condition ofthe financial institutions, and the Organization account balances to minimize potentiairisk. The Organization's cash and cash equivalents at December 31, 2011, held in Mozambique ($12 USD) and Malawi ($2,000,259 USD), which are restricted for use in accordance with the USDA contract agreements (see Note 3), are not covered by FDIC insurance and are subject to credit risk. The Organization has not experienced any losses in such accounts. The Organization believes it is not exposed to any signiflcant Cl'edit risk on its cash and cash equivalents. Approximately 21 % ofthe Organization's accounts receivable - clothing and other goods at December 31,2011, was due from two customers. Approximately 13% ofthe Organization's sales for the year ended December 31,2011, were to one customer. (11) CONTINGENCIES The Organization, from tinIe-to-time, is notified that it is the subject of inquiries initiated by various states in the United States af America. It is management's experience that the results of these infrequent actions wilI not have a material impact an the statement of financial position Ol' the statement af activities and changes in net assets ofthe Organization. Accordingly, no amounts have been reflected in the accompanying [mancial statements. (12) SUBSEQUENT EVENT Subsequent to year-end, the Organization made a $100,000 deposit as part of a purehase and sale agreement for the purehase of a warehouse facility in Massachusetts. The expected cost to acquire this building is $1.4 million. The Organization is currently perfonning due diligence on the facility, which includes exploring financing options to fund a portion ofthe acquisition. - 13 - PLANET AID, INe. SUPPLEMENTARY SCHEDULE OF EXPENDITURES OF FEDERAL A W ARDS NOT -FOR-PROFIT ORGANIZAnON FOR THE YEAR ENDED DECEMBER 31,2011 FEDERAL CFDA NUMBER FEDERAL GRANTORl PASS-THROUGH GRANTORl AGENCY DR PASS-THROUGH EXPENDJTURES U.S. Department of Agriculture: Passed through the Commodity Credit Corporation: F oreign F ood Aid Donation Cluster Food for Progress 10.606 FCC 612-2009/008-00 98.007 AID-FFP-G-l 0-00074 AID-FFP-G-11-00055 $5,101,061 U.S. Agency for International Development: Direct Program: Foreign Food Aid Donation Cluster Food for Peace Development Assistance Program TOTAL EXPENDITURES OF FEDERAL AWARDS NOTE 1. BASIS OF PRESENTATION The accompanying Schedule ofExpenditures af Federal Awards Not-Far-Profit Organization includes the Federal assistance activity ofthe Organization and is presented an the accrual basis af accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-l33, Al/dUs ofStates, Local Governments, and Non-Profit Organizations. NOTE 2. SUBRECIPIENTS Ofthe Federal expenditures presented in the above schedule, the Organization provided Federal awards to subrecipients as follows: Federal CFDA Number 10.606 98.007 Program or Cluster Tide Food for Progress Food for Peace Development Assistance Program Amount Provided to Subrecipients $4,826,151 435,046 t).>o~(i.L127 - 14 - Alexander Aronson Finning Alexander, Aronson, 8. Co., P.C. 21 Eas! Main Street, Westborough, MA 01581-1461 (608) 366-9100 Boston, MA (617) 205-9100 Wellesley, MA (781) 965-9100 www.aafcpa.com FAX (508) 366-9789 info@aafcpa.com CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS Where Every Client Is A Tlalued Client REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANClAL STATEMENT S PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board ofDirectors of Planet Aid, Ine.: We have audited the fmancial statements of Planet Aid, Ine. (the Organization) as of and for the year ended December 31, 2011, and have issued our report thereon dated Apri119, 2012. We conducted our audit in aceordanee with auditing standards generally aeeepted in the United States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General ofthe United States. Internal Control Over Financial Reporting In planning and perfonning our audit, we considered the Organization's intemal control over fmancial reporting as a basis for designing our auditing procedures for the purpose af expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness ofthe Organization's intemal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness ofthe Organization's intemal control over tinancial reporting. A deficieney in intemal control exists when the design Ol' operation of a control does not allow management Ol' employees, in the nonnal course of perfoffiling their assigned functions, to prevent Ol' detect and eorrect misstatements on a timely basis. A material weakness is a deiiciency, Ol' combination of deficiencies, in internal control, such that there is a reasonable possibility that a materialmisstatement of the Organization's consolidating fmancial statements will not be prevented, Ol' detected and corrected on a timely basis. Our consideration of intemal control over financial reporting was for the limited purpose described in the first paragraph ofthis section and was not designed to identiry all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies Ol' material weaknesses. We did not identiry any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. CompIiance and Other Matters As part of obtaining reasonable assurance about whether the Organization's fmancial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect 011 the detennination offinancial statement amounts. However, providing an opinion on compIiance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance ar other matters that are required to be reported under Gavernment Auditing Standards. - 15 - To the Board ofDirectors of Planet Aid, Ine. Page II This report is intended solely for the infonnation and use ofthe Board ofDirectors, management, others within the Organization, and Federal awarding agendes and pass-tln'ough entities and is not intended to be and should not be used by anyone other than these specified parties. ;'l L1i l /i ,/ ! I ;/,> p I v{t"n ('ij/~I " ,'J ·1 ) ", j W oroug~,_J\;!assach~ April 19, 2012 - 16 - Alexander, Arenson, Firming & Co,! P.C. 21 Eas! Main Street, Westborougil, MA 01581-1461 (508) 366-9100 Boston, MA (617) 205-9100 Wellesley, MA (781) 965-9100 www.aafcpa.com FAX (508) 366-9789 info@aafcpa.com CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS T17here Every Client Is A Tlalued Client REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERlAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMR CIRCULAR A-133 Independent Auditor's Report To the Board ofDirectors of Planet Aid, Inc.: Compliance We have audited the compliance ofPlanet Aid, Inc. (the Organization) with the types of compliance requirements described in the OMB Circular A-l33 Compliance Supplement that could have a direct and material effect an each ofthe Organization's major Federal programs for the year ende d December 31,2011. The Organization's major Federal programs are identified in the summary of auditor' s results section of the accompanying schedule of tindings and questioned costs. Compliance with the requirements oflaws, regulations, contracts, and grants applicable to each ofits major Federal programs are the responsibility ofthe Organization's management. Our responsibility is to express an opinion on the Orgallization's compliance based on our audit. We conducted our audit af compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States; and OMB Circular A-133, Audit.~ of States, Loeal Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perfonn the audit to obtain reasonable assurance about whether llollcompliance with the types of compliance requirements referred to above that could have a dh'ect and material effect on a major Federal program occurred. An audit includes examining, on a test basis, evidence about the Organization' s compiiance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does 110t provide a legal detennination ofthe Organization's compliance with those requirements. In our opinion, the Organization complied, in all material respects, with the compiiance requirements referred to above that co uld have a direct and material effect on each af its major Federal programs for the year ended December 31, 2011. - 17 To the Board ofDirectors of Planet Aid, Inc. Page II Internal Control Over Compliance Management ofthe Organization is responsibIe for establishing and maintauling effective mternal control over compliance with the requiremel1ts of laws, regulations, contracts, and grants applicable to Federal programs. In planning and performing our audit, we considered the Organization's internal control over compliance with the requirements that could have a direct and material effect an a major Federal program to deternlme the auditing procedures for the purpose of expressmg our oprnion on compIiance and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressmg an opinion on the effectiveness af internal control over compliance. Accordingly, we do not express an opinion an the effectiveness ofthe Organization's intern al control over compliance. A deficiency in illternal control over compliance exists when the design 01' operation of a control over compliance does not allow management 01' employees, in the nonnal course of performing their assigned functions, to prevent, 01' detect and correct, noncompliance with a type of