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Leadership In Alternative Asset Management2016 ANNUAL REPORT

Our Company IFC

Our Strategy IFC

Our Products 01

2016 Year in Review 02

Report to Shareholders 04

ESG 05

Report on Operations 06

Management’s Discussion and Analysis 08

Management’s Statement on Financial Reporting 18

Independent Auditor’s Report 19

Consolidated Financial Statements 20

Notes to the Consolidated Financial Statements 24

Board of Directors 44

Principal Officers 44

Corporate Information IBC

INTEGRATED ASSET MANAGEMENT CORP. IS A PUBLIC COMPANY (TSX:IAM), MAJORITY-OWNED

BY MANAGEMENT. IAM DEVELOPS AND MANAGES ALTERNATIVE INVESTMENTS (INCLUDING PRIVATE

DEBT, REAL ESTATE, INFRASTRUCTURE DEBT AND MANAGED FUTURES) WHICH ENABLE

INSTITUTIONAL INVESTORS, INCLUDING PENSION FUNDS, ENDOWMENTS, FOUNDATIONS AND

FAMILY OFFICES TO REDUCE RISK AND ENHANCE RETURNS IN THEIR PORTFOLIOS. WE HAVE 26

INVESTMENT PROFESSIONALS AND MORE THAN 40 STAFF LOCATED IN TORONTO AND MONTREAL.

INTEGRATED ASSET MANAGEMENT CORP. SEEKS OUT THE BEST ALTERNATIVE PORTFOLIO

MANAGERS. OVER THE PAST 18 YEARS, WE HAVE BUILT SPECIALIZED TEAMS OF TALENTED,

EXPERIENCED, HIGHLY SUCCESSFUL INVESTMENT PROFESSIONALS. CONSERVATIVE AND

PRUDENT, WE ARE DETERMINED TO BE THE BEST IN TERMS OF INNOVATION, SERVICE AND

CONSISTENTLY SUPERIOR RISK-ADJUSTED RETURNS.

OUR PRODUCTS

Integrated Asset Management Corp. 2016 Annual Report 1

OUR PRODUCT OFFERING IS DEEP AND NEW PRODUCTS ARE CONSTANTLY BEING DEVELOPED. CLIENTS

MAY CHOOSE FROM ESTABLISHED PRODUCTS OR WORK WITH ONE OR MORE IAM INVESTMENT TEAMS

TO DEVELOP A SOLUTION TAILORED TO SPECIFIC REQUIREMENTS. CLIENTS MAY CHOOSE FROM:

IAM Private Debt

• Managed portfolios of investment-grade senior secured, fixed term loans

• Segregated portfolios of investment-grade senior secured, fixed term loans

IAM Real Estate

• Discretionary funds investing primarily in industrial properties

• Segregated portfolios of various property sectors combined with development projects

• Specialized closed-end funds

IAM Infrastructure Debt

• Managed portfolios of long-term infrastructure debt

• Segregated portfolios of long-term infrastructure debt

IAM Managed Futures

• Separately managed accounts of global futures on physical and financial commodities

• Open-end funds investing in global futures on physical and financial commodities

• Custom overlays and hedges

2016 YEAR IN REVIEW


ASSETS UNDER MANAGEMENT (“AUM”)($ Millions)

AUM (Continuing)

AUM (BluMont–Sold)AUM (Darton–Sold)

2,9

79

75

87

56

1,4

65

07

3,0

81

75

05

49

1,7

82

08

2,0

13

30

71

,70

6

09

2,0

16

34

71

,66

9

10

2,3

06

33

51

,97

1

11

1,9

42

29

81

,64

4

12

1,9

35

13

1,8

74

14

1,7

01

15

2,6

28

16

REVENUES($ 000’s)

32

,67

1

07

25

,92

9

08

15

,94

6

09

21

,56

0

10

28

,35

7

11

12

,51

5

12

12

,12

0

13

14

,40

5

14

14

,28

1

15

12

,35

4

16

REVENUES BEFORE PERFORMANCE FEES($ 000’s)

23

,30

2

07

18

,74

3

08

15

,63

2

09

16

,79

1

10

19

,42

1

11

10

,74

5

12

12

,11

2

13

10

,77

0

14

13

,43

1

15

11

,90

8

16

PERFORMANCE FEES($ 000’s)

9,3

69

07

7,1

86

08

31

4

09

4,7

69

10

8,9

36

11

1,7

70

12

8

13

3,6

35

14

85

0

15

44

6

16


Adjusted EBITDA(1)

($ 000’s)

6,7

00

07

7,3

71

08

10

5

09

4,3

59

10

5,4

85

11

1,4

97

12

1,2

71

13

2,3

52

14

1,0

75

15

19

9

16

Earnings Per Share($ Per Share)

0.0

7

07

0.0

7

08

(0.2

3)

09

0.0

4

10

0.1

5

11

(0.0

6)

12

(0.0

2)

13

0.2

7

14

0.0

4

15

0.0

0

16

CASH FLOW($ Per Share)

07 08 09

(0.0

1)

(0.0

1)

10 11 12 13 14 15

0.1

9

0.1

7

0.0

9

0.1

4

0.0

3

0.0

3 0.0

6

0.0

2

16

DIVIDEND($ Per Share)

0.0

7

07

0.0

8

08

0.0

4

09

0.0

4

10

0.0

5

11

0.0

5

12

0.0

5

13

0.0

6

14

0.0

6

15

0.0

6

16

(1) Adjusted Earnings Before Interest, Taxes, Depreciation andAmortization, Stock-based compensation and investmentgains and losses (“Adjusted EBITDA”).

The highlight of the year was a record-breaking achievement in raising over $1 billion in committedcapital for two funds.

In November, 2015, the Private Debt Group closed their fifth private debt fund, raising $667 million.At the end of September, 2016, we closed our first Infrastructure Debt Fund with commitments of $347 million.

The new capital commitments increased our AUM as at September 30, 2016 by 59%, to $2.6billion, compared to September 30, 2015. Between Real Estate and Private Debt, we enter fiscal 2017 withapproximately $964 million to invest.

While the new capital raised represents meaningful value creation, the benefit is not seen immediatelyin the income statement. As the committed capital is invested, the Corporation can expect a substantial increasein recurring revenue for an extended period of time because of the long life of the funds. A particularly attractivefeature of the Infrastructure Debt Fund is that it has a 25-year life.

Our balance sheet is strong, with no debt and net liquid assets of $11.7 million as at September30, 2016. Unrealized performance fees in the real estate funds increased to $11.4 million as at September30, 2016, up from $10.7 million at the end of 2015. These resources give us the flexibility to fund growthand take advantage of opportunities.

During the year we used some of our cash to make a Loan Receivable to an investee company inone of our private debt funds. This created an attractive investment for IAM and afforded important support tothe borrower at a critical time. The loan will be repaid over the next year and a half and the financed operationis now performing well under new ownership.

On August 5, 2016 the Board of Directors approved the payment of a regular annual dividendof $0.06 per common share. This brought the cash dividends declared and paid since 2005 to $0.65 percommon share. As the accumulated committed capital is converted to revenue producing assets, with a corre-sponding increase in revenue and cash flow, the Board will consider increasing the amount and frequency ofdividend payments.

Management is very much aware of the importance of both succession planning and key employeeretention in a business such as ours. While succession planning is more a process than an event, it is nonethelessimportant to have in place clearly identified, logical successors for key positions. We were pleased to announcein April the completion of the current phase of succession planning with the appointment of David Pappin asChief Operating Officer of the Real Estate Group.

At a special meeting of shareholders in July, 2016 a Key Employee Share Loan Plan was approved.Under this plan, key employees may purchase common shares from the treasury with a loan from the corporation.On the first offer under the plan, a total of 517,695 common shares were purchased by eligible employees. Theplan is a key component of employee retention and an integral part of our succession plan.

In summary, we believe IAM is very well positioned to deliver substantially better results over thenext years. We have strong core products with excellent performance. Operating overhead has been reduced;the costs associated with restructuring have been expensed over the last 3 years, thus reducing past profitability.These cost reductions combined with the deployment of the record capital raise should produce steadily improvingrevenue, cash flow and earnings.

Victor Koloshuk John Robertson Executive Chairman President and CEO

REPORT TO SHAREHOLDERS


OUR BELIEF

As an institutional asset manager, IAM takes a long-term perspective in our duty to act in the bestinterests of our clients. In this fiduciary capacity, we believe that ESG factors should be considered and, wherepossible and appropriate, integrated in the investment decision making process.

Our goal remains to seek superior risk-adjusted returns for our clients in a manner that respectsour fiduciary obligations and the evolving objectives of our clients.

We believe that consideration of ESG factors is an important element in determining whether apotential investment, be it a loan, a property or an equity stake in a project, is attractive or not. It is our convictionthat businesses that manage ESG factors effectively will create more value over the long term.

Investing in businesses that work actively to reduce or mitigate environmental, social and governancerisks, or encouraging businesses in which we invest to do more in terms of ESG, may help reduce the risk ofnegative surprises and increase the long-term quality of our debt, real estate and infrastructure debt portfolios.

IAM SUSTAINABLE INVESTMENT POLICY

Purpose: The Sustainable Investment Policy outlines the principles that direct IAM’s commitment tosustainable investing as well as offering a framework by which that commitment will be implemented. IAM willwork with stakeholders across business lines to drive long-term investment returns through the implementationof this policy.

Definition: “Sustainable Investing” is defined as investing in a way that integrates ESG matters into theinvestment decision-making processes, thereby enhancing long-term investment performance and respectingthe objectives of applying ESG principles.

Scope: Implementing our sustainable investing approach rests with multiple investment teams within IAMas the company offers investment strategies across asset classes. Each team is supported by the ESG Committee,which has a responsibility for policy development and oversight of application and implementation.

Policy: IAM’s policy for sustainable investing is consistent with the framework provided by the UnitedNations sponsored Principles of Responsible Investing (PRI).

IAM is a signatory to:

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)


PRIVATE DEBT

The private debt team had a very active 2016. On the fund raising side, we raised a record $1.01billion in new capital, adding 14 new investors to our fund family. Over the last 11 years, the Private Debt Grouphas raised more than $ 2.7 billion for investment grade private debt on behalf of Canadian pension funds,endowments, foundations, insurance companies and other institutional investors.

Our investment management team was busy and productive as well, completing the investmentprogram for Fund IV and making strong inroads on the investment program for Fund V. In all, the team closed7 deals and funded $ 83 million combined during 2016. Additionally, 10 approved investments with a combinedvalue of $226 million are in process and we anticipate they will close during or shortly after the end of the firstquarter of 2017.

At present the team is also working its way through an investment pipeline with over $770 millionin corporate loan prospects and a further $200 million of potential loans for the new Infrastructure Debt Fund.

Managing the established portfolios is vitally important as well. Continuing low oil prices and thecontraction in the Alberta economy put some of our Alberta borrowers under pressure. We monitor these accountsintensively and engage early with management to assist them in working through their difficulties and to protectour position. Our hands-on and proactive management of these accounts resulted in a substantial reductionin our exposure and risk; the portfolio is sound.

Closing the first Infrastructure Debt Fund with commitments of $347 million was a significantachievement. Although we have a long and successful track record in private debt, first time funds are alwaysmore difficult to close. Investors who committed to the fund are a mix of new and repeat clients.

The Infrastructure Debt fund is valuable not only because it represents long-term ( 25 years ) investedcapital for IAM, but because we were able to expand our product line utilizing existing resources and capacity.

Our team’s goals for fiscal 2017 are to maintain a close watch over the portfolios and to makesubstantial progress in investing our two newest funds.

