Olympia Financial Group Inc. Annual Report 2020

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FY2020 Annual Report · Olympia Financial Group Inc.

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ANNUAL REPORT

20
20

WITH US
IT’S

PERSONAL

2020 Annual Report | Olympia Financial Group Inc.

TABLE OF CONTENTS

03. President’s Message

05. Management’s Discussion and Analysis

19. Analysis of Results by Segment

35.

36.

Management’s Responsibility for the
Consolidated Financial Statements

Independent Auditor’s Report for the
Consolidated Financial Statements

41. Consolidated Financial Statements

45. Notes to the Consolidated Financial Statements

75. Corporate Information

2020 Annual Report | Olympia Financial Group Inc.

FINANCIAL HIGHLIGHTS

Results from operations for the year ended December 31,
2020, when compared to operations for the year ended
December 31, 2019.

• Basic and diluted earnings per share attributable

to
shareholders of Olympia decreased 15% to $3.32 per share
from $3.92 per share.

• Total net earnings and comprehensive income decreased 16%

to $7.87 million from $9.33 million.

TOTAL REVENUE BY
DIVISION (%)

2020

2019

• Registered Plans

61.8% 64.4%

• Currency and Global

Payments

18.3% 16.4%

• Private Health Services 15.2% 17.1%

• Corporate and

Shareholder Services

• Exempt Edge

• Other

2.4% 0.4%

2.1% 1.5%

0.2% 0.2%

• Total

revenue decreased 1%

from
$49.08 million mainly due to a decrease in interest revenue,
from both trust and receivables.

to $48.62 million

• Service revenue

increased 2%

to $36.36 million

from
$35.58 million mainly due to continued growth in the
Corporate and Shareholder Services division throughout
2020 and an increase in trading profits in the Currency
and Global Payments division, despite declines in Private
Health Services Plans division revenues caused by the
COVID-19 pandemic.

• Other gains and (losses), net, amounted to ($0.92) million
for the year ended December 31, 2020, compared to
$3.10 million, mainly due to Olympia Trust’s Currency and
Global Payments division recording a $2.23 million unrealized
foreign exchange forward contract gain for the year ended
December 31, 2019. This compares to a ($0.93) million
unrealized foreign exchange forward contract loss in the
current year. In addition, Olympia recognized an insurance
settlement of $0.84 million from the cyber incident claim
during 2019.

• Olympia’s interest revenue and trust income is subject
to fluctuations depending on account balances and changes
in the Canadian prime rate. Interest revenue and trust income
decreased 9% to $12.26 million from $13.50 million, mainly
due to the average Canadian prime rate for the year being
lower at 2.45% compared to an average of 3.95% in 2019.
Interest charges on aged accounts receivable were also
suspended in the Registered Plans division for several months
due to market condition uncertainties resulting from the
COVID-19 pandemic.

• Direct and administrative expenses (excluding depreciation
and amortization) decreased 6% to $35.51 million from $37.79
million, mainly due to decreases in general administration
costs, including staff events, travel, and consulting fees.

• Income tax expense is recognized based on the average
annual income tax rate for the full financial year. A change in
the Alberta corporate tax rate resulted in a rate of 24% being
used for the year ended December 31, 2020. The rate used as
at December 31, 2019 was 26.5%.

• Earnings before income tax decreased 19% to $10.36 million

from $12.86 million.

2020 Annual Report | Olympia Financial Group Inc.

PRESIDENT’S MESSAGE

It is not possible to talk about 2020 without talking about the
impact of the COVID-19 pandemic. While our company generally
performed quite well, the earnings of two of our divisions were
significantly affected by the unprecedented circumstances we
still find ourselves in.

In 2019, our Currency and Global Payments division had a
blockbuster year thanks to a very active cannabis industry and
some large customers in the agricultural sector. The division
made excellent progress operationally this past year, but could
not sustain its 2019 performance in the chaos that was 2020.
The division did a great job of breaking even for most of the year
and then finished with a great December. Under the leadership
of Vice President Neil McCullagh, the division has introduced
new management, foreign exchange options and revitalized
its sales force with new entrepreneurial contracts. We have
renewed enthusiasm and high expectations for this division
moving forward.

The other division that was significantly impacted by COVID-19
was Olympia Benefits. This division makes most of its money
processing health claims. When the virus hit and all but
emergency medical treatment was closed, fees from claims
processing dropped as anticipated. The division reported
$500,000 less earnings in the second quarter of 2020 because
of COVID-19. I am happy to report that claims processing has
returned to normal and we are seeing monthly plan sales hitting
new records.

COVID-19 has also caused the Bank of Canada to lower interest
rates to their lowest levels in years. These lower interest rates
have a negative impact on our earnings.

When the pandemic was declared, we at Olympia showed, as we
have in that past, that we were and remain up to the challenge.
Within 3 days of the pandemic being called, our entire staff
was working from home on encrypted computer systems. Our
customers’ needs were being taken care of and, as far as our
customers could tell, it was business as usual.

Shareholders may recall that Olympia sold its Corporate
and Shareholder Services division in 2013 for $43 million.
As a condition of the sale, we committed to not re-enter the
business for five years and after honouring that commitment,
we commenced a new corporate and shareholder services
division two years ago. We anticipated losses for the first two
years, which proved to be correct as we did lose approximately
$1 million a year during those years. Entering year three we
expect to be profitable. The division is being well received in the
marketplace and even with the marketing and sales challenges
presented by the pandemic, we added 61 new corporate clients
in 2020 and expect 2021 to be even better.

Exempt Edge continues to incur losses while it develops,
improves and enhances its software. Client revenue increased
by 72% while costs rose by 30%. The division is currently
working on the final integration of its systems with Olympia
Trust Company’s
registered plans and corporate and
shareholder services back-office systems. The ultimate goal is
to provide the exempt market with an integrated system that
will connect the issuer, exempt market dealer, exempt market
dealing representative, trust company and end consumer in
an electronic real time relationship, something that does not
currently exist in the marketplace. This system, when combined
with Olympia Trust’s excellent service to the exempt market,
will further entrench us as the company of choice for the
exempt market.

The Registered Plans Division did an excellent job of providing
services to its customers during the pandemic. It was nothing
short of an amazing accomplishment to have all the work done
from the safety of employees’ homes while maintaining excellent
customer service. The division basically held onto its earnings
from the previous year despite lower investment activity and lower

2020 Annual Report | Olympia Financial Group Inc.

CENTENNIAL PLACE - EAST TOWER, CALGARYOlympia will be moving into its new head office on floors 38, 39 and 40interest rates. It continues to develop new and better systems to
service its customers. The division is truly a leader in Canada
in serving the exempt market and in providing administration
services for those clients who wish to hold mortgages in their
registered plans.

Our Head Office has been in the Palliser Square office tower
in downtown Calgary for the last 17 years. It was time for a
change. We will be moving to a near-new office building starting
in March with the final groups coming over in the second half of
the year. Our employees will love their new place of work and
shareholders will enjoy the fact that the occupancy costs in the
new premises are considerably less than we have been paying.
I think that’s what you call a win/win.

In March of 2021 the company will celebrate its 25th anniversary.
It seems like just yesterday when a handful of employees started
to provide services. We now have over 200 employees and are
as excited about the future as we were the first day we opened
our doors for business. It has been a great 25 years, with lots of
great people combining their efforts to make a great company.
We have had lots of challenges and lots of success. We expect
the future will hold the same.

For 2021, the Olympia Charitable Foundation raised more
money than ever (around $350,000). When the world shut
down in March 2020, Olympia Charitable Foundation quickly
made donations to food banks in Calgary, Vancouver, Montreal
and Halifax.

Olympia’s share price started 2020 at a record $55. By the
middle of 2020, when we were about 3 months into the pandemic,
shareholders only had the first quarter financials to give them
an idea of how Olympia was performing, and the share price
dropped to $30. By the end of August, after Olympia’s second
quarter results were available, the share price improved to $40,
where it remains as at the time of writing.

As of December 31, 2020, Olympia had 2,406,336 shares
outstanding with a total market capitalization of approximately
$95 million. The company’s pre-tax earnings for the year were
$10.4 million, a return on market capitalization of approximately
10.9%. Very few companies can show a rate of return on market
capitalization of this size in a market where interest paid at the
bank is under 1%. Olympia looks pretty healthy at this share
price and shareholders may want to consider increasing their
holdings. Based on our current share price of $39.50 and our
monthly dividend of 23 cents per share, Olympia’s current
dividend yield is 7.0%.

Looking forward into the year 2021 we have a great deal of
confidence in our abilities to perform well and grow. 2020
has had a lot of surprises and we have been able to meet the
challenges head on. We look forward to a great year and hope
all of you have the same.

2020 Annual Report | Olympia Financial Group Inc.

CHRISTINE KHITH, LINDSAY STRAIN AND HELEN TEWELDEMANAGEMENT’S DISCUSSION AND ANALYSIS

This Management’s Discussion and Analysis (“MD&A”) is
provided to enable a reader to assess the financial position and
results of operations of Olympia Financial Group Inc. (“Olympia”)
for the period ended December 31, 2020.

This MD&A should be read in conjunction with Olympia’s
audited consolidated financial statements
(“consolidated
financial statements”) for the year ended December 31, 2020,
as well as the MD&A found in Olympia’s 2019 Annual Report,
together with the audited consolidated financial statements
and accompanying notes found therein. Olympia’s audited
consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards
Board (“IASB”).

Amounts are presented
in Canadian dollars, Olympia’s
functional currency. All references to $ are to Canadian dollars
and references to US$ are to United States dollars.

This report, and the information provided herein, is dated as
at February 25, 2021. Additional information about Olympia,
including quarterly and annual reports, is available on Olympia’s
website at www.olympiafinancial.com and on SEDAR at
www.sedar.com.

Cautionary note regarding
forward-looking statements
Certain statements contained in this MD&A may constitute
forward-looking statements. These statements relate to future
events or Olympia’s future performance. All statements, other
than statements of historical fact, may be forward-looking
statements. Forward-looking statements are often, but not always,
identified by the use of words such as “seek,” “anticipate,”
“plan,” “continue,” “estimate,” “expect,” “may,” “will,” “project,”
“predict,” “propose,” “potential,” “targeting,” “intend,” “could,”
“might,” “should,” “believe,” and similar expressions. These
statements involve known and unknown risks, uncertainties
and other factors that may cause actual results or events to
differ materially from those anticipated in such forward-looking
statements. Olympia believes that the expectations reflected
in those forward-looking statements are reasonable, based
on the information available on the date such statements are
made and the process used to prepare the information, but
no assurance can be given that these expectations will prove
to be correct. Any forward-looking statements included in this
MD&A should not be unduly relied upon by investors, as actual
results may vary. These statements speak only as of the date of
this MD&A and are expressly qualified, in their entirety, by this
cautionary statement.

Given the changing circumstances surrounding the COVID-19
pandemic and the related response from governments (federal,
provincial and municipal), regulatory authorities, businesses
and customers, there is inherently more uncertainty associated
with Olympia’s assumptions as compared to prior periods.
These assumptions include, but are not limited to, management
expectations with respect to:

• general economic conditions in Canada, which includes

the impact of the COVID-19 pandemic on the economy and
financial markets;

• the impact of the COVID-19 pandemic and other health risks
on Olympia’s business, operations, capital resources and/or
financial results;

• fluctuations in interest rates and currency values;

• changes in monetary policy;

• changes in economic and political conditions;

• legislative and regulatory developments;

• results from legal proceedings and disputes;

• the level of competition in Olympia’s markets;

• the occurrence of weather related and other

natural catastrophes;

• changes in accounting standards and policies;

• the accuracy and completeness of information Olympia

receives about customers and counterparties;

• the ability to attract and retain key personnel;

• changes in tax laws;

• technological developments;

• cyber security risks;

• costs related to operations remaining consistent with

historical experiences; and

• management’s ability to anticipate and manage risks

associated with these factors.

Olympia’s actual results could differ materially from those
anticipated in the forward-looking statements contained herein
as a result of the risk factors set forth herein.

