Financial statements of MLSE Foundation June 30, 2020 Independent Auditor’s Report 1-2 Statement of financial position 3 Statement of revenue and expenses and changes in net assets 4 Statement of cash flows 5 Notes to the financial statements 6–12 Deloitte LLP 400 Applewood Crescent Suite 500 Vaughan ON L4K 0C3 Canada Tel: 416-601-6150 Fax: 416-601-6151 www.deloitte.ca Independent Auditor’s Report To the Board of Directors of MLSE Foundation Opinion We have audited the financial statements of MLSE Foundation (the “Foundation”), which comprise the statement of financial position as at June 30, 2020, the statements of revenue and expenses, changes in net assets and of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Foundation as at June 30, 2020, 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. Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Foundation in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the 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. In preparing the financial statements, management is responsible for assessing the Foundation’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Foundation or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Foundation’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit 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 Foundation’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Foundation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Foundation to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Chartered Professional Accountants Licensed Public Accountants December 11, 2020 MLSE Foundation Statement of financial position As at June 30, 2020 2020 2019 Notes $ $ Assets Current assets Cash Restricted 3 1,732,154 6,060,797 Unrestricted 3 2,067,184 1,700,538 Accounts receivable 517,072 699,917 Due from related parties 4 1,026,599 657,987 Harmonized Sales Tax recoverable 132,625 178,793 Prepaid expenses and other assets 73,521 7,500 5,549,155 9,305,532 Due from related party 4 — 400,500 Capital assets 5 46,715 27,990 5,595,870 9,734,022 Liabilities Current liabilities Accounts payable and accrued liabilities 11 782,328 1,284,808 Deferred contributions 6 1,019,054 4,943,944 1,801,382 6,228,752 Commitments and contingencies 8 Net assets 3,794,488 3,505,270 5,595,870 9,734,022 The accompanying notes are an integral part of the financial statements. Approved by Board Page 3 MLSE Foundation Statement of revenue and expenses and changes in net assets Year ended June 30, 2020 2020 2019 Notes $ $ Revenue Donations Cash 4 3,088,229 3,178,364 Gifts-in-kind 231,141 173,269 Sponsorships 275,000 305,000 Fundraising 50/50 programs 7 7,313,209 7,946,166 Events and activities 4 2,408,129 2,905,974 13,315,708 14,508,773 Interest income 31,446 19,753 13,347,154 14,528,526 Expenses Fundraising 50/50 programs 7 2,813,359 6,269,281 Other 1,089,665 1,600,151 Gifts-in-kind 213,168 173,269 Administration 172,502 132,717 4,288,694 8,175,418 Excess of revenue over expenses before charitable activities 9,058,460 6,353,108 Charitable activities Youth Centre for Sports Development Refurbishment grants 4 333,500 1,193,500 Other grants and sponsorships 4, 7 6,501,439 2,916,963 Refurbishment grants 250,000 300,000 Other grants and sponsorships 7 1,552,794 1,205,040 Gifts-in-kind 17,974 — Other 113,535 499,975 8,769,242 6,115,478 Excess of revenue over expenses for the year 289,218 237,630 Net assets, beginning of year 3,505,270 3,267,640 Net assets, end of year 3,794,488 3,505,270 Net assets consists of Restricted Invested in Capital assets 46,715 27,990 Unrestricted 3,747,773 3,477,280 3,794,488 3,505,270 The accompanying notes are an integral part of the financial statements. Page 4 MLSE Foundation Statement of cash flows Year ended June 30, 2020 2020 2019 $ $ Operating activities Excess of revenue over expenses for the year 289,218 237,630 Items not affecting cash Amortization of capital assets 14,922 9,405 304,140 247,035 Changes in non-cash working capital items Accounts receivable 182,845 (408,925) Due from related parties (368,612) 433,928 Harmonized Sales Tax recoverable 46,168 4,497 Prepaid expenses and other assets (66,021) 14,169 Accounts payable and accrued liabilities (502,480) 1,159,476 Deferred contributions (3,924,890) 4,618,161 (4,328,850) 6,068,341 Investing activities Due from related party 400,500 433,500 Capital asset additions (33,647) (9,549) 366,853 423,951 (Decrease) Increase in cash during the year (3,961,997) 6,492,292 Cash, beginning of year 7,761,335 1,269,043 Cash, end of year 3,799,338 7,761,335 Cash consists of: Restricted 1,732,154 6,060,797 Unrestricted 2,067,184 1,700,538 3,799,338 7,761,335 The accompanying notes are an integral part of the financial statements. Page 5 MLSE Foundation Notes to the financial statements June 30, 2020 1. Nature and status of Foundation MLSE Foundation (the “Foundation”) was incorporated under the Canada Corporations Act on October 24, 1994 and transitioned to the Canada Not-for-Profit Corporations Act on October 21, 2014. The Foundation is a Registered Charity under Section 149.1 of the Income Tax Act; accordingly, it is not subject to income tax provided certain conditions are complied with. The main aims of the Foundation are to support the restoration, refurbishment and ongoing development of athletic, community and recreational facilities providing a safer environment for youth activities and to make charitable distributions in the form of grants, sponsorship and gifts-in-kind to registered charities in the Province of Ontario.