Philip Robson President, IAM Private Debt Group

REPORT ON OPERATIONS


REAL ESTATE

The Real Estate team made excellent progress investing the capital committed to their 13th fund.In contrast with fiscal 2015, when just two acquisitions were made for a total of $11 million, this year saw thepurchase of 16 properties through 9 transactions with a total value exceeding $100 million.

With just $18 million in equity remaining to be drawn from the original investors, the investmentprogram should be completed before the expiry of the initial investment period, early in 2017.

The 13th fund is fundamentally different from the previous 12 funds. Upon completion of theinitial investment program it becomes an open fund, which means it has perpetual capital and the potential togrow indefinitely. Once open, investors will be able to join the fund quarterly.

Over the course of the past year, senior Real Estate management met with every investor in eachof our active funds. Extensive discussion was had surrounding terms, conditions and preferences for the openfund going forward. Much useful information was obtained and a number of enhancements were identified, allof which will make the fund more appealing to new investors. We will seek approval from the initial investorsfor improvements and then launch active marketing of the fund to new investors.

With a fully invested open fund that has performed well so far, along with our superb long-termtrack record, we will also be in a position to offer the fund to international investors.

Rick Zagrodny President, IAM Real Estate Group


OVERVIEW

The management’s discussion and analysis (“MD&A”) dated December 1, 2016 presents an analysis ofthe financial condition of Integrated Asset Management Corp. (“IAM” or the “Corporation”) and its subsidiaries as atSeptember 30, 2016 compared with September 30, 2015 and the results of operations for the year ended September30, 2016 compared with the year ended September 30, 2015.

This MD&A contains forward-looking statements on the Corporation’s business, strategies, opportunitiesand future financial results. These statements are not promises or guarantees and are based on assumptions and estimatesthat are subject to many different risks and uncertainties, any of which could cause actual results to be significantlydifferent from those derived from the forward-looking statements. The reader should not place undue reliance on anysuch forward-looking statements, which are presented as of December 1, 2016, except where otherwise stated. For moreinformation on risk factors that may impact actual results, please refer to the Corporation’s most recent Annual InformationForm, which is filed on SEDAR at www.sedar.com.

The financial statements for the year ended September 30, 2016, including required comparativeinformation, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued bythe International Accounting Standards Board (“IASB”).

Financial results, including required comparative information, in this MD&A, unless otherwise specifiedherein, are based on these financial statements. The Canadian dollar is the functional and reporting currency for thepurpose of preparing the Corporation’s financial statements.

This MD&A includes non-IFRS financial measures which the Corporation considers shareholders, investmentanalysts and other readers find helpful in understanding IAM’s financial performance. Management uses these measuresin analyzing and comparing IAM’s performance from one period to another. Nevertheless, these financial measures donot have any standardized meaning prescribed by IFRS and may not have been calculated in the same way as similarlynamed financial measures presented by other companies.

BUSINESS REVIEW

IAM is an alternative asset management company offering alternative asset class management to institutional,pension and private clients. The Corporation provides investors with a range of asset classes such as real estate, privatedebt, infrastructure debt and managed futures. The Corporation had assets and committed capital under management(“AUM”) of approximately $2.6 billion at September 30, 2016.

The Corporation’s private debt and real estate products are mostly pools of assets managed by theCorporation for investors and the life of each pool of assets can be up to thirteen years. However, the most recent privatedebt fund has a twenty-five year life, and the most recent real estate fund has an indefinite life and provides for periodicnew subscriptions and redemptions. Typically, the Corporation markets for commitments from investors interested in theasset class. The pool is then closed and the pool makes acquisitions of assets to deploy the commitments over a numberof years. For these types of pools, the Corporation receives fees only when the commitments are deployed and assets arebeing managed. Generally, there is little or no liquidity for the investors during the term of a pool and the pool can beliquidated earlier than scheduled only in exceptional circumstances.

The Corporation’s other financial products, namely managed futures, are subject to agreements, in accordancewith industry practices, whereby clients can withdraw their assets or terminate the contracts on short notice.

MANAGEMENT’S DISCUSSION AND ANALYSIS


FEE REVENUES

The Corporation earns revenues primarily from fees from two sources:

1. Management fees These are typically based on an agreed percentage of deployed AUM, which includes the market value offunds and other assets administered by the Corporation. Revenues generated from management fees are generally expectedto change in direct proportion to the deployed amount of AUM. For income statement purposes, this revenue is recognizedwhen it is earned.

2. Performance fees The Corporation earns performance fees, including carried interests, when investment returns outperforma designated benchmark. These benchmarks (“hurdle rates”) are contract specific and only apply to certain investmentproducts. Three of the Corporation’s real estate funds typically provide for performance fees to be realized only towardsthe end of the life of the pool of assets being managed, which at times can be up to thirteen years; accordingly performancefees are realized sporadically.

Unrealized performance fees can build up over time and form a significant portion of the total unearnedrevenues of the Corporation. Unrealized performance fees can also decrease or be eliminated completely over the life ofthe pool of assets. The financial statements of the Corporation recognize performance fees only when realized. Therevenues and income of the Corporation will tend to fluctuate from period to period, given the timing and amounts ofeach realization.

ASSETS AND COMMITTED CAPITAL UNDER MANAGEMENT

The table below shows the AUM as at the fiscal year end for the last three fiscal years.

($ MILLIONS) SEPT. 30, 2016 SEPT. 30, 2015 SEPT. 30, 2014

Invested CapitalPrivate Debt $ 801.3 $ 836.4 $ 813.5Real Estate 790.8 679.6 651.8Private Equity and Managed Futures 71.6 64.4 53.2

Total Invested Capital 1,663.7 1,580.4 1,518.5Committed Capital to be Invested Private Debt 946.5 4.0 223.6Real Estate 18.1 116.9 131.9

Total Committed Capital to be Invested 964.6 120.9 355.5

Total AUM $ 2,628.3 $ 1,701.3 $ 1,874.0

In aggregate, AUM were approximately $2.6 billion as at September 30, 2016, up approximately $927million from the prior year end.

AUM in IAM Private Debt increased approximately $907 million in fiscal 2016. During the year IAM PrivateDebt Group closed two funds raising $667 million and $347 million respectively. This increase was partially offset bydistributions to investors of routine principal repayments received on loans in pre-existing private debt funds.

AUM in IAM Real Estate increased approximately $12 million in fiscal 2016. The net increase representsthe appreciation of existing assets under management net of the disposal of some assets during the normal course ofbusiness. No new funds were closed in fiscal 2016.

During fiscal 2016, the Corporation received the final payment in its private equity fund and the AUM ofthe managed futures operations increased approximately $7 million during the current fiscal year.


SELECTED ANNUAL INFORMATION

In fiscal 2013, the Corporation sold its wholly-owned subsidiary, BluMont Capital. The financial statementsof the Corporation for the three fiscal years 2014 to 2016 include the operating results of BluMont Capital but they areseparated and classified as “discontinued operations”; the remaining operations of IAM are classified as “continuingoperations”. For example, “Total revenues” shown below exclude the revenues of BluMont Capital in the three years.

$000'S EXCEPT PER SHARE AMOUNTS 2016 2015 2014

Revenues before the undernoted $ 12,438 $ 12,275 $ 10,158Performance fees 446 850 3,635Investment (loss) gain (530) 1,156 612

Total revenues $ 12,354 $ 14,281 $ 14,405

Net performance fees(1) $ 358 $ 729 $ 2,739

Adjusted Earnings before interest, taxes depreciation and amortization (“Adjusted EBITDA”)(2) $ 199 $ 1,075 $ 2,352Net income (loss) from continuing operations $ (262) $ 1,001 $ 1,336Net gain on sale of discontinued operations $ 401 $ 190 $ 6,684Net loss from discontinued operations $ - $ - $ (172)Net income attributed to: Common shareholders $ 119 $ 1,132 $ 7,348 Non-controlling interest $ 20 $ 59 $ 500

$ 139 $ 1,191 $ 7,848

Basic and diluted earnings per share From continuing operations $ (0.01) $ 0.03 $ 0.03 From discontinued operations $ 0.01 $ 0.01 $ 0.24 From net income $ 0.00 $ 0.04 $ 0.27 Dividends per share $ 0.06 $ 0.06 $ 0.06Summary consolidated balance sheets Total assets $ 22,669 $ 23,168 $ 25,944Total liabilities $ 5,101 $ 4,684 $ 6,304Shareholders’ equity(3) $ 17,568 $ 18,484 $ 19,640

(1) Net performance fees is a non-IFRS financial measure used by the Corporation. This measure is calculated as performance fee revenue less expenses incurred relating to performance fees revenue earned.

(2) Adjusted EBITDA is a non-IFRS financial measure used by the Corporation. This measure is calculated as earnings before the deduction of interest expense, income taxes, depreciation and amortization, stock-based compensation and investment gains and losses.

(3) Shareholders’ equity, prepared in accordance with IFRS, includes certain non-controlling interest.

Revenues before performance fees and investment gain (loss) of $12.4 million in fiscal 2016 were up $0.1million from $12.3 million in fiscal 2015. Management fees in IAM Private Debt increased $0.2 million due to higherdeployed AUM and deployment of commitments during the year and this represents most of the $0.3 million increasein management fees.

Performance fees of $0.4 million were realized in fiscal 2016 of which $0.4 million were from the managedfutures operations.

Investment losses of $0.5 million in fiscal 2016 was primarily from the managed futures funds and infiscal 2015 investment gains of $1.2 million were from the managed futures funds.

Adjusted EBITDA was $1.1 million in fiscal 2015 and $0.2 million in fiscal 2016. Excluding the impactof net performance fees ($0.7 million and $0.4 million in fiscal 2015 and 2016 respectively), Adjusted EBITDA decreasedfrom $0.4 million in fiscal 2015 to ($0.2 million) in fiscal 2016. A significant portion of this decrease resulted fromone-off staffing expenses. Investment gains (losses) are excluded in the calculation of Adjusted EBITDA.


The Corporation recorded net income (loss) from continuing operations of ($0.3 million) in fiscal 2016compared with $1.0 million in fiscal 2015. The reconciliation of Adjusted EBITDA to net income is shown below.

The disposition of BluMont Capital in December 2013 is reflected in the financial statements by a net gainon sale of $6.7 million and a net loss from operations of $0.2 million for the period October 1, 2013 to the date ofdisposition. In fiscal 2015 and 2016 respectively, there was a $0.2 million and $0.4 million gain resulting from thereceipt of the Corporation’s share of performance fees realized by the purchaser of BluMont Capital.

The net income of the Corporation, as reported in the statements of income, is attributed to (i) shareholdersof the Corporation and (ii) non-controlling interest. The non-controlling interest represents equity interests in subsidiaries.Fiscal 2015 non-controlling interest includes the payment of a portion of the Corporation’s net performance fees to aformer non-controlling shareholder of IAM Real Estate.

In each of fiscal 2015 and 2016, the Board of Directors of the Corporation approved the payment of aregular annual cash dividend of $0.06 per common share. These dividends have been designated as eligible dividendsby the Corporation in accordance with Canada Revenue Agency guidelines.

FINANCIAL STATEMENTS

The accompanying audited consolidated financial statements included in this annual report comprise theresults for the years ended September 30, 2016 and September 30, 2015.

SUMMARY OF CONSOLIDATED FINANCIAL RESULTS

OPERATING RESULTS

Net Income (loss) and Earnings per Share Net income (loss) from continuing operations for the year ended September 30, 2016 was ($0.3 million)compared with $1.0 million in fiscal 2015. Earnings per share from continuing operations was ($0.01), down from $0.03from the prior year.

