Response to Note 7 in Audited Financial Statements

Janine Marais (wife of Executive Director Tracey Sandilands) and her company Mediaworld
were contracted as external vendors to Pride Toronto, providing web site content management
and newsletter services through various periods between April 2009 and November 2010.

This was intended to be a short-term solution to the problem of providing essential services
needed as the festival approached. The Executive Director discussed the potential conflict of
interest situation and received approval to proceed in 2009 from co-chair Mark Singh and in
2010 by co-chair Jim Cullen.

The current co-chairs first became aware of the financial arrangement with Mediaworld on
November 26, 2010, upon review of the draft audited statements. They asked the Executive
Director to terminate the contract immediately. Until that time, they and several other Board
members believed that Janine was working as a volunteer only.

Exercising due diligence, the Board requested a detailed report from Tracey outlining the history
of the relationship with Mediaworld, including invoices and payment records. After reviewing the
report, the Board concluded that the Executive Director believed she acted in the best interest
of Pride Toronto. Pride is now in the process of returning to a more static web site and is not
currently producing a newsletter.

Prepared by Francisco Alvarez, Co-Chair