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L' Association Des Francophones De Nanaimo

Notes to the Financial Statements
For the year ended March 31, 2008

Event costs

2008 2007
Marketing, promotion and advertising 134,173 156,885
Performers 26,217 23,238
Materials and incidentals 32,757 20,275
Accommodations, food and technical services 34,047 17,632
Other costs 880 586
228,074 218,616

Economic dependence

The Association's main source of income is derived from grants from the Federal Government and its agencies. It's ability
to continue viable operations is dependent upon the continued support from the Federal Government.

Financial instruments

The Association as part of its operations carries a number of financial instruments. It is management's opinion that the
Association is not exposed to significant interest, currency or credit risks arising from these financial instruments except as
otherwise disclosed.

Risk management policy
Due to the small size of the organization, the Association has no formal risk management policy.
Credit risk

Accounts receivable from government agencies in connection with grant revenue represents 90% (2007 - 70%) of total
accounts receivable as at March 31, 2008. The Association believes that there is minimal risk associated with the collection
of these amounts. The balance of accounts receivable is widely distributed. ,

Short-term investments and investments are term deposits and GICs due from Canadian financial institutions. Credit
exposure is limited due to the quality of the financial institution that issued the investments and short 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 risk primarily relating to its investments with a
carrying value of $76,550 which carry interest rates that range 3.5% and 3.85%.

Fair value of financial instruments

The carrying amount of cash, accounts receivable, bank indebtedness, and accounts payable approximates their fair value
due to the short-term maturities of these items. The fair value of short-term investment and investment approximates their
carrying amount as at March 31, 2008 and 2007 because there were no significant change in interest rates subsequent to
their purchase.

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