Although Olympia’s management has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking statements,
there may be other factors that cause results to not be as

2020 Annual Report | Olympia Financial Group Inc.

anticipated, estimated or intended. Forward-looking statements
contained herein are made as of the date of this MD&A and
Olympia disclaims any obligation to update any forward-
looking statements if circumstances or management’s beliefs,
expectations or opinions should change, whether as a result of
new information, future events or otherwise, unless required by
applicable securities laws.

Olympia’s business
Olympia was formed under the Business Corporations Act
(Alberta) and is headquartered in Calgary, Alberta. Olympia is
a reporting issuer in British Columbia, Alberta, and Ontario and
its common shares are listed on the Toronto Stock Exchange
(“TSX”). The majority of Olympia’s business is conducted through
its wholly owned subsidiary Olympia Trust Company (“Olympia
Trust”), a non-deposit taking trust corporation.

Olympia Trust received its letters patent on September 6, 1995,
authorizing the formation of a trust corporation to be registered
under the Loan and Trust Corporations Act (Alberta). Olympia
Trust is licensed to conduct trust activities in Alberta, British
Columbia, Saskatchewan, Manitoba, Québec, Newfoundland
and Labrador, Prince Edward Island, New Brunswick and Nova

Scotia. The Registered Plans division, Currency and Global
Payments division, and Corporate and Shareholder Services
division conduct business under Olympia Trust.

The Private Health Services Plan division conducts business
under Olympia Benefits Inc. (“OBI”), a wholly owned subsidiary
of Olympia. Olympia Benefits Inc. was incorporated on May 4,
2006, under the Business Corporations Act (Alberta).

The Exempt Edge division conducts business under Exempt
Edge Inc. Exempt Edge Inc. was incorporated under the
Business Corporations Act (Alberta) on November 28, 2016.
For the year ended December 31, 2019, Olympia held an 80%
controlling interest in Exempt Edge Inc. and a third party held
a 20% non-controlling interest. The non-controlling interest was
presented separately in the statements of net earnings and
comprehensive income and within equity in the balance sheets,
but separately from Olympia’s equity. As at December 31, 2020,
Exempt Edge Inc. is a wholly owned subsidiary of Olympia,
and thus does not present the non-controlling interest on the
balance sheets.

2020 Annual Report | Olympia Financial Group Inc.

Berniece Wood and Rick Skauge presenting Meals on Wheels with a donation in honour of Gord Angevine• Other gains and losses, net, amounted to ($0.92) million
from $3.10 million, mainly due to Olympia Trust’s Currency and
Global Payments division recording a $2.23 million unrealized
foreign exchange forward contract gain for the year ended
December 31, 2019. This compares to a ($0.93) million foreign
exchange forward contract loss in the current year. In addition,
Olympia recognized an insurance settlement of $0.84 million
from the cyber incident claim during 2019.

• Olympia’s interest revenue and trust income is subject to
fluctuations depending on account balances and changes in
the Canadian prime rate. Interest revenue and trust income
decreased 9% to $12.26 million from $13.50 million, mainly due
to the average Canadian prime rate for the year being lower
at 2.45% compared to an average of 3.95% in 2019. Interest
charges on aged accounts receivable were also suspended in
the RRSP division for several months due to market condition
uncertainties resulting from the COVID-19 pandemic.

• Income tax expense is recognized based on the estimated
average annual income tax rate for the full financial year.
A change in the Alberta corporate tax rate resulted in a rate of
24% being used for the year ended December 31, 2020. The
rate used as at December 31, 2019 was 26.5%.

• Earnings before income tax decreased 19% to $10.36 million

from $12.86 million.

• Basic and diluted earnings per share attributable

to
shareholders of Olympia decreased 15% to $3.32 per share
from $3.92 per share.

resulted

COVID-19 Update
The outbreak of the novel strain of coronavirus, specifically
in governments
identified as “COVID-19,” has
worldwide enacting emergency measures to contain the spread
of the virus. These measures, which include the implementation
of travel bans, self-imposed quarantine periods, self-isolation,
physical and social distancing and the closure of non-essential
businesses, have caused material disruption to businesses
in Canada and globally. Global debt and equity capital
markets have experienced significant volatility and weakness.
Governments and central banks have reacted with significant
monetary and fiscal
to stabilize
economic conditions.

interventions designed

Developments at the end of the first quarter and in the second
quarter regarding the COVID-19 pandemic have resulted
in a shift in Olympia’s focus towards ensuring the safety of
our employees by allowing them to work remotely wherever
possible while maintaining customer service standards and
other critical business operations. The resumption of normal
business operations is highly dependent on the progression
of the pandemic and the success of emergency measures
enacted to contain the spread of the virus, which will influence
when governmental authorities remove various restrictions on
business activities.

As an emerging risk, the duration and total impact of the
COVID-19 pandemic is unknown at this time, as is the efficacy
of the government and central bank interventions. Any estimate
of the length and severity of these developments is therefore
subject to significant uncertainty, and accordingly, estimates
of the extent to which the COVID-19 pandemic may, directly or
indirectly, materially and adversely affect Olympia’s operations,
financial results and condition in future periods is also subject to
significant uncertainty.

Summary of financial results
Overview and financial highlights for the year ended
December 31, 2020, when compared to the year ended
December 31, 2019

• Total net earnings and comprehensive income decreased 16%

to $7.87 million from $9.33 million.

• Total

revenue decreased 1%

from
$49.08 million, mainly due to a decrease in interest revenue
from both trust and receivables.

to $48.62 million

• Service revenue

increased 2%

to $36.36 million

from
$35.58 million, mainly due to continued growth in the CSS
division throughout 2020 and an increase in trading profits in
the CGP division, despite declines in Health division revenues
caused by the COVID-19 pandemic.

2020 Annual Report | Olympia Financial Group Inc.

COMBINED NET EARNINGS
PER QUARTER ($ '000)

EPS PER QUARTER ($)

2,500

2,000

1,500

1,000

500

Q4 – 2020

Q3 – 2020

Q2 – 2020

Q1 – 2020

Q4 – 2019

1.00

0.75

0.50

0.25

Q4 – 2020 Q3 – 2020 Q2 – 2020 Q1 – 2020 Q4 – 2019

2020 Annual Report | Olympia Financial Group Inc.

SUMMARY OF QUARTERLY RESULTS

The following table sets forth a summary of Olympia’s quarterly results for each of the last eight quarters. The quarterly results have been
derived from financial information prepared in accordance with IFRS.

Quarterly Summary

($ thousands)

Dec. 31
2020

Sep. 30

Jun. 30

Mar. 31

Dec. 31

Sep. 30

Jun. 30

Mar. 31

2020

2019

Service revenue

11,181

8,430

7,910

8,843

9,192

8,670

9,188

8,530 1

Interest revenue and trust income

2,670

2,898

3,223

3,465

3,589

3,424

3,441

3,048

Expenses

(9,832 )

(8,924 )2

(9,012 )

(9,579 )

(10,066 )

(9,315 )

(9,556 )

(10,393 )

Other gains/(losses), net

(1,207 )

97 2

193

489

(74 )

2,604 1

Earnings before income taxes

2,812

2,501

2,121

2,922

2,800

3,268

2,999

3,789

Net earnings

2,130

1,917

1,676

2,143

1,998

2,294

2,295

2,739

Per share attributable to shareholders

of Olympia – basic and diluted ($)

0.90

0.81

0.71

0.90

0.85

0.96

0.97

1.14

Dividends per share ($)

0.69

0.63

(1)Presentation of Q1 2019 has been adjusted for the reclassification of the insurance settlement to align with the Q4 2020 presentation.

(2)Presentation of Q3 2020 has been adjusted for the reclassification of the Canada Emergency Wage Subsidy to align with Q4 2020 presentation.

Fourth Quarter Results

Overview and financial highlights for the three-month
period ended December 31, 2020, when compared to the
three-month period ended December 31, 2019

• Total net earnings and comprehensive income increased 7%
to $2.13 million from $2.00 million, mainly due to an increase
in the number and size of forward exchange contracts sold by
Olympia Trust’s Currency and Global Payments division.

• Total

revenue

increased 8%

to $13.85 million

from
$12.78 million, mainly as a result of an increase in trading profits
in the Currency and Global Payments division and continued
growth in the Corporate and Shareholder Services division.
Service revenue decreased in the Private Health Services Plan
division and Registered Plans division.

• Service revenue increased 22% to $11.18 million from
$9.19 million, mainly due to an increase in trading profits in
the CGP division and continued growth in the CSS division.
COVID-19 had the largest impact on the Private Health
Services Plan division with revenue deceasing 10% compared
to the previous year.

• Other gains/(losses) net, went from a gain of $0.09 million to a
loss of $1.21 million, mainly due to $1.20 million in unrealized
foreign exchange losses (net) on forward contracts in the
Currency and Global payments division, compared with a
$0.04 unrealized gain is the fourth quarter of 2019.

• Olympia’s interest revenue and trust income are subject to
fluctuations depending on account balances and changes in
the Canadian prime rate. Interest revenue and trust income
decreased 26% to $2.67 million from $3.59 million, mainly
due to the changes in the Canadian prime rate. The Canadian
prime rate was 2.45% as at December 31, 2020, compared to
3.95% on December 31, 2019.

2020 Annual Report | Olympia Financial Group Inc.

• Direct and administrative expenses (excluding depreciation
and amortization) decreased 3% to $9.35 million from
$9.67 million, mainly due to decreases in staff events, computer
consultant costs, and other general administrative costs.

Objectives for 2021
Management has set the following major objectives for 2021:

• Grow the Corporate and Shareholder Services division;

• Earnings before

income

tax

increased marginally

• Continue to invest in Olympia’s online presence;

$2.81 million from $2.80 million.

• Income tax expense is recognized based on the estimated
average annual income tax rate for the full financial year.
A change in the Alberta corporate rate resulted in a rate of
24% being used for the period ended December 31, 2020.
The rate used as at December 31, 2019 was 26.5%.

• Basic and diluted earnings per share attributable

to
shareholders of Olympia increased 6% to $0.90 per share from
$0.85 per share.

• Implement operational changes to the Currency and Global

Payments division;

• Transition from cost reduction to revenue expansion in the

Private Health Services Plan division;

• Continue to grow the Exempt Edge division; and

• Further develop the Registered Plans division’s app and

online platform.

2020 Annual Report | Olympia Financial Group Inc.

MELISSA WOLSTENHOLMEOlympia’s Charitable Foundation supporting Feed Nova ScotiaGrow the Corporate and Shareholder
Services division
The Corporate and Shareholder Services “(CSS)” division
experienced significant growth throughout 2020. In 2021, CSS
will continue to build on its client base and promote its transfer
agent and trustee services for private and publicly listed issuers
across Western Canada. CSS will also continue to explore
synergies with the Exempt Edge division, providing a robust
service offering for private capital markets.

Continue to invest in Olympia’s online presence
Olympia continues to enhance its online platforms to better serve
its customers with performance and usability improvements.
Olympia has devoted specialized resources to application
development for the purpose of enhancing its online presence.
Olympia continues to invest in its cyber security initiatives
to ensure the safety and security of client information and
prevent malicious activity. As at March 31, 2020, all staff have
successfully transitioned to working from home during the
COVID-19 pandemic. Olympia will further enhance its capability
to maintain normal operations with staff who are working from
home, and will provide and improve support to staff and clients
as needed.

New branding, improved operations, and new
product offerings
Currency and Global Payments ended 2020 with its strongest
month of the year. December was bolstered by volatility as a
result of ongoing COVID-19 impacts on the global economy and
as a result of the US federal election. This volatility saw many
clients take risk-mitigating positions, and as a result, December
saw a significant amount of forward contracts being placed.
As we head into the new year, optimism is starting to return to
the economy.

Currency and Global Payments will focus on streamlining
operations and reducing overall expenditures through 2021.

The business continues to improve policy and procedures to
improve efficiency and reduce risk while adding new products
and services. With over-the-counter options being introduced
in early 2021, the expectations of growth relating to these
products should be realized as Q1 ends. All sales staff are
currently enrolled in their Derivatives, Fundamentals and Options
License course to ensure all sales staff are well versed in the
benefits and risk of these new products.

