Royal Canadian Legion Prince Edward Branch - Financial Statements (Year Ended December 31, 2023)

Independent Auditors' Report

Baker Tilly Victoria Ltd
Chartered Professional Accountants

INDEPENDENT AUDITORS' REPORT

To the Members of
Royal Canadian Legion Prince Edward (British Columbia No.91) Branch

Qualified Opinion
We have audited the financial statements of Royal Canadian Legion Prince Edward (British
Columbia No.91) Branch (the "Branch"), which comprise the statement of financial position as at
December 31, 2023, and the statements of changes in net assets, operations and cash flows and
related schedules for the year then ended, and a summary of significant accounting policies and
other explanatory information.
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion
section of our report, the accompanying financial statements present fairly, in all material respects,
the financial position of the Branch as at December 31, 2023, and 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 Qualified Opinion
In common with many non-profit organizations, the Branch derives revenue from donations and
other similar sources, the completeness of which is not susceptible to satisfactory audit verification.
Accordingly, our verification of these revenues was limited to the amounts recorded in the records
of the Branch. Therefore, we were not able to determine whether any adjustments might be
necessary to donation revenue, net deficit, and cash flows from operations for the year ended
December 31, 2023, and assets and net assets as at December 31, 2023.
We were not able to observe the counting of physical inventories as at December 31, 2023, or
satisfy ourselves concerning those inventory quantities by alternative means. Accordingly,
verification of the year end inventory balance and amounts expensed as cost of sales were limited
to the amounts recorded in the records of the Branch. Therefore, we were not able to determine
whether any adjustments might be necessary to cost of sales, net deficit, and cash flows from
operations for the year ended December 31, 2023, and assets and net assets as at December 31,
2023.

Baker Tilly Victoria Ltd. is a member of Baker Tilly Canada
Cooperative, which is a member of Baker Tilly International
Limited. All members are separate and independent legal entities.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditors' Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the Branch 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 qualified 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 Branch'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 Branch or
to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Branch's financial reporting
process.

Baker Tilly Victoria Ltd. is a member of Baker Tilly Canada
Cooperative, which is a member of Baker Tilly International
Limited. All members are separate and independent legal entities.

Auditors' 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
auditors' 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 generally accepted auditing
standards 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 generally accepted auditing standards, 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 Branch's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
  accounting estimates and related disclosures made by management.

Baker Tilly Victoria Ltd. is a member of Baker Tilly Canada
Cooperative, which is a member of Baker Tilly International
Limited. All members are separate and independent legal entities.

• 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 Branch's ability to
  continue as a going concern. If we conclude that a material uncertainty exists, we are required
  to draw attention in our auditors' 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 auditors' report. However, future events or
  conditions may cause the branch 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
Victoria, B.C.
May 27, 2024

Baker Tilly Victoria Ltd. is a member of Baker Tilly Canada Cooperative, which is a member of Baker Tilly International Limited. All members are separate and independent legal entities.

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Statement of Financial Position

As at December 31, 2023

Total Assets: 7,408,797 (2023) and 3,845,710 (2022)

SIGNED ON BEHALF OF THE BOARD:
Director

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Statement of Changes in Net Assets

For the Year Ended December 31, 2023

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Statement of Operations

For the Year Ended December 31, 2023

Revenue

Expenses

Net Surplus (Deficit) from Operations: 100,754 (2023) and (34,801) (2022)

Other Income (Loss)

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Statement of Cash Flows

For the Year Ended December 31, 2023

| Investing Activities | | | | Purchase of capital assets | (4,206,351) | (2,249,513) | | Proceeds from disposition of investments - term deposits | 52,251 | 1,103,475 | | Proceeds from disposition of investments - portfolio securities | 582,879 | 6,604 | | Purchase of investments - term deposits | (105,123) | (52,251) | | Net cash used in investing activities | (3,676,344) | (1,191,685) |

| Financing Activity | | | | Proceeds from demand loan | 3,700,000 | | | Net Increase (Decrease) in Cash | 48,048 | (750,604) | | Cash - Beginning of Year | 339,833 | 1,090,437 | | Cash - End of Year | 387,881 | 339,833 |

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Schedule 1 — Schedule of Licensed Premises

For the Year Ended December 31, 2023

Licensed Premises Revenue

Licensed Premises Expenses

Licensed Premises Surplus for the Year: 77,642 (2023) and 54,933 (2022)

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Schedule 2 — Licensed Premises Gross Margin on Sales

For the Year Ended December 31, 2023

2023

2022

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Schedule 3 — Events, Rentals, Catering, Kitchen

For the Year Ended December 31, 2023

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Schedule 4 — Meat Draw

For the Year Ended December 31, 2023

Meat Draw Revenue

Meat Draw Expenses

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Schedule 5 — Pull Tab and Lottery