compiiance requirement of a Federal program on a timely basis. A material weakness in internal control over COlllpiiance is a deficiency, 01' combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that lllaterial noncolllpliance with a type af cOlllpliance rcquirclllcnt of a Fedcral program will not be prevented, ar detectcd and corrected, an a tirnely basis. Our consideration of internal control over cOlllpliance was for the lilllited purpose described in the first paragraph ofthis section and was not designed to identif)r all deficiencies ill intern al control over cOlllpliance that might be deficiencies, significant deficiencies, ar lllaterial weaknesses. We did not identif)r any deficiencies in illternal control over compliance that we consider to be material weaknesses, as defmed above. °IT This rep art is illtended solely for the infonnation and use oflllanagement, the Board ofDirectors, Federal awardillg agencies, and pass-through entities and is not intended to bc and should not be used by anyone these specified parties. I ) Westborough, Massachusetts April 19, 2012 - 18 j PLANET AID, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS DECEMBER 31, 2011 I. SUMMARY OF AUDITOR'S RESULTS Financial Statements An unqualified opinion was issued an the fmancial statements ofthe auditee. Internal control over financial reporting: 41) (II Material weakness( es) identified? Ves Significant deficiency(ies) identified that are not considered to be material weaknesses? Ves None reported Ves No Noncompliance material to financial statements noted? X No Federal Awards' Internal control over major programs: ti .. Material weakness( es) identified? Ves X No Significant deficiency(ies) idel1tified that are not considered to be material weaknesses? Ves X None reported X No An unqualified opinion was issued on compliance for major programs. Any audit findings disclosed that are required to be reported in accordance with section 510(a) ofOMB Circular A-l33? Ves ldentification ofmajor programs: Federal CFDA Number Program or Cluster Title Foreign Food Aid Donation Cluster: Food for Progress Food for Peace Development Assistance Program 10.606 98.007 The dollar threshold used to distinguish between Type A and Type B programs was $300,000. Auditee qualified as low-risk auditee? II. x Ves FINANClAL STATEMENT FINDINGS IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS None III. No FINDINGS AND QUESTIONS COSTS .FOR FEDERAL AW ARDS None - 19 PVO Annual Submission 2009 1. PVO Information Name of Private Voluntary Organization (PVO): Planet Aid Acronym: Address 1: Address 2: City: State: Zipcode: Phone: Fax: Email: Web Site: EIN: DUNS: Incorporated: FYE: Holliston MA 01746 (508) 893-0644 (508) 893-0646 info@planetaid.org www.planetaid.org 043348171 110910064 1/28/1997 December Registered: Decode: 12/16/2005 A9025 Executive Representative Name: Title: Email: Ms. Ester Neltrup President and CEO eneltrup@planetaid.org Financial Representative Name: Title: Email: Mr. Thomas Meehan CFO tom.meehan@planetaid.org Correspondence Representative Name: Title: Email: Ms. Ester Neltrup President and CEO eneltrup@planetaid.org One Cross Street Planet Aid - 2009 2. Organization Information Annual Questions: 1. Is the organization a private, charitable, and nongovernmental organization?: VES 2. Enter the total number of employees organization-wide: 248 8 3. Enter the number of employees at principal headquarters: 4. Does the organization receive cash contributions from the general public (i.e., private individuals, foundations, and corporations)?: VES 5. Does the organization solicit cash contributions from the general public (i.e., perform fundraising activities)?: VES 6. If no, please explain: The primary source of funds is from sales of donated clothing. 7. Are the organization's board members compensated for serving on the board?: 8. Enter the total number of board members: 6 9. Enter the number of meetings held by the board within the past 12 months: 4 10. Are the organization's financial statements available to the public upon request?: NO VES 11. If no, please explain: 12. Enter the number of months of data contained in the financial statements: 12 Financial Statements Auditing Firm: 13. Company: Alexander Aronson Finning 14. Contact: Jeffrey Cicolini 15. Phone: (508) 366-9100 16. Email: jcicolini@aafcpa.com 2/27/2013 2 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Planet Aid - 2009 3. VolAg Report Data SUPPORT, REVENUE AND EXPENSES USAID SUPPORT 1. Section 123 Ocean Freight 2. P.L. 480 Freight 3. P.L. 480 Donated Food 4. USAID Grants, Cooperative Agreements, and Excess Property 5. USAID Contracts 6. Total USAID Support FEDERAL GOVERNMENT SUPPORT 7. U.S. Federal Government Grants and Cooperative Agreements 8. U.S. Federal Government Contracts 9. U.S. Federal Government Excess Property 10. Total Other U.S. Federal Government Support $ $ $ $ $ $ $ $ $ $ 152,411 152,411 10,184,228 10,184,228 PRIVATE AND OTHER SUPPORT 11. 12. 13. 14. 15. 16. 17. 18. Private Contributions Subgrants Privately Donated Goods and Equipment Privately Donated Services Private Revenue and Contracts Foreign Government Support International Organization Support Other U.S. Government Support (Le., State and Local Grants and Contracts) $ $ $ $ $ $ $ $ 42,368 Overseas Programs 40% 594,224 0% 25,512,053 40% 461,681 100% 19. Total Private and Other Support $ 26,610,326 20. Total Support and Revenue $ 36,946,965 EXPENSES 21. Overseas Program Expenses 22. Domestic Program Expenses 23. Administrative and Management Expenses 24. Fundraising Expenses $ $ $ $ 14,633,410 15,335,504 2,493,181 4,080,070 25. Total Expenses $ 36,542,165 3 2/27/2013 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Planet Aid - 2009 4. USAID Awards Award 1. FPG-G-00-08-0052-00 Office USAI D\Zimbabwe Amount $152,411 Title Faod For Peace Development Total USAID Awards: $152,411 5. Non-USAID USG Awards Award 1. FCC-656-2007 /007 -00 2. FCC-612-2006/092-00-A 3. FCC-612-2009/008-00 Office Dept. af Agriculture Dept. af Agriculture Dept. of Agriculture Total Non-USAID USG Awards: Title Faad For Progress Food For Progress Food For Progress Amount Overseas $6,178,083 100% $2,276,109 100% $1,730,036 100% $10,184,228 4 2/27/2013 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Planet Aid - 2009 6. Balance Sheet Data ASSETS 1. 2. 3. 4. 5. 6. 7. CURRENT ASSETS Cash and equivalents Accounts receivable Short-term inventory Short-term investments Prepaid expenses Other current assets TOTAL CURRENT ASSETS 8. 9. 10. 11. FIXED ASSETS, NET OF DEPRECIATION LONG-TERM INVENTORY LONG-TERM INVESTMENTS OTHER ASSETS 12. TOTAL ASSETS $ $ $ $ $ $ $ $ $ $ $ $ 4,294,041 648,212 381,430 383,233 2,046,481 7,753,397 4,567,389 130,419 12,451,205 LIABILITIES AND NET ASSETS 13. 14. 15. 16. CURRENT LIABILITIES Accounts payable Deferred revenue Other current liabilities TOTAL CURRENT LIABILITIES LONG-TERM LIABILITIES $ $ $ $ $ $ 17. 18. TOTAL LIABILITIES 19. 20. 21. NET ASSETS Permanently restricted net assets Temporarily restricted net assets Unrestricted net assets 22. TOTAL NET ASSETS $ $ $ $ 23. TOTAL LIABILITIES AND NET ASSETS $ 494,084 5,374,419 1,898,951 7,767,454 791,222 8,558,676 3,892,529 3,892,529 12,451,205 2/27/2013 5 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Planet Aid - 2009 7. Activity Sectors 10 Reported Sectors: Food Security and Food Aid, Rural Development, Institution Strengthening and Development, Community Development, Basic Education, Giris' Education, Vocational Education, Conservation, Child Survival, HIV/AIDS and Infectious Diseases 8. Activity Countries 2 Reported Countries: Zimbabwe, Malawi 9. Overseas Activities Malawi Primary Activity: HIV/AIDS and Infectious Diseases Secondary Activity: Basic Education In-Country Staff: Employees: 367 Volunteers: O Local NGOs Partnered with PVO: 3 Percent of TotalOverseas Expenses: 40% Mozambique Primary Activity: HIV/AIDS and Infectious Diseases Secondary Activity: Basic Education In-Country Staff: Employees: 523 Volunteers: O Local NGOs Partnered with PVO: 3 Percent of TotalOverseas Expenses: 59% Zimbabwe Primary Activity: Food Security and Food Aid Secondary Activity: HIV/AIDS and Infectious Diseases In-Country Staff: Employees: 8 Volunteers: O Local NGOs Partnered with PVO: 1 Percent of TotalOverseas Expenses: 1% 6 2/27/2013 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Plane! Aid - 2009 10. Board of Directors Last Neltrup Title Company 1. Ester President Planet Aid, Ine. (b)(S) 2. Jytte Martinussen Treasurer Planet Aid, Ine. NO 3. Mikael Norling Chainnan Planet Aid, Ine. NO 4. Eva Nielson DireC10r Planet Aid, Ine. NO 5. Clifford Reeves Director Planet Aid, Ine. 6. Alfred Di rec10r Planet Aid, Ine. First Besa Phone Address (bl(S) NO L..