Transition from cost reduction to revenue expansion
in the Private Health Service Plan division
Olympia’s Private Health Services Plan division has three
strategic objectives for 2021 and beyond – increase sales,
strengthen
technology
the customer base, and advance
infrastructure.

Understanding the customer journey and the conversion of
leads is a top priority for improving sales. A new website and
an extension of current marketing endeavours is anticipated to
increase lead generation.

Customer success is crucial given the division’s transition
to a subscription model. The division has deepened its
understanding of the customer experience. A new customer
model has been developed to encourage customers to not only
renew their plan, but purchase additional products such as the
Wellness Spending Account and Telemedicine.

To keep pace with the competitive market, the division will place
an emphasis on advancing its core technology infrastructure.
The customer platform “My Olympia” database system and
mobile app are being refined to provide a sturdy and flexible
foundation for future growth.

Continue to grow the Exempt Edge division
Throughout 2020, Exempt Edge continued to grow its user
base of Issuers and Dealers while increasing the adoption of
EdgeLink, the Ecosystem for the Private Capital Market of
Canada. Development efforts in 2021 will continue to focus on
integrating the Dealer’s Edge and Issuer’s Edge platforms with
the trust services provided by the Registered Plans division and
the transfer agency services provided by the Corporate and
Shareholder Services division.

Further develop the Registered Plans division’s app
and online platform
The Registered Plans division has implemented Phase I of its
integration with Exempt Edge’s Dealer’s Edge platform. Investors
may now open new Olympia accounts easily and efficiently
through Exempt Edge’s Dealer’s Edge platform. Over the next
year we plan to continue to create efficiencies for our division
by continuing to integrate. The Registered Plans division will
also continue to focus on increasing the usage of our existing
app and online platform while starting work on a new portal to
streamline the mortgage funding process. Olympia has had
great success with the “manage fees” option, which allows
clients to easily manage and pay their fees from their personal
devices.

Outlook for 2021
Olympia continues to monitor and assess the impact of
COVID-19 and the emergency measures enacted to contain the
spread of the virus and mitigate its economic effects. Olympia
is well diversified, with its Registered Plans, Private Health
Services Plan, Currency and Global Payments, Exempt Edge,
and Corporate and Shareholder Services divisions.

2020 Annual Report | Olympia Financial Group Inc.

FINANCIAL ANALYSIS

Consolidated Balance Sheets as at

($)

ASSETS
Current assets

Cash & cash equivalents
Trade & other receivables
Inventory
Prepaid expenses
Promissory note receivable
Derivative financial instruments

Total current assets
Non-current assets

Restricted cash & investments
Equipment & other
Intangible assets
Right-of-use assets
Other financial assets
Long-term lease receivable
Promissory note receivable
Derivative financial instruments
Deferred tax assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities

Trade & other payables
Deferred revenue
Other liabilities & charges
Revolving credit facility
Lease liabilities
Derivative financial instruments
Current tax liability
Total current liabilities
Lease liabilities
Derivative financial instruments

Total liabilities
EQUITY

Share capital
Contributed surplus
Retained earnings

Equity attributable to owners of Olympia

Non-controlling interests

Total equity
Total equity & liabilities

December 31, 2020

December 31, 2019

15,939,759
2,809,248
49,428
1,722,259
140,000
3,340,251
24,000,945

1,000,000
799,623
2,292,702
539,142
72,566
8,117
1,120,000
-
820,724
6,652,874
30,653,819

999,404
550,876
1,962,561
4,946,744
890,722
1,801,662
450,799
11,602,768
147,564
-
11,750,332

7,886,989
86,373
10,930,125
18,903,487
-
18,903,487
30,653,819

13,754,089
3,105,766
56,518
1,270,284
140,000
2,177,020
20,503,677

2,500,000
1,120,955
2,748,214
1,073,064
38,574
55,156
1,260,000
1,840,389
786,200
11,422,552
31,926,229

1,456,166
486,655
1,732,886
6,655,347
907,066
657,259
176,795
12,072,174
1,038,286
887,020
13,997,480

7,886,989
86,373
10,164,595
18,137,957
(209,208 )
17,928,749
31,926,229

2020 Annual Report | Olympia Financial Group Inc.

Cash, cash equivalents and restricted cash
and investments
Olympia continues to generate cash from its core businesses.
As at December 31, 2020, cash reserves increased by 16%
to $15.94 million (December 31, 2019 – $13.75 million).
The majority of this amount came from increases in cash from
operating activities, of $10.66 million (December 31, 2019 –
$8.85 million). Cash from investing activities included the return
of $1.50 million previously held as investment collateral for
foreign exchange exposure. Additional cash of $0.25 million was
used for the purchase of the non-controlling interest in Exempt
Edge Inc. as well as $1.71 million to repay the Olympia Trust
revolving credit facility. Additional cash was used to finance
the purchase of the outstanding 20% non-controlling interest in
Exempt Edge Inc. during the fourth quarter of 2020.

Restricted cash and investments as at December 31, 2020, of
$1.00 million (December 31, 2019 – $2.50 million), consist of cash
held by financial institutions as collateral for the performance
of Olympia’s Currency and Global Payments division’s trading
platform obligations. The decrease is mainly due to associated
contracts in the Currency and Global Payments division being
settled throughout the end of 2020, which had obligated Olympia
to maintain these amounts as collateral. Restricted cash and
investments are not readily accessible for use in operations and
are reported separately from cash and cash equivalents on the
balance sheet. Olympia had used its revolving credit facility to
fund the collateral requirements.

Olympia’s cash is placed with a Canadian financial institution
where it generates interest. Cash and cash equivalents comprise
66% of the total current assets of Olympia at December 31,
2020, compared to 67% at December 31, 2019.

Trade and other receivables
Trade and other receivables are comprised largely of receivables
from the Registered Plans division’s clients. The decrease in
trade receivables is mainly due to increases in the balance of
allowances for bad debts.

Olympia has made allowances for doubtful accounts of
$1.25 million, compared to $0.98 million as at December 31,
2019. Management is committed to a policy of closely monitoring
risk and exposure in this area and is actively pursuing past due
accounts through its internal collection process.

Included within receivables is the current portion of a lease
receivable of $0.05 million recognized based on the present
value of sublet property as required by IFRS 16.

Promissory note receivable
On June 5, 2018, Olympia announced the sale to Tarman ATM
Inc. (“Tarman”) of the ATM business operated by Olympia ATM
Inc., as a going concern, for an amount equal to the then current
net book value of all assets used in the ATM business less all
assumed liabilities; an amount estimated to be $1.4 million.

The sale of the ATM business to Tarman, a corporation owned
and controlled by Rick Skauge, was a related party transaction,
as defined in Multilateral Instrument 61-101 – Protection of
Minority Security Holders in Special Transactions, but was
exempted from Olympia obtaining disinterested shareholder
approval and a formal valuation as the fair market value of
the proposed transaction was less than 25% of Olympia’s
market capitalization.

An ad hoc committee composed solely of the independent
members of Olympia’s Board of Directors was constituted to
consider and approve the sale of the ATM business to Tarman.
As part of its deliberations, the ad hoc committee of the Board
of Directors noted the continuing losses of approximately
$120,000 per month in the ATM business and acknowledged
that while the ATM business still had the potential to grow and
expand, it was unlikely to become profitable in the near future.
Given the immediate financial benefits that the sale of the ATM
business would have for Olympia and the uncertain timelines
to profitability, the ad hoc committee believed the sale of the
ATM business to be in the best interest of Olympia. The ad
hoc committee of the Board of Directors obtained a fairness
comfort letter stating that the proposed transaction was fair to
the disinterested shareholders of Olympia. In addition, following
the public disclosure of the transaction, Olympia received an
unsolicited expression of interest in the ATM business from a
third party. Olympia permitted the third party to conduct a due
diligence review and valuation of the ATM business and received
an offer to purchase the ATM business from the third party.

In conjunction with the sale of substantially all the assets of
Olympia ATM Inc. to a related party in 2018, the purchase price
was paid by the delivery of a secured demand promissory
note (“the promissory note”) for $1.40 million by Tarman. The
outstanding principal amount of the promissory note bears
interest at prime plus 0.25%. Subject to Canadian Western
Bank’s (“CWB”) consent (as discussed below), all interest
accrued under the promissory note shall be paid on an annual
basis on or before the 30th day of June of each calendar year
and, commencing June 30, 2020, Tarman is required to repay
the outstanding principal amount of the promissory note in
annual installments of $140,000 on or before the 30th day of
June of each calendar year, with the outstanding balance of the
principal amount to be repaid in full on or before June 30, 2023.
As at December 31, 2020, the first installment of $140,000 had
been repaid, together with all accrued interest.

In connection with the financing of the vault cash used by
Tarman, Olympia agreed to postpone to CWB the receipt of
all amounts owed to it by Tarman and is required to obtain
CWB’s consent prior to accepting any amounts from Tarman.
Olympia has obtained the required consent. Olympia also
agreed to subordinate to CWB all interests granted to Olympia
by Tarman.

Olympia has assessed the expected credit loss as it relates to
the promissory note and has determined it to be nominal.

2020 Annual Report | Olympia Financial Group Inc.

Forward foreign exchange contracts
Olympia purchases forward exchange contracts when its
Currency and Global Payments division enters into a transaction
to buy or sell foreign currency in the future. These contracts
are both short term and long term in nature, are in the normal
course of business, and are used to manage foreign exchange
foreign exchange contracts are not
exposure. Forward
designated as hedges and they are recorded at fair market
value through profit and loss.

Forward foreign exchange contracts are recorded on Olympia’s
balance sheet as either an asset or liability, with changes in
fair value included in net earnings. This accounting treatment
resulted in the recognition of a forward foreign exchange contract
asset of $3.34 million as at December 31, 2020, compared to
$4.02 million as at December 31, 2019, and a forward foreign
exchange contract liability of $1.80 million as at December 31,
2020, compared to $1.54 million as at December 31, 2019.
The movement in the derivative financial instruments asset and
liability is mainly due to the fluctuation of the Canadian, United
States dollar, and Japanese yen exchange rates, as the vast
majority of the Currency and Global Payments division’s trades
are in Canadian and United States dollars, and Japanese yen.
The number and size of outstanding forward foreign exchange
contracts largely impacts the movement in the derivative
financial instrument assets and liabilities, with the resultant
change to fair value being recorded

Intangible assets
The capital additions of $0.35 million relates to the continued
development and enhancement of systems in Exempt Edge and
the Registered Plans division’s mobile application.

Current liabilities
The breakdown of Olympia’s trade and other payables consists
of trade and other payables (22%), government taxes (32%),
amounts due to agents, clients and commission payable (33%)
and amounts due to related parties (13%).

Other liabilities and charges consist of bonus accruals, deferred
commissions and bonuses, professional fees payable, and
employee benefits payable.

Deferred revenue
At December 31, 2020, deferred revenue totaled $0.55 million,
compared to $0.49 million as at December 31, 2019. This
is comprised of annual fees received by the Private Health
Services Plan division and the Corporate and Shareholder
Services division. The unearned portion of these annual fees
is recognized as deferred revenue at the time of payment and
revenue is recognized on a straight-line basis in relation to
Olympia rendering these services.

Employee Share Ownership Plan (ESOP)
Olympia has established an Employee Share Ownership Plan
(“ESOP”). Under this plan, Olympia contributes $1 for each $1
contributed by an employee up to a maximum that is based on
the employee’s earnings and years of service. The employee and
Olympia’s contributions are used to purchase common shares of
Olympia through the facilities of the TSX. Olympia’s contribution
is included as an administrative expense in the statements of
net earnings and comprehensive income and amounted
to $0.34 million for the year ended December 31, 2020
(December 31, 2019 – $0.28 million).

Contingencies
Olympia is not a money lender, nor does it guarantee or
participate in loans or mortgages of any type, except in its
capacity as trustee of mortgages held on behalf of its clients.

Olympia is a defendant and plaintiff in a number of legal actions
that arise in the normal course of business, the losses or gains
from which, if any, are not anticipated to have a material effect
on the consolidated financial statements.

