Canadian Charity Law

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CANADIAN AMATEUR WRESTLING ASSOCIATION L'ASSOCIATION CANADIENNE DE LUTTE AMATEUR

FINANCIAL STATEMENTS (Audited)

Year Ended March 31, 2014

TABLE OF CONTENTS

Auditors Keport

Statement of Financial Position

PAGE

1-2

Statement of Changes in Fund Balances 3

Statement of Operations 4

Schedule I uperations txpenses 5

Schedule 2 - Administrative Expenses 6

Schedule 3 - Marketing Revenue and Expenses 7

Schedule 4 - Other Revenue 8

Notes to Financial Statements 9-15

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III+ LESLIE &

414 MACLEOD

CHARTERED ACCOUNTANTS A PROFESSIONAL CORPORATION

2039 Robertson Road, Suite 403 Ottawa, Ontario, K2H 8R2 P — 613.820.0335

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS:

We have audited the accompanying financial statements of the Canadian Amateur Wrestling Association, which comprise the statement of financial position as at March 31, 2014, and the statements of revenues and expenditures, changes in net assets, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

In common with many not-for-profit organizations, the Association derives revenue from fundraising and donations the completeness of which is not susceptible of satisfactory audit verification. Accordingly, our verification of these revenues was limited to the amounts recorded in the records of the Association and we were not able to determine whether any adjustments might be necessary to contributions, excess of revenues over expenses, current assets and net assets.

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Qualified Opinion

In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of Canadian Amateur Wrestling Association as at March 31, 2014 and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

lerti/e Sr Rae/ea/

Ottawa, Canada Leslie & MacLeod, Chartered Accountants (A Professional Corporation)

June 22, 2014 Authorized to practice accounting by the

Institute of Chartered Accountants of Ontario

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STATEMENT OF FINANCIAL POSITION

As at March 31, 2014

2014 2013

ASSETS CURRENT

Cash $ 233,007 $ 146,361

Accounts receivable 100,009 46,309

Investments (MV - $74,634) 74,634 47,442

HST receivable 18,180 41,300

Prepaid expenses 22,975 43,059

Inventory 6,193 7,432

Due from restricted funds (Note 10) 1,000

455,998 331,096

RESTRICTED (Note 10)

Bob McLeod Scholarship Fund (Note 4) 1,224 2,224

Athlete Reserve Fund (Note 4) 2,756 12,952

Quest for Gold Fund (Note 4) 10,000 10.000

13,980 25,176

EQUIPMENT (Note 3) 608 L643

LONG TERM INVESTMENTS (MV - $45,100) (Note 5) 45,100

$ 515.686 $ 358.722

...continued on next Da-se

The accompanying notes are an integral part of these financial statements

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STATEMENT OF FINANCIAL POSITION — continued

As at March 3I, 2014

2014 2013

CURRENT

LIABILITIES

Government remittances payable $ 17,637 $ 11,643

Accounts payable and accrued liabilities 138,346 153,935

Due to restricted funds (Note 10) 8.951

155.983 174.529

DEFERRED REVENUE 9.266

NET ASSETS General Fund:

Unrestricted 336,457 159,017

Endowment Funds (Note 4) 13.980 25.176

350.437 184.193

$ 515,686 $ 358,722

COMMITMENTS (Note 8)

On behalf of the Board:

Director Director

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Net contributions NET ASSETS, end of year

Unrealized gains on investments INTERFUND TRANSFERS (Note 7)

Amortization of contributions

REVENUE OVER EXPENSES

NET ASSETS, beginning of year

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CANADIAN AMATEUR WRESTLING ASSOCIATION For The Year Ended March 31, 2014

STATEMENT OF CHANGES IN NET ASSETS

L'ASSOCIATION CANADIENNE DE LUTTE AMATEUR

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SCHEDULE I -- LAL11\1).L:

For The Year Ended March 31, 2014

2014 2013

Block administration (Schedule 2) $ 610,438 $ 485,555

Athlete development 14,290

International relations 59,499 139,657

National championships 180,021 229,471

National coaches 605,202 484,409

National team 1,077,740 968,409

Officiating development 28,349 20,143

Other 5,000 24,000

Professional staff (salaries and travel) 207,573 272,427

Skills award program 21,117 22,458

$ 2.794.939 $ 2 659.819

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SCHEDULE 2 - ADMINISTRATIVE EXPENSES For The Year Ended March 31, 2014

