FINANCIAL STATEMENTS

Transcription

1 FINANCIAL STATEMENTS 2012 HALTON COMMUNITY HOUSING CORPORATION 1151 Bronte Road, Oakville, Ontario L6M 3L1 (905) Approved by the Board on May 21, 2013

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3 KPMG LLP Chartered Accountants Box King Street West Suite 700 Hamilton ON L8N 3R1 Telephone (905) Telefax (905) To the Members of Board of Directors Halton Community Housing Corporation INDEPENDENT AUDITORS' REPORT We have audited the accompanying financial statements of Halton Community Housing Corporation, which comprise the statement of financial position as at December 31, 2012, December 31, 2011, and January 1, 2011, the statements of operations, changes in net financial assets and cash flows for the years then ended, and notes, comprising 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 public sector accounting standards, 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. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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 our 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, we consider 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 audit opinion. KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. KPMG Canada provides services to KPMG LLP. KPMG Confidential

4 Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Halton Community Housing Corporation as at December 31, 2012, December 31, 2011, and January 1, 2011, the statements of operations, changes in net financial assets and cash flows for the years then ended, in accordance with Canadian public sector accounting standards. Chartered Accountants, Licensed Public Accountants May 21, 2013 Hamilton, Canada

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6 STATEMENT OF OPERATIONS (with comparative figures for the year ended December 31, 2011) REVENUES Restated Rental revenues $ 11,872,607 $ 11,021,535 Operating subsidies 6,153,276 5,789,484 Capital revenues 8,320,135 16,135,975 Other 331, ,531 Total Revenues 26,677,879 33,297,525 EXPENSES Non-Profit Housing (Note 13) 10,849,541 10,340,448 Public Housing (Note 13) 12,732,676 11,867,954 Affordable Housing Program (Note 13) 2,329, ,947 Total Expenses 25,911,866 22,471,349 NET REVENUES 766,013 10,826,176 ACCUMULATED SURPLUS, BEGINNING OF YEAR 89,407,187 78,581,011 ACCUMULATED SURPLUS, END OF YEAR $ 90,173,200 $ 89,407,187 See accompanying notes to financial statements.

7 STATEMENT OF CHANGE IN NET DEBT (with comparative figures for the year ended December 31, 2011) Restated Net revenues $ 766,013 $ 10,826,176 Acquisition of tangible capital assets (2,465,203) (16,226,927) Amortization of tangible capital assets 6,524,084 5,253,178 Change in prepaid expenses 29,462 (2,990) Change in net debt 4,854,356 (150,563) NET DEBT, BEGINNING OF YEAR (64,956,631) (64,806,068) NET DEBT, END OF YEAR $ (60,102,275) $ (64,956,631) See accompanying notes to financial statements.

8 STATEMENT OF CASH FLOWS as at December 31, 2012 (with comparative figures as at December 31, 2011) Cash provided by (used in): OPERATING ACTIVITIES Restated Net revenues $ 766,013 $ 10,826,176 Items not involving cash: Amortization 6,524,084 5,253,178 Change in non-cash assets and liabilities: Accounts receivable 1,758,075 (1,507,001) Government subsidy receivable 739,846 (94,220) Accounts payable and accrued liabilities (3,251,669) 2,957,096 Government subsidy payable (869,872) 12,610 Deferred revenue (435,510) (357,031) Prepaid expenses 29,462 (2,990) Net change in cash from operating activities 5,260,429 17,087,818 CAPITAL ACTIVITIES Cash used to acquire tangible capital assets (2,465,203) (16,226,927) Net change in cash from capital activities (2,465,203) (16,226,927) INVESTING ACTIVITIES Investments (309,062) (353,067) Net change in cash from investing activities (309,062) (353,067) FINANCING ACTIVITIES Debt issued and assumed (1,877,807) 2,736,713 Long-term debt repaid (2,652,710) (2,497,611) Net change in cash from financing activities (4,530,517) 239,102 NET CHANGE IN CASH (2,044,353) 746,926 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,694,931 2,948,005 CASH AND CASH EQUIVALENTS, END OF YEAR $ 1,650,578 $ 3,694,931 See accompanying notes to financial statements.