-_ _..J 508893-0644 Empl. VES 1 Cross SI Holliston , MA 01746 NO United Slales 2127120 13 7 FOR REFERENCE ONL Y. CHANGES TO THIS DOCUMENT DO NOT UPDATE ONLINE ANNUAL SUBMISSION Planet Aid - 2009 11. Executive Summary Annual Report Executive Summary: In 2010, Planet Aid advanced its mission to hel p poor and disadvantaged citizens improve their lives and those of future generations. It 's commitment to protect the Earth's natural habitat through its U.S. recycling program yielded 95 million pounds of used clothing and shoes - an amount otherwise destined for solid waste and negative consequences for the planet's air, water and soil. Donations gathered at its 13,000 donation bins enabled Planet Aid to provide $12 million in support of 45 international aid and development projects in some of the world's most impoverished areas. Through a broad and diverse spectrum of programs, Planet Aid helped improve the health, education, food production, and income generation of individuals and families in 16 countries on three continents. Planet Aid has identified several needs common to many lesser-developed countries. Among them, aready supply of trained primary school teachers to improve literacy rates of the fastest growing segment of the population. To address this critical shortage, Planet Aid continued its support of 26 colleges which produce nearly 3,000 new primary school teachers a year. In 2010, teacher-training programs in Mozambique, Angola, and Malawi helped alleviate student to teacher ratios surpassing 70 to 1. A variety of obstacles stand in the way of those seeking an education. Orphans, street children, and the underprivileged in general, are often excluded from government or private schools due to capacity or cost issues. In 2010, Planet Aid supported vocational training at schools in Angola, Guinea Bissau, Mozambique, and Zimbabwe. Through hands-on training, African youth learned the necessary skilIs to enter jobs in agriculture, carpentry, construction, accounting, and community development While education remains a viable means to rise above subsistence living, it is still out of reach for vast numbers of the world's population. In India alone, 35 million children from ages 5 to 14 are not in school. In order to provide for themselves and their families, many must work as rag pickers, laborers, or in service jobs, and forego an education. Through the Academies for Working Children, Planet Aid provided the means for children to receive academic instruction while employed, with the goal of eventually entering mainstream schools. In 2010, six Academies in Jaipur, Neemrana, Gurgaon, and Ghaziabad each provided 300 working children with a basic education. In 2010, Child Aid Programs continued to provide safe and supportive living conditions for children and their families. Reducing the rate of hygiene and water-related infections, establishing potable water supplies and improving basic levels of education, health, and income were key objectives of the Village Action Groups. Through Planet Aid support, hundreds of groups in eight countries effectively organized individuals and families to improve and sustain daily living conditions. Access to adequate food supplies in many regions continued to drive hunger and malnutrition rates among the poor. Through Famers' Club programs, members learn to farm more effectively, enhance soil fe rti litY, and manage water and other resources to increase crop yields. Instruction at Planet Aid-supported Farmers' Clubs produced significant increases in annual harvests, household incomes, and arable acreage in 2010. Mobilizing communities to increase HIV/AIDS awareness and providing care for those afflicted by the disease remained at the forefront for Total Control of the Epidemic and HOPE programs supported by Planet Aid. Education about the disease remains the single most effective tool in preventing its transmission. Equipped with the basics of how and why the disease spreads, many are able to change behavior and make informed choices. In the U.S. through its Schools Program, students learned first-hand the value of recycling and the positive impact of donations to other nations. Also in 2010, Planet Aid moved its Baltimore-Washington Operations Center and headquarters functions to a new 52,000 square foot facility in Columbia, MD to accommodate continued expansion of it recycling efforts. Recognizing the needs of the world's underprivileged are many and the resources are few, the past year allowed 8 2/27/2013 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Planet Aid - 2009 Planet Aid to make a quantitative and qualitative impact on many of those seeking basic assistance. Through support of on-going projects and development of new initiatives, Planet Aid will continue to pursue it mission to protect the planet and contribute to humanity's well-being. Annual Report Web Link: http://planetaid.org/web_documents/arTEXTsingle.pdf 12. VolAg Narrative VolAg Report Narrative: Supports and undertakes development projects in a number of countries in Africa, Asia, and Latin America. Planet Aid supports Child Aid, Farmers Clubs, and children's towns; teacher training, vocational schools, and schools for street children; and health care, HIV/AIDS prevention, and income-generating activities. Founded in 1997, Planet Aid raises funds by coliecting and reseliing used clothing. Planet Aid also receives corporate funding and grants from the U.S. Government. 2/27/2013 9 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION FINANCIAL STATEMENTS DECEMBER 31, 2009 AND 2008 TOGETHER WITH INDEPENDENT AUDITOR'S REpORT AND SUPPLEMENTAL INFORMATION PLANET AID, INC. CONTENTS DECEMBER 31, 2009 AND 2008 PAGES INDEPENDENT AUDITOR'S REPORT ..................................................................... . FINANClAL STATEMENTS: Statements of Financial Position ............................................................................ o....... 2 Statements of Activities and Changes in Net Assets .... .................................................. 3 o....................... o... o.............. o.................................................. 4 Statements of Functional Expenses ....... ................................. .............. .......................... 5-6 Notes to Financial Statements ....................... o................................................................ 7 16 Statements of Cash Flows SUPPLEMENTAL INFORMATION: Independent Auditor' s Report on Supplemental Information .............. ............. ............. 17 Supplemental Schedules of International Aid Contributions - Cash Basis .................... 18 - 20 Alexander Aronson Finning Alexander, Aronson, Finning & Co., P.C. 21 East Main SIreet, Westborough, MA 01681-1461 (608) 366-9100 BosIon, MA (617) 206-9100 Wellesley, MA (781) 966-9100 www.aafcpa.com FAX (608) 366-9789 info@aafcpa.com CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS Where Every Client Is A valued Client INDEPENDENT AUDITOR'S REPORT To the Board of Directors of Planet Aid, Ine.: We have audited the accompanying statements of financial position of Planet Aid, Inc_ (a Massachusetts corporation, not for profit) (the Organization) as of December 31, 2009 and 2008, and the related statements of activities and changes in net assets, cash flows and functional expenses for the years then ended. These financial statements are the responsibility of the Organization' s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement An audit includes examining, on a test basis, evidenee supporting the amounts and disclosures in the financial statements_ An audit also includes assessing the aceounting princip les used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Planet Aid, Ine. as of December 31, 2009 and 2008, and the ehanges in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the U ited St~tes of Ameriea. ' 1. >.ti D. h .(i . "/'W'fldl/V Ijtt I I [' ~ ~(,vJ I!--..v~y I r U Wes borough, Massachusetts May 11,2010 -l - I " LJO' /' '1 I ~. . PLANET AID, INC. STATEMENTS OF FINANClAL POSITION DECEMBER 31, 2009 AND 2008 ASSETS 2009 2008 CURRENT ASSETS: Cash and cash equivalents Unrestricted eash and cash equivalents Restricted cash and cash equivalents $ Total cash and eas h equivalents Aceounts receivable - clothing and other goods, net of allowance for doubtful accounts of $50,000 Aceounts receivable commodities Inventories Prepaid expenses and other Total current assets SECURITY DEPOSITS PROPERTY AND EQUIPMENT, net 672,312 3,621,729 $ 671,043 2,668,988 4,294,041 3,340,031 648,212 2,046,481 381,430 383,233 924,534 4,238,550 830,854 289,350 7,753,397 9,623,319 130,419 117,256 4,567,389 5,140,517 Total assets LIABILITIES AND NET ASSETS CURRENT LIABILITIES: $ Note payable to a bank Current portion of notes payable Current portion of capitallease obligations Accounts payable Accrued expenses and other Deferred revenue Total current liabilities 98,358 319,812 858,525 494,084 622,256 7,767,454 NOTES PAYABLE, net of current portion $ 396,358 454,277 868,555 509,486 1,033,998 6,412,006 9,674,680 294,462 CAPITAL LEASE OBLIGATIONS, netof current portion Totalliabilities 791,222 1,424,221 8,558,676 11,393,363 1,294,699 2,597,830 1,388,727 2,099,002 3,892,529 3,487,729 $ 12,451,205 $ 14,881,092 NET ASSETS: Unrestricted Operating Property and equipment Total unrestricted net assets Total liabilities and net assets The accompanying notes are an integral part of these statements. 