Related party transactions
Refer to Note 32 of the consolidated financial statements for the
period ended December 31, 2020, for disclosure on Olympia’s
related party transactions.

Olympia’s President and CEO owns and controls 29.49%
of Olympia’s shares. During the year, Olympia entered into
transactions with the following related parties:

• Companies and businesses controlled by the President

and CEO of Olympia;

• Companies and businesses associated with the directors

of Olympia;

• Companies and businesses controlled by management

of Olympia;

• Family members of

the President, management and

directors; and

• Key management and directors.

The following transactions with related parties were measured
at the exchange amount, which is the amount of consideration
agreed to by the parties:

2020 Annual Report | Olympia Financial Group Inc.

Service revenue

December 31, 2020

December 31, 2019

Companies and businesses controlled by the President and CEO

31,560

34,330

Service revenue from associated entities totaled $31,560 for the year ended December 31, 2020 (December 31, 2019 – $34,330).
This consisted mainly of revenue from legal services provided by Olympia’s in-house general counsel to Tarman, a company controlled
by the President and CEO, as well as sublease income ($24,000) from Exempt Experts Inc., a company controlled by the President
and CEO.

Interest revenue

December 31, 2020

December 31, 2019

Companies and businesses controlled by the President and CEO

40,294

58,800

Interest revenue from associated entities totaled $40,294 for the year ended December 31, 2020, (December 31, 2019 – $58,800), and
consists of interest earned from the promissory note receivable.

Administrative expenses

December 31, 2020

December 31, 2019

Companies and businesses controlled by the President and CEO
(management fee)

Olympia Charitable Foundation

Companies and businesses controlled by the President and CEO

3,136,568

76,070

7,560

3,220,198

3,734,826

68,155

38,379

3,841,360

Administrative expenses paid to associated entities totaled
$3.22 million for the year ended December 31, 2020 (December
31, 2019 – $3.84 million), and consisted of the following:

• The Olympia Charitable Foundation is funded by Olympia
and the employees of Olympia. Olympia’s matched donation
totaled $76,070 for the year ended December 31, 2020
(December 31, 2019 – $68,155).

• Management fees are paid to Tarman based on a percentage
of pre-tax profits of Olympia’s divisions, except for the Private

Health Services Plan division, where the management fee
is based on a percentage of health claims administered.
These fees are for services provided as President and CEO
of Olympia. For the year ended December 31, 2020, this
amounted to $3.14 million (December 31, 2019 – $3.73 million).

• Fees paid to Olympia ATM Ltd., a company owned and
controlled by Olympia’s President and CEO, of $7,560 relate
to maintenance services provided for Olympia’s foreign
exchange ATMs.

Trade and other receivables include amounts receivable
from related parties

Companies and businesses controlled by the President and CEO
(current)

Companies and businesses controlled by the President and CEO
(non-current)

Receivables from associated entities totaled $1.29 million for
the year ended December 31, 2020 (December 31, 2019 –
$1.45 million), and consisted mainly of the following:

December 31, 2020

December 31, 2019

167,165

1,120,000

1,287,165

189,966

1,260,000

1,449,966

• A receivable in the amount of $22,560 (December 31, 2019
– $34,421) from Tarman, a company controlled by Olympia’s
President and CEO, reflects legal services provided and cost
recoveries relating to accounting and other administration
services provided.

2020 Annual Report | Olympia Financial Group Inc.

• A receivable in the amount of $4,605 (December 31, 2019 –
$15,545) from Olympia ATM Ltd., a company controlled by the
President and CEO of Olympia, for expense recoveries relating
to accounting and other administrative services provided.

• A receivable in the amount of $1.26 million (December 31,
2019 – $1.40 million) from Tarman, a company controlled by
Olympia’s President and CEO of Olympia. On June 5, 2018,
Olympia announced the sale to Tarman ATM Inc. (“Tarman”) of
the ATM business operated by Olympia ATM Inc., as a going
concern, for an amount equal to the then current net book
value of all assets used in the ATM business less all assumed
liabilities; an amount estimated to be $1.4 million.

The sale of the ATM business to Tarman, a corporation owned
and controlled by Olympia’s President and CEO, was a related
party transaction, as defined in Multilateral Instrument 61-101
– Protection of Minority Security Holders in Special Transactions,
but was exempted
from Olympia obtaining disinterested
shareholder approval and a formal valuation as the fair market
value of the proposed transaction was less than 25% of Olympia’s
market capitalization.

to profitability, the ad hoc committee believed the sale of the
ATM business to be in the best interest of Olympia. The ad
hoc committee of the Board of Directors obtained a fairness
comfort letter stating that the proposed transaction was fair to
the disinterested shareholders of Olympia. In addition, following
the public disclosure of the transaction, Olympia received an
unsolicited expression of interest in the ATM business from a
third party. Olympia permitted the third party to conduct a due
diligence review and valuation of the ATM business and received
an offer to purchase the ATM business from the third party that
was economically comparable to the offer made by Tarman.

In conjunction with the sale of substantially all assets of Olympia
ATM Inc. in 2018, the purchase price paid by Tarman was equal
to the aggregate net book value of the assets used by the ATM
division. The assets’ book value at June 5, 2018, was estimated
to be $1.40 million. The purchase price was paid by the delivery
of a secured demand promissory note (“the promissory note”) for
$1.40 million by Tarman. The outstanding principal amount of the
promissory note bears interest at prime plus 0.25%. All interest
accrued under the promissory note shall be paid on an annual
basis on or before the 30th day of June of each calendar year.
Subject to Canadian Western Bank’s consent, which Olympia
has obtained, commencing June 30, 2020, Tarman is required
to repay the outstanding principal amount of the promissory note
in annual installments of $140,000 on or before the 30th day of
June of each calendar year, with the outstanding balance of the
principal amount to be repaid in full on or before December 31,
2023. As at June 30, 2020, the first installment of $140,000 has
been repaid, together with all accrued interest.

Olympia has assessed the expected credit loss as it relates to
the promissory note and has determined it to be nominal.

Trade and other payables and provision for other liabilities
and charges include amounts payable to related parties

December 31, 2020

December 31, 2019

Companies and businesses controlled by the President and CEO

Directors’ fees

146,117

86,830

232,947

151,939

83,291

235,230

Payables to associated entities totaled $232,947 for the year
ended December 31, 2020 (December 31, 2019 – $235,230),
and consisted mainly of the following:

• A payable in the amount of $36,668 (December 31, 2019 –
$39,994) to Tarman, a company controlled by the President
and CEO of Olympia, for commissions related to the sale of
health plans offered by OBI.

President and CEO of Olympia, for services provided to
maintain foreign exchange ATMs.

• A management fee payable in the amount of $107,152
(December 31, 2019 – $108,850) to Tarman, a company
controlled by the President and CEO of Olympia, based on a
percentage of pre-tax profits of Olympia’s divisions.

• A payable for directors’ fees of $86,830 (December 31, 2019 –

• A payable in the amount of $2,297 (December 31, 2019 –
$3,095) to Olympia ATM Ltd, a company controlled by the

$83,291).

These payables are all current.

2020 Annual Report | Olympia Financial Group Inc.

Key management compensation

Compensation paid to key management is included in notes
22 and 32 of the consolidated financial statements. Key
management includes the Board of Directors and executive
team members from OBI, Olympia Trust, Exempt Edge Inc., and
Olympia. Olympia uses management or employment contracts

Salaries, bonuses and profit sharing

Management fees

Directors fees

Short-term employee benefits

Shareholders’ equity
As at December 31, 2020, Olympia had 2,406,336 outstanding
shares (December 31, 2019 – 2,406,336), with a carrying
value of $7.89 million. In April 2019, Olympia repurchased
fractional shares from former shareholders at $50 per share. The
repurchase was allocated to retained earnings.

as a means to incent certain executives to maximize the
profitability of their applicable business units and the profitability
of Olympia as a whole. The compensation paid or payable to key
management is shown in the following table:

December 31, 2020

December 31, 2019

4,123,412

3,136,568

255,580

247,174

5,322,684

3,734,826

285,001

250,978

7,762,734

9,593,489

Income taxes
Deferred income tax assets are recognized for loss carry-forward
and other deductible temporary differences to the extent that the
realization of the related tax benefit is probable through future
taxable profits or other tax planning opportunities. The average
corporate rate used for the year ended December 31, 2020,
was 24% (December 31, 2019 – 26.5%). On June 29, 2020,
the Government of Alberta introduced Alberta’s Recovery Plan,
which among other things reduced Alberta’s general corporate
income tax rate to 8% effective July 1, 2020.

2020 Annual Report | Olympia Financial Group Inc.

ANALYSIS OF RESULTS BY SEGMENT

Registered Plans Division

Summary of divisional results for the year ended December 31

($ thousands)

Service revenue

Interest revenue and trust income

Direct expenses

Administrative expenses

Depreciation and amortization

Other gains, net

Earnings before income tax

Income taxes

Net earnings

2020

18,087

11,938

(64 )

29,961

(19,595 )

(1,104 )

9,262

(2,036 )

7,225

2019

Variation

18,784

12,812

(51 )

31,545

(20,814 )

(982 )

9,844

(2,627 )

7,217

The Registered Plans division (“RRSP”) specializes in the administration of
registered plan accounts, including RRSPs, RRIFs, LIRAs, LIFs and TFSAs.
In contrast to traditional registered plan account administrators, Olympia’s
focus is on exempt market securities and arm’s length mortgages. The holder
of a registered plan account with Olympia will typically hold multiple exempt
market securities or mortgages in their Olympia registered plan account.

RRSP’s service revenue decreased 4% to $18.09 million from $18.78 million
when compared to the year ended December 31, 2019. The decrease is a
result of a decrease in the number of account transactions.

Interest revenue and trust income decreased 7% to $11.94 million from
$12.81 million when compared to the year ended December 31, 2019, due to
a decrease in the Canadian prime rate from 3.95% as at December 31, 2019,
compared to 2.45% as at December 31, 2020.

Direct, administrative, depreciation and amortization expenses decreased
5% to $20.76 million from $21.85 million when compared to the year ended
December 31, 2019. This decrease is due to a decrease in computer projects
and consulting, bonuses, and corporate events.

Earnings before income tax decreased 6% to $9.26 million from $9.84 million
for the year ended December 31, 2019.

RRSP net earnings increased marginally to $7.23 million from $7.22 million
when compared to the year ended December 31, 2019.

RRSP is responsible for 62% of Olympia’s total revenue (including interest),
a decrease from 64% when compared to the year ended December 31, 2019.

Service revenue decreased 4% to
$18.09 million from $18.78 million

Interest revenue and trust income
decreased 7% to $11.94 million
from $12.81 million

Direct, administrative, depreciation
and amortization expenses
decreased 5% to $20.76 million
from $21.85 million

Earnings before income tax
decreased 6% to $9.26 million
from $9.84 million

RRSP net earnings increased
0% to $7.23 million from
$7.22 million

-4%

-7%

25%

-5%

-6%

12%

-100%

-6%

-22%

2020 Annual Report | Olympia Financial Group Inc.

ANALYSIS OF RESULTS BY SEGMENT

Private Health Services Plan Division

Summary of divisional results for the year ended December 31

($ thousands)

Service revenue

Interest revenue and trust income

Direct expenses

Administrative expenses

Depreciation and amortization

Other gains, net

Earnings before income tax

Income taxes

Net earnings

2020

7,239

172

(1,482 )

5,929

(3,468 )

(163 )

2,298

(553 )

1,745

2019

8,079

335

(1,708 )

6,706

(3,745 )

(153 )

2,821

(748 )

2,073

Variation

-10%

-49%

-13%

-12%

-7%

-100%

-19%

-26%

-16%

The Private Health Services Plan division (“Health”) markets, sells and
administers health and wellness benefits to business owners through OBI, a
wholly owned subsidiary of Olympia. Health’s current objectives are to improve
sales, increase the value of its customer base, and advance technology
infrastructure.