9 1. AUTHORITY AND PURPOSE The Halton Community Housing Corporation (the Corporation ) is incorporated with share capital under the Ontario Business Corporations Act to provide, operate and construct housing accommodation primarily for persons of low and moderate income. The Corporation operates the following non-profit properties under Parts VI and VII of the Housing Services Act (HSA): Walkers Fields, The Abbeyview, Sheridan Woods, Golden Briar Heights, Walkers Landing, Bray s Lane, Maple Crossing, Donaghey Square, Glen Valley Place, Wellington Terrace. Part VI of the HSA governs the following public housing, 100% rent geared to income properties: Holmesway Place, John Armstrong Terrace, Margaret Drive, Sargent Court, The Bruce Apartment, Longmoor Avenue, John R. Rhodes Residence, Harmony Court, Maurice Drive, Burloak Drive, Braeside, Pinedale, Lakeview Villa, Elm Road, Kin Court. Financing of these properties is held by the Province and are not reflected in the Corporation s financial statements. The HSA is not applicable to the Brant Court, Martin House Seniors Residence and Aldershot Village Residence properties. The Martin House Seniors Residence and the Aldershot Village Residence are governed by contribution agreements with The Regional Municipality of Halton (the Region ) and are subject to the requirements of the provincial Affordable Housing Program. The Corporation s shares are 100% owned by the Region. The Region is also the Service Manager for the Corporation. The Corporation is exempt from tax under the Federal Income Tax Act. 2. CONVERSION TO PUBLIC SECTOR ACCOUNTING STANDARDS The Housing Services Act (HSA) was proclaimed into law on January 1, 2012 replacing and repealing the Social Housing and Reform Act (SHRA). A control assessment was performed and it was determined that due to the changes in legislation the Corporation is controlled by the Region for reporting purposes under the Canadian Public Sector Accounting (PSA) standards recommended by the Canadian Institute of Chartered Accountants (CICA). As an entity controlled by a local government, the Corporation is required to follow PSA standards. Beginning with the 2012 fiscal year, the Corporation has adopted the PSA standards without non-profit provisions in sections PS 4200 to PS These financial statements are the first financial statements for which the Corporation has applied PSA standards. Relating accounting changes have been applied retroactively with restatement of prior period results. Key adjustments on the Corporation s financial statements resulting from the adoption of the PSA standards are as follows: (a) Investments Previously, the Corporation recorded its investments at fair value because they were classified as held-for-trading financial instruments. Unrealized gains and losses on investments and interest received were recorded in the related fund statement. PSA standards require that investments be recorded at cost with interest earnings recognized when received or receivable. Gains and losses on investments are recorded at the time of sale. (b) Deferred Revenue Under the Canadian generally accepted accounting principles for non-profit organizations the Corporation was required to defer revenue recognition for the funding received for the construction of the Aldershot Village Residence and Martin House Seniors Residence and recognize the revenue over the useful life of the assets. PSA standards require revenue recognition for government transfers at the point in time when eligibility criteria are met and

10 2. CONVERSION TO PUBLIC SECTOR ACCOUNTING STANDARDS (continued) construction is complete. A portion of the funding received from the Service Manager for this purpose was recognized as revenue as a result of this change. (c) Tangible Capital Assets Prior to the adoption of PSA standards, the Corporation accounted for tangible capital assets in accordance with provisions of the SHRA. These practices are materially different from Canadian generally accepted accounting principles. Non-profit properties previously governed by Section 103 of the SHRA were recorded at historical cost with amortization for buildings provided at a rate equal to the annual principal repayments on the related mortgages. Under PSA standards the amortization of these properties is calculated based on the useful life of the building components. Public housing properties previously governed by Section 106 of the SHRA are financed by the Province of Ontario and these capital assets were not recorded on the Corporation s financial statements. The Brant Court property transferred to the Corporation from the City of Burlington was not recorded in the Corporation s financial statements. Under PSA standards these properties are recognized in the financial statements at their fair value at the time of contribution to the Corporation with amortization calculated based on the useful life of the building components. The Martin House Seniors Residence and Aldershot Village Residence properties, constructed in 2011, were recorded at cost with amortization reported based on the useful life of the building components in accordance with Canadian generally accepted accounting principles for non-profit organizations. This accounting treatment is substantially the same as the provisions under PSA standards. (d) Reserves and Reserve Funds Under the Canadian generally accepted accounting principles for non-profit organizations the Corporation was required to present reserves and reserve funds as part of the Net Assets section on the Statement of Financial Position below assets and liabilities. Under PSA standards, funds transferred to the Corporation from the Service Manager for expenses relating to capital projects meet the definition of government transfers and are reported as part of deferred revenue until the funds are expended for the designated purpose. Operating and capital reserves funded from the annual surplus form part of accumulated surplus. The impact of the conversion to PSA standards on the accumulated surplus at the date of transition on January 1, 2011 and the 2011 annual surplus is presented below. These accounting changes have been applied retroactively with restatement of prior periods. January 1, 2011 Accumulated surplus as originally reported, beginning of year $12,244,565 Adjustments to accumulated surplus: Investments (228,727) Deferred revenue 9,124,904 Tangible Capital Assets 67,177,690 Capital reserve balance reclassification (9,737,421) Accumulated surplus as restated, beginning of year $78,581,011

