FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 AND AUDITOR'S REPORT TO THE MEMBERS

FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 AND AUDITOR'S REPORT TO THE MEMBERS

FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 AND AUDITOR'S REPORT TO THE MEMBERS TABLE OF CONTENTS Independent Auditor's Report Statement of Financial Position Statement of Changes in Fund Balances Statement of Operations - General Statement of Cash Flows Notes to the Financial Statements PAGE 1 3 4 5 6 7-10

May 19, 2016 Independent Auditor s Report To the Members of Skate Canada We have audited the accompanying financial statements of Skate Canada, which comprise the statement of financial position as at March 31, 2016 and the statements of changes in fund balances, operations - general and cash flows for the year then ended, and the related notes, which comprise 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. PricewaterhouseCoopers LLP 99 Bank Street, Suite 800, Ottawa, Ontario, Canada K1P 1E4 T: +1 613 237 3702, F: +1 613 237 3963 PwC refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our unqualified audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Skate Canada as at March 31, 2016 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. Chartered Professional Accountants, Licensed Public Accountants 2

Skate Canada Statement of Financial Position As at March 31, 2016 ASSETS 2016 $ 2015 $ Current assets Cash 499,337 1,967,429 Accounts receivable 2,556,034 1,507,881 Unbilled contract revenue 853,000 879,000 Merchandise inventory Note 3-237,917 Prepaid expenses 398,470 286,245 Skate Canada Skater Trust Fund Note 4 78,536 865,171 4,385,377 5,743,643 Investments Note 5 18,287,001 20,277,040 Capital Assets Note 6 1,992,253 1,830,007 LIABILITIES AND FUND BALANCES 24,664,631 27,850,690 Current liabilities Bank indebtedness Note 8 1,302,867 - Accounts payable and accrued liabilities Note 7 2,431,963 2,317,417 Deferred revenue 356,268 423,894 Deferred contributions Note 9 558,258 2,643,354 Skate Canada Skater Trust Fund Note 4 78,536 865,171 4,727,892 6,249,836 Fund balances General Fund Unrestricted 8,725,934 10,114,774 Invested in Capital Assets 1,992,253 1,830,007 Internally restricted - Athlete Fund 7,411,942 7,811,666 Internally restricted - Hall of Fame Fund 1,414,339 1,452,136 Externally restricted 210,664 210,664 Endowment 181,607 181,607 19,936,739 21,600,854 Commitments Note 12 24,664,631 27,850,690 3-Jun-16 Dan Thompson, Skate Canada CEO Leanna Caron, Skate Canada President The accompanying notes are an integral part of these financial statements 1

Skate Canada Statement of Changes in Fund Balances Balance - Beginning of the year $ Net expense for the year $ Purchase of capital assets $ Balance - End of the year $ General Unrestricted 10,114,774 (928,060) (460,780) 8,725,934 Internally restricted - Invested in Capital Assets 1,830,007 (298,534) 460,780 1,992,253 11,944,781 (1,226,594) - 10,718,187 Internally restricted - Athlete Fund 7,811,667 (399,725) - 7,411,942 Internally restricted - Hall of Fame Fund 1,452,135 (37,796) - 1,414,339 21,208,583 (1,664,115) - 19,544,468 Externally restricted 210,664 - - 210,664 Endowment 181,607 - - 181,607 Total 21,600,854 (1,664,115) - 19,936,739 The accompanying notes are an integral part of these financial statements 4

Skate Canada Statement of Operations - General Unrestricted Athlete Fund Hall of Fame Fund 2016 2015 $ $ Revenue Membership 6,214,367 - - 6,214,367 6,378,502 Test Fees 925,859 - - 925,859 887,002 Events 3,958,596 - - 3,958,596 1,879,901 Merchandising 209,688 - - 209,688 567,829 Government and other Grants 2,345,800 - - 2,345,800 2,500,276 Sponsorship 1,595,016 - - 1,595,016 1,470,660 Investment Income (loss) (note 5) (53,894) (25,103) (4,782) (83,779) 2,362,400 Other 261,697 - - 261,697 251,479 Strategic Planning (note 9) 2,085,096 - - 2,085,096 1,343,505 17,542,225 (25,103) (4,782) 17,512,340 17,641,554 Expense Section Grants 3,328,217 - - 3,328,217 3,330,862 Athlete Grants 461,663 330,987-792,650 707,694 Events 3,544,296-367 3,544,663 2,444,984 Merchandising 57,477 - - 57,477 419,244 Agent fees and Advertising 152,317 - - 152,317 257,931 Investment fees and bank charges 126,870 43,635 7,741 178,246 164,528 Salaries, benefits and professional development 4,349,378-150 4,349,528 4,617,329 Professional fees and contracted services 1,348,620-4,281 1,352,901 1,037,671 Facilities 548,567-4,191 552,758 459,505 Travel and living 1,638,383-9,797 1,648,180 1,590,442 Technology and subscriptions 540,928 - - 540,928 460,236 Office 163,730-3,204 166,934 205,368 General 124,743-3,283 128,026 162,615 Amortization 298,534 - - 298,534 477,188 Strategic Planning (note 9) 2,085,096 - - 2,085,096 1,343,505 18,768,819 374,622 33,014 19,176,455 17,679,102 Net expense for the year (1,226,594) (399,725) (37,796) (1,664,115) (37,548) The accompanying notes are an integral part of these financial statements 5