2 PLANET AID, INC. STATEMENTS OF ACTIVITIES AND CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 OPERATING REVENUE: Sales of donated c10thing and other go ods Contracts - Federal Other contributions Interest and other revenue Totaloperating revenue OPERATING EXPENSES: Program services General and administrative Fundraising and development Totaloperating expenses Changes in unrestricted net assets from operations NON-OPERATING REVENUE (EXPENSE) Foreign currency gains (losses) Changes in unrestricted net assets NET ASSETS, beginning of year NET ASSETS, end of year 2009 2008 $ 25,338,289 10,653,088 594,224 216,132 $ 25,907,097 14,573,457 674,947 78,819 36,801,733 41,234,320 29,968,914 2,493,181 4,080,070 33,674,022 2,463,632 4,110,489 36,542,165 40,248,143 259,568 986,177 145,232 404,800 984,950 3,487,729 2,502,779 $ 3,892,529 $ 3,487,729 The accompanying notes are an integral part af these statements. 3 (1,227) PLANET AID, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 2009 CASH FLOWS FROM OPERATING ACTIVITIES: Changes in net assets $ Adjustments to reconcile changes in net assets to net cash provided by operating activities: Depreciation Bad debts Net gains (losses) on sales and disposals of property and equipment Changes in operating assets and liabilities Accounts receivable - clothing and other goods Accounts receivable - commodities Inventories Prepaid expenses and other Security deposits Accounts payable Accrued expenses and other Customer deposits Deferred revenue 404,800 2008 $ 945,700 935,062 241,087 (11,845) 3,150 276,322 2,192,069 449,424 (93,883) (13,163) (15,402) (411,742) Net cash provided by operating activities (1,037,587) (522,827) (1,137,516) (249,874) (157,011) (22,817) (214,643) 447,283 (93,498) 1J70,962 2,699,688 1,369,313 4,800 40,127 CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sales of property and equipment Acquisitions of property and equipment Net cash used in investing activities (134,432) (118,619) (298,000) (428,927) (884,319) 71,358 (468,566) (710,218) (l,6 I 1,246) (1,107,426) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from (payments on) note payable to a bank Principal payments on notes payable Principal payments on capitallease obligations Net cash used in financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS 954,010 CASH AND CASH EQUIVALENTS, beginning of year 984,950 143,268 3,340,031 CASH AND CASH EQUIVALENTS, end of year SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for interest $ 275,838 $ 352,420 SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS: Cos t of property and equipment disposed $ 86,351 $ 95,431 Purchase of property and equipment via capitallease obligations $ 241,290 $ 865,179 Soyand wheat produets received from USDA grants $ 9,600,000 Distribution of soy produets The accompanying notes are an integral part of these statements. 4 $ 14,976,100 PLANET AID, INC. STATEMENT OF FUNCTIONAL EXPENSES FOR TRE YEAR ENDED DECEMBER 31, 2009 (With Summarized Comparative Totals for the Year Ended December 31, 2008) 2009 U.S. CLOTHING COLLECTION ANDHABITAT PROTECTION INTERNATIONAL AND LOCAL AID CLOTffiNG COLLECTION AND RECYCLING: Contractor transportation Vehicle costs Collection container costs Other clothing collection costs Site tinding costs Total clothing collection and recyc1ing $ 95,653 PROGRAM SERVICES INTERNATIONAL EXCHANGE, TRAINlNG AND INTERNATIONAL AID EDUCATION $ 14,171,913 $ TOTAL PROGRAM SERVICES $ 14,267,566 3,885,644 1,090,120 3,885,644 1,090,120 444,729 444,729 5,420,493 200S GENERAL AND ADMINlS· TRATIVE $ FUNDRAISING AND DEVELOPMENT TOTAL TOTAL $ 14,267,566 $ 16,379,147 126,731 3,885,644 1,147,025 994,093 444,729 126,731 5,216,006 1,449,768 919,450 187,200 219,656 1,177,729 6,598,222 7,992,080 $ 56,905 994,093 5,420,493 PERSONNEL AND RELATED: Payroll Employee benefits Payroll taxes Contract labor 4,241,308 538,420 390,548 123,598 192,856 24,482 17,758 4,434,164 562,902 408,306 123,598 753,310 95,629 69,366 11,325 1,289,236 163,664 118,715 172,221 6,476,710 822,195 596,387 307,144 6,394,658 553,032 611,366 383,052 Total personnel and related 5,293,874 235,096 5,528,970 929,630 1,743,836 8,202,436 7,942,108 1,197,838 1,207,382 1,064,809 83,552 60,464 14,442 108,365 927,854 345,888 753,783 1,199,277 1,248,442 971,461 935,062 1,068,490 258,577 563,681 342,134 352,420 120,885 197,797 193,394 83,300 16,142 142,659 241,087 OTHER: Occupancy Sales commissions Shipping and bailing Depreciation Membership fees Professional services Repairs and maintenance Office Interest Insnrance Telephone Travel and lodging Bank charges Advertising Miscellaneous Bad debts Total other Total operating expenses 1,197,838 755,076 1,064,809 83,552 112,375 239,916 234,063 72,322 169,474 149,435 137,378 23,697 13,794 7,220 452,306 20,270 8,698 9,191 471 112,375 239,916 254,333 72,322 169,474 149,435 146,076 32,888 14,265 7,220 47,108 34,004 200,721 628 169,512 1,985 11,651 26,197 11,147 3,295 29 35 4,948 1,272,744 1,207,382 1,064,809 945,700 927,854 458,263 440,637 302,069 275,838 169,474 162,567 161,022 59,114 14,265 12,203 4,260,949 29,439 461,497 4,751,885 1,563,551 1,158,505 7,473,941 7,934,808 $ 15,070,969 $ 264,535 $ 14,633,410 $ 29,%8,914 $ 2,493,181 $ 4,080,070 $ 36,542,165 $ 40,248,143 The accompanying notes are an integral part of these statements. -5- PLANET AID, INC. STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31,2008 U.S. CLOTHING COLLECTlON ANDHABITAT PROTECTlON INTERNATIONAL AND LOCAL AID CLOTHlNG COLLECTION AND RECYCLING: Contractor transportation Vehicle costs Collection container costs Other c10thing coIlection costs Site finding costs Total c10thing collection and recycling $ 95,143 PROGRAM SERVICES INTERNATIONAL EXCHANGE, TRAINING AND INTERNATIONAL EDUCATION AID $ 16,284,004 $ GENERAL TOTAL PROGRAM SERVICES AND ADMINIS- FUNDRAISING TRATlVE DEVELOPMENT $ 16,379,147 $ 5,216,006 1,397,757 5,216,006 1,397,757 184,946 184,946 6,798,709 6,798,709 AND TOTAL $ 16,379,147 $ 52,011 919,450 2,254 219,656 5,216,006 1,449,768 919,450 187,200 219,656 1,193,371 7,992,080 PERSONNEL AND RELATED: PayroIl Employee benefits Payroll taxes Contract labor 4,228,111 353,039 401,921 115,760 370,755 38,351 35,425 4,598,866 391,390 437,346 115,760 557,165 44,016 55,716 4,814 1,238,627 117,626 118,304 262,478 6,394,658 553,032 611,366 383,052 Total personnel and related 5,098,831 444,531 5,543,362 661,711 1,737,035 7,942,108 1,143,201 1,248,442 971,461 166,059 51,401 4,675 53,072 1,068,490 146,602 8,564 118,853 20,740 715,931 3,605 19,380 70,127 8,745 15,791 1,199,277 1,248,442 971,461 935,062 1,068,490 258,577 563,681 342,134 352,420 120,885 197,797 193,394 83,300 16,142 142,659 241,087 OTHER: Occupancy Sales commisions Shipping and bailing Depreciation Membership fees Professional services Repairs and maintenance Office Interest Insurance Telephone Travel and lodging Bank charges Advertising Miscellaneous Baddebts Totalother Totaloperating expenses 1,143,201 767,202 922,461 166,059 111,975 389,167 190,125 77,845 120,885 185,447 148,575 9,139 16,142 124,279 481,240 49,000 18,000 9,648 4,034 18,380 111,975 389,167 208,125 77,845 120,885 185,447 158,223 13,173 16,142 142,659 165,950 15,156 253,835 241,087 4,372,502 46,028 534,274 4,952,804 1,801,921 U80,083 7,934,808 $ 16,365,185 $ 490,559 $ 16,818,278 $ 33,674,022 $ 2,463,632 $ 4,110,489 $ 40,248,143 The accompanying notes are an integral part of these statements. -6- PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2009 AND 2008 (1) OPERATIONS, NONPROFIT STATUS AND SIGNIFICANT ACCOUNTING POLICIES OPERATIONS AND NONPROFIT STATUS Planet Aid, Ine. (the Organization) supports development projects in third world countries, promotes international exchange and education, supports recycling and habitat proteetion, and supports emergency and disaster relief programs. The Organization' s revenues are derived from used clothing contributions, government contracts, corporate grants and private contributions. The Organization is exempt from Federal incorne taxes as an organization (not a private foundation) formed for charitable purposes under Section 501 (c)(3) of the Internal Revenue Code. The Organization is also exempt from state ine orne taxes. Donors may deduct contributions made to the Organization within Internal Revenue Code requirements. SIGNIFICANT ACCOUNTING POLICIES The Organization prepares its financial statements in accordance with generally accepted accounting standards and principles established by the Financial Accounting Standards Board (FASB). References to U. S. GAAP in these footnotes are to the FASB Accounting Standards Codification. Revenue Recognition and Deferred Revenue The Organization recognizes sales of donated clothing and other goods when the risks and rewards of ownership have transferred to the customer, which is generally considered to have occurred upon receipt of goods by the customer. The Organization recognizes contraet revenue when the proceeds of the sales of certain commodities under contracts with the United States Department of Agriculture (USDA) (see Note 4) have been distributed to organizations that perform HIV/AIDS education and awareness programs, the training of rural primary school teaehers, and agricultural and nutrition training in Mozambique and Malawi. Deferred revenue represents amounts received from the sales of commodities in exces s of amounts expended for programs that extend beyond the end of the Organization's fiscal year. Deferred revenue wiIl be recognized as incorne as expenditures are incurred. Unrestricted grants and contributions, including used clothing and other goods, are recorded as revenue when received or unconditionaUy pledged. Restricted grants and contributions are recorded as temporarily restricted revenues and net assets when received or unconditionally pledged. Transfers are made to unrestricted net assets as costs are incurred or time restrictions or program restrietions have lapsed. Donor restricted grants received and satisfied in the same period are included in unrestricted net assets. All other revenues are recorded when they are earned. 