11 2. CONVERSION TO PUBLIC SECTOR ACCOUNTING STANDARDS (continued) December 31, 2011 Annual surplus (deficit) for the year as originally reported $(206,300) Adjustments to annual surplus for the year: Re-valuation of Investments (39,428) Deferred revenue 12,524,276 Tangible Capital Assets (1,789,629) Capital reserve balance reclassification 337,257 Annual surplus for the year as restated 10,826,176 Accumulated surplus, end of year as restated $89,407,187 The impact on the Statement of Cash Flows is as follows: Previously stated December 31, 2011 Adjustment December 31, 2011 Restated December 31, 2011 Amortization of capital costs $2,497,611 $2,755,567 $5,253,178 Unrealized gain on investment (39,427) 39,427 - Government subsidy receivable (1,063,757) 969,537 (94,220) Deferred revenue 13,474,039 (13,831,070) (357,031) Tangible Capital Assets (15,260,989) (965,938) (16,226,927) 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Corporation have been prepared in accordance with accounting standards issued by the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants (CICA). Significant accounting policies adopted by the Corporation are as follows: (a) Basis of Accounting The Corporation follows the accrual method of accounting for revenues and expenses. Revenues are normally recognized in the year in which they are earned. Expenses are recognized as they are incurred and are measurable as a result of receipt of goods or services. (b) Deferred Revenue Deferred revenue represents revenues which have been collected but for which the related services have yet to be performed or eligible expenses incurred. Deferred revenue is comprised of general and capital deferred revenue. Government transfers such as funds for capital projects are recognized when the transfer can be reasonably estimated, is authorized and eligibility criteria have been met. (c) Amortization Methods The cost, less residual value, of tangible capital assets is amortized on a straight-line basis over their estimated useful lives. Estimated useful lives for major categories of tangible capital assets are as follows: Buildings and Building Improvements Land Land Improvements 15 to 60 years Not Amortized 15 to 70 years

12 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Machinery and Equipment 5 to 60 years Land tangible capital assets are not amortized. For all other tangible capital assets, amortization commences in the year following acquisition, with a full year s amortization charged in the final year of useful life. No amortization is calculated for assets not in service or under construction until they are available to be put into service. (d) Contributed Assets All assets contributed to the Corporation are recorded at their fair value at the time of contribution. Revenue at an equal amount is recognized at the time of contribution. (e) Reserves and Reserve Funds Under Provincial policy and as part of the funding agreements with the Service Manager, the Corporation is mandated to transfer annual surplus amounts up to a cumulative maximum of $300 per unit to the operating reserves. Remaining surplus amounts are transferred to reserves designated for capital expenditures. Withdrawals from the reserves must have Board of Directors approval. (f) Government Transfers Government transfers are received from the Service Manager and the Province for the provision of social housing services, building construction and other capital expenditures. The Corporation recognizes the transfer of government funding when the transfer can be reasonably estimated, is authorized and eligibility criteria have been met. Revenue is recorded on the Statement of Operations when the relating services are performed or eligible expenses incurred. (g) Rental revenue Rental and other revenue is recognized at the time the services are provided. (h) Investments Investments consist of money market bond funds and are stated at the lower of cost and market value. Gains and losses on investments are recorded when incurred and interest is recorded when received or receivable. (i) Cash and cash equivalents Cash and cash equivalents include short-term investments with a term to maturity of 90 days or less at acquisition. (j) Use of estimates The preparation of financial statements, in conformity with Canadian Public Sector Accounting Standards, 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 dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