RECONCILIATION OF EBITDA TO NET INCOME AND COMPREHENSIVE INCOME

($000's) 2016 2015

Adjusted Earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") $ 199 $ 1,075Amortization (63) (1,020)Interest expense (38) (42)Stock-based compensation (138) (36)Investment (loss) gain (530) 1,156Interest of third parties in investment loss (gain) 221 (55)Income taxes (recovery) 87 (77)

Income (loss) from continuing operations, net of income taxes $ (262) $ 1,001Gain on sale of discontinued operations, net of income taxes 401 190Loss from discontinued operations, net of income taxes - -

Net income and comprehensive income for the year $ 139 $ 1,191

Net income attributed to: Common shareholders of the Corporation $ 119 $ 1,132 Non-controlling interest 20 59

$ 139 $ 1,191


REVENUES

Total revenues in fiscal 2016 were down from fiscal 2015 at $12.4 million and $14.3 million respectively,however there were significant differences in each component of revenue.

Management fees in fiscal 2016 were $0.3 million higher primarily due to higher revenues in IAM PrivateDebt and IAM Real Estate. Performance fees were $0.4 million lower as there was no scheduled real estate fund mone-tization in fiscal 2016. In aggregate, investment (loss) gain and interest and other income decreased approximately $1.9million primarily due to investment losses on managed futures funds.

EXPENSES

The Corporation reported consolidated expenses for the year ended September 30, 2016 of $12.9 millioncompared to $13.1 million for the year ended September 30, 2015. Excluding expenses relating to performance fees,expenses decreased by $0.3 million from $13.1 million to $12.8 million in fiscal 2016. The decrease is due primarilyto staffing changes throughout the Corporation and bonuses.

The principal components of expenses are selling, general and administration (“SG&A”) of $12.6 million(2015–$11.9 million), approximately 77% of which is salaries and related costs (2015– 74%).

The current and future income tax assets and liabilities are recorded on the consolidated balance sheetbased on legislated future income tax rates, interpretation of tax legislation and assumptions about the realization andtiming of future benefits and costs. Future income tax rates can be changed through legislation at any time and a smallchange in rates or in interpretation or timing could result in a significant change in the income taxes shown on theconsolidated statements of income.

DISCONTINUED OPERATIONS

The gain on the sale and the loss from discontinued operations (BluMont Capital) for fiscal 2015 and fiscal2016 is shown in detail in note 3 to the financial statements.


QUARTERLY SUMMARY

Revenues and Adjusted EBITDA vary considerably from quarter to quarter depending on whether or notperformance fees are realized and on the amounts of commitments deployed by the real estate and private debt funds.

Performance fees in fiscal 2016 were from the managed futures operations in Q1 and Q4.

Investment losses were $0.5 million in fiscal 2016 compared to investment gains of $1.2 million in fiscal2015, the majority of which were in the managed futures funds. Investment gains and losses impact net income but areexcluded in the calculation of Adjusted EBITDA. Adjusted EBITDA in Q1 was adversely impacted by one-off staffing expenses.

FISCAL 2016

$000'S, EXCEPT PER SHARE AMOUNTS AND AUM Q1 Q2 Q3 Q4 TOTAL

Revenues before performance fees $ 2,690 $ 2,659 $ 3,013 $ 3,546 $ 11,908Performance fees 445 - - 1 446

Total revenues (continuing operations) $ 3,135 $ 2,659 $ 3,013 $ 3,547 $ 12,354

Net performance fees (continuing operations) $ 357 $ - $ - $ 1 $ 358Adjusted EBITDA (continuing operations) $ (350) $ (189) $ 314 $ 424 $ 199Net income (loss) from continuing operations(1) $ (139) $ (155) $ 209 $ (197) $ (282)Net income from discontinued operations $ 401 $ - $ - $ - $ 401Net income (loss) and comprehensive income (loss)(1) $ 262 $ (155) $ 209 $ (197) $ 119Earnings per share(1) Basic and diluted (continuing operations) $ (0.00) $ (0.01) $ 0.01 $ (0.01) $ (0.01) Basic and diluted (discontinued operations) $ 0.01 $ - $ - $ - $ 0.01

AUM ($ millions) $ 2,385 $ 2,397 $ 2,397 $ 2,628

FISCAL 2015

$000'S, EXCEPT PER SHARE AMOUNTS AND AUM Q1 Q2 Q3 Q4 TOTAL

Revenues before performance fees $ 3,233 $ 3,837 $ 2,798 $ 3,563 $ 13,431Performance fees 530 211 108 1 850

Total revenues (continuing operations) $ 3,763 $ 4,048 $ 2,906 $ 3,564 $ 14,281

Net performance fees (continuing operations) $ 502 $ 145 $ 81 $ 1 $ 729Adjusted EBITDA (continuing operations) $ 692 $ 161 $ 463 $ (241) $ 1,075Net income (loss) from continuing operations(1) $ 763 $ 454 $ (178) $ (97) $ 942Net income from discontinued operations $ - $ - $ - $ 190 $ 190Net income (loss) and comprehensive income (loss)(1) $ 763 $ 454 $ (178) $ 93 $ 1,132Earnings per share(1) Basic and diluted (continuing operations) $ 0.03 $ 0.02 $ (0.01) $ (0.01) $ 0.03 Basic and diluted (discontinued operations) $ - $ - $ - $ 0.01 $ 0.01

AUM ($ millions) $ 1,829 $ 1,764 $ 1,711 $ 1,701

(1) Attributed to the common shareholders of the Corporation

The financial data provided was prepared in accordance with the same accounting principles for all eightquarters and the fiscal years encompassing those quarters.


CONSOLIDATED FINANCIAL POSITION AT SEPTEMBER 30, 2016

Estimate of unrealized performance fees Unrealized performance fees can build up over time and are important to the Corporation. Unrealized perform-ance fees are not reflected in the consolidated financial statements and will only be reflected when realized. These unrealizedperformance fees are subject to the deduction of third party and corporate expenses, including non-controlling interest.

($ 000's) SEPT. 30, 2016

Real Estate $ 11,396

IAM manages investment products in which significant amounts of unrealized performance fees have builtup because the performance to date has exceeded the applicable benchmarks. However, the excess returns have not yetbeen monetized.

Performance fees in the real estate funds are realized sporadically as they tend to be recognized towardsthe end of the life of the pool of assets being managed, which at times can be up to thirteen years.

REAL ESTATE FUNDS UNREALIZED FISCAL YEAR OF($ 000'S) PERFORMANCE FEES EXPECTED REALIZATION

Fund 10 $ 694 2018Fund 11 7,862 2022Fund 12 2,840 2024

Total $ 11,396

Any estimate of unrealized performance fees is subject to significant change, given the various stages ofdevelopment of the properties, the period to realization and the volatile nature of the real estate market. Accordingly, theestimate of unrealized performance fees shown could be substantially over or understated.

The unrealized performance fees of the real estate funds increased $0.7 million to $11.4 million in fiscal 2016.

The managed futures operations manages a number of accounts and funds with performance fees in theircompensation structures. Performance fees are realized either on a quarterly or annual basis. As at September 30, 2016,there are no unrealized performance fees in a fund in which the actual performance fees, if any, are scheduled to berealized on December 31, 2016.


Liquidity and capital resources The Corporation’s primary liquidity requirement is to generate sufficient cash flow to meet its operatingobligations on a continuous basis.

Cash flow from operations(1) and dividends in fiscal years 2016 and 2015 are summarized below.

$000'S EXCEPT PER SHARE AMOUNTS 2016 2015

Cash flow from (used in) operations(1) $ (194) $ 555

Dividends declared $ 1,612 $ 1,575Cash flow from (used in) operations per share(2) $ (0.01) $ 0.02Dividends per share $ 0.06 $ 0.06

(1) These amounts are shown on the consolidated statements of cash flows in the financial statements under “Cash provided by operating activities before changes in operating assets and liabilities and are in respect of continuing operations.

(2) Calculated by dividing cash flow from operations by the weighted average number of shares outstanding in the fiscal year.

Cash flow from (used in) continuing operations(1) was ($0.2 million) in fiscal 2016 which does not includethe investment loss of $0.5 million.

The Corporation’s net liquid assets (current assets less current liabilities) decreased $5.1 million duringthe year from $16.8 million as at September 30, 2015 to $11.7 million as at September 30, 2016. The Corporationprovided a $3.6 million loan receivable to an investee company which is a borrower in an IPD Fund managed by IAMPrivate Debt. Common share issuances (through the Employee Share Purchase Plan and the exercise of stock options)raised $0.5 million.

On August 4, 2016 the Corporation’s board of directors approved payment of the annual cash dividend inthe amount of $0.06 per share or $1.6 million in aggregate. Since the Corporation began declaring dividends in fiscal2005, IAM has declared and paid cash dividends totaling $0.65 per share.

At September 30, 2016 the Corporation had 27.4 million common shares outstanding (September 30,2015 - 26.3 million) representing capital stock of $19.9 million (September 30, 2015 - $18.8 million). At December1, 2016 the Corporation had 27.4 million common shares outstanding.


Liquidity and capital resources (continued) On May 13, 2016, the Corporation announced its notice of the renewal of its Normal Course Issuer Bid(“NCIB”) in which the Corporation is permitted to purchase, for cancellation, up to 1,377,830 common shares of theCorporation at prevailing market prices during the 12 month period commencing May 24, 2016 and ending May 23, 2017.

A copy of IAM’s notice of the NCIB which was filed with the Toronto Stock Exchange may be obtained byany shareholder, without charge by contacting IAM.

During fiscal 2016, the Corporation acquired no common shares (fiscal 2015 – approximately 1.4 millioncommon shares) for an aggregate cash consideration of nil (fiscal 2015 - $1.2 million).

The Corporation has agreed to make certain long-term incentive bonus payments to take effect on theearlier of September 30, 2018 or the date of cessation of the employment of an executive officer of the Corporation. Inaggregate these payments could total up to $2.5 million payable over a five year period. The Corporation expects to fundthis obligation out of cash flow in the fiscal years in which the obligation becomes due. For additional information, seenote 18 (“Related Party Transactions”) in the financial statements.

RELATED PARTY TRANSACTIONS

There were no material related party transactions other than those described in the 2016 Annual Reportand the Management Information Circular of the Corporation.

MANAGING RISK

There is risk inherent in the asset management industry. Risk factors related to the Corporation include

• Poor investment performance • Loss of key employees • Lack of client diversification • Lack of product diversification • Competitive pressures • Litigation risks

These risks are described in greater detail in the Corporation’s Annual Information Form. These risk factorsare mitigated to the extent possible and practical by management through its day-to-day activities.

In the normal course of business, the Corporation receives claims for additional compensation from formeremployees. IAM has made provisions based on current information and the probable resolution of such proceedings andclaims. The amount of the losses, if any, cannot be reasonably determined at this time.


SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

The annual consolidated financial statements for fiscal 2016 have been prepared in accordance with IFRS.For a summary of the significant accounting policies used in preparing the financial statements, please refer to Note 2of the notes to the financial statements. Included in Note 2 is a summary of significant judgements and estimates which,in the view of management, could have a material impact on the financial statements. These judgements and estimatescover revenue recognition, provisions, fair value of financial assets and other items.

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

The Corporation maintains a set of disclosure controls and procedures (“DC&P”) and internal controls overfinancial reporting (“ICFR”). The DC&P have been designed to provide reasonable assurance that material informationrelating to the Corporation is made known to the Corporation’s Chief Executive Officer (“CEO”) and Chief Financial Officer(“CFO”) by the other officers of the Corporation, particularly during the period in which the annual filings are being prepared;and information required to be disclosed by the Corporation in its annual filings, interim filings or other reports filed orsubmitted by it under securities legislation is recorded, processed, summarized and reported within the time periodsspecified in securities legislation. The ICFR has been designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

Consistent with National Instrument 52-109, the CEO and CFO have caused the DC&P and ICFR to bedesigned under their supervision. Management, under direction of the CEO and CFO, has concluded that the ICFR areeffective. Management has evaluated, with the participation of the CEO and CFO, the effectiveness of the DC&P as atSeptember 30, 2016. As a result of this, the CEO and CFO have concluded that they are reasonably assured the DC&Pwere effective and that material information relating to IAM was made known to them within the time periods specifiedunder applicable securities legislation. For the year ended September 30, 2016, there have been no changes to ICFRthat have materially affected, or are reasonably likely to affect, internal controls over financial reporting.