2014 2013

Amortization $ 1,034 $ 1,034

Bad debts 3,955

Bank charges 7,276 7,249

Computer/website expenses 49,620 4,529

FAP grants 367,094 291,120

FILA fees 17,634 19,635

Insurance 14,186 14,534

Meetings 80,118 80,787

Miscellaneous 495 343

Office 7,435 5,061

Postage and delivery 6,628 7,727

Professional fees 9,616 8,836

Rent 21,218 18,282

Telephone, fax, internet 13,967 15,252

Translation 10,164 10,166

$ 610.438 $ 484.555 6

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7 CANADIAN AMATEUR WRESTLING ASSOCIATION

SCHEDULE 3 - MARKETING REVENUE AND EXPENSES

2014 2013

REVENUE

Certification $ 11,397 $ 11,124

Donations quest for gold 2,050 765

General sales 1,062

Product line 17,350 7,394

Value in kind 27,552 27,152

58,349 4/,49/

EXPENSES

Certification 4,917 4,715

Communications 10,174 14,692

Marketing commission 1,353 3,788

Product line 5.299 4,845

21,743 28,040

$ 36.606 $ 19.457

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SCHEDULE 4 -- OTHER REVENUE

2014 2013

Athletes fees $ 4,800 $ 3,641

FAP - donations 367,094 286,030

Fees - Affiliation 92,830 97,265

Fees - Club 198,085 256,218

Sanction fees 24,402 30,698

Sundry 72,011 19,893

$ 759.222 $ 693.745

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NOTES TO FINANCIAL STATEMENTS

March 3 I, 2014

The (..anadian Amateur Wrest lins. Association (the "Association") is a not-for-profit corporation incorporated without share capital. Its purpose is to foster the development of amateur wrestlers, coaches, managers, trainers and officials who desire to join in membership to the advancement of amateur wrestling in Canada, and to provide these members with the opportunity to participate and contribute to the improvement of wrestling.

The Association is a Registered Canadian Amateur Athletic Association under the Canadian Income Tax Act and as such is exempt from income taxes.

I. SIGNIFICANT ACCOUNTING POLICIES

The Association follows the standards in Part III of the CICA Handbook and has prepared these financial statements in accordance with Canadian accounting standards for not-for-profit organizations (ASNPO). The financial statements have in management's opinion. been p' roberly prepared within reasonable limits of materiality and within the framework of the accounting policies outlined below.

(a) Revenue recognition

The Association receives restricted contributions for reimbursement of certain specified technical and administrative expenses during the year. Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Unexpended portions of contributions are refundable to the contributor.

Sport Canada contributions are subject to specific terms and conditions regarding the expenditure of the funds. The Association's records are subject to audit by Sport Canada to identify instances, if any, in which amounts charged against contributions have not complied with the agreed terms and conditions and which, therefore, would be refundable to Sport Canada. In the event that adjustments to prior years' contributions are requested, they would be recorded in the year in which Sport Canada requests the adjustments.

Revenue from the sales of products is recognized when the product is shipped and collection is reasonably assured.

Endowment contributions are recognized as direct increases in the Endowment Fund balance.

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I0

NOTES TO FINANCIAL STATEMENTS

March 31, 2014

2. SIGNIFICANT ACCOUNTING POLICIES (.... continued)

Endowment investment income is recognized as revenue of the appropriate fund in the year in which the related expenses are incurred. Unrestricted and board restricted investment income is recognized as revenue when earned.

(b) Investments

Short and long term investments for which there are quoted prices in an active market are carried at fair value. Unrealized gains or losses are reported as part of net income. Investments for which there is not an active market are carried at amortized cost except when it is established that their value is impaired. Impairment losses, or reversal of previously recognized impairment losses, are reported as part of net income.

(c) Fund accounting

The Association follows the deferral method of accounting for contributions.

The operating fund accounts for the Association's program delivery and administration activities.

Endowment funds -- Note 4

(d) Equipment

Computer equipment is stated at cost less accumulated amortization. Computer equipment is amortized over its useful life at the following rate and method:

Computer equipment 3 years straight-line method

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March 31, 2014

(e) Contributed services

Volunteers contribute their services to assist the Association in its service delivery activities. Because of the difficulty in determining their fair value, contributed services are not recognized in the financial statements.

Value in kind revenue is recorded at the fair value of the contributed product.

(f) Capital disclosures

The Association defines capital as invested in equipment, unrestricted and restricted net assets. The Association's objectives when managing capital is to fund capital additions continue as a going concern, and to protect its ability to meet its on-going liabilities.

The Association is not subject to externally imposed capital requirements and its overall strategy with respect to capital remains unchanged from the year ended March 3 I , 2013.

