L' Association des Francophones de Nanaimo

Notes to the Financial Statements
For the year ended March 31, 2005

Purpose of the Association

The Association was incorporated under the Society Act of British Columbia on March 21, 1978 as a not-for-profit
organization. It is an autonomous body whose purpose is to unite Francophones in the Nanaimo area and to promote the
French language and organize and promote various cultural activities.

The Association is exempt from income tax provided certain requirements of the Income Tax Act are met.

Significant accounting policies

The financial statements have been prepared in accordance with Canadian generally accepted accounting principles using
the following significant accounting policies:

Inventory

Inventory is valued at the lower of cost and net realizable value.
Investments

Investments are recorded at the lower of cost and market.
Capital assets

Capital assets are carried at cost if purchased, or fair value at the date of acquisition if received by gift. Proceeds of
disposals, less carrying values of these assets are reported in the statement of revenues and expenses as gains or losses on
disposal. The Association does not record amortization on an annual basis.

Revenue recognition

The Association follows the deferral method of accounting for contributions. 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 collections is reasonably assured.

Grant revenue is recognized as revenue in the funding period or when the expenditure is made, as applicable. Revenue from
gaming and donation revenue is recognized when the contribution is received or receivable. Gifts in kind are recognized in
the year received. Goods sold, fees and miscellaneous revenue is recognized when cash is received and service or product
is delivered.

Measurement uncertainty (use of estimates)

The preparation of financial statements in conformity with Canadian generally accepted accounting principles 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 amounts of revenues and expenses
during the reporting period. Accounts receivable are stated after evaluation as to their collectibility and an appropriate
allowance for doubtful accounts is provided where considered necessary. Provisions are made for slow moving and
obsolete inventory.

These estimates and assumptions are reviewed periodically and, as adjustments become necessary they are reported in
earnings in the periods in which they become known.