For the Year Ended December 31, 2023

Pull Tab Revenue and Expenses (extract as presented):

Pull Tab

• Pull Tab Revenue: 23,674 (2023) and 36,462 (2022) [as presented within the schedule]
• Pull Tab prizes paid out: (14,329) (2023) and (24,842) (2022)
• Pull tab purchases: (50) (2023) and (8,473) (2022)
• Pull Tab Surplus for the Year: (14,379) (2023) and (33,315) (2022) — (Note: schedule formatting in source is condensed)

Lottery

• Lottery Revenue (Keno Sales): 38,865 (2023) and 66,332 (2022)
• Lottery prizes paid out: (39,274) (2023) and (58,663) (2022)
• Lottery Surplus for the Year: (409) (2023) and 7,669 (2022)

Total Pull Tab and Lottery Surplus for the Year: 8,886 (2023) and 10,816 (2022)

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Notes to Financial Statements

For the Year Ended December 31, 2023

1 Purpose of the Organization

The Royal Canadian Legion Prince Edward (British Columbia No.91) Branch ("The Branch") is a member of the Royal Canadian Legion whose mission is to serve veterans, which includes serving military, RCMP members and their families. In addition, the Legion's purpose is to promote remembrance and to serve our communities and our country. The Branch is a not-for-profit organization under paragraph 149(1)(1) of the Income Tax Act and as such is exempt from income taxes.

2 Summary of Significant Accounting Policies

The Branch, with the consent of its members, has elected to prepare its financial statements in accordance with Canadian Accounting Standards for Not-for-Profit Organizations. Significant accounting policies are as described below.

Inventory

Inventories are carried at the lower of cost, determined on a first-in, first-out basis, and net realizable value. Inventory of alcohol is based on a count taken on December 31, 2023. All other inventory is based on estimates provided by management.

Investments

The Branch follows the amortized cost method of accounting for its investments in term deposits. Portfolio securities are recorded at fair value in the statement of financial position and changes in fair value are included in net surplus for the year.

Capital Assets

Capital assets are carried at cost less accumulated amortization. Amortization is charged against income using the declining balance method in amounts sufficient to amortize the cost of capital assets over their estimated useful lives as follows using the following annual rates:

• Buildings — 4%
• China and linen — 20%
• Computer equipment — 55 - 65%
• Computer software — 100%
• Office furniture and equipment — 20%
• Parking areas — 8%
• Vehicle — 30%

Capital assets under development are amortized once construction is completed and the assets are put into use.
The Branch has made the policy choice to expense interest costs incurred while assets are under development.

Internally Restricted Net Assets

The Branch has internally restricted funds for future repairs and maintenance.

Revenue Recognition

The Branch recognizes contributions in accordance with the deferral method of accounting.
All revenues are recorded on the accrual basis to the extent that amounts to be received can be reasonably estimated and collection is reasonably assured.
Revenues from licensed premises, events, rentals, catering, and kitchen are recognized in the period that the revenue is earned.
Donations are recognized in the period that they are received.
Membership dues are recognized as revenue in the year to which they relate. As such, amounts which apply to subsequent years are recorded as a deferred revenue liability and are recognized as revenue in the appropriate year.
Investment revenue is recognized in the period the income is earned.
Pull tab and Keno revenues are recognized in the period that the sales are made.

Financial Instruments — Measurement of financial instruments

Financial instruments are financial assets or liabilities of the Branch where, in general, the Branch has the right to receive cash or another financial asset from another party or the Branch has the obligation to pay another party cash or other financial assets.

The Branch initially measures its financial assets and liabilities at fair value, except for certain non-arm's length transactions that are measured at the exchange amount.
The Branch subsequently measures all its financial assets and financial liabilities at amortized cost.
Financial assets measured at amortized cost include cash, investments - term deposits, and accounts receivable.
Financial liabilities measured at amortized cost include accounts payable and accrued liabilities and demand loan.

Impairment

Financial assets measured at cost or amortized cost are tested for impairment, at the end of each year, to determine whether there are indicators that the asset may be impaired. The amount of the write-down, if any, is recognized in net surplus. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account. The reversal may be recorded provided it is no greater than the amount that had been previously reported as a reduction in the asset and it does not exceed original cost. The amount of the reversal is recognized in net surplus for the year.

Use of Estimates

The preparation of the financial statements in accordance 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 and expenditure during the reporting period. Significant areas requiring the use of management estimates related to the determination of the amortization of capital assets, and the valuation of inventories. Actual results could differ from those estimates. Adjustments, if any, will be reflected in the operations in the period of the settlement.