15.

L'Association Des Francophones De Nanaimo

Notes to the Financial Statements
For the year ended March 31, 2010
(Unaudited)

Credit risk

Financial instruments that potentially subject the Association to concentrations of credit risk consist primarily of cash, short-
term investment and investment. Accounts receivable from government agencies in connection with grant revenue
represents 91% (2009 - 86%) of total accounts receivable as at March 31, 2010. The balance of accounts receivable is
widely disbursed. The Association believes that there is minimal risk associated with the collection of these amounts.

Cash, short-term investment and investment are held by Canadian financial institutions. Credit exposure is limited due to
the quality of the financial institution that hold cash and term deposits.

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. Changes in market interest rates may have an effect on the cash flows associated with some financial assets and
liabilities, known as cash flow risk, and on the fair value of other financial assets or liabilities, known as price risk. In
seeking to minimize the risks from interest rate fluctuations, the Association manages exposure through investing in term
deposits with short maturities. The Association is exposed to interest rate price risk primarily relating to its short-term
investment and investment with a carrying value of $53,310 (2009 - $52,418) and a carrying value of $28,658 (2009 -
$27,827), which have interest rates of 1.07% and 1.1% respectively.

Fair value of financial instruments

The carrying amount of cash, short-term investment, accounts receivable, investment, bank indebtedness, accounts
payable and accruals approximates their fair value due to short-term nature these items. The fair value of short-term
investments approximates their carrying value as their interest rates are adjusted to current market values angually.

Capital management

The Association’s objective, when managing capital, is to maintain its ability to continue as a going concern in order to meet
its overall purpose to promote the French language and organize and promote various cultural activities. In order to ensure
that operations will continue from year to year, grant applications are completed, a budget is completed, financial
statements are prepared on a monthly basis and approved by the Board of Directors. Should the capital requirements not
be sufficient, any decisions regarding staffing and/or major purchases are reassessed, and discretionary expenditures may
be reduced.

The Association's managed capital includes unrestricted net assets and investment in capital assets. Major capital
injections are from external bodies who have specified reporting requirements which are imposed on the Association.

Staff and the Board of Directors are appraised on a regular basis of any terms and conditions by any externally imposed
capital requirements and copies of these documents are held on file at the Association's office. The Association is aware of
the consequences arising from non-compliance of these requirements. To date, the Association has complied with all terms
and conditions imposed by external parties.

During the year, the Association's strategy was unchanged from the prior year.

; Mp