Health primarily serves professional and small corporations that are
particularly vulnerable to the economic impacts of the mandated closures
and social distancing restrictions put in place in response to the COVID-19
pandemic. Client behaviors could change materially as a result of this
challenging economic situation, including the reduction of services and the
inability of clients to pay outstanding amounts.

Service revenue decreased 10% to

$7.24 million from $8.08 million 10%

Direct, administrative, depreciation
and amortization expenses
decreased 9% to $5.11 million
from $5.61 million

Health’s service revenue decreased 10% to $7.24 million from $8.08 million
when compared to the year ended December 31, 2019, due to clients
submitting fewer claims as a result of the COVID-19 pandemic.

Earnings before income tax
decreased 19% to $2.30 million

from $2.82 million 19%

Direct, administrative, depreciation and amortization expenses decreased
9% to $5.11 million from $5.61 million when compared to the year ended
December 31, 2019. The decrease is due to a decrease in commission and
bonuses, direct expenses proportionate to service revenue, and a Canada
Emergency Wage Subsidy during 2020 of $0.17 million.

Earnings before income tax decreased 19% to $2.30 million from $2.82 million
when compared to the year ended December 31, 2019. Health’s net earnings
decreased 16% to $1.75 million from $2.07 million when compared to the year
ended December 31, 2019. Health is responsible for 15% of Olympia’s total
revenue (including interest), a decrease from 17% when compared to the year
ended December 31, 2019.

Health’s net earnings decreased
16% to $1.75 million from

$2.07 million 16%

2020 Annual Report | Olympia Financial Group Inc.

ANALYSIS OF RESULTS BY SEGMENT

Currency and Global Payments Division

Summary of divisional results for the year ended December 31

($ thousands)

Service revenue

Interest revenue and trust income

Direct expenses

Administrative expenses

Depreciation and amortization

Other gains/(losses), net

Earnings before income tax

Income taxes

Net earnings

2020

8,882

(1,144 )

7,809

(6,082 )

(308 )

(919 )

500

(110 )

390

2019

7,779

253

(1,376 )

6,656

(7,308 )

(286 )

2,999

2,061

(542 )

1,519

Variation

14%

-72%

-17%

17%

-17%

>100%

-76%

-80%

-74%

The Currency and Global Payments division (“CGP”) allows corporations and
private clients to buy and sell foreign currencies at competitive rates. The
division offers its clients same-day transactions, as well as long-term forward
contracts. With offices in Vancouver and Calgary, the CGP division is well
situated to service Western Canada.

CGP’s service revenue increased 14% to $8.88 million from $7.78 million when
compared to the year ended December 31, 2019. The increase is due to an
increase in trading demand throughout the end of 2020. Other gains/(losses),
net, are ($0.92) million from $3.00 million, mainly due to unrealized gains and
losses on forward foreign exchange contracts.

Service revenue increased 14%

to $8.88 million from $7.78 million 14%

Direct, administrative, depreciation
and amortization expenses
decreased 16% to $7.53 million

from $8.97 million 16%

Direct, administrative, depreciation and amortization expenses decreased
16% to $7.53 million from $8.97 million when compared to the year ended
December 31, 2019. The decrease is mainly due to a decrease in commission
expense and salaries and wages.

Earnings before income tax
decreased 76% to $0.50 million

from $2.06 million 76%

Earnings before income tax decreased 76% to $0.50 million from $2.06 million
when compared to the year ended December 31, 2019.

CGP’s net earnings decreased 74% to $0.39 million from $1.52 million when
compared to the year ended December 31, 2019.

CGP is responsible for 18% of Olympia’s total revenue (including interest),
an increase from 16% when compared to the year ended December 31, 2019.

CGP’s net earnings
decreased 74% to $0.39 million

from $1.52 million 74%

2020 Annual Report | Olympia Financial Group Inc.

ANALYSIS OF RESULTS BY SEGMENT

Exempt Edge Division

Summary of divisional results for the year ended December 31

($ thousands)

Service revenue

Interest revenue

Direct expenses

Administrative expenses

Depreciation and amortization

Other gains, net

Loss before income tax

Income taxes recovery

Net loss

Loss attributable to non-controlling interests

Loss attributable to EEI

2020

997 *

(94 )

904

(1,538 )

(230 )

(864 )

(767 )

(122 )

(645 )

2019

Variation

731

(51 )

681

(1,297 )

(82 )

(695 )

183

(512 )

(102 )

(410 )

36%

84%

33%

19%

>100%

-100%

24%

-47%

50%

20%

57%

*Excluded from service revenue are fees of $163,625 for services provided by the EEI division but invoiced by the CSS division.

The Exempt Edge division (“EEI”) focuses on the provision of information
technology services to exempt market dealers, registrants and issuers.

Service revenue increased 36% to $1.00 million from $0.73 million when
compared to the year ended December 31, 2019. This increase is largely
due to growth in EEI’s client base. Excluded from service revenue are fees
of $163,625 for services provided by the EEI division to an external client.
However, these fees were invoiced and therefore included as service revenue
in the Corporate and Shareholder Services division.

Direct, administrative, depreciation and amortization expenses increased
30% to $1.86 million from $1.43 million when compared to the year ended
December 31, 2019. This increase is mainly due to an increase in operating
expenses such as salaries, computer consultants’ fees, and promotion costs
to facilitate the growth in clients, as well as depreciation.

Loss before income tax for the year ended December 31, 2020, increased
24% to ($0.86) million from ($0.70) million when compared to the year ended
December 31, 2019.

EEI’s net loss increased 50% to ($0.77) million from ($0.51) million when
compared to the year ended December 31, 2019.

Service revenue increased 36% to

$1.00 million from $0.73 million 36%

Direct, administrative, depreciation
and amortization expenses
increased 30% to $1.86 million

from $1.43 million 30%

Loss before income tax
increased 24% to ($0.86) million

from ($0.70) million 24%

EEI’s net loss increased 50% to

($0.77) million from ($0.51) million 50%

2020 Annual Report | Olympia Financial Group Inc.

ANALYSIS OF RESULTS BY SEGMENT

Corporate and Shareholder Services Division

Summary of divisional results for the year ended December 31

($ thousands)

Service revenue

Interest revenue and trust income

Direct expenses

Administrative expenses

Depreciation and amortization

Loss before income tax

Income taxes

Net loss

2020

1,097 *

(88 )

1,055

(1,919 )

(37 )

(901 )

198

(703 )

2019

Variation

180

(3 )

180

(1,265 )

(33 )

(1,118 )

294

(824 )

>100%

52%

12%

-19%

-33%

-15%

*Included in service revenue are fees of $163,625 for services provided by the EEI division but invoiced by the CSS division.

The Corporate and Shareholder Services division (“CSS”)
provides transfer agent and registrar services to public and
private issuers across Canada. CSS is positioned as an
alternative to the large trust companies that are principally
focused on Eastern Canada. The services provided by CSS
include administering dividend
reinvestment, acting as
depository and disbursing agent for corporate reorganizations,
assisting with shareholder solicitations, and scrutineering
shareholder meetings. The CSS management team comprises
highly respected and experienced individuals with a track
record of success.

Service revenue increased more than 100% to $1.10 million from
$0.18 million, when compared to the year ended December
31, 2019. This is due to the CSS division continuing to grow its
customer base.

Direct, administrative, depreciation and amortization expenses
increased 57% to $2.04 million from $1.30 million. This is
mainly due to an increase in employee salaries, computer
maintenance, consulting fees, and costs associated with growth
of the business.

Loss before income tax decreased 19% to ($0.90) million
from ($1.12) million when compared to the year ended
December 31, 2019.

CSS’s net loss decreased 15% to ($0.70) million from ($0.82)
million when compared to the year ended December 31, 2019.

Service revenue increased more
than 100% to $1.10 million from

$0.18 million 100%

Direct, administrative, depreciation
and amortization expenses
increased 57% to $2.04 million

from $1.30 million 57%

Loss before income tax decreased
19% to ($0.90) million from

($1.12) million 19%

CSS’s net loss decreased 15% to

($0.70) million from ($0.82) million 15%

2020 Annual Report | Olympia Financial Group Inc.

ANALYSIS OF RESULTS BY SEGMENT

Corporate Division

Summary of divisional results for the year ended December 31

($ thousands)

Service revenue

Interest revenue

Administrative expenses

Other (losses)/gains, net

Earnings/(loss) before income tax

Income taxes expense

Net loss

2020

(31 )

(86 )

(24 )

2019

125

(175 )

(6 )

(56 )

(91 )

(147 )

Variation

>100%

-71%

-28%

-82%

>100%

-5%

-84%

The Corporate division carries out support functions in the areas of accounting, information technology, legal services, human resources,
payroll and internal audit. Support function remuneration is allocated, based on usage, to the various divisions.

Total revenue earned is incidental to Olympia’s activities.

Administrative expenses for the year ended December 31, 2020, decreased 82% to $0.03 million from $0.18 million when compared to
the year ended December 31, 2019.

The Corporate division’s net loss was $0.02 million for the year ended December 31, 2020.

2020 Annual Report | Olympia Financial Group Inc.

OFF-BALANCE SHEET ARRANGEMENTS
During the normal course of operations, Olympia administers
client assets that are not reported on its balance sheet. The cash

component of these off-balance sheet arrangements represents
the cash and cash equivalents held in trust.

December 31, 2020

December 31, 2019

($ thousands)

Cash and public
securities at
estimated fair value

Private securities,
mortgages and mutual
funds at cost

Cash and public
securities at

estimated fair value

Private securities,
mortgages and
mutual funds at cost

Registered Plans

649,938 1

4,514,979

599,171 3

4,380,533

Private Health

Services Plan

Corporate and

Shareholder Services

Currency and

Global Payments

12,100

1,048,377 2

19,433

11,462

15,228

15,727

1,729,848

4,514,979

641,588

4,380,533

1 The cash portion included in Registered Plans is $570.33 million.

2 Included in the CSS securities is $155.58 million of treasury bills and public securities.

3 The cash portion included in Registered Plans is $569.60 million.

Registered Plans division (“RRSP”)

At December 31, 2020, RRSP administered self-directed
registered plans consisting of private company securities
and mortgages with a cost value of $4.51 billion (December 31,
2019 – $4.38 billion) plus cash, public securities, term deposits,
and outstanding cheques with an estimated fair value of $649.94
million (December 31, 2019 – $599.17 million). These assets
the account holders and Olympia
are
Trust does not maintain effective control over the assets.
Therefore, the assets are not reflected in these consolidated
financial statements. Olympia earned trust income from the
cash portion of the assets held in trust of $11.68 million for
the year ended December 31, 2020 (December 31, 2019 –
$12.16 million).

the property of

Private Health Services Plan division (“Health”)

funds

At December 31, 2020, Health held
trust of
$12.1 million (December 31, 2019 – $11.46 million) on behalf
of its self-insured private health clients. These assets are the
property of the plan holders and OBI does not maintain effective
control over the assets. Therefore, the assets are not reflected in
these consolidated financial statements.

Currency and Global Payments (“CGP”)

At December 31, 2020, CGP held funds in trust of $4.01 million
(December 31, 2019 – $3.69 million) for clients who have paid

margin requirements on forward foreign exchange contracts,
and $15.43 million (December 31, 2019 – $12.04 million) of
outstanding payments. These assets are the property of the
contract holders and Olympia Trust does not maintain effective
control over the assets. Therefore, the assets are not reflected in
these consolidated financial statements.

Corporate and Shareholder Services division (“CSS”)

At December 31, 2020, CSS held funds in trust and outstanding
cheques of $1.05 billion (December 31, 2019 – $15.23 million) for
clients who have hired Olympia Trust to provide trustee services.
This includes approximately $155.58 million in treasury bills and
public securities held in trust. These assets are the property of
the trust clients and Olympia Trust does not maintain effective
control over the assets. Therefore, the assets are not reflected in
these consolidated financial statements.