OTHER INFORMATION

Additional information about the Corporation, including its most recent Annual Information Form andManagement Information Circular, is available on the System for Electronic Document Analysis and Retrieval (“SEDAR”)at www.sedar.com.


The Corporation’s management is responsible for the integrity, objectivity, reliability and fairness of presentationof the accompanying consolidated financial statements and all information in this Annual Report. The consolidatedfinancial statements and Management’s Discussion and Analysis have been approved by the Board of Directors. Theconsolidated financial statements have been prepared by management, in accordance with International Financial ReportingStandards (“IFRS”) and where appropriate reflect management’s judgement and best estimates. Preparation of financialstatements necessarily requires inclusion of amounts which have been based on management’s best estimates, whichhave been made using careful judgement. Financial information contained elsewhere in this Annual Report is consistentwith the consolidated financial statements.

The Corporation’s management is responsible for maintaining systems of internal accounting and admin-istrative controls that provide reasonable assurance that assets are safeguarded from loss or unauthorized use and producereliable accounting records for the preparation of financial information. Such systems are designed to meet the managementneeds of a growing business and to provide assurance that financial information is accurate and reliable in all materialrespects, consistent with reasonable costs. The Corporation’s management believes that such systems are operatingeffectively and that the systems of internal controls meet management’s responsibilities for the integrity of the consolidatedfinancial statements.

The Audit Committee of the Board of Directors, all of whom are independent directors, meets with man-agement and the auditors to discuss the Corporation’s financial reporting and internal control. The Committee meets atleast quarterly with management to satisfy itself that management is properly discharging their responsibilities. TheCommittee, among other things, reviews financial matters related to Corporate Governance, the quality of audits andfinancial reporting and maintains practices intended to preserve the independence of the external auditors including areview of their independence. The Audit Committee reviews the consolidated financial statements, the independentauditor’s report and the annual and quarterly reports to the shareholders prior to submitting the information to the Boardof Directors for approval. Both the independent auditor and the Audit Committee have the right to request a meeting inthe absence of management at any time.

Management recognizes its responsibility to conduct the Corporation’s affairs in the best interest of itsshareholders.

John Robertson Tom Felkai Chief Executive Officer Chief Financial Officer

MANAGEMENT’S STATEMENT ON FINANCIAL REPORTING


TO THE SHAREHOLDERS OF INTEGRATED ASSET MANAGEMENT CORP.

We have audited the accompanying consolidated financial statements of Integrated Asset ManagementCorp., which comprise the consolidated balance sheets as at September 30, 2016 and September 30, 2015 and theconsolidated statements of income and comprehensive income, changes in shareholders’ equity, and cash flows for theyears then ended, and the related notes, which comprise a summary of significant accounting policies and other explanatoryinformation.

Management’s responsibility for the consolidated financial statements Management is responsible for the preparation and fair presentation of these consolidated financialstatements in accordance with International Financial Reporting Standards, and for such internal control as managementdetermines is necessary to enable the preparation of consolidated financial statements that are free from materialmisstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits.We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whetherthe consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessmentof the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation ofthe consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to providea basis for our audit opinion.

Opinion In our opinion, the consolidated financial statements present fairly, in all material respects, the financialposition of Integrated Asset Management Corp. as at September 30, 2016 and September 30, 2015 and its financialperformance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Chartered Professional Accountants, Licensed Public Accountants Toronto, OntarioDecember 5, 2016

INDEPENDENT AUDITOR’S REPORT


NOTES SEPTEMBER 30, 2016 SEPTEMBER 30, 2015

AssetsCurrent Cash and cash equivalents $ 10,327,303 $ 15,692,443 Restricted cash equivalents (Note 4) 802,827 - Receivables 735,847 401,673 Income taxes recoverable 140,118 583,392 Prepaids 200,690 178,388 Proprietary investments (Note 5) 3,899,326 4,086,354 Loan Receivable and Other assets (Note 6) 92,535 -

Total current assets 16,198,646 20,942,250

Property and equipment (Note 7) 121,376 109,042Goodwill and Intangible assets (Note 8) 1,667,956 1,661,407Proprietary investments (Note 5) 198,389 -Loan Receivable and Other assets (Note 6) 3,610,038 10,038Deferred income taxes (Note 13) 872,582 444,875

$ 22,668,987 $ 23,167,612

Liabilities and Shareholders’ Equity Current Payables and accruals $ 2,410,315 $ 3,003,714 Deposits 125,000 - Tenant inducements 91,947 91,947 Income taxes payable 412,593 246,150 Interest of third parties in proprietary investments (Note 5) 1,416,677 797,872

Total current liabilities 4,456,532 4,139,683

Tenant inducements 76,622 168,569Long-term incentive bonus obligation (Note 18) 559,000 352,000Deferred income taxes (Note 13) 9,121 23,614

Total liabilities 5,101,275 4,683,866

Contingencies (Note 19)

Shareholders’ Equity (Note 9) Capital stock 19,315,633 18,843,043Contributed surplus 1,250,872 1,112,929Deficit (3,003,278) (1,510,518)Non-controlling interest 4,485 38,292

Total shareholders’ equity 17,567,712 18,483,746

$ 22,668,987 $ 23,167,612

See accompanying notes to the consolidated financial statements.

CONSOLIDATED BALANCE SHEETS


(IN CANADIAN $)

FOR THE YEARS ENDED SEPTEMBER 30 NOTES 2016 2015

RevenuesManagement and administration fees $ 12,168,483 $ 11,828,402Performance fees 446,431 850,360Investment gain (loss) (Note 11) (530,163) 1,156,407Interest and other income 269,888 446,920

12,354,639 14,282,089

Expenses Selling, general and administration (Note 12) 12,597,233 11,928,691Stock-based compensation (Note 9) 137,943 35,945Fees and expenses relating to performance fees 88,008 121,699Amortization of property and equipment (Note 7) 30,343 25,693Amortization of intangible assets (Note 8) 31,812 995,013Interest expense 38,313 42,475

Total expenses 12,923,652 13,149,516

Interest of third parties in investment gain (loss) (Note 11) (220,849) 55,282

Income (loss) before income taxes (348,164) 1,077,291

Income taxes (recovery) (Note 13) Current 355,607 477,551 Deferred (442,200) (400,797)

(86,593) 76,754

Income (loss) from continuing operations (261,571) 1,000,537Gain from discontinued operations, net of income taxes (Note 3) 401,294 190,369

Net income and comprehensive income(1) $ 139,723 $ 1,190,906

Net income attributed to: Common shareholders of the Corporation $ 119,236 $ 1,131,627 Non-controlling interest 20,487 59,279

$ 139,723 $ 1,190,906

Earnings per share attributed to the common shareholders of the Corporation Basic and diluted earnings per share (Note 9)

Continuing operations $ (0.01) $ 0.03

Discontinued operations $ 0.01 $ 0.01

$ 0.00 $ 0.04

(1) The Corporation had no Other Comprehensive Income for the year ended September 30, 2016 or 2015.



CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (IN CANADIAN $)

NUMBER OF RETAINED NON-

SHARES CAPITAL CONTRIBUTED EARNINGS CONTROLLING TOTAL

OUTSTANDING STOCK SURPLUS (DEFICIT) INTEREST EQUITY

$ $ $ $ $

At October 1, 2015 26,327,010 18,843,043 1,112,929 (1,510,518) 38,292 18,483,746Stock-based compensation - - 137,943 - - 137,943Net income and comprehensive income - - - 119,236 20,487 139,723Distributions paid to non-controlling interest - - - - (54,294) (54,294)Regular dividend (Note 10) - - - (1,611,996) - (1,611,996)Issuance of common shares on exercise of stock options 230,000 163,000 - - - 163,000Issuance of common shares through employee share purchase plan 309,590 309,590 - - - 309,590Issuance of common shares through key employee share loan plan (Note 9) 517,695 - - - - -

Balance, September 30, 2016 27,384,295 19,315,633 1,250,872 (3,003,278) 4,485 17,567,712

At October 1, 2014 26,951,650 19,144,871 1,076,984 (868,345) 286,377 19,639,887Stock-based compensation - - 35,945 - - 35,945Net income and comprehensive income - - - 1,131,627 59,279 1,190,906Distributions paid to non-controlling interest - - - - (307,364) (307,364)Common shares purchased for cancellation (1,364,600) (970,988) - (198,614) - (1,169,602)Regular dividend (Note 10) - - - (1,575,186) - (1,575,186)Issuance of common shares on exercise of stock options 260,000 194,000 - - - 194,000Issuance of common shares through employee share purchase plan 479,960 475,160 - - - 475,160

Balance, September 30, 2015 26,327,010 18,843,043 1,112,929 (1,510,518) 38,292 18,483,746



CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (IN CANADIAN $)

FOR THE YEARS ENDED SEPTEMBER 30 NOTES 2016 2015

Operating activities Net income (loss) from continuing operations $ (261,571) $ 1,000,537Add (subtract) non-cash items: Stock-based compensation 137,943 35,945Amortization of property and equipment 30,343 25,693Amortization of intangible assets 31,812 995,013Deferred income taxes recovery (442,200) (400,797)Investment loss (gain) (Note 11) 530,163 (1,156,407)Interest of third parties in investment gain (loss) (220,849) 55,282

Cash provided by (used in) operating activities before changes in operating assets and liabilities (194,359) 555,266Net change in non-cash balances relating to operations (119,564) 2,452,442Interest received 177,353 296,358Interest paid (38,313) (42,475)Income taxes paid (212,118) (2,130,392)

Cash provided by (used in) continuing operating activities (387,001) 1,131,199

Cash provided by discontinued operating activities 401,294 190,369

Cash provided by operating activities 14,293 1,321,568

Investing activities Investments in proprietary investments (202,439) -Restricted cash equivalents (802,827) -Proceeds from sale of proprietary investments 500,571 1,418,256Purchase of property and equipment (81,038) (76,249)Loan Receivable (3,600,000) -

Cash provided by (used in) investing activities (4,185,733) 1,342,007

Financing activities Dividends paid to shareholders (Note 10) (1,611,996) (1,575,186)Distributions paid to non-controlling interest (54,294) (307,364)Common shares repurchased for cancellation - (1,169,602)Issuance of common shares on exercise of stock options 163,000 194,000Issuance of common shares through employee share purchase plan 309,590 475,160Repayment of management loans - 100,667

Cash used in financing activities (1,193,700) (2,282,325)

Increase (decrease) in cash and cash equivalents (5,365,140) 381,250Cash and cash equivalents continuing operations, beginning of year 15,692,443 15,311,193

Cash and cash equivalents, end of year $ 10,327,303 $ 15,692,443



CONSOLIDATED STATEMENTS OF CASH FLOWS (IN CANADIAN $)

1. ORGANIZATION AND NATURE OF BUSINESS

Integrated Asset Management Corp. (the "Corporation" or "IAM") is incorporated under the laws of Ontarioand its common shares are listed on the Toronto Stock Exchange (TSX). Its registered office is at 70 University Avenue,Suite 1200, Toronto, Ontario. The Corporation’s principal business is alternative asset management and it operates inone geographic segment (Canada).