Skate Canada Statement of Cash Flows Cash flows provided by (used in) 2016 2015 $ $ Operating activities Net expense for the year (1,664,115) (37,548) Items not affecting cash - Amortization 298,534 477,188 Changes in the fair value of investments 658,398 (1,750,125) Net change in non-cash working capital items (2,934,637) (371,099) (3,641,820) (1,681,584) Investing activities Proceeds on disposition of investments 4,220,450 6,142,928 Purchase of investments (2,888,809) (5,142,020) Purchase of capital assets (460,780) (383,486) 870,861 617,422 Net change in cash for the year (2,770,959) (1,064,162) Cash - Beginning of year 1,967,429 3,031,591 Cash (Bank indebtedness) - End of year (803,530) 1,967,429 Cash is comprised of Cash 499,337 1,967,429 Bank Indebtedness (1,302,867) - (803,530) 1,967,429 The accompanying notes are an integral part of these financial statements 6

SKATE CANADA Notes to the Financial Statements 1 PURPOSE OF THE ORGANIZATION Skate Canada ("the Association") is the national skating governing body whose purpose is to develop, regulate and promote skating in Canada. For the purposes of management and control, Skate Canada is divided into 13 geographic jurisdictions knowns as Sections. Sanctioned skating clubs, skating schools and certified professional coaches are members of Skate Canada. All sections are autonomous, separately incorporated organizations. The Association is incorporated under the Canada Not-for-profit Corporations Act. The Association is a Registered Canadian Amateur Athletic Association (RCAAA) within the meaning of the Income Tax Act and is, therefore, not subject to income taxes. As a RCAAA, the Association has the authority to issue donation receipts. 2 SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in accordance with Canadian accounting standards for not-for-profit organizations 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 amount of revenue and expense during the year. Actual results could differ from those estimates. Merchandise inventory Inventory is valued at the lower of cost, determined on a first in, first out basis, and estimated net realizable value. Investments Investments are carried at fair value based on quoted market prices. Changes in fair value are included in net expense for the year. Capital Assets Capital assets are initially recorded at cost and are then amortized on a straight-line basis over their anticipated useful lives as follows: Computer equipment & software Competition equipment Database system Office equipment Building Fund Accounting Internally restricted Externally restricted 3 years 5 years 10 years 5 years 25 years The Association collects artifacts and archival materials which are historically significant to figure skating in Canada. Contributed collection assets are not recognized in the financial statements. Resources are classified for accounting and reporting purposes into funds according to the activity specified. The Athlete fund reports activities designed to encourage the development of figure skating in Canada by providing financial assistance to athletes. The Hall of Fame fund reports activities designed to preserve records, and honour individuals who have made a noteworthy contribution to figure skating in Canada. The Elvis Stojko Fund reports activities with the intent of providing awards to selected skaters who display talent and have an ability to expand the horizons of the sport of figure skating. The Barbara Graham Fund reports activities associated with providing an annual bursary of $500 to each male and female Pre-Novice champion in each of the 13 sections. 7

SKATE CANADA Notes to the Financial Statements Endowment Funds As endowments, only the interest earned on the capital may be distributed and the capital must be preserved. The Stewart G. Esdaile fund reports on activities associated with providing annual awards to selected skaters from the Ottawa-Gatineau area skating clubs who skated in the previous Canadian Championships or the Canada Junior Nationals in the Novice or Junior categories. The Paul Giesinger Estate fund reports on activities associated with providing an annual award to the Novice Ladies and Novice Men's Championship at the Canadian National Figure Skating Championships. Revenue Recognition The Association follows the restricted fund method of accounting for contributions. Externally restricted contributions are recognized as revenue of the appropriate externally restricted fund in the year it is received. If there is no designated externally restricted fund, externally restricted contributions are deferred and recognized as revenue in the period in which the related expenses are incurred. Endowment contributions are recognized as revenue in the Endowment fund when received. Unrestricted contributions are recognized as revenue of the General fund in the current period. Membership and test fees revenues are recognized when applications are received. Sponsorship revenue is recognized on a straight-line basis over the term of the related agreement. Event revenue is recognized in the year that the event occurs and event deliverables are completed. Government and other grants revenue including strategic planning revenue is recognized based upon the completion of deliverables as identified in contractual agreements. Contributed goods and services are recorded at the fair value at the time of receipt if the value can be reasonably estimated and the related goods and services would otherwise have been purchased. These financial statements do not reflect the value associated with numerous hours contributed by volunteers to assist the Association in carrying out its service delivery activities. Investment income earned on externally restricted amounts is recognized as revenue of the externally restricted fund according to the terms of the restricted contribution. Foreign Currency Translation Monetary assets and liabilities are translated at the exchange rate in effect at the statement of financial position date. Others assets and liabilities are translated at the exchange rate in effect at the transaction date. Items appearing in the current year s statement of operations - general are translated at the exchange rate in effect at the transaction date. Exchange gains and losses are included in the statement of operations - general. 3 Merchandise Inventory 2016 2015 Programming - badges and ribbons Nil $ 175,921 Novelties and other Nil 61,996 $ - $ 237,917 The amount of merchandise inventory expensed during the year is $295,394 (2015 - $419,244). outsourced to a third party. During the year merchandising activities were 4 Skate Canada Skater Trust Fund The Association administers trust funds on behalf of certain skaters who have earned money from sponsorship contracts, equipment endorsements, advertising, participation in competitions and other activities. An administrative fee was not charged for this service. These funds are reported as trust assets and trust liabilities as the Association has no title to these assets, but solely administers them on behalf of the skaters. 8