Management of capital resources
Olympia includes shareholders’ equity, which comprises share
capital, contributed surplus, non-controlling interest and retained
earnings, in the definition of capital. Olympia’s main objectives
when managing its capital structure are to:

• Maintain sufficient cash and cash equivalents over the
short and medium term in order to finance its growth and
development, including capital expenditures;

2020 Annual Report | Olympia Financial Group Inc.

• Maintain investor and creditor confidence to sustain future

development of the business;

• Maintain regulatory capital for Olympia Trust as required by the
Loan and Trust Corporations Act (Alberta) ($2 million). Similar
regulatory capital is required by legislation in Nova Scotia
($5 million) and Saskatchewan ($5 million). Regulatory capital
is defined as share capital and retained earnings. Olympia
Trust has maintained these minimum capital requirements
throughout the twelve months ended December 31, 2020; and

• Maintain compliance with financial covenants, which
includes maintaining a minimum equity of $12 million. The
financial covenants are reviewed and controls are in place to
maintain compliance with the covenants. Olympia complied
with its financial covenants for the twelve months ended
December 31, 2020.

In managing capital, Olympia estimates its future dividend
payments and capital expenditures, which are compared to
planned business growth for purposes of sustainability. The
capital structure of Olympia is managed and adjusted to reflect
changes in economic conditions. In order to maintain or adjust
the capital structure, adjustments may be made to the amount
of dividends (if any) to shareholders, in addition to the number
of new common shares issued or common shares repurchased.
Management reviews the financial position of Olympia on a
monthly and cumulative basis.

Financing decisions are set based on the timing and extent of
expected operating and capital cash outlays. Factors considered
when determining capital and the amount of operational cash
required are weighed against the costs associated with excess

cash, its terms and availability, whether to issue equity and the
creation of value for the shareholders. Olympia works towards
managing its capital objectives to the extent possible while
facing the challenges of market conditions and the public’s
assessment of Olympia’s risk profile.

Olympia maintains a strong capital base to maintain investor
and creditor confidence and to sustain future development of
the business.

Olympia has committed capital resources to its 2021 Objectives
(set out previously) and has sufficient capital through internally
generated cash flows and its credit facility to meet these
spending objectives.

Completing and fulfilling its 2021 Objectives will help Olympia
meet its growth and development activities. No other significant
expenditure is required to maintain growth and development
activities. Olympia’s Currency and Global Payments division
maintains various foreign currency bank accounts, of which
Canadian dollar and United States dollar bank accounts are the
most significant. It is Olympia Trust’s policy to limit the amount of
foreign currencies on hand to $1.50 million to reduce exposure
to foreign currency risk.

Olympia’s capital management objectives have remained
substantially unchanged over the years presented.

Liquidity
Liquidity risk is the risk that Olympia will encounter difficulties in
meeting its financial obligations. Olympia manages its liquidity
risk by keeping surplus cash with a highly rated financial
institution. This allows Olympia to earn interest on surplus cash

2020 Annual Report | Olympia Financial Group Inc.

PEGGY CHU, CHRISTINE LAW, MATT SHEWCHUK AND RICK SKAUGEAmaryllis winnerswhile having access to it within a short time. Olympia seeks to
ensure the security and liquidity of these investments.

Olympia has a current ratio (current assets: current liabilities)
of 2.07:1 as at December 31, 2020, compared to 1.71:1 as
at December 31, 2019. The increase in Olympia’s current
ratio is mainly due to increases in cash that were previously
used as collateral for the performance of Olympia’s Currency
and Global Payments division’s trading platform obligations.
Funds placed as collateral are considered to be restricted
cash and investments (non-current assets), are not readily
accessible for use in operations, and are reported separately
from cash and cash equivalents (current assets) on the
balance sheet.

There are no legal or practical restrictions on the ability of
subsidiaries to transfer cash to Olympia.

Cash flows

Operating activities

The movement in cash flow from operating activities for the year
ended December 31, 2020, is mainly attributable to decreases
in administrative expenses, including salaries, bonuses, and
general administration, when compared to the year ended
December 31, 2019.

Investing activities

The movement in cash used in investing activities during the year
ended December 31, 2020, is mainly attributable to reduced
collateral requirements for the CGP division and decreased
capital asset expenditure when compared to 2019.

Financing activities

Cash used in financing activities during the year ended
December 31, 2020, increased mainly due to the repayment of
the revolving credit facility as compared to net borrowing during
the year ended December 31, 2019, and the purchase of the
20% non-controlling interest in Exempt Edge Inc.

Cash
Cash is placed with a Canadian financial institution where it
generates interest. Cash and cash equivalents comprise 66%
of the total current assets of Olympia, compared to 67% as at
December 31, 2019.

One factor that affects Olympia’s profitability is effective interest
rates. Although Olympia Trust is a non-deposit taking trust
corporation, it does earn trust income on cash held in trust.
Cash held in trust generated trust income of $11.68 million,
a 4% decrease from $12.16 million when compared to the year
ended December 31, 2019.

Olympia, through its operational cash flow and line of credit, has
sufficient funds to meet its Objectives for 2021.

Liquidity risks associated with financial
instruments are
addressed in the notes to the accompanying consolidated
financial statements. Management understands that currency
markets are volatile and therefore subject to higher risk.
Olympia’s CGP division mitigates currency risk through its
policy of limiting the amount of foreign currencies on hand to
$1.50 million.

Commitments
Olympia leases various offices under lease agreements. The
initial lease terms are between twelve months and fifty months
and the majority of lease agreements are renewable at market
rates when the lease period ends.

Future aggregate contractual minimum lease payments are
listed in the table below:

2021

2022

December 31, 2020

923,397

147,932

1,071,329

Credit facility
As at December 31, 2020, Olympia has drawn $4.95 million on
its credit facility, compared to $6.66 million as at December 31,
2019. On March 15, 2019, Olympia increased the credit facility
amount from $8.50 million to $15 million. Amounts drawn in the
current period have been used to facilitate the additional trading
collateral requirements for the CGP division and to finance the
growth of the Exempt Edge division. The credit facility provides
a maximum of $15 million and bears interest at the Canadian
prime rate plus 0.25%. The Canadian prime rate at December
31, 2020 was 2.45% compared to 3.95% December 31, 2019.
The credit facility is subject to review at any time.

The credit facility contains a number of affirmative covenants,
including maintaining specific security, maintaining a specific
financial ratio, and maintaining a total equity of $12 million.
The financial ratio is a quarterly cash flow coverage ratio of
not less than 1.50:1. At December 31, 2020, Olympia’s cash
flow coverage ratio under the terms of the credit facility was
calculated to be 1.83:1 (December 31, 2019 – 1.99:1). Total
equity as at December 31, 2020, was $18.90 million, compared
to total equity of $17.93 million at December 31, 2019.

The cash flow coverage calculation is based on Olympia’s
previous four quarters’ revolving Earnings Before Interest,
Tax, and Depreciation and Amortization (“EBITDA”) less cash
taxes paid. This revolving EBITDA for the twelve months ended
December 31, 2020, has been calculated at $10.20 million
(December 31, 2019 – $11.47 million) after adjusting for finance
expenses of $0.21 million (December 31, 2019 – $0.34 million).
The coverage required is based on an annualized average of the

2020 Annual Report | Olympia Financial Group Inc.

scheduled facility principal of $15 million, and interest payments
calculated at 3.79% (December 31, 2019 – 5.13%) over a period
of 36 months. As at December 31, 2020, this was calculated to
be $5.57 million (December 31, 2020 – $5.77 million). Should
the covenants and other limitations be breached, it could cause
a default, which might result in a requirement for immediate
repayment of all amounts outstanding

Security for the credit facility includes a general security
agreement providing a first security charge over all present and
after acquired property.

During the period, the credit facility was amended to divide the
facility between Olympia and Olympia Trust. The new agreement
provides Olympia with a $9 million facility and Olympia Trust with
a $6 million facility.

On May 16, 2016, Olympia Trust entered into a contingent credit
facility to be used only by the CGP division. During the year
ended December 31, 2019, the agreement was replaced with a
new demand credit facility with a US$6 million limit.

As at December 31, 2020, no amounts have been drawn on
this facility.

Credit facility

Available balance at January 1

Drawn

Available at December 31

December 31, 2020

December 31, 2019

15,000,000

(4,946,744 )

10,053,256

15,000,000

(6,655,347 )

8,344,653

Risk framework
Olympia is exposed to various types of risks owing to the
nature of the commercial activities it pursues. Management has
identified the following risks:

Liquidity risk

Liquidity risk is the risk that Olympia will encounter difficulties in
meeting its financial obligations. Olympia manages its liquidity
risk by keeping surplus cash in liquid investments with a highly
rated financial institution. This allows Olympia to earn interest on
surplus cash while having access to it within a very short time.

Liquidity risk is associated with Olympia’s credit facility. The
credit facility is available to finance day-to-day operations to a
maximum principal amount of $15 million (December 31, 2019 –
$15 million) and bears interest at the Canadian prime rate plus
0.25%. For the year ended December 31, 2020, a balance of
$4.95 million is outstanding (December 31, 2019 – $6.66 million).
Olympia has determined the principal and interest to be current.

Security for the credit facility includes a general security
agreement providing a first security interest in all present and
subsequently acquired property.

The timing of cash outflows is outlined in the following tables:

At December 31, 2020

Current

31 to 60 days

61 to 90 days Over 90 days

Total

Trade and other payables

910,184

Other liabilities and charges

1,962,561

86,830

2,390

999,404

1,962,561

Lease liabilities (current)

Current income tax liability

82,918

674,644

450,799

923,398

450,799

Total

$ 2,955,663

533,717

169,748

677,034

$ 4,336,162

At December 31, 2019

Trade and other payables

$ 1,388,733

67,433

Other liabilities and charges

1,732,886

$ 1,456,166

1,732,886

Lease liabilities (current)

Current income tax liability

82,918

746,259

176,795

995,013

176,795

Total

$ 3,204,537

327,146

82,918

746,259

$ 4,360,860

As at December 31, 2020, trade and other payables totaled $1.00 million (December 31, 2019 – $1.46 million). Olympia continues to
meet all of the obligations associated with its financial liabilities.

2020 Annual Report | Olympia Financial Group Inc.

The aging of the undiscounted lease payments is outlined in the following table:

At December 31, 2020

Less than
one year

One to
two years

Two to
three years

More than
three years

Total
undiscounted
lease payments

Lease payments

923,397

147,932

$ 1,071,329

The liquidity risk relating to derivative financial instruments payable is outlined in the following table:

Current

31 to 60 days

61 to 90 days

Over 90 days

Non-current (1–3 years)

Market risk

Market risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market
prices, following variations in the parameters underlying their
evaluation, such as interest rates, exchange rates or quoted
stock market prices, and is comprised of foreign currency
exchange risk, interest rate risk, management’s assessment,
and operational risks.

Foreign currency exchange risk

Olympia is exposed to changes in foreign exchange rates when,
and if, revenues or financial instruments fluctuate because of
changing rates. Transactions in the applicable financial market
are executed consistent with established risk management
policies. Olympia purchases forward contracts whenever it
enters into a transaction to buy or sell foreign currency in the
future. These contracts are both short term and long term in
nature and are in the normal course of business. Management
understands that the currency markets are volatile and therefore
subject to higher risk.

Olympia applies
currency risk:

the

following policy

to mitigate

the

• For forward contracts, a margin of 5% is payable on signature

of the contract;

• Olympia sets up a corresponding position with its currency

supplier; and

• If market rates vary by 4% or more, the client is required to
adjust their margin to match the variance by the end of the
trading day.

December 31, 2020

December 31, 2019

92,671

130,419

369,692

1,208,880

1,801,662

7,766

32,175

11,733

605,585

657,259

887,020

Olympia’s FX division maintains various foreign currency bank
accounts of which Canadian dollar and United States dollar
bank accounts are the most significant. It is Olympia Trust’s
policy to limit the amount of foreign currencies on hand to
$1.50 million to reduce exposure to foreign currency risk.

If the Canadian dollar exchange rate at December 31, 2020,
were to have increased by $0.10 relative to other currencies, it
is estimated that Olympia’s after-tax earnings for the year ended
December 31, 2020, based on amounts shown in notes 11 and 13
of the consolidated financial statements, would have decreased
by approximately $159,277 (December 31, 2019 – $232,876).
A $0.10 decrease in the Canadian dollar exchange rate relative
to other currencies would have had an equal but opposite effect.
The vast majority of Olympia’s Currency and Global Payments
division’s trades are Canadian dollars traded for United States
dollars and vice versa, although it trades in various other
currencies. This sensitivity analysis assumes that all other
variables remain constant.