The Corporation manages assets across a variety of alternative asset classes for institutional and high networth customers. Substantially all of the Corporation’s revenues and cash flows are derived from managing and admin-istering this business.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance These consolidated financial statements have been prepared in accordance with International FinancialReporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).

The consolidated financial statements of the Corporation for the year ended September 30, 2016 wereauthorized for issuance by the Board of Directors of IAM on December 1, 2016.

Basis of presentation The consolidated financial statements of IAM have been prepared on a historical cost basis, except forcertain financial instruments which have been measured at fair value.

Principles of consolidation The consolidated financial statements include the accounts of the Corporation and the following materialsubsidiaries, all of which have their principal place of business in Ontario:

GPM Investment Management (“GPM”) (a partnership) 100%(a)

IAM Private Debt Group Corp. (“Private Debt Group”) 100% Integrated Managed Futures Corp. (“IMFC”) 77.5% Integrated Partners Holding GP One Limited (“IPHGPOL”) 57.8%

(a) In fiscal 2009, the Corporation acquired the remaining 25.025% of GPM that it did not already own. The vendor retained his 25.025% pro-rata economic interest in performance fees that may be realized by GPM from one specific fund in the future.

The consolidated financial statements include all the assets, liabilities and operations of a fund managedby the Corporation for the period in which the Corporation had a controlling interest in the fund. At September 30, 2016,the Corporation had a controlling interest in the AlphaCentric/IMFC Managed Futures Strategy Fund (formerly Attain IMFCMacro Fund). The Corporation does not have any contractual arrangements that could require it to provide financial support,nor did it provide such support, to this consolidated structured entity. Interest of third parties in proprietary investmentsrepresents the share of AlphaCentric/IMFC Managed Futures Strategy Fund owned by outside parties; it is presented asa component of liabilities and any changes in fair value are included in the consolidated statements of income andcomprehensive income. Subsidiaries are fully consolidated from the date on which control is obtained by the Corporationand are de-consolidated from the date that control ceases. Intercompany transactions, balances, income, expenses andprofit and losses are eliminated. Non-controlling interest represent equity interests in subsidiaries; the share of net assetswhich are attributable to non-controlling interest is presented as a component of equity. Its share of net income andcomprehensive income is recognized directly in equity, if characterized as non-controlling interest. Changes in IAM’sownership interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


FOR THE YEARS ENDED

SEPTEMBER 30, 2016 AND 2015

The Corporation applies the acquisition method to account for business combinations. The considerationtransferred for the acquisition of a subsidiary is the fair value of (i) the assets transferred, (ii) the liabilities incurred tothe former owners of the acquiree and (iii) the equity interest issued by the Corporation. The consideration transferredincludes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assetsacquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fairvalues at the acquisition date. The Corporation recognizes any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognized amountsof the acquiree’s identifiable net assets.

Revenue recognition Management and administration fees are primarily based upon the net asset value or the assets underadministration of the respective funds and are recognized on an accrual basis. Performance fees are earned when investmentreturns of a fund outperform a designated benchmark and are recognized when management is assured of their realization.The Corporation owns proprietary investments and a forward currency contract; and recognizes the change in fair valueon the consolidated statements of income and comprehensive income as Investment Gain (Loss).

Foreign currency translation The Corporation’s consolidated financial statements are presented in Canadian dollars; the functionalcurrency of the Corporation and each of its subsidiaries. Assets and liabilities denominated in foreign currencies are convertedto Canadian dollars at the rate of exchange at each balance sheet date. Purchases and sales of assets and liabilities andinvestment income denominated in foreign currencies are converted into Canadian dollars at the rate of exchange at thedate of transaction. Realized and unrealized gains (losses) on assets, liabilities and income denominated in foreigncurrencies are included in the statement of income.

Cash, cash equivalents, and restricted cash Cash consist of cash on deposit with banks. Cash equivalents consist of highly liquid investments. Restrictedcash is cash and cash equivalents held in connection with a foreign currency contract held by the Corporation.

Financial Instruments All financial instruments are measured at fair value on initial recognition. Transactions costs that are directlyattributable to the acquisition or issue of a financial instrument classified as other than at fair value through profit or lossare added to the carrying amount of the asset or liability.

At each reporting date, the Corporation assesses whether there is objective evidence that a financial asset(other than a financial asset classified as fair value through profit and loss) is impaired. If such evidence exists, the Corporationrecognizes an impairment loss. The loss is the difference between the amortized cost of the loan or receivable and presentvalue of the estimated future cash flows, discounted using the instrument’s original effective interest rate. The carryingamount of the asset is reduced by this amount either directly or indirectly through the use of an allowance account.

Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods ifthe amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairmentwas recognized.

The Corporation’s financial instruments consists of cash and cash equivalents, restricted cash, and cashequivalents, receivables, proprietary investments, management loans, third party loan receivable, accounts payable, andaccrued liabilities. Proprietary investments are recorded at fair value. Investments which are not publicly traded or otherassets for which no public market exists are valued at fair value. The fair value of these investments is determined usingan appropriate valuation methodology and use of observable data and/or unobservable data, as determined appropriate bymanagement. Accounts receivable, accounts payable and accrued liabilities are classified as loans and receivables andother financial liabilities are carried at amortized cost, using the effective interest rate method, which approximates fairvalue given their short term nature.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value hierarchy Fair value estimates are classified within a three level hierarchy based on the lowest level of input that issignificant to the determination of fair value. The three levels are:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and Level 3 Inputs that are not based on observable market data

Investments in proprietary investments Investments in proprietary investments are assessed to determine whether or not they are controlled. Thisdetermination includes consideration of all factors and circumstances relevant to the investment, including: the extentof the Corporation's direct and indirect interests in the fund, the level of compensation to be received from the fund formanagement services provided to it, kick out rights available to other investors and the extent of power that the Corporationhas over the fund. The fund is consolidated by the Corporation in circumstances where it is determined to be controlled.The interest of third parties in certain investment funds qualify as financial liabilities measured at fair value throughprofit and loss and are accordingly presented as such in the consolidated balance sheets and statements of income andcomprehensive income. The Corporation’s investment in underlying funds it manages is recognized as financial assets atfair value through profit and loss.

Forward currency contracts are measured at fair value through profit or loss. These contracts are valuedbased on the difference between the contract rate and current forward rates applied to the contracts’ notional amount.The purpose of these financial instruments are to hedge the currency exposure of the proprietary investments which aremeasured at fair value through profit or loss.

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheetsif, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention tosettle on a net basis, or to realize the assets and settle the liabilities simultaneously. As of September 30, 2016, thereare no material financial assets and financial liabilities to be offset.

The change in fair value on forward contracts are recognized as Investment Gain (Loss) on the consolidatedstatements of income and comprehensive income.

Property and equipment Property and equipment are recorded at cost less accumulated amortization and impairment costs. Costsinclude expenditures that are directly attributable to the acquisition of the asset. Amortization based on the estimateduseful life of the asset is calculated as follows:

Furniture and fixtures 20% diminishing balance basis Computer hardware 30% diminishing balance basis Leasehold improvements straight line over the term of the lease

Assets’ residual values, useful lives and methods of amortization are reviewed at each reporting date, andadjusted prospectively if appropriate.


Intangible assets Fund management contracts Fund management contracts are recorded net of any write-down for impairment. The Corporation evaluatesthe carrying value of fund management contracts for potential impairment by comparing the recoverable amount withthe carrying value. These evaluations are performed on an annual basis or more frequently if events or changes in cir-cumstances indicate a potential impairment. Any impairment would be written off to income. Fund management contractswith a finite life are amortized on a straight-line basis over seven years.

Goodwill Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fairvalue of the non-controlling interest, if any, over the net identified assets acquired and liabilities assumed. If this consid-eration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit andloss. Goodwill is assessed for impairment annually or more frequently if events or circumstances suggest that there maybe impairment. Goodwill is allocated to the appropriate cash-generating unit (CGU) for the purpose of impairment testing.The carrying value of a CGU is compared with the recoverable amount, which is the higher of value in use and the fairvalue less costs of disposal. Any impairment is recognized immediately as an expense and is not subsequently reversed.

Computer software & website development The costs of purchasing computer software & website development are capitalized where it is probable thatfuture economic benefits which are attributable to the assets will flow to the Corporation and the cost of the assets canbe measured reliably. Computer software & website development is recorded initially at cost and amortized on a 30%diminishing balance basis.

Income taxes The Corporation records deferred tax assets and liabilities by measuring the amounts expected to be recov-ered from, or paid to, the taxation authorities. The Corporation provides for income taxes using the asset and liabilitymethod of tax allocation. Under this method, deferred income tax assets and liabilities are determined based on differencesbetween the carrying value and tax basis of assets and liabilities and are measured using the substantially enacted taxrates and laws that will likely be in effect when the differences are expected to reverse. Deferred tax assets are recognizedonly when it is probable that sufficient taxable income will be available against which deductible temporary differencesmay be utilized.

Deposits All deposits are measured at fair value and are shown as a current liability on the consolidated balancesheets. Deposits are a normal course of business within the Private Debt Group when borrowers are applying for loansthey are required to make a deposit towards their fees while the loan is being approved.

Tenant inducements and leases Tenant inducements are financial benefits provided by the owner of office space to the Corporation as aninducement to enter into a lease of that office space. These tenant inducements are deferred and amortized on a straight-line basis over the term of the lease.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor areclassified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) arecharged to the statement of income on a straight-line basis over the period of the lease.

Provisions Provisions are recognized when the Corporation has a legal or constructive obligation as a result of a pastevent and it is considered probable that an outflow of economic benefits will be required to settle the obligation. They aremeasured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate thatreflects current market assessments of the time value of money and the rights specific to the obligations. Provisions arereviewed at each reporting date and adjusted to reflect the current best estimates. In the event that it is considered nolonger probable that an outflow of economic benefits will be required to settle the obligation, the provision is reversed.


2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock Options The Corporation applies the fair value based method of accounting for stock options granted to employeesand directors. The fair value of the stock options, as at the date of grant, is determined using the Black-Scholes optionvaluation model. This compensation expense is recognized over the applicable vesting period with a corresponding increasein contributed surplus, based on the amount of awards expected to vest.

Key Employee Share Loan Plan The Corporation issues non-recourse loans to employees to purchase treasury stock under the Key EmployeeShare Loan Plan (the “Loan Plan”). The loans are not recorded as an asset on the balance sheet of the Corporation dueto the non-recourse nature of the loan and as such are treated for accounting as stock based compensation. Similar tothe stock option, the Corporation applies the fair value based method of accounting for the shares issued from treasuryunder this plan. The fair value of the shares issued, as at the date of the purchase, is determined by a ten day tradingaverage of the Corporation’s stock. The stock based compensation expense is calculated using the Black-Scholes optionvaluation model. The entirety of the compensation expense is recognized in the same period as the shares are issuedfrom treasury, as there is no vesting period. The shares ownership is passed to the employee at the issuance date of thetreasury stock. The shares issued to the employee are pledged as collateral against the loan.

Earnings per share Earnings per share amounts are based on the application of the treasury stock method for the calculationof the dilutive effect of stock options and other dilutive securities. Basic per share amounts are determined by dividingnet income attributable to equity owners by the weighted average number of common shares outstanding during the year.Diluted per share amounts are determined by adjusting the weighted average number of shares outstanding for any dilutiveeffect of stock options.

Dividends Dividends are recognized as a liability in the consolidated balance sheets in the period in which the dividendsare approved by the Corporation’s Board of Directors.

Significant accounting judgements and estimates The process of applying the Corporation’s accounting policies requires management to make significant judge-ments involving assumptions and estimates. Key assumptions and estimates which could have a material impact on thecarrying amounts of assets and liabilities are described below.