13 4. OAKVILLE SENIOR CITIZENS RESIDENCES (OSCR) OSCR is a non-profit corporation that operates subsidized senior citizens housing projects in the Town of Oakville. The operations of OSCR are governed by an independent Board of Directors and it is funded independently through rental income and subsidies from the Province. The OSCR property is owned by the Corporation and is included as part of tangible capital assets. Capital maintenance and improvements to OSCR s buildings are the responsibility of the Corporation and such expenditures on behalf of OSCR are included in the Statement of Operations. As a result of this responsibility, OSCR is required to remit any net surplus it has for the year to the Corporation. The net surplus for the year is recorded as revenue on the Statement of Operations. The surplus remitted for the current year is $ nil ( $ nil). 5. INVESTMENTS The Corporation s investments include money market bond funds with a cost value of $11,156,369 ( $10,847,307) and a market value of $11,317,808 ( $11,115,462) at the end of the year. The market value represents the realizable value of the investments if they were to be sold at December 31, The investments are managed by Phillips, Hager & North Investment Funds Ltd. as per the provisions of the HSA. The Corporation s discretion regarding the management of the funds is limited by the investment pooling provision contained in the HSA. 6. ACCOUNTS RECEIVABLE Accounts receivable recorded on the balance sheet are composed of the following: GST/HST Receivable $431,898 $2,026,498 Other Receivables 84, ,381 Rents 324, ,850 Allowance for doubtful accounts (135,000) (135,000) Total accounts receivable $706,654 $2,464, DEFERRED REVENUE The Corporation s deferred revenue is comprised of general and capital deferred revenue. General deferred revenue consists of funding designated for specific operating expenditures that will occur in future periods. Funding for capital projects has been provided by the Service Manager under Provincial policy to ensure funds are available to maintain the housing stock in a state of good repair. The use of these funds is governed by Provincial policy and the Service Manager and requires the approval of the Board of Directors. These funds will be used for capital projects in conjunction with the capital reserve which forms part of the accumulated surplus.

14 Deferred revenue reported on the Statement of Financial Position is made up of the following: Emergency shelter $18,318 $18,318 Capital deferred revenue 8,964,654 9,400,164 Total deferred revenue $8,982,972 $9,418, MORTGAGES PAYABLE Mortgages are secured by properties of the Corporation. The mortgages principal amount repaid this period was $2,652,710 (2011- $2,497,611) and mortgages interest paid and payable was $2,642,425 (2011- $2,789,083). As at December 31, 2012, the unpaid balances of the mortgages are as follows: Non Profit Properties: Walkers Fields CMHC amortized over 20 years with a renewal date of June 1, 2015, at 4.39% per annum with blended monthly payments of $31,289, retires January $3,524,130 $3,741,096 The Abbeyview CMHC amortized over 15 years with a renewal date of February 1, 2016, at 2.75% per annum with blended monthly payments of $31,521, retires December Sheridan Woods CMHC amortized over 20 years with a renewal date of March 1, 2017, at 4.42% per annum with blended monthly payments of $30,372, retires April ,133,994 4,395,294 3,875,473 4,065,609 Golden Briar Heights Bank of Nova Scotia amortized over 22 years with a renewal date of September 1, 2015, at 4.318% per annum with blended monthly payments of $53,299, retires September ,986,052 7,318,867 Walkers Landing Royal Bank amortized over 20 years with a renewal date of March 1, 2018, at % per annum with blended monthly payments of $82,088, retires March ,751,313 11,225,279 Bray s Lane Toronto Dominion amortized over 30 years with a renewal date of July 1, 2028, at 5.94% per annum with blended monthly payments of $39,535, retires July ,839,616 5,024,149

