WORLD BLIND UNION

REPORT ANDFINANCIAL STATEMENTS

DECEMBER 31, 2012

Tel: (905) 602 8009Fax: (905) 602 8011

Website: www.gilmoreandco.com2600 Skymark Avenue, Building 9, Suite 201, Mississauga, ON L4W 5B2

AUDITORS’ REPORT

To the Board of Directors of World Blind Union

We have audited the accompanying financial statements of the World Blind Union, which comprise the statement of financial position as at December 31, 2012, and the statements of operations, changes in net assets and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these 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.

Auditors’ ResponsibilityOur responsibility 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 comply 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 financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the financial 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.

Auditors’ Responsibility (continued)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 financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of the World Blind Union as at December 31, 2012, and the results of its operations and cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

Gilmore & Company LLP

Mississauga, Canada Chartered Accountants May 7, 2013 Licensed Public Accountants

WORLD BLIND UNIONStatement of Financial Position As at December 31,(in U.S. dollars)

2012 2011

Assets

Current assets:Cash $485,347 $651,838Accounts receivable (Note 2) 123,746 93,024Prepaid expenses 19,417 23,585

628,510 768,447Capital Assets (Note 3) - 762

$628,510 $769,209

Liability, Deferred Contributions and Net Assets

Current liability:Accounts payable and accrued liabilities $164,016 $ 61,924

Deferred contributions (Note 4) 143,163 143,218

307,179 205,142

Net Assets:Invested in capital assets (Note 5) - 762Endowment (Note 6) 35,000 35,000Internally restricted (Note 7) 38,282 191,615Unrestricted 248,049 336,690

321,331 564,067

$628,510 $769,209

See accompanying notes to financial statements

On behalf of the Board of Directors:

Director DirectorPage 1

WORLD BLIND UNIONStatement of OperationsFor the Year Ended December 31,(in U.S. dollars)

2012 2011 (Note 11)

RevenueDonations and grants (Note 8) $ 422,315 $ 282,222Membership dues 298,050 298,570Interest income - 17

720,365 580,809

Expenditures (Schedule A)Capacity development activities 510,570 185,292Mission representation activities 121,503 98,320Information and education activities 87,540 70,979Membership related activities 57,077 63,606Fund development activities 26,612 24,140

803,302 442,337

Administration, finance and governance costs 159,799 54,971

963,101 497,308

(Deficiency) excess of revenue over expenditures

$ (242,736)

$ 83,501

See accompanying notes to financial statements

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WORLD BLIND UNIONStatement of Changes in Net AssetsFor the Year Ended December 31,(in U.S. dollars)

Invested in InternallyCapital Assets Endowment Restricted Total Total

(Note 5) (Note 6) (Note 7) Unrestricted 2012 2011

Balance, beginning of year $ 762 $ 35,000 $ 191,615 $ 336,690 $ 564,067 $ 480,566

(Deficiency) excess of revenue over expenditures - - (198,414) (44,322) (242,736) 83,501

Invested in capital assets (Note 5) (762) - - 762 - -

Interfund transfers (Note 7) - - 45,081 (45,081) - - -Balance, end of year $ - $ 35,000 $ 38,282 $ 248,049 $ 321,331 $ 564,067

See accompanying notes to financial statements

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WORLD BLIND UNIONStatement of Cash FlowsFor the Year Ended December 31,(in U.S. dollars)

2012 2011

Cash provided by (used in):Operating activities:

(Deficiency) excess of revenue over expenditures $ $ (242,736) $ 83,501Add item not affecting cash:

Amortization 762 1,564(241,974) 85,065

Net changes in non-cash net assets:Short-term investments - 120,000Accounts receivable (30,722) (27,136)Prepaid expenses 4,168 ( 4,168)Accounts payable and accrued liabilities 102,092 (922)

(166,436) 172,839

Financing activityDeferred contributions (55) 31,442

(Decrease) increase in cash during the year (166,491) 204,281

Cash, beginning of year 651,838 447,557

Cash, end of year $ 485,347 $ 651,838

See accompanying notes to financial statements

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WORLD BLIND UNIONNotes to Financial StatementsDecember 31, 2012

Nature of the organization

The World Blind Union (“WBU”) is an international not-for-profit organization representing some 285 million people globally who are blind or have low vision. Its mission is achieved with and through its members – organizations of blind and partially sighted persons, and organizations providing services to blind and partially sighted persons – in some 190 countries and six regional unions.

WBU’s long term vision is “A community where people who are blind or partially sighted are empowered to participate on an equal basis in any aspect of life they choose”. This vision is actualized through WBU’s three Strategic Priorities of:

Representation: Promoting full participation and equal opportunities for blind and partially sighted persons in all aspects of social, economic, political and cultural life;Capacity building: Strengthening the capabilities and capacity of the WBU regional structures and member organizations; andInformation sharing: Serving as an international information and resource centre on matters in respect of blind and partially sighted persons.