Interest rate risk

Interest rate risk is the risk that the value of a financial
instrument will fluctuate because of changes in market interest
rates. Olympia is exposed to interest rate risk as the cash
flows generated from Olympia’s own cash ($15.94 million)
and the cash portion of the off-balance sheet arrangements
($570.33 million), from which Olympia Trust earns trust income,
are held in interest bearing instruments that fluctuate in
response to changes in market interest rates.

If the interest rates were to have increased by 1%, it is estimated
that Olympia’s after-tax earnings for the twelve months ended
December 31, 2020, would have increased by approximately

2020 Annual Report | Olympia Financial Group Inc.

$4.46 million (December 31, 2019 – $4.14 million). A 1%
decrease in interest rates would have had an equal but opposite
effect. This sensitivity analysis assumes that all other variables
remain constant.

Credit risk

Credit risk is the risk that the counterparty to a financial asset
will default, resulting in Olympia incurring a financial loss.
Given the changing circumstances surrounding the COVID-19
pandemic and the related response from governments (federal,
provincial and municipal), regulatory authorities, businesses
and customers, there is inherently more uncertainty associated
with counterparties as compared to prior periods.

Olympia continues to monitor and assess the impact of COVID-19
and the emergency measures enacted to contain the spread of
the virus and mitigate its economic effects. As such, it is not
possible to accurately determine the impact that the COVID-19
pandemic will have on Olympia’s credit risk or results of
operations in future periods. Before material transactions begin
with a new counterparty, the counterparty’s creditworthiness
is assessed by the CGP division. The assessment practice
considers both quantitative and qualitative factors.

Olympia constantly monitors the exposure to any single
customer or counterparty along with the financial position of
the customer or counterparty. If it is deemed that a customer

Current

31 to 60 days

61 to 90 days

Over 90 days

Allowance for doubtful accounts

or counterparty has become materially weaker, Olympia will
work to reduce the credit exposure and lower the credit limit
allocated. Olympia is exposed to credit risk on its cash and cash
equivalents, restricted cash and investments, trade and other
receivables, promissory note receivable and derivative financial
instruments receivable. The maximum exposure to credit risk of
Olympia at the end of the year is the carrying value of cash and
cash equivalents, restricted cash and investments, trade and
other receivables, promissory note receivable and derivative
financial instruments receivable.

Cash and cash equivalents

Olympia mitigates its exposure to credit risk by maintaining its
bank accounts with a highly rated financial institution.

Restricted cash and investments

Olympia limits its counterparty credit risk on these assets by
dealing with reputable counterparties and performing due
diligence to assess their creditworthiness.

Trade and other receivables

Olympia has policies and procedures in place to govern the
credit risk it will assume. Trade receivables over 90 days are
considered past due. As of December 31, 2020, impaired
receivables net of allowances are $2.29 million (December 31,
2019 – $2.83 million). The aging of trade and other receivables
is as follows:

December 31, 2020

December 31, 2019

144,790

258,700

120,052

3,537,411

(1,251,705 )

2,809,248

247,890

19,093

7,337

3,813,030

(981,584 )

3,105,766

The allowance for doubtful accounts is based on an account portfolio analysis. Movements on Olympia’s provision for impairment of
trade receivables are as follows:

At January 1

Increase in provision

Receivables written off

Allowance for doubtful accounts

December 31, 2020

December 31, 2019

981,584

717,640

(447,519 )

1,251,705

571,363

478,930

(68,709 )

981,584

2020 Annual Report | Olympia Financial Group Inc.

Included within receivables is the current portion of a lease
receivable of $0.05 million recognized based on the present
value of sublet property, as required by IFRS 16.

The balance relates to a number of independent clients which
Olympia is actively pursuing through its internal collection
process. As a result, management considers the outstanding
amounts to be recoverable.

The provision for impaired receivables has been included in
administrative expenses in the consolidated statements of net
earnings and comprehensive income. Amounts charged to the
allowance account are generally written off when there is no
expectation of recovering additional cash.

Capital risk management

Olympia’s objectives when managing capital are to safeguard
Olympia’s ability to continue as a going concern in order to
provide returns and benefits to shareholders and to maintain an
optimal capital structure to reduce the cost of capital and to meet
minimum regulatory capital requirements. In order to maintain or
adjust the capital structure, Olympia may adjust the amount of
dividends paid to shareholders, return capital to shareholders,
issue new shares, or repurchase shares.

Olympia
includes shareholders’ equity of $18.90 million
(December 31, 2019 – $17.93 million) in the definition of capital.
Shareholders’ equity comprises share capital, contributed
surplus, and retained earnings.

Olympia’s main objectives when managing its capital structure
are to:

• Maintain sufficient cash and cash equivalents over the
short and medium term in order to finance its growth and
development, including capital expenditures;

• Maintain investor and creditor confidence to sustain future
development of the business. Olympia’s objective when
managing capital is to maintain adequate financial flexibility to
preserve its ability to meet financial obligations. In managing
capital, Olympia estimates its future dividend payments and
capital expenditures, which is compared to planned business
growth for purposes of sustainability;

• Maintain regulatory capital for Olympia Trust as required by the
Loan and Trust Corporations Act (Alberta) ($2 million). Similar
regulatory capital is required by legislation in Nova Scotia ($5
million) and Saskatchewan ($5 million). Regulatory capital
is defined as share capital and retained earnings. Olympia
Trust has maintained these minimum capital requirements
throughout the twelve month period ended December 31,
2020; and

• Maintain compliance with financial covenants, which includes
maintaining a minimum equity of $12 million. The financial
in
covenants are reviewed quarterly and controls are
place to maintain compliance with the covenants. Olympia
complied with its financial covenants for the period ended
December 31, 2020.

The capital structure of Olympia is managed and adjusted to
reflect changes in economic conditions. In support thereof,
management reviews the financial position of Olympia on a
monthly and cumulative basis. Financing decisions are set based
on the timing and extent of expected operating and capital cash
outlays. Factors considered when determining capital and the
amount of operational cash requirements are weighed against
the costs associated with excess cash, its terms and availability
and whether to issue equity. Olympia works towards managing
its capital objectives to the extent possible while facing the
challenges of market conditions and the public’s assessment of
Olympia’s risk profile. Olympia’s capital management objectives
have remained substantively unchanged over the periods
presented.

Operational risks

Management has identified the following major operational
risks which could negatively affect Olympia’s future strategies
and objectives:

• The risk of fluctuations in interest rates and currency values

negatively affecting Olympia’s business;

• Legal developments and changes in tax laws;

• The occurrence of weather related and other natural

catastrophes;

• The risk that the regulatory environment in which Olympia

carries out commercial activities may change;

• The level of competition in Olympia’s markets;

• The risk that new markets may fail to produce estimated

revenues;

• The risk of changes in accounting standards and policies;

• The risk that negative stakeholder impressions about Olympia’s
business practices, actions or inaction, whether true or not,
could cause deterioration in Olympia’s value, brand, liquidity,
or customer base;

• The risk that general economic conditions could deteriorate
and any significant downturn in capital markets or the general
economy could negatively affect financial results;

2020 Annual Report | Olympia Financial Group Inc.

• The cyber security risk that failure of computer hardware,
data processing systems, network access and software could
interrupt operations or materially impact Olympia’s ability to
deliver its services; and

result of changes in a customer’s financial situation. This includes
risks associated with the gross receivable position on foreign
exchange forward contracts, which are all assessed regularly
for impairment.

• The accuracy and completeness of information Olympia

receives about customers and counterparties.

(ii) Depreciation and amortization methods (Note 14

and Note 15)

insurance program

Olympia’s corporate
further mitigates
certain operational risk exposures. Olympia looks to industry
benchmarks as well as legal, regulatory and contractual
requirements when deciding on types of coverage and limits.
Coverage is placed at limits considered appropriate for
Olympia’s size, structure and type of operations. Olympia
reviews the insurance program annually to ensure it remains well
suited and compliant with regulations and requirements.

Accounting Policies
The financial information contained in the accompanying
financial statements and this MD&A is prepared in accordance
with IFRS as issued by the IASB. The accounting policies
adopted are consistent with those in the prior years except as
noted below. In addition, some accounting policies, due to their
nature, require further explanation.

However, actual results could differ from these estimates. By
their very nature, these estimates are subject to measurement
uncertainty, and the effect on the financial statements of
future periods could be material. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the
estimates are revised and in any future periods affected.

In the process of applying Olympia’s accounting policies,
management has made the following judgments, estimates
and assumptions which have the most significant effect on the
amounts recognized in the consolidated financial statements.

(i) Allowance for doubtful accounts (Note 7)

Olympia regularly performs a review of outstanding accounts
receivable balances
to determine eventual collectability.
A provision for bad debt is recorded based on historical
information or if an account is deemed uncollectable. Olympia
analyzes the bad debt provision regularly to determine if any of
the accounts provided for should be written off. Those accounts
which are deemed uncollectable could materially change as a

Olympia estimates the useful lives of property, plant, equipment
and intangible assets, based on the period over which the
assets are expected to be available for use.

The estimated useful lives are reviewed periodically and are
updated if expectations differ from previous estimates due to
physical wear and tear, technical or commercial obsolescence
and legal or other limits on the use of the relevant assets. In
addition, the estimation of the useful lives is based on internal
technical evaluation, current facts and past experience with
similar assets, and takes into consideration the anticipated
expected life of the asset, existing long-term agreements and
contracts, current and forecasted demand and the potential
for technological obsolescence. It is possible, however, that
future results of operations could be materially affected by
changes in estimates brought about in turn by changes in the
factors mentioned above. The amounts and timing of recorded
expenses for any period would also be affected by changes in
these factors and circumstances.

(iii) Impairments (Note 15)

Olympia performs impairment tests of assets when indications
of impairment exist. Application of judgment is required
in determining whether an impairment test is warranted.
Impairment exists when the carrying value of an asset or
Cash-Generating Unit (“CGU”) exceeds its recoverable amount,
which is the higher of (a) its fair value less costs of disposal and
(b) its value in use. The fair value represents the price that would
be received to sell the asset in an orderly transaction between
market participants at the measurement date. The value in use
calculation is based on the present value of expected cash flows.
As at December 31, 2020, the discount rate used was 4.0%.
The cash flows are derived from internal budgets and do not
include restructuring activities that Olympia is not yet committed
to or significant future investments that will enhance the asset’s
performance or the CGU being tested. The recoverable amount
is most sensitive to the discount rate used for the present
value of expected cash flows. It is also sensitive to expected
transaction volumes, future operating costs, margins, and the
growth rate used for extrapolation purposes. There is a certain
amount of subjectivity and judgment in the determination of
the recoverable amount calculation. Amounts stated in notes
7, 14, and 15 are subject to measurement uncertainty, and the
impact of differences between actual and estimated amounts
on the consolidated financial statements of future periods could
be material.

2020 Annual Report | Olympia Financial Group Inc.

When indicators support that the asset is no longer impaired,
Olympia will
the
impairment
impairment, application of judgment is required to determine
whether a reversal should be considered.

losses. Similar

reverse

(iv) Income taxes (Note 21)

Olympia calculates an income tax provision in each of the
jurisdictions in which it operates. Estimation of income taxes
includes evaluating the recoverability of deferred tax assets
based on an assessment of the ability to use the underlying
future tax deductions against future taxable income before
the deductions expire. The assessment is based on existing
tax laws and estimates of future taxable income. Further,
there are transactions and calculations for which the ultimate
tax determination is uncertain during the ordinary course of
business. Provisions are made using the best estimate of the
amount expected to be paid based on a qualitative assessment
of all relevant factors. Olympia reviews the adequacy of these
provisions at each reporting period. However, it is possible that
at some future date an additional liability could result from audits
by taxation authorities. Where the final outcome of these tax-
related matters is different from the amounts that were initially
recorded, such differences will affect the tax provisions in the
period in which such determination is made.

