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Answer the following questions: What story does the financial statements tell about the organization's financial activities and its overall financial health? GrantThornton Independent Auditor's Report

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Answer the following questions:

What story does the financial statements tell about the organization's financial activities and its overall financial health?

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GrantThornton Independent Auditor's Report Gnat 111mm LLP i91t1 Float. Royal Bank Place South inner 2100 Bay Street, Brass tomato. ON M5J 299 T +1 416 366 11100 To the Members of F +1416 360 4949 Dixon Hail mmentThombnea We have audited the accompanying nancial statements of Dixon Hall, which comprise the statement of nancial position as at December 31, 2014 and the statements of operations, changes in fund balances and cash flows for the year then ended and a summary of signicant accounting policies and other explanatory information. Management's responsibility for the nancial statements Management is responsible for the preparation and fair presentation of these nancial statements in accordance with Canadian acconnting standards for not-forprot organizations, and for such internal control as management determines is necessaqr to enable the preparation of nancial statements that are free from material misstatement, whether due to fraud or error. Auditor's responsibility Our responsibiiity 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 complyr 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 nancial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the nancial 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 nancial 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 nancial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. W'TIX'NMW 0'31 \"WILEAWI'Il-Wufmmhn Mama's! LIII 1 Grant Thornton Independent Auditor's Report - continued Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of Dixon Hall as at December 31, 2014 and its financial performance and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for profit organizations. Grant Thornton LLP Toronto, Canada Chartered Accountants May 12, 2015 Licensed Public Accountants Audit . Tax . Advisory Grant Thornton LLP. A Canadian Member of Grant Thornton International LLJ 2Dixon Hall Statement of Financial Position December 31 2014 2013 (Note 1) Assets Current Cash and cash equivalents $ 299,659 $ 44,320 Accounts receivable 1,290,739 1,143,232 Prepaid expenses 87,512 94,647 1,677,910 1,282, 199 Investments (Note 3) 907,588 415,457 Property and equipment (Note 4) 1,979,197 1,915,841 $ 4,564,695 $ 3,613,497 Liabilities and fund balances Current Accounts payable and accrued liabilities $ 1,181,515 $ 1,076,765 Deferred contributions 337,887 590,917 Current portion of mortgages payable (Note 5) 29,085 236,682 048,487 1,904,364 Mortgages payable (Note 5) 280,630 100,000 Deferred contributions relating to property (Note 6) 1,183,180 1,066,858 3,512,297 3,071,222 Net assets Endowments (Note 7) 53,508 53,508 Unrestricted 998,890 488,767 1,052,398 542,275 $ 4,564,695 $ 3,613,497 On behalf of the Board Illidaebe Director Director See accompanying notes to the financial statements. 3Dixon Hail Statement of Operations Year ended December 31 2014 Revenue Grant revenue - City of Toronto (Note 10} $ 4,545,203 Gram revenue Province of Ontario 3,036,215 Grant revenue - Federal government 254,421 Fu ndraising - 1 ,1 83,649 United Way of Greater Toronto 303,146 User fees 480,767 Amortization of deferred contributions relating to property {Note 6) 148,731 Interest 13,427 my Expenses (Note 8) ' Neighbourhood programs 1,191,678 Housing and homelessness programs 4,106,346 Seniors programs 3.1 93,437 Employment programs 1,327,446 Community development programs 212,441 Infrastructure and support services 431 728 1 0.51 3,076 Excess of revenue over expenses from continuing operations 7,488 Contribution of net assets from Mid-Toronto Community Services inc. (Note 1) 502.635 Excess of revenue over expenses after giving effect to voluntary integration of MidToronto Community Services inc. 610,123 201 3 (Note 1) $ 4,244,668 1,716,973 497,321 937,915 622,113 188,732 182,155 2,543 8I 392,420 1,347,057 4,0?3,507 940,18? 1 280,677 1 ?9,055 568 319 8 333 802 3,318 3.618 See accompanying notes to the nancial statements. Dixon Hall Statement of Changes in Net Assets Year ended December 31 2014 2013 Endowments Unrestricted Total Total Note 1) Net assets, beginning of year $ 53,508 $ 488,767 $ 542,275 $ 538,657 Excess of revenue over expenses after giving effect to voluntary integration of Mid-Toronto Community Services Inc. 510,123 510,123 3,618 Net assets, end of year 53,508 998,890 $ 1,052,398 $ 542,275 See accompanying notes to the financial statements. 5Dixon Hall Statement of Cash Flows Year ended December 31 2014 2013 (Note 1) Increase (decrease) in cash and cash equivalents Operating Excess (deficiency) of revenue over expenses from continuing operations 7,488 $ 3,618 Item not involving cash Amortization of property and equipment 205,913 242,509 Amortization of deferred contributions relating to property (148,731) (182,155) 64,670 63,972 Net change in non-cash operating assets and liabilities Accounts receivable 38,158 53,920 Prepaid expenses 39,193 (44,076) Accounts payable and accrued liabilities (109,932) (222, 199) Deferred contribution 194,737 19,982 162,156 (192,373) 226,826 (128,401) Financing Repayment of mortgage (26,967) (25,297) Investing Net change in investments (126,216) (302,543) Purchase of property and equipment (172,172) (114,438) Contributions for property and equipment 167,956 82,702 (130,432) (334,279) Net change in cash and cash equivalents during the year 69,427 (487,977) Cash and cash equivalents, beginning of year 44,320 532,297 Cash and cash equivalents received (Note 1) 185,912 Cash and cash equivalents, end of year $ 299,659 $ 44,320 See accompanying notes to the financial statements. 