Fair values of financial investments In situations where the fair values of financial assets and financial liabilities cannot be derived from activemarkets, they are determined using other methodology which requires a degree of judgement. Changes in the underlyingassumptions could affect the reported financial assets and financial liabilities.

Deferred tax assets Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable incomewill be available against which the losses can be utilized. Significant management judgement is required to determinewhether it is probable that taxable income will be available in the future to utilize tax losses. Changes in the underlyingassumptions could affect whether unused tax losses are recognized as a deferred tax asset or not.

Provision for other liabilities Provisions are liabilities of the Corporation, including long-term incentive bonus obligation and litigation,which are of uncertain timing or amount. Due to the nature of the provisions, a considerable part of their determinationis based on estimates and judgements, including assumptions concerning the future. The actual outcome of theseuncertain factors may be materially different from the estimates, causing differences with the estimated provisions.


3. DISCONTINUED OPERATIONS

On December 2, 2013, the Corporation completed the sale of all its shares of BluMont Capital Corporation(“BluMont Capital”). The Corporation recognized consideration of $9,733,991 in respect of the sale and recorded a gainfrom discontinued operations, net of income taxes, of $6,512,026 in fiscal 2014.

The Corporation recognized consideration of $259,006 in respect to the Corporation’s share of performancefees realized by the purchaser of BluMont Capital and recorded a gain from discontinued operations, net of income taxes,of $190,369 in fiscal 2015.

The Corporation recognized consideration of $395,308 in respect to the Corporation’s final share of per-formance fees realized by the purchaser of BluMont Capital and recorded a gain from discontinued operations, net ofrelated income tax adjustments, of $401,294 in fiscal 2016. The Corporation is not entitled to any further consideration.

SEPTEMBER 30, 2016 SEPTEMBER 30, 2015

Gain on discontinued operations, net of income taxes $ 401,294 $ 190,369

4. RESTRICTED CASH EQUIVALENTS

The Corporation has restricted cash of $0.8 million which is invested in a cashable guaranteed investmentcertificate (GIC) as collateral for the forward currency contract. The GIC is held with a Canadian Schedule 1 Bank witha credit rating of Aa2.

5. PROPRIETARY INVESTMENTS


Fair value through profit or loss proprietary investments $ 3,899,126 $ 4,035,814Fair value of forward currency contract 200 -Unlisted proprietary investments 198,389 50,540

$ 4,097,715 $ 4,086,354Less amount included in current assets (3,899,326) -

$ 198,389 $ 4,086,354

The Corporation’s maximum exposure to loss from its proprietary investments is equal to the total fair valueof its investments.

Fair value through profit or loss proprietary investments consist of an investment in a fund managed by theCorporation.

As at September 30, 2016, the Corporation had a controlling interest in one fund (September 30, 2015:one fund) and, includes all of the assets, liabilities and results of operations of the fund in the Corporation’s consolidatedfinancial statements for the period in which the Corporation had a controlling interest in that fund. The interest of thirdparties in proprietary investments in the amount of $1,416,677 has been included as a liability on the Corporation’sconsolidated balance sheet as at September 30, 2016 (September 30, 2015: $797,872).

The Corporation holds a significant portion of proprietary investments in US dollar currency. The Corporationis therefore exposed to foreign exchange risk, as the value of the financial assets are in US dollars and will fluctuate dueto changes in foreign exchange rates. On August 31, 2016 the Corporation entered into a forward currency contract,whereby the Corporation agreed to sell $2,000,000 USD at an exchange rate of 1.3118 with an option of rolling thecontract forward at market rate.

As at September 30, 2016, the unlisted proprietary investments comprises of the Corporation’s investmentin the Integrated Private Debt Fund V LP (“IPD Fund V”) which is managed by the Private Debt Group. The Corporationowns 0.3% of the fund with total net assets of $667,000,000 at September 30, 2016. Notwithstanding commitmentsas disclosed in Note 19, the Corporation has no current intentions to provide financial or other support to the IPD FundV, including intentions to assist the fund in obtaining financial support.


5. PROPRIETARY INVESTMENTS (continued)

As at September 30, 2015, the unlisted proprietary investments comprised of the Corporation’s investmentand 7.4% ownership of units in a fund managed by the Corporation. During the year ended September 30, 2015, thefund completed the sale of its remaining investment. As at September 30, 2016 all proceeds have been fully distributedto its limited partners, including the Corporation.

6. OTHER ASSETS


Loan Receivable(a) $ 3,692,535 $ -Other 10,038 10,038

$ 3,702,573 $ 10,038Less amount included in current assets(b) (92,535) -

$ 3,610,038 $ 10,038

(a) The loan receivable is to a borrower in a Private Debt Group Fund. In fiscal 2016, the Corporationentered into an agreement to loan up to $4.0 million to be repaid within 18 months, or if needed an extension as agreedby the counterparty. The loan receivable is collateralized by a first charge over the assets of the borrower. The interestrate is 8.0% per annum on loan receivable advances, the Corporation’s maximum exposure to loss from this loan receivableis equal to the total amount advanced plus fees accrued.

The Corporation received a 10% ownership of Hornepayne Power Inc. as part of the loan receivable refinancing.The ownership position has nominal value as at September 30, 2016.

(b) Amount in current assets includes interest and standby fees receivable due within 30 days of year-end.

7. PROPERTY AND EQUIPMENT

FURNITURE AND COMPUTER

FIXTURES HARDWARE TOTAL

Cost At September 30, 2014 $ 200,142 $ 375,325 $ 575,467Additions 1,300 37,733 39,033

At September 30, 2015 $ 201,442 $ 413,058 $ 614,500 Additions 30,905 11,772 42,677

At September 30, 2016 $ 232,347 $ 424,830 $ 657,177

Accumulated Amortization At September 30, 2014 $ (154,513) $ (325,252) $ (479,765)Amortization (6,142) (19,551) (25,693)

At September 30, 2015 $ (160,655) $ (344,803) $ (505,458) Amortization (8,053) (22,290) (30,343)

At September 30, 2016 $ (168,708) $ (367,093) $ (535,801)

Net Book Value At September 30, 2015 $ 40,787 $ 68,255 $ 109,042

At September 30, 2016 $ 63,639 $ 57,737 $ 121,376


8. GOODWILL AND INTANGIBLE ASSETS

FUND

MANAGEMENT COMPUTER

CONTRACTS – SOFTWARE &

FINITE LIFE GOODWILL WEBSITE TOTAL

Cost As at September 30, 2014 $ 6,932,501 $ 1,578,471 $ 633,800 $ 9,144,772Additions - - 37,216 37,216

As at September 30, 2015 $ 6,932,501 $ 1,578,471 $ 671,016 $ 9,181,988Additions - - 38,361 38,361

As at September 30, 2016 $ 6,932,501 $ 1,578,471 $ 709,377 $ 9,220,349

Accumulated amortization As at September 30, 2014 $ (5,962,475) $ - $ (563,093) $ (6,525,568)Amortization (970,026) - (24,987) (995,013)

As at September 30, 2015 $ (6,932,501) $ - $ (588,080) $ (7,520,581)Amortization - - (31,812) (31,812)

As at September 30, 2016 $ (6,932,501) $ - $ (619,892) $ (7,552,393)

Net Book Value at: September 30, 2015 $ - $ 1,578,471 $ 82,936 $ 1,661,407

September 30, 2016 $ - $ 1,578,471 $ 89,485 $ 1,667,956

Goodwill is allocated to two cash-generating units; Private Debt Group and GPM, for the purpose ofimpairment testing.

9. SHAREHOLDERS’ EQUITY

a) Capital Stock At September 30, 2016 the Corporation had 27.4 million shares outstanding (2015 – 26.3 million).

On May 13, 2016, the Corporation announced its notice of the renewal of its Normal Course Issuer Bid(“NCIB”) in which the Corporation is permitted to purchase, for cancellation, up to 1,377,830 common shares of theCorporation at prevailing market prices during the 12 month period commencing May 24, 2016 and ending May 23, 2017.

From October 1, 2015 to September 30, 2016 the Corporation purchased nil common shares under theNCIB (September 30, 2015 – purchased 1,364,600 common shares for aggregate cash consideration of $1,169,602).

b) Employee Share Purchase Plan The Corporation had an Employee Share Purchase Plan (the “Plan”) which was approved at the Corporation’smeeting of shareholders in February 2015. Under the Plan, eligible employees were permitted by the Corporation to purchasecommon shares from the treasury of the Corporation. The maximum number of common shares permitted to be issuedunder the Plan was 1,500,000 common shares. During the year ended September 30, 2016 the Corporation issued309,590 common shares (September 30, 2015 – 479,960) from treasury for cash of $309,590 (September 30, 2015– $475,160) and accrued a bonus obligation of $77,400 payable to those eligible employees (September 30, 2015 –$118,790). The purchase price for the shares of the Plan was determined by using the stock’s price history before thepurchase date. The Plan has been discontinued as of July 15, 2016.


9. SHAREHOLDERS’ EQUITY (continued)

c) Key Employee Share Loan Plan The Corporation has a Loan Plan which was approved at the Corporation’s special meeting of the shareholdersin July 2016. Under the Loan Plan, eligible employees may be permitted by the Corporation to purchase common sharesfrom treasury of the Corporation with a loan from the Corporation. The employees’ shares are pledged as collateral for theloan, which has an annual interest rate of 2.25% and a term of 5 years. The maximum number of common shares that maybe issued under the Loan Plan is 1,250,000 common shares. During the year ended September 30, 2016 the Corporationissued 517,695 common shares from treasury for loans receivable from employees of $584,995. The purchase price ($1.13)for the shares of the Loan Plan was determined by using the stock’s price history before the purchase date. Due to thenon-recourse nature of the employees’ loans, the Corporation accounts for the Loan Plan as stock based compensation.

The stock based compensation expense is calculated using the Black-Scholes option valuation model. Theentirety of the compensation expense of $74,895 is recognized in the same period as the stock was issued from treasury,as there is no vesting period. The assumptions used to determine the fair value of the benefit ($0.145 per share) for theLoan Plan included: (i) purchase price of $1.13; (ii) risk-free interest rate of 0.98% (iii) employee loan term of 5 years;(iv) expected volatility of the Corporation stock of 30.7%; (v) expected forfeiture rate of 0% and (vi) expected dividendyield of 5.3%.

d) Stock Option Plan The Corporation has an incentive stock option plan for the executives, key employees, directors and consultantsto the Corporation. The Corporation does not issue equity or cash in return for the cancellation of options.

The changes in the stock options are as follows:

TOTAL NUMBER WEIGHTED AVERAGE

OF OPTIONS EXERCISE PRICE

September 30, 2015Outstanding at beginning of year 1,635,000 $ 0.74Granted 670,000 $ 0.92Exercised (260,000) $ 0.75Cancelled and expired (120,000) $ 0.75

Outstanding at end of year 1,925,000 $ 0.80

September 30, 2016 Granted 200,000 $ 1.02Exercised (230,000) $ 0.71Cancelled and expired (50,000) $ 0.70

Outstanding at end of year 1,845,000 $ 0.83

The exercise prices for the option grants’ of 150,000 options and 50,000 options were determined by using the stock price’s 10 trading day trading history before the grant date. The weighted average fair value of the options granted during the year has been estimated to be $0.16 per option using the Black-Scholes option pricing model. The assumptions used to determine the fair value of the options on the grant date included: (i) exercise price of $1.00 and $1.07; (ii) risk-free interest rate of 1.37% and 1.02%; (iii) expected option life of 7 years; (iv) expected volatility of 33.8% and 31.2%; (v) expected forfeiture rate of 13.3% and 20% and (vi) expected dividend yield of 6.0% and 5.6%.