7 PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Continued) (1) OPERATIONS, NONPROFIT STATUS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) SIGNIFICANT ACCOUNTING POLICIES (Continued) Unrestricted Net Assets Unrestricted net assets are those net resources that bear no extemal restrictions and are generally available for use by the Organization. The Organization has grouped its unrestricted net assets into the following categories: Operating net assets represent net assets which are available for operations and bear no extemal restrietions. Property and equipment net assets represent amounts expended and resources available for property and equipment, net of related debt. Expense Allocation Expenses related directly to a program are distributed to that program, while other expenses are allocated to programs based upon management's estimate of the percentage attributable to each function. Uncertainty in Incorne Taxes The Organization adopted the standards for Accounting for Uncertainty in Income Taxes which require the Organization to report any uncertain tax positions, related interest and penalties, and to adjust its financial statements for the impact thereof. As ofDecember 31,2009, the Organization determined that it had no tax positions that did not meet the "more likely than not" threshold of being sustained by the applicable tax authority. The Organization files ine orne tax and information retums in the United States (Federal) and Massachusetts (state) jurisdictions. These retums are generally subject to examination by tax authorities for the last three years. Estimates The preparation of financial statements in accordance with U. S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents For the purpose of the statements of cash flows, management considers all high ly liquid investments with an initial maturity of three months or less to be cash equiva1ents. At December 31, 2009 and 2008, cash and cash equivalents include checking, savings, money market and an ovemight sweep account. 8 PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Continued) (1) OPERATIONS, NONPROFIT STATUS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and Cash Equivalents (Continued) Restricted cash at December 31, 2009, includes 56,932,673 Mozambican Meticals ($1,943,758 USD), 106,940,801 Malawi Kwachas ($732,498 USD), and $945,473, which are segregated and restricted for use in accordance with the USDA contract agreements (see Note 4). Restricted cash at December 31,2008, included 41,842,254 Mozambican Meticals ($1,657,119 USD), 129,722,804 Malawi Kwachas ($922,638 USD), and $89,231, which were segregated and restricted for use in accordance with the USDA contract agreements (see Note 4). Accounts Receivable - Clothing and Allowance for Doubtful Accounts Accounts receivable - clothing are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is based on management's best estimate of probable credit losses in accounts receivable clothing. The allowance is based on specific identification of probable losses and an estimate of additionallosses based on write-off experience. Management reviews the allowance for doubtful accounts weekly. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. Accounts receivab1e - commodities at December 31, 2009 and 2008, consists of amounts expected to be received in 2010 and 2009, respectively (see Note 4). Inventories Inventories consist of used clothing, shoes, books and household goods of $381,430 and $688,396 at December 31, 2009 and 2008, respectively. At December 31, 2008, inventory also included food stored in a warehouse in Zimbabwe of $142,458 (see Note 4). These inventories are accounted for at the lower of cost (as determined by the first-in, first-out (FIFO) method) or market. Property and Equipment and Depreciation Purchased property and equipment are recorded at cost (see Note 3). Donated property and equipment are recorded at fair market value at the time of donation. Renewals and betterments are capitalized while rep air and maintenance are charged to expense as they are incurred. Depreciation is computed using the straight-line method (mid-month convention for additions) over the folIowing estimated usefullives: Collection boxes Fumiture, fixtures and equipment Computers and vehicIes Leasehold improvements -9 - 10 years 3 - 5 years 3 years 5 years PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Continued) (1) OPERATIONS, NONPROFIT STATUS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) SIGNIFICANT ACCOUNTING POLICIES (Continued) Advertising Costs The Organization expenses advertising costs as incurred. Foreign Currency Gains (Losses) Transactions denominated in foreign currencies are translated to U.S. dollars using actual exchange rates at the time of the transaction, while assets and liabilities are translated at the exchange rate in effect at the reporting date. The effect of change in exchange rates between the designated functional currency and the currency in which a transaction is denominated is recorded as a foreign currency gains (losses) on the accompanying statements of activities and changes in net assets. Donated Space - Collection Boxes The Organization receives contributed use of land for collectian boxes. These services are reflected in the accompanying financial statements based upon the estimated value of $0.01 per pound of clothing and other goods collected, net of any payments made for the use af the space. The value recorded for the years ended December 31, 2009 and 2008, is $583,654 and $669,198, respectively. These amounts are included in other contributions in the accompanying statements of activities and changes in net assets. Fair Value Measurement The Organization values its qualifying assets and liabilities under a fair value hierarchy that prioritizes the inputs and assumptions used to measure fair value. The three levels of the fair value framework under the standards are as follows: Level 1: Inputs that reflect unadjusted quoted prices in active markets for identical assets at the measurement date. Level 2: Inputs other than quoted prices that are observable for the asset either directly or indirectly, including inputs from markets that are not considered to be active. Level 3: Inputs that are unobservable. An asset or liability's level within the framework is based upon the lowest levelof any input that is significant to the fair value measurement. The Organization values all qualifying assets and liabilities using Level 1 inputs. -10 PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Continued) (1) OPERATIONS, NONPROFIT STATUS AND SIGNIFICANT ACCOUNTING POLICIES (Continued) SIGNIFICANT ACCOUNTING POLICIES (Continued) Subsequent Events The preparation of financial statements in accordance with U. S. GAAP requires management to disclose the date through which subsequent events have been evaluated for possibie recognition or disclosure in the accompanying financial statements. Subsequent events are transactions or events that occur after the statement of financial position date, but before the financial statements are issued or available to be issued. The accompanying financial statements include the evaluation of subsequent events that have occurred through May 11, 2010, which is the date the financial statements were available to be issued. (2) RELATED PARTY TRANSACTIONS Certain directors and members of senior management are directors or employees of other organizations with which the Organization does business. The Board of Directors of the Organization has adopted a conflict of interest policy requiring full disclosure of possibie conflicts. The policy established that Board members, senior management and employees can not participate in decisions where their personal interests and those of the Organization may conflict. The Organization is a member of "The Federation for Associations connected to the International Humana People to People Movement" (the Federation). The Federation is a not-for-profit membership organization established under the laws of SwitzerIand. The Federation coordinates funds raised by its members with the needs of the numerous international aid programs, assists with program development and training of staff through workshops and conferenees, and delivers services in the areas of administration and supervision. The Organization's Chairman was a member ofthe Board of Directors of the Federation until October 31, 2009. The Organization paid annual membership fees of $927,854 and $1,068,490 to the Federation in 2009 and 2008, respectively, based on a formula outlined in the membership contract agreement. In addition, the Organization donated $273,337 and $181,986 to programs run by the Federation in 2009 and 2008, respectively. One of the Organization's Board of Directors is also a Board member of two other not-for-profit organizations in the United States of America. The Organization exchanged services with one agency totaling $3,250 and $53,541 during 2009 and 2008, respectively. These services were for assistance with placing collection boxes at businesses throughout the United States of America. 