15 8. MORTGAGES PAYABLE (continued) Non Profit Properties: Maple Crossing Toronto Dominion amortized over 17 years with a renewal date of September 1, 2017 at 2.442% per annum with blended monthly payments of $47,487, retires September ,834,725 8,154,072 Donaghey Square Bank of Nova Scotia amortized over 24 years with a renewal date of September 1, 2015, at % per annum with blended monthly payments of $19,329, retires September ,769,715 2,880,532 Glen Valley Place CMHC amortized over 22 years with a renewal date of June 1, 2018, at 3.65% per annum with blended monthly payments of $28,898, retires May ,474,220 4,655,300 Wellington Terrace Toronto Dominion amortized over 22 years with a renewal date of January 1, 2018, at 4.726% per annum with blended monthly payments of $68,417, retires January ,642,871 10,003,397 AHP Properties: Martin House Seniors Residence Halton Region amortized over 20 years at 4.5% per annum with blended monthly payments of $8,292, retires September 2032 Aldershot Village Residence Halton Region amortized over 20 years at 4.5% per annum with blended monthly payments of $6,087, retires November ,301, ,113 2,307,781 1,851,026 Total mortgages payable $ 61,091,885 $ 65,622,402 The annual principal repayments, assuming refinancing at the end of the term, for each of the five years subsequent to December 31, 2012 are as follows: $ 2,871, ,991, ,112, ,215, ,344, ,556,145 Total $ 61,091,885

16 9. TANGIBLE CAPITAL ASSETS Tangible capital assets are recorded at cost on the Statement of Financial Position. Contributed tangible capital assets are recorded at their fair value at the time of contribution. There were no contributed tangible capital assets during the year ( $nil). During the year there were no write-downs of assets ( $nil). The Corporation has no tangible capital assets recognized at a nominal value. There was no interest capitalized in the year ( $nil). There were no assets under construction at the end of the current year ( $295). The use of the tangible capital assets owned by the Corporation is governed by the provisions of the HSA. As such, these assets must be used in the provision of social housing and cannot be divested without prior consent of the Service Manager and the Minister. The public housing properties held by the former Halton Housing Corporation and passed through to the Corporation were originally financed by the Province of Ontario through general obligation provincial debentures. At the time of the transfer of ownership of the Halton Housing Corporation to the Region, the Province did not transfer the responsibility for the repayment of these debentures. Accordingly, the value of the provincial debentures has not been recorded on the Corporation s financial statements. The value of the debentures at the end of the year is $10.9 million ( $11.7). The Martin House Seniors Residence property has been constructed on the land leased from the Region. The lease is for a term of twenty (20) years. HCHC shall pay to the Region a nominal base rent of Two Dollars ($2.00) for the term. The following charts summarize tangible capital asset balances by category for the years 2012 and 2011: (Dollars in Thousands) Asset Type Opening Balance Additions Disposals Ending Balance Opening Accumulated Amortization Balance Amortization Disposals Ending Accumulated Amortization Balance Ending Net Book Value 1-Jan Dec-12 1-Jan Dec Dec-12 General Buildings and Building Improvements $116,979 $1,296 $68 $118,207 $38,290 $3,466 $68 $41,688 $76,519 Land 50, , ,573 Land Improvements 8, ,207 5, ,846 3,361 Machinery and Equipment 45, ,056 23,909 2,539-26,448 19,608 Total General Capital 221,351 2, ,043 67,526 6, , ,061 Assets Under Construction 295 (295) Total Tangible Capital Assets $221,646 $2,465 $68 $224,043 $67,526 $6,524 $68 $73,982 $150,061 (Dollars in Thousands) Asset Type Opening Balance Additions Disposals Ending Balance Opening Accumulated Amortization Balance Amortization Disposals Ending Accumulated Amortization Balance Ending Net Book Value 1-Jan Dec-11 1-Jan Dec Dec-11 General Buildings and Building Improvements $99,940 $17,117 $78 $116,979 $35,373 $2,995 $78 $38,290 $78,689 Land 50, , ,573 Land Improvements 7, ,601 4, ,327 3,274 Machinery and Equipment 36,654 8,544-45,198 22,025 1,884-23,909 21,289 Total General Capital 194,950 26, ,351 62,351 5, , ,825 Assets Under Construction 10,547 (10,252) Total Tangible Capital Assets $205,497 $16,227 $78 $221,646 $62,351 $5,253 $78 $67,526 $154,120