6Dixon Hall Notes to the Financial Statements December 31, 2014 1. Nature of operations Dixon Hall (operating as Dixon Hall Neighbourhood Services) (the "Agency") was founded in 1929. The Agency's vision and work is to create strong communities through the development of good jobs, good health, safe shelter, and vibrant cultures. The Agency works in partnership with other agencies, institutions, corporate and government partners, and volunteers to provide a range of programs and services. Services include recreation and leisure, health and wellness activities for seniors, home support services that enable seniors and disabled individuals to live independently; support to newcomers from around issues of immigration and integration; leadership training for community youth; support to families; instrumental and vocal music instruction for children; summer day camps, school break programs and after 4 programs for children and youth; employment services and training programs for youth and adults; carpentry and cabinetry training for youth and adults; full suite of employment services to assist those looking for work and those looking for workers; shelter and housing support for adult homeless men and women; access to legal and income tax information, food and nutrition programs. Effective January 1, 2014, the Agency assumed the assets and liabilities of Mid-Toronto Community Services Inc. as part of a voluntary integration. As a result, the Agency's capacity was significantly expanded to serve seniors and individuals living with disability or illness in the downtown core of the City of Toronto through the addition of meals on wheels program, community transportation and day programming for those living with dementia or other cognitive challenges. The following assets and liabilities of Mid-Toronto Community Services Inc. were assumed: Cash and cash equivalents $ 185,912 Accounts receivable 185,665 Prepaid expenses 32,058 Investments 365,915 Property and equipment 97,097 Accounts payable (214,682) Deferred contributions (52,233) Deferred contributions relating to property (97,097) 502,635 The contribution of net assets from Mid-Toronto Community Services Inc. has been recorded in the statement of operations. The 2013 comparative numbers included in the 2014 financial statements represent the financial statements of Dixon Hall prior to the voluntary integration. Dixon Hall is incorporated under the Corporations Act (Ontario). As a registered charitable organization, Dixon Hall is exempt from income taxes. 7W Dixon Hall Notes to the Financial Statements December 31, 2014 2. Summary of significant accounting policies The nancial statements have been prepared by management in accordance with Canadian accounting standards for not~for~profit organizations (ASNPO), the more signicant of which are outlined below. Cash and cash equivalents Cash and cash equivalents consist of cash on deposit and short-term investments with a short term to maturity of approximately three months or less from the date of purchase unless they are held for investment rather than liquidity purposes. in which case they are classified as investments. Property and equipment Purchased property and equipment are recorded at cost. Contributed property and equipment are recorded at fair value at the date of contribution. Amortization is provided on a straight-line basis over the assets' estimated useful lives as follows: Buildings and improvements 20 years Equipment 5 years Leasehold improvements 10 years Automotive 5 years Revenue recognition The Agency follows the deferral method of accounting for contributions, which include grants and donations. Grants and bequests are recorded in the accounts when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Other donations are recorded when received, since pledges are not legally enforceable claims. Unrestricted contributions are recognized as revenue when initially recorded in the accounts. Externally restricted contributions. except endowment contributions, are deferred when initially recorded in the accounts and recognized as revenue in the year in which the related expenses are recognized. Externally restricted endowment contributions are recognized as direct increases in net assets when recorded in the accounts. User fees are ruconized when the services have been provided. Financial Instruments The Agency considers any contract creating a nancial asset. liability or equity instrument as a nancial Instrument. The Agency's financial instruments consist of: cash and cash equivalents accounts receivable investments accounts payable mortgages payable Financial assets or liabilities obtained in arm's length transactions are initially measured at their fair value and financial assets or liabilities obtained in related party transactions are measured at their exchange amount. The Agency subsequently measures all oi its financial assets and nancial liabilities at amortized cost. Dixon Hall Notes to the Financial Statements December 31, 2014 2. Summary of significant accounting policies - continued Contributed materials and services Volunteers contribute numerous hours to the Agency in carrying out certain aspects of its service delivery activities. The fair value of these contributed services is not readily determinable and, as such, they are not reflected in the financial statements. Other contributed services and materials are also not recognized in the financial statements. Allocation of expenses The Agency allocates salaries and benefits, premises, finance support services and amortization of property and equipment to neighbourhood programs, housing and homelessness programs, seniors programs, employment programs, community development programs and infrastructure and support services. Allocations of salaries and benefits are based on the time spent by the employees on each function. Allocations of premises, support services and amortization are based on the number of staff, time spent, program requirements and office space utilization. 