11 PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Continued) (3) PROPERTY AND EQUIPMENT Property and equipment consist ofthe folIowing as ofDecember 31,2009 and 2008: Collection boxes Furniture, fixtures and equipment Computers and vehicles Leasehold improvement Less accumulated depreciation 2009 2008 $7,472,776 832,781 587,852 10,900 8,904,309 4,336,920 $7,290,026 762,772 557,340 8,610,138 3.469,621 Depreciation was $945,700 and $935,062 for the years ended December 31,2009 and 2008, respectively. (4) ACCOUNTS RECEIVABLE - COMMODITIES The Organization received 30,000 metric tons of wheat in 2009 and 30,000 metric tons of wheat and 70 metric tons ofbagged soy produets (collectively, the Commodities) in 2008 from the USDA. The Commodities are sold to distributors in Mozambique and Malawi under sales contracts whereby the distributors have aiready identified purehasers of the Commodities. Accounts receivable - commodities represent the uncollected balances under these sales contracts. Management monitors the accounts receivable - commodities for potential collection losses based upon the credit risk of specific balances, historical trends and other information. There are no reserves for uncollectible amounts as of December 31,2009 and 2008. Under the current programs, the USDA is expected to provide 10,000 metric tons of wheat in 2010 and 2011. In 2009 and 2008, the Organization recognized contract revenue of $406,729 and $796,540, respectively, from the USDA to cover general and administrative expenses under a negotiable indireet cost reimbursement agreement. During 2008, the Organization also received 75 metric tons of shelf-stable prepackaged food under a contract from United States Agency for International Development (USAID). This food is to be transported and distributed to vulnerable populations in Zimbabwe. The food was valued at $173,278 on the date of receipt. As of December 31, 2008, this food was included in inventories on the accompanying statement of financial position, net of $30,820 of food that had been distributed to the people in Zimbabwe during 2008. The remaining food valued at $142,458 was distributed and the revenue was recognized during 2009. - 12 PLANET AID, INe. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Continued) (S) NOTE PAYABLE TO A BANK The Organization has a $400,000 revolving line of credit agreement with a bank that expires October 31,2010. Borrowings under the agreement bear interest at the bank's prime lending rate (3.25% at December 31,2009 and 2008), plus 1% per annum, with a floor of 4.5%. The line of credit, as well as the notes payable included in Note 6, are collectively secured by all business assets of the Organization. The Organization must meet certain financial and non-financial covenants as specified in the agreement. All covenants have been met or waived by the bank at December 31, 2009 and 2008. The balance outstanding under this agreement at December 31, 2009 and 2008, was $98,358 and $396,358, respectively (6) NOTES PAYABLE Notes payable consist of the folIowing at December 31: 7.12 % note payable to a bank with an original principal balance of $1,150,000 dated November 29,2005. Principal and interest are due in monthly instalIments of $27,785 through November 30,2010. $300,000 $594,110 7.36% note payable to a bank with an original principal balance of $250,000 dated November 25, 2004. Principal and interest are due in monthly instal1ments of $1,837. This note will be paid offin 2010. 19,812 39,572 7.36% note payable to a bank with an original principal balance of $700,000 dated August 25,2005. Principal and interest are due in monthly instalIments of $15,140 through August 25,2009. This note was paid off during 2009. 115,057 319,812 319,812 Less - current portion 748,739 Bach of the notes payable above, as well as the note payable to a bank (see Note 5), are collectively secured by all of the business assets of the Organization. The Organization must comply with various covenants under these loan agreements. All covenants have been met or waived by the bank at December 31, 2009 and 2008. - 13 - PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Continued) (7) CAPITAL LEASE OBLIGATIONS The Organization leases certain collection boxes and vehicles with an aggregate cost of $3,618,210 and $3,376,911 at December 31,2009 and 2008, respectively, under capitallease agreements. lnterest rates under these agreements range from approximately 7% to 15.7% per annum. The obligations mature on various dates through November, 2013. Future minimum lease payments under these agreements are as follows: 2010 2011 2012 2013 $ 990,733 589,106 253,526 15,567 Total future minimum payments Less amounts representing interest 1,848,932 Present value of future minimum payments Less - current portion 1,649,747 858,525 $ 791.222 For the years ended December 31, 2009 and 2008, depreciation expense on collection boxes and vehicles purchased under capitalleases was $391,719 and $329,366, respectively. At December 31, 2009 and 2008, accumulated depreciation on collection boxes and vehicles purchased under capitallease obligations was $813,668 and $421,949, respectively. Subsequent to December 31, 2009, the Organization entered into a capitallease agreement to lease an additional 330 collection boxes. Monthly payments of $4,986 are due through December 15, 2013. The implicit interest rate of the lease is 11.8%. (8) LEASES The Organization rents facilities from third parties under operating lease agreements that expire at various dates through 2013. The Organization has the option to renew certain leases for additional periods of one to five years. The Organization also rents certain facilities under tenant-at-will agreements. The Organization is required to pay monthly rent plus its pro-rata share of increases in property taxes and common area charges, where applicable. Rent expense under these agreements for the years ended December 31,2009 and 2008, was $1,091,628 and $1,001,425, respectively, and is included in occupancy expense in the accompanying statements of functional expenses. The Organization also rents vehicles and equipment under operating lease agreements which expire at various dates through 2014. The agreements require the Organization to make minimum monthly payments of $46,500, plus mileage and other related charges. Rent expense under these agreements for the years ended December 31, 2009 and 2008, was $396,931 and $248,782, respectively, and is included in vehicle costs, other clothing collections costs, and shipping and bailing in the accompanying statements of functional expenses. - 14 - PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Continued) (8) LEASES (Continued) Future minimum lease payments, including the Organization' s estimated share of operating expenses and real estate taxes required under certain non-cancelable operating leases, are as follows: Facility 2010 2011 2012 2013 2014 (9) $443,889 $187,515 $ 72,563 $ 73,683 $ Vehicles and Equipment $432,837 $292,677 $156,841 $106,190 $ 45,990 PENSION PLAN The Organization maintains a defined contribution plan (the Plan) under Section 401(k) of the Internal Revenue Code. The Plan covers substantially all eligible employees. Employees become eligible to participate after completing three months of service and attaining the age of 21. Employees may contribute up to 85% of eligible compensation, not to exceed Internal Revenue Code limits. Employee contributions may be matched, at the discretion of the Board of Directors of the Organization. Employer contributions vest over a certain period as described in the Plan. The Organization elected not to match the employee contributions that were made to the Plan during 2009 and 2008. (10) AGENCY CONTRIBUTIONS Contributions provided by third parties that are required to be forwarded to other charitable organizations specified by the donor are considered agency pass-through transactions and have not been recorded in the accompanying statements of activities and changes in net assets. The Organization completed agency pass-through contributions totaling $384,826 and $1,086,500 during fiscal years 2009 and 2008, respectively. Agency pas s-through contributions received but not yet distributed to the respective charitable organization are recorded as cash and accounts payable on the accompanying statements of financial position. These amounts totaled $34,826 and $5,325 as of December 31, 2009 and 2008, respectively. (11) CONCENTRATIONS The Organization maintains its cash and cash equivalents in several financial institutions. At various times throughout the year, the balances in these institutions exceeded the maximum amount of insurance provided by the Federal Deposit Insurance Corporation. Management monitors, on a regular basis, the financial condition of the financial institutions, and the Organization account balances to minimize potential risk. The