SKATE CANADA Notes to the Financial Statements 5 Investments 2016 2015 Fixed Income $ 7,578,754 $ 8,317,935 Equity 10,708,247 11,959,105 18,287,001 20,277,040 The investment portfolios are managed in accordance with written investment policy statements. The fixed income investments consist of Federal and Provincial government bonds, high quality corporate bonds rated "A" or higher, and guaranteed investment certificates. Bonds bear interest at fixed rates ranging from 2.25% to 7.05%, and have maturities ranging from 2017 to 2045. The equities are primarily large capitalization stocks across industry sectors and markets such as Canada 70% (2015-72%), the United States 21% (2015-21%), Europe and the Far East 7% (2015-7%). Investment income (loss) consists of: 2016 2015 Interest and dividends $ 574,619 $ 612,275 Changes in the fair value of investments $ (658,398) 1,750,125 (83,779) 2,362,400 6 Capital Assets 2016 2015 Cost Accumulated Net Net $ Amortization $ $ Computer equipment & software $ 172,144 $ 102,460 $ 69,684 $ 117,820 Competition equipment 291,003 193,720 97,283 146,691 Database system 461,698 54,152 407,546 182,204 Office equipment 339,810 98,130 241,680 108,919 Building 2,407,653 1,337,380 1,070,273 1,168,586 Land 105,787-105,787 105,787 $ 3,778,095 $ 1,785,842 $ 1,992,253 $ 1,830,007 Cost and accumulated amortization for the year ended March 31, 2015 amounted to $3,444,463 and $1,614,456 respectively. 7 Government Remittances Government remittances (sales and payroll taxes) of nil (2015 - $20,592) are included in accounts payable and accrued liabilities. 8 Bank Indebtedness The Association has an available operating loan of $4,000,000 with variable interest at prime + 0.5%. facility with a minimum balance to be maintained at $8,000,000. Investments are pledged as security for this 9 Deferred Contributions The governments of Canada and Ontario contributed $2,200,000 and $1,500,000, respectively in fiscal 2013 to support the planning, delivery and execution of the 2013 World Figure Skating Championships. The deferred contributions represent the profits of that event. The Association has developed a long term Strategic Plan which will incorporate these deferred contributions to invest in new initiatives and programs to create greater capacity and enhanced opportunities for skating in Canada. Balance - Beginning of the year Contributions received Deferred strategic planning $ 2,643,354 - $ 2,085,096 Revenue recognized during the year Balance - End of the year $ $ 558,258 9

SKATE CANADA Notes to the Financial Statements 10 Government Assistance Funding Agencies have the ability to demand repayment of any portion of the grants if the Association does not spend all of the advanced funds or purchases disallowed expenditures. The Association is required to meet certain performance milestones as stipulated by the agreements. 11 Contributed Goods and Services During the year, the Association received contributed goods and services having a fair market value of $475,406 (2015 $152,688). These contributed goods and services were provided primarily to sponsor a wide range of activities for the Association's competition events. 12 Commitments The Association is committed under lease agreements (Ottawa and a sublease agreement -Toronto) to make annual payments as follows: For the year ending March 31, 2017 $ 534,037 March 31, 2018 $ 537,266 March 31, 2019 $ 541,141 March 31, 2020 $ 542,016 March 31, 2021 $ 493,582 13 Subsequent Events (i) The Association completed the sale of its owned office building and contents in April 2016. The sale proceeds of $2,850,000 resulted in an approximated gain of $1,500,000. (ii) The Association undertook a reorganization that was determined to strengthen the organizational structure and reduce costs over time. The costs related to Association staff, payment of severance, vacation pay, employee benefits and outplacement transition services, are expected to amount to approximately $775,000. 10