Incentive stock options vest one-third on each of the second, third and fourth anniversary of the date ofgrant. The expense relating to the cancelled options is not reversed due to a forfeiture rate being included in the optiongrant’s fair value calculation.

The following table summarizes information about the Corporation’s stock option plan at September 30, 2016:

NUMBER OF NUMBER OF

OPTIONS OPTIONS VESTED

OUTSTANDING AND EXERCISABLE EXERCISE PRICE EXPIRY DATE

50,000 - $ 1.07 2023 160,000 - $ 1.07 2022 150,000 - $ 1.00 2022 10,000 - $ 0.96 2022 500,000 - $ 0.86 2022 160,000 53,333 $ 0.90 2021 40,000 40,000 $ 0.55 2019 80,000 80,000 $ 0.90 2018 695,000 695,000 $ 0.70 2017

1,845,000 868,333

e) Basic and diluted earnings per share The following table presents the calculation of basic and diluted earnings per common share.

2016 2015

Numerator Net income attributed to common shareholders of the Corporation – basic and diluted $ 119,236 $ 1,131,627

Denominator Weighted average number of common shares, basic 26,661,160 26,338,410Dilutive effect of employee stock options 372,310 383,135

27,033,470 26,721,545Earnings per common share, basic and diluted $ 0.00 $ 0.04

f) Non-controlling interest Non-controlling interest represents equity interests owned by outside parties in subsidiaries.


Subsidiaries of the Corporation $ 4,485 $ 38,292


10. DIVIDENDS

The following dividend was declared by the Corporation during the year ended September 30, 2016:

CASH DIVIDEND TOTAL DIVIDEND

RECORD DATE PAYMENT DATE PER SHARE AMOUNT

August 18, 2016 – regular dividend September 8, 2016 $ 0.06 $ 1,611,996

The following dividend was declared by the Corporation during the year ended September 30, 2015:

CASH DIVIDEND TOTAL DIVIDEND

RECORD DATE PAYMENT DATE PER SHARE AMOUNT

August 17, 2015 – regular dividend September 9, 2015 $ 0.06 $ 1,575,187

11. INVESTMENT GAIN (LOSS)

YEAR ENDED SEPTEMBER 30 2016 2015

Proprietary investments at fair value through profit or loss $ (639,363) $ 1,156,407 Realized and unrealized gain (loss) on forward currency contract 109,200 -

$ (530,163) $ 1,156,407

The Corporation owns proprietary investments and a forward currency contract; and recognizes the changein fair value on the consolidated statements of income and comprehensive income.

Included in these amounts is an investment gain (loss) of $(220,849) (September 30, 2015 – $55,282)in respect of funds consolidated in these financial statements that is attributed to the interest of third parties in proprietaryinvestments.

12. SELLING, GENERAL AND ADMINISTRATION EXPENSES


Salaries and benefits $ 9,652,276 $ 8,865,481Advertising and marketing 180,104 216,951Travel and entertainment 393,306 342,857Consulting fees 200,582 111,147Occupancy 654,172 665,234Professional fees 834,834 533,552Fees and licences 104,410 116,818Office expenses and other 577,549 1,076,651

$ 12,597,233 $ 11,928,691


13. INCOME TAXES FROM CONTINUING OPERATIONS

2016 2015

Current income taxes: Based on taxable profits for the year $ 355,607 $ 477,551

Total current income taxes $ 355,607 $ 477,551

Deferred income taxes: Origination and reversal of temporary differences (442,200) (400,797)

Income taxes (recovery) expense $ (86,593) $ 76,754

The following table reconciles income taxes calculated at the Canadian statutory corporation income taxrate with the provision for income taxes:

2016 2015

Income (loss) before income taxes $ (348,164) $ 1,077,291Canadian statutory income tax rate 26.5% 26.5%Income taxes (recovery) based on Canadian statutory income tax rate (92,263) 285,482Utilization of tax losses for which an income tax benefit was not previously recognized (33,538) (145,469)Losses for which an income tax benefit has not been previously recognized (92,754) -Non-deductible items 102,105 (37,962)Prior years’ and other adjustments 29,857 (25,297)

Income taxes (recovery) expense, as reported $ (86,593) $ 76,754

The analysis of deferred income tax assets and deferred income tax liabilities is as follows:

2016 2015

Deferred income tax assets: Deferred income tax assets to be recovered after more than 12 months $ 6,163 $ 120,407Deferred income tax assets to be recovered within 12 months 866,419 324,468

$ 872,582 $ 444,875

Deferred income tax liabilities: Deferred income tax liabilities to be incurred after more than 12 months (9,121) (23,614)Deferred income tax liabilities to be incurred within 12 months - -

(9,121) (23,614)

Net deferred income tax assets $ 863,461 $ 421,261


13. INCOME TAXES FROM CONTINUING OPERATIONS (continued)

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amountsof assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The movementin significant components of the Corporation’s deferred income tax liabilities and assets for the year ended September30, 2016 is as follows:

RECOGNIZED

AS AT IN INCOME AS AT

SEPTEMBER 30, (FROM CONTINUING SEPTEMBER 30,

2015 OPERATIONS) 2016

Deferred income tax assets Unused non-capital tax losses $ 324,468 $ 393,816 $ 718,284Other 27,127 (20,964) 6,163Long-term incentive bonus obligation 93,280 54,855 148,135

Total deferred income tax assets $ 444,875 $ 427,707 $ 872,582

Deferred income tax liabilities Other 23,614 (14,493) 9,121

Total deferred income tax liabilities $ 23,614 $ (14,493) $ 9,121

Net deferred income tax assets $ 421,261 $ 442,200 $ 863,461

RECOGNIZED

AS AT IN INCOME AS AT

SEPTEMBER 30, (FROM CONTINUING SEPTEMBER 30,

2014 OPERATIONS) 2015

Deferred income tax assets Unused non-capital tax losses $ 220,677 $ 103,791 $ 324,468Other 26,196 931 27,127Long-term incentive bonus obligation 54,590 38,690 93,280

Total deferred income tax assets $ 301,463 $ 143,412 $ 444,875

Deferred income tax liabilities Fund management contracts 257,057 (257,057) -Other 23,942 (328) 23,614

Total deferred income tax liabilities $ 280,999 $ (257,385) $ 23,614

Net deferred income tax asset $ 20,464 $ 400,797 $ 421,261

The ultimate realization of deferred tax assets is dependent upon future taxable profits during the periodsin which those temporary differences become deductible. Management considers the expected reversal of deferred taxliabilities and projected future taxable income in making this assessment. Based upon the level of historical taxableincome and projections for future taxable income over the periods in which the deferred tax assets are deductible,management believes it is probable that the Corporation will realize the benefits of these deductible differences.


Deferred income tax assets are recognized for tax losses carried forward to the extent that the realizationof the related tax benefit through future taxable profits is probable. The Corporation did not recognize the deferred incometax assets in respect of taxable losses in subsidiary companies amounting to $2,149,000 (2015 – $1,915,000) thatcan be carried forward against future taxable income.

The non-capital losses expire as follows:

2026 $ 134,0002027 101,0002028 54,0002029 23,0002030 37,0002031 25,0002032 148,0002033 320,0002034 374,000

1,216,000Capital losses 933,000

Total $ 2,149,000

14. FAIR VALUE MEASUREMENTS

Financial instruments are classified based on categories as follows:

FAIR VALUE LOANS AND

THROUGH RECEIVABLE OR

PROFIT OTHER FINANCIAL

OR LOSS LIABILITIES

As at September 30, 2016Restricted cash equivalents $ - $ 802,827 Receivables - 735,847 Proprietary investments 4,097,715 -Other assets - 3,702,573

Total financial assets $ 4,097,715 $ 5,241,247

Payables and accruals $ - $ 2,969,315 Deposits - 125,000Interest of third parties in proprietary investments 1,416,677 -

Total financial liabilities $ 1,416,677 $ 3,094,315

As at September 30, 2015 Receivables $ - $ 401,673Proprietary investments 4,086,354 -Other assets - 10,038

Total financial assets $ 4,086,354 $ 411,711

Payables and accruals $ - $ 3,355,714Interest of third parties in proprietary investments 797,872 -

Total financial liabilities $ 797,872 $ 3,355,714


15. RISK MANAGEMENT

The Corporation’s financial instruments are subject to specific risks as described below.

Market Risk Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interestrates, equity market fluctuations and other relevant market rate or price changes. Market risk is directly influenced bythe volatility and liquidity in the markets in which the related underlying assets are traded.

The Corporation's only substantive financial instrument affected by market risk is its proprietary investments,which consist of capital the Corporation invests in new products in order to ensure their successful introduction into themarketplace.

Products currently consist of managed futures and private debt funds. Consequently, the Corporation isimpacted by both the changing value of the securities in the market, as well as changes in the relative value of foreigncurrencies. There may be some liquidity risk depending on the underlying securities in the funds, however, this is mitigatedthrough the diversification of the funds’ portfolios, regulatory restrictions on investing in illiquid securities and ensuringsecurities acquired are sufficiently liquid in nature. The Corporation holds a significant portion of these investments inUS dollar currency, the Corporation is exposed to foreign exchange risk, and as such the Corporation has entered into aforward currency contract to hedge the risk.

Based on the fair value of the proprietary investments at September 30, 2016, the effect of a 10% increaseor decline in the value of investments would result in approximately a $410,000 (September 30, 2015 - $409,000)unrealized gain or loss on the Corporation’s consolidated statement of income and comprehensive income.

The Corporation holds approximately US $141,000 in cash and cash equivalents as at September 30,2016 (September 30, 2015 - $173,000). Accordingly, the Corporation would not be materially impacted if the US dollarstrengthened or weakened against the Canadian dollar.

Credit Risk Credit risk is the risk that one party to a financial instrument fails to discharge an obligation and causesfinancial loss to another party. The Corporation is exposed to credit risk principally on its receivables which have normalthirty day terms. The majority of the receivables relate to management fees from the funds managed by the Corporationand other trade receivables which are subject to minimal risk. No allowance for bad debts has been recorded.

Approximately 78% of the Corporation's receivables at September 30, 2016 are due within thirty days(September 30, 2015 – 64%). Approximately $3.6 million of loan and receivables have been classified as long term andare expected to be paid within 18 months.

The Corporation is exposed to credit risk of the counterparty of a $3.6 million loan receivable (Note 6).Credit risk is considered to be moderate as the counterparty is a newly formed company acquiring assets in the biomassenergy sector. The loan receivable earns an 8% annual interest. Credit risk is managed by oversight of the counterpartyby actively monitoring credit exposure and the financial health of the counterparty. The Corporation has a first charge onall assets of the counterparty.

The Corporation is exposed to credit risk on its unlisted proprietary investments. These investments comprisethe Corporation’s investment in the IPD Fund V which is managed by the Private Debt Group. The credit risk for theseinvestments is the underlying borrowers of the Funds and their ability to meet their obligations of repayments to theFunds. The Fund’s credit exposure is assessed as the outstanding balance of principal payments as at the reporting dateof the Fund. In order to manage the risk, the Private Debt Group performs a credit analysis through its loan selectionprocess, actively monitors the loans in its loan portfolio, collateralizes the loans with various securities and puts in placeloan covenants which it monitors. As at September 30, 2016 the Corporation’s position in IPD Fund V is $198,389.

The Corporation is exposed to credit risk on the loans issued to employees of the Corporation under theLoan Plan. The Corporation launched the Loan Plan during the fiscal year and as at September 30, 2016 had issued$584,995 in loans to employees for their purchase of 517,695 treasury shares at fair market value of $1.13. TheCorporation is financing the non-recourse loans and credit risk is considered low as shares acquired by the eligible employeesserve as collateral against the loans. As at September 30, 2016 the loans and accrued interest exceeded the fair marketvalue of the collateral shares.