17 10. ACCUMULATED SURPLUS Accumulated Surplus consists of the following: Difference Public and Non-Profit Housing operating reserve $691,871 $691,871 $- Affordable Housing Program operating reserve 43,500-43,500 Affordable Housing Program capital reserve 342,405 91, ,877 Tangible Capital Assets 150,061, ,120,359 (4,058,881) Contributed capital 1,074 1,074 - Mortgages payable (61,091,885) (65,622,402) 4,530,517 Other 124, ,757 - Total Accumulated Surplus $90,173,200 $89,407,187 $766,013 Capital and operating reserves have been established through Service Manager policy. The Corporation is mandated to place a cumulative amount of $300 per unit into the operating reserve. Remaining accumulated surplus is allocated to the capital reserve. As at December 31, 2012 the operating reserve was fully funded for all programs. Contributions to and withdrawals from the funds are governed by Service Manager policy and must have approval from the Board of Directors. Additional funds from the Service Manager designated specifically for capital projects are accounted for in accordance with PS 3410 Government Transfers. As such, these funds are recorded as deferred revenue until the funds are expended for the specified purposes as directed by the Board of Directors and the Service Manager. 11. PROVINCIAL CAPITAL GRANT In 2012 the Provincial Social Housing Capital Repairs (SHRRP) Fund has provided a grant for the following capital projects: 2012 Revenues 2012 Expenses Abbeyview Machine guarding of elevators $353 $353 Wellington Terrace - Machine guarding of elevators 6,350 6,350 Bruce Apartments - Machine guarding of elevators 5,957 5,957 Longmoor Avenue - Machine guarding of elevators John R. Rhodes Residence - Machine guarding of elevators 1,412 1,412 Longmoor Avenue Lighting replacement 16,332 16,332 Total provincial capital grant $31,110 $31,110

18 12. CAPITAL EXPENDITURES FUNDED FROM RESERVES BY HOUSING PROPERTY Portfolio Building Type 2012 Budget 2012 Actual 2011 Actual Walker s Fields NP Family $54,395 $127,227 $88,763 Walker s Landing NP Family 232, , ,456 Maple Crossing NP Family 52, , ,382 Abbeyview NP Family 246, , ,961 Sheridan Woods NP Family 235, , ,334 Bray s Lane NP Family 688, , ,329 Golden Briar Heights NP Family 59, , ,905 Glen Valley Place NP Family 56,848 59,445 43,785 Donaghey Square NP Family 87,299 68, ,062 Wellington Terrace NP Senior 239, , ,501 Burloak Drive PH Family 327, , ,307 Holmesway Place PH Family 36,055 98,637 25,141 Margaret Drive PH Family 247, , ,374 Maurice Drive PH Family 226, , ,077 Elm Road PH Family 317, ,549 87,873 Longmoor Avenue PH Senior 103,375 92,022 78,956 Pinedale Avenue PH Senior 41, ,030 77,461 John Armstrong Terrace PH Senior 255, ,561 44,845 Sargent Court PH Senior 32,791 10,653 29,746 Braeside PH Senior 109,637 80,993 25,103 Lakeview Villa PH Senior 274, ,057 93,822 Kin Court PH Senior 36,761 16,234 33,204 Bruce Apartments PH Senior 108, , ,322 Harmony Court PH Senior 1,028, , ,354 John R. Rhodes PH Senior 220, , ,956 Oakville Senior Citizens Residence PH Senior 417, , ,656 Aldershot Village Residence AHP Senior 37,344 2,600 - Martin House Seniors Residence AHP Senior 45,555 1,228 - Brant Court Other Family 500, ,819 78,744 Total expenditures $6,320,885 $6,287,977 $3,684, SEGMENTED DISCLOSURE Segmented information has been identified based on the social housing programs operated by the Corporation. The programs that have been separately disclosed in the segmented information are as follows: Non-Profit Housing The properties that form part of the Non-Profit housing program are governed by Parts VI and VII of the HSA. The properties include rent geared to income and market rent units. Public Housing The properties that form part of the Public Housing program are governed by Part VI of the HSA. All of the properties are rent geared to income. The Brant Court property is included within this portfolio.