(v) Revenue

Olympia applies judgment to determine whether fee revenue
should be recognized on a gross basis or net of fees paid to the
merchant or insurer for providing, processing, and maintaining
the service to a customer. Pursuant to the guidance in
IFRS 15, Olympia has assessed whether to record such
payments as a reduction of associated service revenues or as
a direct expense. Olympia determines whether the nature of its
promise to customers is a performance obligation to provide the
service itself or to arrange for that service to be provided by
another party. Specific factors considered are, whether Olympia
acts as the principal and is the primary obligor in performance
obligations, provides the processing for the performance
obligations, has significant influence over pricing and has the
risks and rewards of ownership, including a variable earnings
component and the risk of loss for collection. Olympia has full
discretion over the price of the services and therefore has no
unfulfilled obligations that could affect a client’s acceptance of
the service. Olympia recognizes insurance fees on a net basis.
As a result, for agreements under which Olympia acts as the
principal, Olympia records the total amounts earned from the
underlying performance obligations as service revenues, and
records the related merchant expense as a direct expense of
operating revenues. However, for those agreements in which
Olympia does not meet the criteria to qualify as the principal in a
performance obligation, Olympia does not record the related fee
revenue, as the rights associated with this revenue stream are
attributable to the benefit of the merchant. Olympia records fee
revenue under these arrangements on a net basis.

Whether Olympia is considered to be the principal or an agent in
a performance obligation depends on analysis by management
of both the legal form and substance of the agreement between
Olympia and the merchant. Such judgments impact the amount
of reported revenue and expenses, but do not impact reported
assets, liabilities or cash flows.

(vi) Lease term

In determining the lease term, management considers all facts
and circumstances that create an economic incentive to exercise
an extension option, or not exercise a termination option. The
assessment is reviewed if a significant event or a significant
change in circumstances occurs which affects this assessment.

Future accounting pronouncements
There are no significant new or amended accounting standards
issued during the twelve months ended December 31, 2020,
that are applicable to Olympia in future periods.

International Accounting Standards Board

(“IASB”)
The
published Interest Rate Benchmark Reform (Amendments
to IFRS 9, IAS 39, and IFRS 7). This amendment addresses
issues that may affect financial reporting in instances where an
existing interest rate benchmark is replaced with an alternative
benchmark interest rate. These amendments include a practical
expedient to gain or loss for a change in benchmark as a result
of these reforms.

The amendments are effective for annual periods beginning on
or after January 1, 2021, and would be applicable to the portion
of Olympia’s bank credit facility that is based on the Canadian
Dollar Offered Rate (“CDOR”). Olympia does not anticipate any
impact on the consolidated financial statements as a result of
the amendment.

Evaluation of disclosure controls and procedures and
internal control over financial reporting
The President and Chief Executive Officer (“CEO”) and Vice
President, Finance and Chief Financial Officer (“CFO”) of
Olympia are responsible for establishing and maintaining
Disclosure Controls and Procedures (“DC&P”) and Internal
Control over Financial Reporting (“ICFR”) for Olympia.

DC&P are designed to provide reasonable assurance that
material information relating to Olympia is made known to the
CEO and CFO by others, particularly in the period in which the
annual filings are being prepared, and that information required
to be disclosed in documents filed with securities regulatory
authorities is recorded, processed, summarized and reported
within the time periods specified in securities legislation, and
includes controls and procedures designed to ensure that such
information is accumulated and communicated to Olympia’s
management, including the CEO and CFO, as appropriate,
to allow timely decisions regarding required disclosure. ICFR
is designed to provide reasonable assurance regarding the

2020 Annual Report | Olympia Financial Group Inc.

reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with IFRS.

In accordance with the requirements of National Instrument
52-109 “Certification of Disclosures in Issuer’s Annual and
Interim Filings,” an evaluation of the effectiveness of DC&P and
ICFR was carried out under the supervision of the CEO and
CFO at December 31, 2020. Based on this evaluation, the CEO
and CFO have concluded that Olympia’s DC&P and ICFR are
effective, and are operating as intended.

Olympia’s management, including the CEO and CFO, does not
expect that Olympia’s DC&P and ICFR will prevent or detect all
misstatements or instances of fraud. The inherent limitations in all
control systems are such that they can provide only reasonable,
not absolute, assurance that all control issues, misstatements or
instances of fraud, if any, within Olympia have been detected.

There have been no changes in Olympia’s internal control
over financial reporting that occurred during the year ended
December 31, 2020, which have materially affected, or are
reasonably likely to materially affect, Olympia’s internal control
over financial reporting. In response to the COVID-19 pandemic,
several social distancing measures taken by Olympia and
third parties are reasonably likely to impact the design and
performance of internal controls at Olympia if such measures
remain in place for an extended period of time. Olympia will
continue to monitor and mitigate the risks associated with
changes to its control environment in response to COVID-19.

Outstanding share data
As at February 25, 2021, Olympia has an aggregate of 2,406,336
common shares issued and outstanding.

Additional information
Further information regarding Olympia can be accessed under
Olympia’s public filings found at www.sedar.com.

to contact Olympia’s

Shareholders seeking
independent
directors may do so by calling Rick Skauge, Olympia’s
President and CEO, at 403-261-7501 or by email at
ricks@olympiafinancial.com.

2020 Annual Report | Olympia Financial Group Inc.

MANAGEMENT’S RESPONSIBILITY FOR THE CONSOLIDATED
FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2020 AND
DECEMBER 31, 2019
The accompanying consolidated financial statements and all
the data included in this report have been prepared by and are
the responsibility of the Board of Directors and management of
Olympia Financial Group Inc. (“Olympia”).

The consolidated financial statements have been prepared
International Financial Reporting
in accordance with
Standards as set out in the Handbook of the Chartered
Professional Accountants of Canada and reflect management’s
best estimates and
judgments based on currently
available information. In the opinion of management, the
consolidated financial statements have been prepared within
acceptable limits of materiality and are in accordance with
International Financial Reporting Standards appropriate in
the circumstances.

The Board of Directors has reviewed and approved the
accompanying consolidated financial statements
the
periods ended December 31, 2020 and December 31, 2019.

for

The Audit Committee, comprised of non-management
directors, acts on behalf of the Board of Directors to ensure that
management fulfills its financial reporting and internal control
responsibilities. Management maintains appropriate systems of
internal control. Policies and procedures are designed to give
reasonable assurance that transactions are properly authorized,
assets are safeguarded, and financial records properly
maintained to provide reliable information for the preparation of
the consolidated financial statements.

Internal controls are further supported by an internal audit
function which conducts periodic audits of Olympia’s financial
reporting and internal controls. The internal audit function
reports to the Audit Committee. In performing its duties, the Audit
Committee acts only in an oversight capacity and necessarily
relies on the work and assurances of Olympia’s management.

Olympia’s
independent auditor, PricewaterhouseCoopers
LLP, has performed an audit on these consolidated financial
statements in accordance with the standards established by
the Chartered Professional Accountants of Canada. Their report
outlines the scope of their examination and opinion.

Signed Rick Skauge

Signed Gerhard Barnard

Rick Skauge
President and Chief Executive Officer

Gerhard Barnard, CPA, CMA
Chief Financial Officer

Calgary, Canada, February 25, 2021

2020 Annual Report | Olympia Financial Group Inc.

Independent auditor’s report

To the Shareholders of Olympia Financial Group Inc.

Our opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of Olympia Financial Group Inc. and its subsidiaries (together, the Company) as at
December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in
accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board (IFRS).

What we have audited
The Company’s consolidated financial statements comprise:



the consolidated balance sheets as at December 31, 2020 and 2019;

the consolidated statements of net earnings and comprehensive income for the years then ended;

the consolidated statements of changes in equity for the years then ended;

the consolidated statements of cash flows for the years then ended; and

the notes to the consolidated financial statements, which include significant accounting policies and
other explanatory information.

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.

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

Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our
audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities
in accordance with these requirements.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements for the year ended December 31, 2020. These matters were

PricewaterhouseCoopers LLP
111-5th Avenue SW, Suite 3100, Calgary, Alberta, Canada T2P 5L3
T: +1 403 509 7500, F: +1 403 781 1825

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

2020 Annual Report | Olympia Financial Group Inc.

addressed in the context of our audit of the consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

How our audit addressed the key audit matter

Our approach to addressing the matter included the
following procedures, among others:

 Tested how management determined the

recoverable amount of the intangible assets,
which included the following:

 Evaluated the appropriateness of the

method applied and the discounted cash
flow model.

 Tested the reasonableness of the expected
transaction volume by comparing it with the
results historically achieved by the
Company.

 Assessed the appropriateness of the

discount rate applied.

 Tested underlying data used in the

discounted cash flow model.

 Tested the disclosures made in the

consolidated financial statements, particularly
on the significant assumptions.

Impairment assessment of intangible assets of
Exempt Edge Inc. (EEI) cash generating unit
(CGU)

Refer to note 3 – Significant accounting policies
and note 15 – Intangible assets to the consolidated
financial statements.

The Company had $2.3 million of intangible assets
as at December 31, 2020, which included intangible
assets relating to the EEI CGU. When impairment
indicators of intangible assets exist, an impairment
assessment is conducted at the level of the CGU,
which is the lowest level for which identifiable cash
flows are largely independent of the cash inflows of
other assets. An impairment loss is recognized if
the carrying amount of a CGU exceeds its
recoverable amount.

Due to the continued losses recorded by EEI,
management performed an impairment test on the
EEI CGU. Management has estimated the
recoverable amount of the intangible assets relating
to the EEI CGU based on the value in use
calculation, which is the present value of expected
cash flows. The significant assumptions applied by
management in estimating the recoverable amount
included expected transaction volume and discount
rate. Management did not recognize an impairment
charge as the recoverable amount exceeded the
net book value as at December 31, 2020.

We considered this a key audit matter due to the
significant judgment made by management in
developing assumptions to determine the
recoverable amount. This in turn resulted in
significant audit effort and subjectivity in performing
audit procedures to test the recoverable amount
determined by management.

2020 Annual Report | Olympia Financial Group Inc.

Other information

Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis and the information, other than the consolidated financial statements and our
auditor’s report thereon, included in the annual report.

Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the
consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the
Company’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 Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting
process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated 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 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 consolidated financial statements.

2020 Annual Report | Olympia Financial Group Inc.

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 consolidated 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 Company’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 Company’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 consolidated 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 Company to
cease to continue as a going concern.

 Evaluate the overall presentation, structure and content of the consolidated financial statements,

including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.

 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit. We
remain solely responsible for our audit opinion.

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.

We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

2020 Annual Report | Olympia Financial Group Inc.

From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor’s report is Peter Harris.

Chartered Professional Accountants

Calgary, Alberta
February 25, 2021

2020 Annual Report | Olympia Financial Group Inc.

CONSOLIDATED BALANCE SHEETS

($)

ASSETS
Current assets

Cash & cash equivalents (note 11)
Trade & other receivables (note 7)
Inventory
Prepaid expenses
Promissory note receivable (note 5)
Derivative financial instruments (notes 7 and 13)

Total current assets
Non-current assets

Restricted cash & investments (note 10)
Equipment & other (note 14)
Intangible assets (note 15)
Right-of-use asset (note 16)
Other financial assets
Long-term lease receivable (note 7)
Promissory note receivable (note 5)
Derivative financial instruments (notes 7 and 13)
Deferred tax assets (note 21)

Total non-current assets
Total assets
LIABILITIES
Current liabilities

Trade & other payables (notes 7 and 17)
Deferred revenue (note 18)
Other liabilities & charges (note 19)
Revolving credit facility (note 12)
Lease liabilities (note 8)
Derivative financial instruments (notes 7 and 13)
Current tax liability (note 7)

Total current liabilities

Lease liabilities (note 8)
Derivative financial instruments (notes 7 and 13)

Total liabilities
EQUITY

Share capital (note 20)
Contributed surplus (note 20)
Retained earnings

Equity attributable to owners of Olympia

Non-controlling interests (note 34)

Total equity
Total equity & liabilities
Contingencies (note 31)