The World Blind Union was incorporated in Canada on March 16, 2007 by Letters Patent under the Canada Corporations Act. This followed a General Assembly decision to set up a permanent office for the WBU and the Officer’s Committee decision to situate that office in Toronto, Canada. Prior to this, WBU’s treasurer and accounting books rotated on a quadrennial basis, the last treasurer being in New York.

Effective September 26, 2008, WBU obtained recognition as a registered charity under the Income Tax Act of Canada (the “Act”) and, as such, is exempt from income taxes and is able to issue donation receipts for income tax purposes. In order to maintain its status as a registered charity under the Act, WBU must meet certain requirements under the Act. In the opinion of management, these requirements have been met.

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WORLD BLIND UNIONNotes to Financial StatementsDecember 31, 2012

1. Significant accounting policies

The financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations and include the following significant accounting policies:

Foreign currency translation

WBU records all accounting transactions in U.S. dollars, which is its official currency. Monetary assets and liabilities in foreign currencies have been translated into U.S. dollars at the exchange rates prevailing at the balance sheet date. Non-monetary assets and liabilities are converted at the rate of exchange in effect at the date of the transaction. Revenues and expenditures arising from foreign currency transactions have been translated at the exchange rate prevailing at the date of the transactions. Gains and losses arising from these translation policies are included in income.

Capital assets

Purchased capital assets are recorded at cost. Contributed capital assets are recorded at fair value at the date of contribution. Assets are amortized over their expected useful life. If a capital asset no longer contributes to WBU’s operations, its carrying amount is written down to its residual value. Repairs and maintenance costs are charged to expense.

Capital assets are amortized on a straight-line basis using the following annual rates:

Computer equipment 3 years

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WORLD BLIND UNIONNotes to Financial StatementsDecember 31, 2012

1. Significant accounting policies (continued)

Use of estimates

The preparation of financial statements in accordance with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Such estimates include the useful lives of capital assets and allowances for doubtful accounts receivable. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates, and, as adjustments become necessary, they are reported in the statement of operations in the period in which they become known.

Revenue recognition

WBU follows the deferral method of accounting for contributions, which include donations, grants, and membership dues. Membership dues do not represent payment for any service rendered to members and are, therefore, in the nature of voluntary contributions received by WBU.

Externally restricted contributions, other than endowments, are recognized as revenue in the year in which the related expenses are incurred.

Endowment contributions are recognized as direct increases in net assets in the year in which they are received.

Unrestricted contributions are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured.

Interest income attributable to endowments and deferred contributions is deferred and recognized as revenue in the year in which the related expenses are incurred. All other interest and investment income is recognized as revenue when earned.

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WORLD BLIND UNIONNotes to Financial StatementsDecember 31, 2012

1. Significant accounting policies (continued)

Financial instruments

WBU initially measures its financial assets and liabilities at fair value. WBU subsequently measures all its financial assets and financial liabilities at amortized cost. WBU has not designated any financial asset or financial liability to be measured at fair value.

2. Accounts receivable

2012 2011

Memberships receivable $ 79,312 $ 98,782Allowance for doubtful accounts (17,961) (14,965)Miscellaneous receivable 42,202 -HST rebate receivable 18,706 7,720Interest and other receivable 1,487 1,487

$ 123,746 $ 93,024

3. Capital assets

2012 2011

Net NetAccumulated Carrying Carrying

Cost Amortization Value Value

Computer equipment $ 4,692 $ 4,692 $ - $ 762

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WORLD BLIND UNIONNotes to Financial StatementsDecember 31, 2012

4. Deferred contributions

Deferred contributions related to expenses of future periods represent unspent, externally restricted amounts.

2012 2011

Balance, beginning of year $ 143,218 $ 111,776

Add: amounts received 392,566 311,969

Less: amounts recognized as revenue during the year (392,621) (280,527)

Balance, end of year $ 143,163 $ 143,218

5. Invested in capital assets

The amount represents the cost of capital assets purchased out of unrestricted resources less the accumulated amortization thereon.

2012 2011

Balance, beginning of year $ 762 $ 2,326

Less: amounts amortized (762) ( 1,564)

Balance, end of year $ - $ 762

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WORLD BLIND UNIONNotes to Financial StatementsDecember 31, 2012

6. EndowmentThe endowment is known as the “Hermoine Grant Calhoun Scholarship Fund”. The income earned on this fund is to be used to award annual scholarships to blind female students attending college in their own country.

7. Internally restricted net assetsThe Board of Directors has designated certain net assets as internally restricted for General Assembly, Arne Husveg development fund and Pedro Zurita scholarship fund purposes. In 2012 WBU held its 8 th general assembly. In prior years the Board of Directors had internally restricted $150,000 of net assets to cover the expected cost of the general assembly having allocated $50,000 in each of the preceding three years to internally restricted assets. In 2012, the Board of Directors transferred $43,912 to cover the remaining cost of the general assembly.