(g) Financial instruments policy

Measurement of financial instruments

The Association initially measures its financial assets and financial liabilities at fair value.

The Association subsequently measures all its financial assets and financial liabilities at cost or amortized cost, except for investments in equity instruments that are quoted in an active market, which are measured at fair value. Changes in fair value of these financial instruments are recognized in net income.

Financial assets measured at amortized cost on a straight-line basis include cash, accounts receivable, and government remittances receivable.

Financial liabilities measured at amortized cost on a straight-line basis include accounts payable and accrued liabilities, government remittances payable and deferred revenues.

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NOTES TO FINANCIAL STATEMENTS March 31, 2014

(h) Measurement uncertainty

The preparation of financial statements in conformity with Canadian accounting standards for not-for- profit organizations requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Such estimates are periodically reviewed and any adjustments necessary are reported in earnings in the period in which they become known. Actual results could differ from these estimates.

3. EQUIPMENT

2014 2013

Cost Accumulated Netbook Netbook

amortization value value

Computer equipment $ 3,103 $ 2.494 $ 608 $ 1.643

4. ENDOWMENT FUNDS

The endowment funds are to be used for the following purposes:

(a) Bob McLeod Scholarship Fund

The Bob McLeod Scholarship Fund was established to provide scholarships to worthy athletes.

(b) Athlete Reserve Fund

The Athlete Reserve Fund consists mainly of revenue and expenses of the Canadian Wrestling Team and its development. Revenue is received in the form of donations and expenses are paid out in the form of reimbursement for training of wrestlers.

(c) Quest for Gold Endowment Fund

!jut ingfistal2004. the ,Assot iation entered into contracts with Trafalgar 1 radi,4 1. icnit P-1 Tr afarea,' r.

a company incorporated under the laws of Bermuda, the purpose of which is to solicit donations from qualified donors. The donation proceeds must be paid directly to Trafalgar for investment into a royalty-producing portfolio. The agreement entitles the Association to receive royalties until termination of the contract. The royalties payable to the Association are based on appreciation in value of the investment portfolio and are net of management fees. During the fiscal year, royalties of

$76,544 (2013-$85,127) were received.

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March 31, 2014

4. ENDOWMENT FUNDS ( Continued)

During fiscal 2007, the Executive committee made the decision to no longer contract with Trafalgar but will receive royalties, which are presently not estimable with certainty.

5. LONG TERM INVESTMENTS

Long term investments consist of guaranteed investment certificates with maturities greater than one year.

Fair market value as at March 31, 2014 is $45,100 ($NIL — 2013).

6. FINANCIAL INSTRUMENTS

The Association is exposed to various risks through its financial instruments and has a comprehensive risk management framework to monitor, evaluate and manage these risks. The following analysis provides information about the Association's risk exposure and concentration as of March 31, 2014.

Credit risk

Credit risk arises from the potential that a counter party will fail to perform its obligations. The Association is exposed to credit risk from customers. In order to reduce its credit risk, the Association conducts regular reviews of its existing customers' credit performance. An allowance for doubtful accounts is established based upon factors surrounding the credit risk of specific accounts, historical trends and other information. The Association has a significant number of customers which minimizes concentration of credit risk.

Fair Value

The Association's carrying value of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities approximates its fair value due to the immediate or short term maturity of these instruments.

Interest rate risk

Interest rate risk is the risk that the value of a financial instrument might be adversely affected by a change in the interest rates. In seeking to minimize the risks from interest rate fluctuations, the Association manages exposure through its normal operating and financing activities. The Association is not exposed to interest rate risk.

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NOTES TO FINANCIAL STATEMENTS

March 31, 2014

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7. INTERFUND TRANSFER

During fiscal 2014, thc, Association's board of directors authorized the transfer of $76,544 (2013- $75,127) from the Quest for Gold Endowment Fund to the General Fund.

8. COMMITMENTS

The Association rents office accommodation under an operating lease, which expires October 31, 2016. The annual commitment is approximately $9,000 plus operating costs.

The Association leases a printer / fax / photocopy machine under an operating lease which expires July 2014.

The minimum annual commitment is $1,941 plus taxes.

9. CASH

Cash consists of:

2014 2013

General Fund $ 233.007 $ 146 361

Athlete Reserve Fund 2,756 12,952

Quest for Gold Endowment Fund 10,000 49

Bob McLeod Scholarship Fund 2,224 3,224

$ 14.980 $ 16.225

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13. STATEMENT OF CASH FLOW

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