Organization' s cash and cash equivalents at December 31, 2009, held in Mozambique ($1,943,758) and Malawi ($732,498), which are restricted for use in accordance with the USDA contract agreements (see Note 4), are not covered by FDIC insurance and are subject to credit risk. The Organization has not experienced any losses in such accounts. The Organization believes it is not exposed to any significant credit risk on its cash and cash equivalents. - 15 - PLANET AID, INC. NOTES TO FINANClAL STATEMENTS DECEMBER 31, 2009 AND 2008 (Continued) (12) CONTINGENCIES The Organization, from time to time, is notified that it is the subject of inquiries initiated by various states in the USA. It is management' s experience that the resuIts of these infrequent actions will not have a material impact on the statement of financial position or the statement of activities and changes in net assets of the Organization. Accordingly, no amounts have been reflected in the accompanying financial statements. (13) RECLASSIFICATION Certain amounts in the 2008 financial statements have been rec1assified to conform with the 2009 presentation. (14) SUBSEOEUNT EVENT On March 22, 2010, the Organization entered into an Escrow Agreement that would lead to a contract for purchase and sale agreement with an individual to acquire a parcel of land and a building located in Maryland for $2,995,000. This property will be utilized for business purposes. The study period ends June 2,2010, at which point the Organization may buy the building if no issues have been detected with the property and reasonable financing has been obtained. 16 SUPPLEMENTAL INFORMATION Alexander Aronson Finning Alexander, Aronson, Finning & Co., P.C. 21 Eas! Main S!reet, Westborough, MA 01581-1461 (508) 366-9100 Boston, MA (617) 205-9100 Wellesley, MA (781) 965-9100 www.aafcpa.com FAX (508) 366-9789 info@aafcpa.com CERTIFIED PUBLIC ACCOUNTANTS & BUSINESS ADVISORS Where Every Client Is A Valued Client INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTAL INFORMATION To the Board of Directors of Planet Aid, Ine.: Our audit was eonducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedule of international aid contributions - eash basis on pages 18 to 20 is presented for the purpose of addition al analysis and is not a required part of the basic finaneial statements. Such information has not been subjected to the auditing procedures applied in the audit af the basic financial statements, and accordingly, we express no opinion an it. 17 PLANET AID, INC. SUPPLEMENTAL SCHEDULES OF INTERNATIONAL AID CONTRIBUTIONS . CASH BASIS DECEMBER 31, 2009 AND 2008 Cash contributions: Associacao Mocambicana Para a Ajuda de Desenvolvimento de Povo para Povo HIV and AIDS education programs, training of rural primary school teaehers and their trainers and agriculture training supported by proceeds from USDA grant DNS Chimoio Child Aid Irlhambane Total Associacao Mocambicana Para a Ajuda de Desenvolvimento de Povo para Povo Development Aid from People to People in Malawi mv and AIDS education programs, training of rural primary school teachers and agricultural training supported by proceeds from USDAgrant Development Aid from People to People in Zimbabwe Child Aid Zimbabwe USAID Food Program Ponesai Vanhu Technical College Hope Humana People to People Zimbabwe Ponesai Vanhu Junior School TCE Zimbabwe Farmers' Clubs Communal to Commercial Farmer Zimbabwe $ 5,897,702 $ 8,843,611 55,087 34,157 5,986,946 8,843,611 3,845,294 4,331,506 239,410 149,143 112,363 Il 1,5 I 8 94,254 70,455 20,000 79,700 49,024 38,300 152,026 58,000 25,000 Total Development Aid from People to Peop1e in Zimbabwe Humana People to People South Africa Total Control of the Epidemic South Africa Child Aid Dornkop Child Aid Bakenberg HOPE Humana People to People Child Aid Tubatse Total Humana People to People South Africa Humana People to People India Total Control of the Epidemic India Training Center for Global Development Community Development India Harit Sankalp - Green Action Academy for W orking ChiIdren Total Humana People to People India - 18 - 797,143 402,050 693,413 78,000 22,200 393,645 55,100 16,595 21,935 12,725 793,613 500,000 75,945 17,115 80,600 164,190 103,435 43,317 10,581 93,060 402,123 PLANET AID, INC. SUPPLEMENTAL SCHEDULES OF INTERNATIONAL AID CONTRIBUTIONS - CASH BASIS DECEMBER 31, 2009 AND 2008 (Continued) Cash contributions (Continued): Development Aid from People to People in Zambia Child Aid Central Provinee HOPE Zambia Child Aid and Environmental Southern Provinee Total Development Aid from People to People in Zambia Humana People to People Namibia TCENambia 60,186 59,885 150,000 171,777 40,000 120,071 361,777 5,000 Humana People to People Angola Capacity Building Vocational School Cabinda Vocational School Benguela 300,000 30,000 20,000 350,000 Total Humana People to People Angola Humana People to People Guinea Bissau C to C Guinea Bissau 7,450 Humana People to People Congo Establishment af new projects 345,635 230,826 Humana People to People Botswana HOPE Botswana Child Aid Botswana 315,000 46,698 265,461 29,961 Total Humana People to People Botswana 361,698 295,422 The Federation for Associations connected to the International Humana People to People Movement (The Federation) Murgwi Community Center, Zimbabwe 250,000 150,000 Humana People to People Brazil Establishment and start af Child Aid Brazil 424,070 318,354 Humana People to People China Farmers' Clubs China Child Aid China HOPEChina Maleria Project China TCEChina Partnership Office China Yunnan Institute ofDevelopment and Child Aid, China 26,419 25,587 25,055 20,917 15,000 9,000 86,685 121,978 Total Humana People to People China - 19 - 14,848 101,533 PLANET AID, INe. SUPPLEMENTAL SCHEDULES OF INTERNATIONAL AID CONTRIBUTIONS . CASH BASIS DECEMBER 31, 2009 AND 2008 (Continued) Cash contributions (Continued): Humana People to People Laos Establishment of new projects 43,403 Humana People to People Belize Establishment of new projects 246,754 168,551 Humana Pueblo A Pueblo Establishment and start of Child Aid Ecuador 334,254 26,300 14,198,844 16,227,396 461,368 498,341 23,337 23,179 17,110 31,986 5,225 11,487 Other miseeIIaneous eharities, sehooIs and ehurehes Total cash contributions In-Kind Contributions and Direct Expenses: Commission, handling fees, foreign currency loss and other expenses related to USDA and USAID eontracts Computer equipment contributed to The Federation for Associations connected to the Humana People to People Movement and related member organizations Other miscellaneous eharities, schools and ehurehes Computer equipment contributed to Africa Used bo ok and clothing eontributions to Development Aid from People to People in Malawi Soy contributions to Associacao Mocambican Para a Ajuda de Desenvolvimento de Povo para Povo Computer equipment eontributed to HPP Congo Computer equipment contributed to HPP India Computer equipment contributed to HPP Botswana Computer equipment contributed to ADPP Guinea-Bissau Program eosts for Asociacion Planet Aid, Ine. Managua, Nicaragua Computer equipment contributed to DAPP Namibia Total in-kind contributions Total International and Loeal Aid - 20- 53,138 3,422 3,047 2,215 1,754 1,600 831 530,219 607,821 $ 14,729,063 $ 16,835,217 PVO Annual Submission 2010 1. PVO Information Name of Private Voluntary Organization (PVO): Planet Aid Acronym: Address 1: Address 2: City: State: Zipcode: Phone: Fax: Email: Web Site: EIN: DUNS: Incorporated: FYE: Holliston MA 01746 (508) 893-0644 (508) 893-0646 info@planetaid.org www.planetaid.org 043348171 110910064 1/28/1997 December Registered: Decode: 12/16/2005 A9025 Executive Representative Name: Title: Email: Ms. Ester Neltrup President and CEO eneltrup@planetaid.org Financial Representative Name: Title: Email: Mr. Thomas Meehan CFO tom.meehan@planetaid.org Correspondence Representative Name: Title: Email: Ms. Ester Neltrup President and CEO eneltrup@planetaid.org One Cross Street Planet Aid - 2010 2. Organization Information Annual Questions: 1. Is the organization a private, charitable, and nongovernmental organization?: VES 2. Enter the total number of employees organization-wide: 282 3. Enter the number of employees at principal headquarters: 4. Does the organization receive cash contributions from the general public (i.e., private individuals, foundations, and corporations)?: VES 5. Does the organization solicit cash contributions from the general public (i.e., perform fundraising activities)?: VES 6. If no, please explain: We receive donations of recycled used clothing. 7. Are the organization's board members compensated for serving on the board?: 8. Enter the total number of board members: 6 9. Enter the number of meetings held by the board within the past 12 months: 4 10. Are the organization's financial statements available to the public upon request?: 9 NO VES 11. If no, please explain: 12. Enter the number of months of data contained in the financial statements: 12 Financial Statements Auditing Firm: 13. Company: Alexander Aronson Finning 14. Contact: Jeffrey Cicolini 15. Phone: (508) 366-9100 16. Email: jcicolini@aafcpa.com 2/27/2013 2 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Planet Aid - 2010 3. VolAg Report Data SUPPORT, REVENUE AND EXPENSES USAID SUPPORT 1. Section 123 Ocean Freight 2. P.L. 480 Freight 3. P.L. 480 Donated Food 4. USAID Grants, Cooperative Agreements, and Excess Property 5. USAID Contracts 6. Total USAID Support FEDERAL GOVERNMENT SUPPORT 7. U.S. Federal Government Grants and Cooperative Agreements 8. U.S. Federal Government Contracts 9. U.S. Federal Government Excess Property 10. Total Other U.S. Federal Government Support $ $ $ $ $ $ $ $ $ $ o 7,006,779 7,006,779 PRIVATE AND OTHER SUPPORT 11. 