19 Affordable Housing Program (AHP) The properties that form part of the AHP program are governed by contribution agreements with the Service Manager and are subject to the requirements of the provincial Affordable Housing Program. A grant program offered by the Service Manager allows rents at these properties to be on average 50% of market rents. Oakville Senior Citizens Residences (OSCR) The OSCR property is owned and maintained by the Corporation. The operation of the subsidized senior citizens housing projects is the responsibility of the OSCR Board of Directors which is independent of the Corporation as described in Note 4. Non-Profit Housing Public Housing* Affordable Housing Program Revenues Rental revenue $4,832,570 $6,197,074 $842,963 $11,872,607 Operating subsidies earned 4,899, , ,200 6,153,276 Capital subsidies earned 2,383,884 3,900,263 2,035,988 8,320,135 Non-rental revenue: Interest on working capital** 24,824 36,509 4,897 66,230 Laundry and parking 51,220 45,930 20, ,404 Other 77,360 60,902 9, ,227 Total Revenues 12,269,292 10,987,320 3,421,267 26,677,879 Expenses Mortgage interest 2,612,218-30,207 2,642,425 Amortization of capital costs 1,910,661 3,357,282 1,256,141 6,524,084 Municipal taxes 1,392,324 1,508, ,044 3,189,133 Property management** 2,643,668 3,792, ,961 6,962,770 Capital maintenance 1,684,958 2,288,339 3,828 3,977,125 Other 9,959 24,763-34,722 Utilities 399,226 1,590, ,386 2,185,632 Insurance** 124, ,440 28, ,485 Uncollectible receivables 71,564 30, ,490 Total Expenses 10,849,541 12,732,676 2,329,649 25,911,866 NET REVENUES (EXPENSES) $1,419,751 ($1,745,356) $1,091,618 $766,013 * includes OSCR ** allocated to each program based on the number of units 2012 Total

20 13. SEGMENTED DISCLOSURE (continued) Non-Profit Housing Public Housing* Affordable Housing Program Revenues Rental revenue $4,730,676 $6,225,925 $64,934 $11,021,535 Operating subsidies earned 4,893, , ,368 5,789,484 Capital subsidies earned 1,462,430 2,149,268 12,524,277 16,135,975 Non-rental revenue: Interest on working capital** 26,153 38,463-64,616 Laundry and parking 51,308 16, ,141 Other 84, ,287 23, ,774 Total Revenues 11,249,155 9,169,615 12,878,755 33,297,525 Expenses Mortgage interest 2,789, ,789,083 Amortization of capital costs 1,898,588 3,354,590-5,253,178 Municipal taxes 1,416,632 1,514,474 25,865 2,956,971 Property management** 2,497,642 3,607, ,233 6,318,122 Capital maintenance 1,152,745 1,493,016-2,645,761 Other 17,047 55,675-72,722 Utilities 387,690 1,664,268 18,321 2,070,279 Insurance** 118, ,793 5, ,161 Uncollectible receivables 62,181 18,891-81,072 Total Expenses 10,340,448 11,867, ,947 22,471,349 NET REVENUES (EXPENSES) $908,707 ($2,698,339) $12,615,808 $10,826,176 * includes OSCR ** allocated to each program based on the number of units 2011 Total

21 14. BUDGET COMPARISON The Board approves HCHC s operating and capital budgets each year on a cash basis. Since the audited financial statements are prepared on a full accrual basis, reconciliation must be performed in order to present the annual budget. A summary of that reconiciliation for 2012 is as follows : 2012 Approved Budget 2012 Full Accrual Budget 2012 Actuals Adjustments* Statement of Operations Revenues Rental revenues $11,747,458 $- $11,747,458 $11,872,607 Operating subsidies 9,637,537 (3,462,611) 6,174,926 6,153,276 Capital subsidies - 8,320,135 8,320,135 8,320,135 Other 184, , ,861 Total Revenues 21,569,117 4,857,524 26,426,641 26,677,879 Expenses Non-Profit Housing 10,577, ,373 10,790,050 10,849,541 Public Housing 9,497,180 3,690,897 13,188,077 12,732,676 Affordable Housing Program 1,494,260 1,035,565 2,529,825 2,329,649 Total Expenses 21,569,117 4,938,835 26,507,952 25,911,866 Net Revenues - (81,311) (81,311) 766,013 Statement of Changes in Net Debt Net Revenues (81,311) 766,013 Acquisition of tangible capital assets (2,465,203) (2,465,203) Amortization of tangible capital assets 6,524,084 6,524,084 Change in prepaid expenses 29,462 29,462 Change in Net Debt $4,007,032 $4,854,356 *Adjustments include revenue and expenses which were not budgeted (amortization) or included in capital budget (unit turnover). Given that certain budget information is not available in full accrual format, the assumption of using budget adjustments that equal the actual full accrual adjustments was used. These full accrual budget estimates are unaudited and for financial statement presentation only.