2012 2011

General assemblyBalance, beginning of year $ 150,000 $ 100,000External contributions 44,928 -Internal transfer – contributions allocated 43,912 50,000Expenditures (238,840) -Balance, end of year - 150,000

Arne Husveg development fundBalance, beginning of year 3,850 8,830Expenditures - (4,980)Balance, end of year 3,850 3,850

Pedro Zurita scholarship fundBalance, beginning of year 37,765 40,962Internal transfer – contributions allocated 1,169 1,203Expenditures (4,502) (4,400)Balance, end of year 34,432 37,765

$ 38,282 $ 191,615WORLD BLIND UNION

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Notes to Financial StatementsDecember 31, 2012

8. Donations and grants

The following represent donations and grants revenue:

2012 2011

Externally restricted: Permanent office setup $ 120,805 $ 216,652 H.G. Calhoun scholarship fund 2,698 3,250 World Braille Council project - 3,276 Haiti recovery efforts - 11,833 Soros CRPD project - 25,000 General Assembly sponsorship 44,928 - CBM Advocacy 60,000 - Trillium project 162,515 18,840

Internally restricted: Pedro Zurita scholarship fund 1,169 1,203

Unrestricted donations 30,200 2,168$ 422,315 $ 282,222

9. Expenditures by type and area of activity

The costs of carrying out the various activities have been summarized and shown on Schedule A attached to the financial statements. Costs which cannot be specifically identified with a particular activity and which benefit more than one activity have been allocated on the basis of estimates of the portion of time expended by staff on the various activities and by other bases of cost allocation considered reasonable and applied consistently.

WORLD BLIND UNION

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Notes to Financial StatementsDecember 31, 2012

10. Financial instruments

The significant financial risks to which WBU is exposed are as follows:

Credit riskWBU is exposed to credit risk in the event of non-performance by members, as well as non-performance by other entities which have pledged donations and grants to WBU, but WBU does not anticipate such non-performance. WBU’s maximum credit risk is the fair value of its accounts receivable.

Currency riskCurrency risk is the risk to WBU’s operating results that arise from fluctuations of foreign exchange rates and the degree of volatility of these rates. WBU is exposed to foreign currency exchange risk on cash and accounts payable held in foreign currencies. WBU does not use derivative instruments to reduce its exposure to foreign currency risk. As at December 31, 2012 Canadian denominated cash amounted to $124,038 (2011 - $24,482) and Canadian denominated accounts payable and accrued liabilities amounted to $164,016 (2011 - $58,924).

11. Comparative figures

Certain comparative figures have been reclassified to conform with the current year's presentation.

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WORLD BLIND UNION Schedule A

Statement of Expenditures by Type and Area of ActivityFor the Year Ended December 31,(in U.S. dollars)

Type of expenditureCapacity

development

Mission represent-

ation

Information and

educationMembership

relatedFund

development

Administration, finance and governance

Total2012

Total2011

Accounting $ 6,704 $ 6,704 $ 6,090 $ 3,793 $ - 2,77 $ 3,419 $ 26,710 $ 21,697Assistance and donations 41,403 21,219 1,960 64,582 44,843Audit 9,222 9,222 9,618Bank charges 293 4,189 4,482 2,521General Assembly 203,014 35,826 238,840 -I.T. service 5,857 686 623 388 350 7,904 9,408Legal 1,469 1,469 -Member dues waived 7,618 7,618 27,142Office costs and supplies 555 555 504 314 23 477 2,428 3,537Committee and project costs 4,634 4,634 28,657Other costs 15,036 12,034 8,485 5,284 (5,240) 14,406 50,005 13,547Postage and courier 215 215 360

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WORLD BLIND UNION Schedule A

Statement of Expenditures by Type and Area of Activity (Continued)For the Year Ended December 31,(in U.S. dollars)

Type of expenditureCapacity

development

Mission represent-

ation

Information and

educationMembership

relatedFund

development

Administration, finance and governance

Total2012

Total2011

Salaries and benefits 164,269 66,234 60,164 37,471 31,485 33,777 393,400 246,019Scholarships awarded 7,200 7,200 12,630Telephone 2,198 1,950 1,771 1,103 994 8,016 3,174Translation 17,434 1,952 4,761 1,106 25,253 9,507Travel – staff 1,641 6,714 633 51 18,874 27,913 23,210Travel – officers and executive 7,200 3,455 103 26,091 36,849 40,456Website and newsletter 38,059 2,446 5,856 46,361 982

$ 510,570 $ 121,503 $ 87,540 $ 57,077 $ 26,612 $ 159,799 $ 963,101 $ 497,308

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