Cash and cash equivalents of the Corporation are held at Canadian Schedule 1 banks.


Liquidity Risk Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet cash flow commit-ments associated with financial instruments. The Corporation has contractual obligations and financial liabilities andtherefore is exposed to liquidity risk. The purpose of liquidity management is to ensure that there is sufficient cash tomeet all financial commitments and obligations as they fall due. The Corporation monitors its current and expected cashflow requirements to ensure it has sufficient cash and cash equivalents to meet its liquidity requirements in the shortand longer terms. To manage cash flow requirements, the Corporation maintains a sizeable cash balance held at CanadianSchedule 1 banks. The Corporation has no outstanding borrowings at September 30, 2016 and 2015 and all payablesand accrued liabilities are due within one year.

Fair Value Hierarchy Fair values are classified as Level 1 when the related security or derivative is actively traded and a quotedprice is available. If an instrument classified as Level 1 subsequently ceases to be actively traded, it is transferred outof Level 1. In such cases, instruments are reclassified into Level 2, unless the measurement of its fair value requires theuse of significant unobservable inputs, in which case it is reclassified as Level 3. There were no transfers between levelsduring the year.

If different levels of inputs are used to measure a financial instrument’s fair value, the classification withinthe hierarchy is based on the lowest level input that is significant to the fair value measurement.

The following tables illustrate the classification of the Corporation’s financial instruments within the fairvalue hierarchy as at September 30, 2016:

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL

Proprietary investments $ 3,899,126 $ 200 $ 198,389 $ 4,097,715Loan Receivable $ - $ - $ 3,600,000 $ 3,600,000Interest of third parties in proprietary investments(a) $ 1,416,677 $ - $ - $ 1,416,677

The following tables illustrate the classification of the Corporation’s financial instruments within the fairvalue hierarchy as at September 30, 2015:

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL

Proprietary investments $ 4,035,814 $ - $ 50,540 $ 4,086,354Interest of third parties in proprietary investments(a) $ - $ 797,872 $ - $ 797,872

The following table represents the Level 3 reconciliation as at September 30, 2016:

UNLISTED

PROPRIETARY LOAN

INVESTMENTS RECEIVABLE

As at September 30, 2014 $ 674,971 $ -Sales (672,209) -Total unrealized gains: included in statement of income 47,778 -

As at September 30, 2015 $ 50,540 $ -

Sales (88,293) -Purchases 198,389 3,600,000Total realized gain: included in statement of income 37,753 -

As at September 30, 2016 $ 198,389(b) $ 3,600,000(c)


15. RISK MANAGEMENT (continued)

(a) The measurement of the fair values of the interest of third parties in proprietary investments is basedon the third parties’ ownership percentage of the net asset value of the proprietary investment. There were no changesin the fair values that are attributable to changes in the credit risk of this liability.

(b) The measurement of the fair value of the unlisted proprietary investments at September 30, 2016 isbased on the share of the IPD Fund V’s drawn capital held by the Corporation. The fair value of the loan portfolio in IPDFund V is based on the present value of the sum of all future contracted interest and principal receipts based on theinterest rates in effect if the loans had been made as of the reporting date of IPD Fund V. The estimated fair values ofall other financial instruments in IPD Fund V approximate their carrying values in IPD Fund V’s balance sheet. If therewas a 10% increase or decrease in the fair value of the loan portfolio, net income would have increased or decreased byapproximately $20,000.

(c) The measurement of the fair value of the loan receivable is based on the outstanding note receivable plusaccrued interest and fees at September 30, 2016. If there was a 10% increase or decrease in the fair value of the loanreceivable, net income would have increased or decreased by approximately $360,000.

16. CAPITAL MANAGEMENT

The Corporation's capital is comprised solely of Shareholders' Equity, as disclosed on the Corporation'sconsolidated balance sheet. The Corporation has no debt and has determined that debt will not be a material componentof its capital structure at this time.

The Corporation's primary objectives when managing capital are:

(i) To maintain financial strength; (ii) To manage liquidity requirements; (i) To provide a sufficient level of shareholders' equity and cash on hand to fund anticipated dividend payments; (iv) To provide financial flexibility to fund product initiatives and possible acquisitions; (v) To maintain compliance with regulatory capital requirements; and, (vi) To maximize returns for shareholders over the long term.

The Corporation's registrations with securities commissions in Canada require it to maintain a minimumlevel of regulatory capital and, as at September 30, 2016 and 2015, the Corporation met its capital requirements.

17. COMMITMENTS

(a) Future minimum annual lease payments under operating leases as at September 30, 2016 are as follows:

2017 $ 874,090 2018 661,582

$ 1,535,672

(b) The Corporation has agreed to indemnify its directors in accordance with its by-laws. The Corporationmaintains insurance policies that may provide coverage against certain claims.

(c) The Corporation made a commitment of $2,000,000 to IPD Fund V, as at September 30, 2016 thefund has drawn $202,000 of that commitment. It is expected that the fund will draw down on the commitments by itsinvestors including the Corporation over a period of up to 36 months.

(d) In September 2016, the Corporation announced the close of its IAM Infrastructure Private Debt Fundin the amount of $347 million. The Corporation made a commitment of $2,000,000 to the fund and it is expected thatthe fund will draw down on the commitments by its investors including the Corporation over a period of up to 36 months.


18. RELATED PARTY TRANSACTIONS

The remuneration of directors and other key management personnel of the Corporation are:


Salaries $ 1,920,530 $ 1,778,742Bonus 642,489 477,568Long-term incentive bonus obligation(a) 207,000 146,000Equity-based compensation(b) 49,303 8,834

Total $ 2,819,322 $ 2,411,144

(a) In October 2012, the Corporation agreed to make long-term incentive bonus payments to one executive,or his estate, to take effect on the earlier of September 30, 2018 or date of cessation of the employment. These paymentswill be applicable for a period of up to 5 years and each annual payment will be a defined percentage of up to 5% of theCorporation’s net after-tax profits in each of those years, subject to a maximum of $500,000 annually.

Depending on the Corporation’s net after-tax profits in the applicable fiscal years (fiscal years 2018 to2022 or earlier if cessation of employment is earlier than September 30, 2017), the Corporation would be obligated tomake payments in aggregate ranging from Nil to a maximum of $2,500,000.

The Corporation accounts for this liability by estimating the present value of the estimated payments tobe made using a discount rate of 7%. The Corporation accrues amounts quarterly, calculated on a straight line basiswhich will accumulate over a five year period, beginning in fiscal 2013, to provide for the estimated liability for futurepayments. $207,000 was expensed in fiscal 2016 and in aggregate, $559,000 was accrued as at September 30, 2016($352,000 at September 30, 2015).

(b) Equity-based compensation is comprised of the value of the stock options and the Loan Plan for keyemployees.

19. CONTINGENCIES AND PROVISIONS

From time to time the Corporation is engaged in litigation arising in the ordinary course of businessincluding claims for additional compensation by former employees. IAM has made provisions based on current informationand the probable resolution of such proceedings and claims. The amount of the losses, if any, cannot be reasonablydetermined at this time.


20. CHANGES IN ACCOUNTING POLICIES

The Company has adopted the following new and revised IFRS Accounting Standards, as issued by theIASB, along with any consequential amendments, effective October 1, 2014.

IAS 36, Impairment of assets – Disclosures, limited scope amendments to disclosure requirements in IAS36, Impairment of Assets. There have been no impact to these financial statements.

IAS 32, Financial instruments – Presentation, amended to clarify requirements for offsetting of financialassets and financial liabilities. There have been no impact to these financial statements.

21. FUTURE CHANGES IN ACCOUNTING POLICIES

The Corporation is currently evaluating the impact that the following new standards issued or amendedby the IASB will have on its financial statements. IAM has not yet determined whether to early adopt any of the newor amended standards.

INTERNATIONAL ACCOUNTING STANDARD EFFECTIVE DATE

IFRS 15 – Revenue from contracts with customers October 1, 2018IFRS 9 – Financial Instruments October 1, 2018IFRS 16 – Leases October 1, 2019

IFRS 15, Revenue from contracts with customers, establishes a single, comprehensive revenue recognitionmodel for all contracts with customers to improve comparability within industries, across industries, and across capitalmarkets. It contains principles that an entity will apply to determine the measurement of revenue and timing of when itis recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or servicesto customers at an amount that the entity expects to be entitled to in exchange for those goods or services. It also containsnew disclosure requirements.

IFRS 9, Financial Instruments (“IFRS 9”), will replace IAS 39 Financial Instruments: Recognition andMeasurement (“IAS 39”). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortizedcost or fair value, replacing the multiple rules presently in IAS 39. The approach in IFRS 9 is based on how an entitymanages its financial instruments in the context of its business model and the contractual cash flow characteristics ofthe financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impair-ment methods in IAS 39.

IFRS 16, Leases (“IFRS 16”), will replace IAS 17. IFRS 16 requires lessees to recognize lease liabilityreflecting future lease payments and a “right-of-use asset” for virtually all lease contracts. The IASB has included anoptional exemption for certain short-term leases and leases of low-value assets.

There are no other IFRS interpretations that are not yet effective that would be expected to have a materialimpact on the financial statements.



Integrated Asset Management Corp.

Victor KoloshukExecutive Chairman

John RobertsonPresident and Chief Executive Officer

Tom FelkaiChief Financial Officer

David MatherExecutive Vice President

Jean-Christophe GreckVice PresidentQuebec

Ginger RothenbergerCorporate Controller

IAM Real Estate

Rick ZagrodnyPresident

David PappinChief Operating Officer

David WarkentinSenior Vice President Investments

Robert BurnsChief Financial Officer

Michael O’SullivanVice PresidentAsset Management

IAM Private Debt

John RobertsonChairman

Philip RobsonPresident

Theresa ShuttChief Investment Officer

Douglas ZinkiewichManaging Directorand Head of InvestmentManagement

Jeff DeaconManaging Director

Greg DimmerManaging Director

Brian KoManaging Director

Andrew ShannonManaging Director

Donald BangayVice-Chair

Frank DuffyVice-Chair

IAM Managed Futures

Roland AustrupChairman, Chief ExecutiveOfficer and ChiefInvestment Officer

David MatherPresident andChief Operating Officer

Robert KoloshukSenior Strategist andDirector of Trading

BOARD OF DIRECTORS

PRINCIPAL OFFICERS

Victor Koloshuk(2)

Executive Chairman Integrated Asset Management Corp.

David Atkins (1) (2)

Corporate Director

Robert Brooks(1)

Corporate Director

John Crocker (1) (2)

Corporate Director

Bruce Day(1) (2)

Corporate Director

Veronika Hirsch(2)

Executive Vice Presidentand Portfolio ManagerArrow CapitalManagement Inc.

David Mather (3)

Executive Vice President Integrated Asset Management Corp.

John RobertsonPresident and ChiefExecutive OfficerIntegrated Asset Management Corp.

(1) Member of the Audit Committee

(2) Member of the Compensation, Nominating and Governance Committee

(3) Secretary of the Corporation

CORPORATE INFORMATION


Auditors

PricewaterhouseCoopers LLP

Stock Listing

TSX:IAM

Corporate Headquarters

70 University AvenueSuite 1200Toronto, OntarioM5J 2M4 Canadat: 416 360 7667f: 416 360 7446e: [email protected]

Transfer Agent

TSX Trust Company


DESIGN: Goodall Integrated Design

INTEGRATED ASSET MANAGEMENT CORP.

70 University Avenue, Suite 1200Toronto, Ontario, Canada M5J 2M4tel: 416 360 7667 fax: 416 360 7446

www.iamgroup.ca

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