3. Investments Investments classified as long-term are held for investing rather than liquidity purposes and consist of the following 2014 2013 (Note 1) Province of Ontario bonds with maturities ranging from June 2016 to June 2018 $ 354,624 $ Guaranteed investment certificates due before December 31, 2015 with interest rates of 0.8% 552,964 415,457 $ 907,588 $ 415,457 4. Property and equipment 2014 2013 Accumulated (Note 1) Cost Amortization Net Net Land $ 500,000 $ $ 500,000 $ 500,000 Building and improvements Heyworth House Shelter 1,530,014 919,383 610,631 687,132 - Sumach and other locations 2,252,058 1,623,745 628,313 536,079 Equipment 1,157,057 1,001,780 155,276 176,213 Leasehold improvements 25,257 11,366 13,892 16,417 Automotive 90,021 18,935 71,086 $ 5,554,406 $ 3,575,209 $ 1,979,197 $ 1,915,841 Additions to property and equipment in 2014 consisted of $42,360 (2013 - $120,619) in building improvements and $129,812 (2013 - $Nil) in equipment purchases. Property and equipment received from Mid-Toronto Community Services Inc. as a result of the voluntary integration totaled $97,097 and consisted of $90,916 in automotive and $6,181 in equipment (Note 1). 9Dixon Hall Notes to the Financial Statements December 31 , 2014 5. Mortgages payable 2014 2013 {Note 1) First mortgage bearing an interest rate of 3.628% per annum, payments of prtncipal and interest totaling $3,017 are required monthly, secured by the Heyworth House Shelter property and a first charge general security agreement, maturing August 1, 2017 $ 209,717 $ 286,682 Second mortgage due to the City of Toronto, secured by the Heyworth House Shelter property and a generai security agreement on assets relating to the Heyworth House Shelter 100,000 100,000 309,715 333,682 Less: current portion [29,0851 (233.6821 L.__._280 630 was interest on the second mortgage ts at 7.5% per annum. However, if the mortgage has not been in default, on August 31, 2016. the principal amount and all accrued interest will be deemed to be zero. Accordingly, Interest on this mortgage has not been recorded in the accounts. interest paid on long-term debt totaled $10,065 for lisca! 2014 (2013 - $11,848}. 6. Deferred contributions relating to property Deferred contributions rotating to property represent the unamortized amount of designated grants and donations for capital purchases. Changes in the deferred contributions baiance tor the year are as follows: 20151 2013 {Note 1) Balance, beginning of year 5 1,066,850 $ 1,166,311 Add: contributions assumed from Mid-Toronto Community Services (Note 1} 97,097 - other contributions received 167,956 82,702 Less: amounts amortized and recognized as revenue during the year 1140,7311 1182,1551 Balance, and of year 5 1,183,180 1,066,858 7. Endowment net assets Endowment net assets consist of amounts that have been gifted to the Agency that must be hetd in perpetuity with the income used to provide support for the instruction of music to neighbourhood chiictren. 10 Dixon Hall Notes to the Financial Statements December 31, 2014 8. Allocation of expenses Housing and Community Infrastructure Neighbourhood homelessness Seniors Employment development and support 2014 2013 programs programs programs programs programs services Total Total (Note 1) Salaries and benefits 774,035 $ 3,037,110 $ 2,399,195 $ 641,584 $ 175,238 168,462 $ 7,195,624 $ 5,698,454 Social, educational and food 247,515 625,097 478,211 257,732 25,383 9,091 1,643,029 1,162,027 Premises 79,785 263,746 101,677 338,727 3,098 19,561 806,594 758,768 Support services 80,379 103,893 171,346 84,425 8,722 213,151 661,916 527,044 Amortization of property and equipment 9,964 76.500 43.008 4,978 71,463 205,913 242,509 $ 1,191,678 $ 4,106,346 $ 3,193,437 $ 1,327,446 212,441 481,728 $ 10,513,076 $ 8,388,802Dixon Halt Notes to the Financial Statements December 31. 2014 9. Financial instruments Dixon Hall has the following risks associated with its financial instruments: Credit risk Credit risk arises from the potential that a counter party will fail to perform its obligations. The Dixon Hall does not consider credit risk on its accounts receivable to be signicant given the high quality nature of the Agency's sources of revenue. interest rate risk The Agency is exposed to interest rate risk on its short-term investments when the value of these nancial instruments uctuates due to changes in market interest rates. Concentration rlsk Dixon Hall's largest fender is the City of Toronto. These grants represent 43% of revenues during the current year (2013 - 50%). Grants from the Province of Ontario represent 29% (2013 20%) of the Agency's total revenues. 1 0. Grant revenue - City of Toronto included in grant revenue - City of Toronto is a $20,000 grant received from the Toronto Art Council in support of the music school program. 11 . Comparative amounts Certain comparative amounts have been reolassliied from those previously presented to conform to the presentation of the 2014 financial statements. 12

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