12. 13. 14. 15. 16. 17. 18. Private Contributions Subgrants Privately Donated Goods and Equipment Privately Donated Services Private Revenue and Contracts Foreign Government Support International Organization Support Other U.S. Government Support (Le., State and Local Grants and Contracts) $ $ $ $ $ $ $ $ 26,281 Overseas Programs 43% 567,922 0% 27,772,924 43% 1,109,369 100% 19. Total Private and Other Support $ 29,476,496 20. Total Support and Revenue $ 36,483,275 EXPENSES 21. Overseas Program Expenses 22. Domestic Program Expenses 23. Administrative and Management Expenses 24. Fundraising Expenses $ $ $ $ 12,029,089 16,018,017 3,343,042 4,536,121 25. Total Expenses $ 35,926,269 3 2/27/2013 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Planet Aid - 2010 4. USAID Awards None Reported 5. Non-USAID USG Awards Award 1. FCC-656-20071007 -00 2. FCC-612-2009/008-00 Office Dept. of Agriculture Dept. of Agriculture Total Non-USAID USG Awards: Title Food For Progress Food For Progress Amount Overseas $2,746,223 $4,260,556 100% 100% $7,006,779 4 2/27/2013 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Planet Aid - 2010 6. Balance Sheet Data ASSETS 1. 2. 3. 4. 5. 6. 7. 8. CURRENT ASSETS Cash and equivalents Accounts receivable Short-term inventory Short-term investments Prepaid expenses Other current assets TOTAL CURRENT ASSETS 9. 10. 11. FIXED ASSETS, NET OF DEPRECIATION LONG-TERM INVENTORY LONG-TERM INVESTMENTS OTHER ASSETS 12. TOTAL ASSETS $ $ $ $ $ $ $ $ $ $ $ $ 1,478,848 784,363 353,266 428,203 1,856,250 4,900,930 5,136,840 129,775 10,167,545 LIABILITIES AND NET ASSETS 13. 14. 15. CURRENT LIABILITIES Accounts payable Deferred revenue Other current liabilities 16. TOTAL CURRENT LIABILITIES 17. LONG-TERM LIABILITIES 18. TOTAL LIABILITIES 19. 20. 21. NET ASSETS Permanently restricted net assets Temporarily restricted net assets Unrestricted net assets 22. TOTAL NET ASSETS $ $ $ $ 23. TOTAL LIABILITIES AND NET ASSETS $ $ $ $ $ $ $ 710,559 2,195,041 1,805,999 4,711,599 1,006,411 5,718,010 4,449,535 4,449,535 10,167,545 2/27/2013 5 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Planet Aid - 2010 7. Activity Sectors 10 Reported Sectors: Food Security and Food Aid, Rural Development, Institution Strengthening and Development, Community Development, Basic Education, Giris' Education, Vocational Education, Conservation, Child Survival, HIV/AIDS and Infectious Diseases 8. Activity Countries 2 Reported Countries: Zimbabwe, Malawi 9. Overseas Activities Malawi Primary Activity: HIV/AIDS and Infectious Diseases Secondary Activity: Basic Education In-Country Staff: Employees: 285 Volunteers: O Local NGOs Partnered with PVO: 3 Percent of TotalOverseas Expenses: 63% Mozambique Primary Activity: HIV/AIDS and Infectious Diseases Secondary Activity: Basic Education In-Country Staff: Employees: 750 Volunteers: O Local NGOs Partnered with PVO: 3 Percent of TotalOverseas Expenses: 37% 6 2/27/2013 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Plane! Aid - 2010 10. Board of Directors Last Title Company 1. Ester Neltrup President & GEO Planet Aid, Inc. 2. Jytte Martinussen nia nia First Empl. Pbone FS) VES NO United States 3. Mikael Norling nia NO nia Milford , United States 4. Eva Nielson nia NO nia United States 5. Clifford Reeves nia NO nia United States 6. Alfred Besa nia NO nia Uniled States 2127120 13 7 FOR REFERENCE ONL Y. CHANGES TO THIS DOCUMENT DO NOT UPDATE ONLINE ANNUAL SUBMISSION Planet Aid - 2010 11. Executive Summary Annual Report Executive Summary: In 2010, Planet Aid advanced its mission to hel p poor and disadvantaged citizens improve their lives and those of future generations. It 's commitment to protect the Earth's natural habitat through its U.S. recycling program yielded 95 million pounds of used clothing and shoes - an amount otherwise destined for solid waste and negative consequences for the planet's air, water and soil. Donations gathered at its 13,000 donation bins enabled Planet Aid to provide $12 million in support of 45 international aid and development projects in some of the world's most impoverished areas. Through a broad and diverse spectrum of programs, Planet Aid helped improve the health, education, food production, and income generation of individuals and families in 16 countries on three continents. Planet Aid has identified several needs common to many lesser-developed countries. Among them, aready supply of trained primary school teachers to improve literacy rates of the fastest growing segment of the population. To address this critical shortage, Planet Aid continued its support of 26 colleges which produce nearly 3,000 new primary school teachers a year. In 2010, teacher-training programs in Mozambique, Angola, and Malawi helped alleviate student to teacher ratios surpassing 70 to 1. A variety of obstacles stand in the way of those seeking an education. Orphans, street children, and the underprivileged in general, are often excluded from government or private schools due to capacity or cost issues. In 2010, Planet Aid supported vocational training at schools in Angola, Guinea Bissau, Mozambique, and Zimbabwe. Through hands-on training, African youth learned the necessary skilIs to enter jobs in agriculture, carpentry, construction, accounting, and community development While education remains a viable means to rise above subsistence living, it is still out of reach for vast numbers of the world's population. In India alone, 35 million children from ages 5 to 14 are not in school. In order to provide for themselves and their families, many must work as rag pickers, laborers, or in service jobs, and forego an education. Through the Academies for Working Children, Planet Aid provided the means for children to receive academic instruction while employed, with the goal of eventually entering mainstream schools. In 2010, six Academies in Jaipur, Neemrana, Gurgaon, and Ghaziabad each provided 300 working children with a basic education. In 2010, Child Aid Programs continued to provide safe and supportive living conditions for children and their families. Reducing the rate of hygiene and water-related infections, establishing potable water supplies and improving basic levels of education, health, and income were key objectives of the Village Action Groups. Through Planet Aid support, hundreds of groups in eight countries effectively organized individuals and families to improve and sustain daily living conditions. Access to adequate food supplies in many regions continued to drive hunger and malnutrition rates among the poor. Through Famers' Club programs, members learn to farm more effectively, enhance soil fe rti litY, and manage water and other resources to increase crop yields. Instruction at Planet Aid-supported Farmers' Clubs produced significant increases in annual harvests, household incomes, and arable acreage in 2010. Mobilizing communities to increase HIV/AIDS awareness and providing care for those afflicted by the disease remained at the forefront for Total Control of the Epidemic and HOPE programs supported by Planet Aid. Education about the disease remains the single most effective tool in preventing its transmission. Equipped with the basics of how and why the disease spreads, many are able to change behavior and make informed choices. In the U.S. through its Schools Program, students learned first-hand the value of recycling and the positive impact of donations to other nations. Also in 2010, Planet Aid moved its Baltimore-Washington Operations Center and headquarters functions to a new 52,000 square foot facility in Columbia, MD to accommodate continued expansion of it recycling efforts. Recognizing the needs of the world's underprivileged are many and the resources are few, the past year allowed 8 2/27/2013 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION Planet Aid - 2010 Planet Aid to make a quantitative and qualitative impact on many of those seeking basic assistance. Through support of on-going projects and development of new initiatives, Planet Aid will continue to pursue it mission to protect the planet and contribute to humanity's well-being. Annual Report Web Link: http://planetaid.org/web_documents/arTEXTsingle.pdf 12. VolAg Narrative VolAg Report Narrative: Supports and undertakes development projects in a number of countries in Africa, Asia, and Latin America. Planet Aid supports Child Aid, Farmers Clubs, and children's towns; teacher training, vocational schools, and schools for street children; and health care, HIV/AIDS prevention, and income-generating activities. Founded in 1997, Planet Aid raises funds by coliecting and reseliing used clothing. Planet Aid also receives corporate funding and grants from the U.S. Government. 2/27/2013 9 FOR REFERENCE ONL Y. CHANGES TO THIS OOCUMENT DO NOT UPOATE ONLINE ANNUAL SUBMISSION