28 EPRA ANNUAL REPORT 2017 5. Accounts payable and accrued liabilities: Included in accounts payable and accrued liabilities are government remittances payable of $826,361 (2016 – $518,640), which includes amounts payable for harmonized sales tax. 6. Restricted funds: (a) Effectiveness and Efficiency Fund: The EPRA Board of Directors established an Effectiveness and Efficiency Fund to promote best practices for the collection, transportation and processing of end-of-life electronics and to ensure overall continued reduction of the environmental impact of the EPRA program. The intent of the fund is for the enhancement of non-funded program elements, such as ensuring that there is adequate capacity to properly handle end-of-life electronics collected through the program, providing improvements to the metrics of the program and ensuring that best practices are employed for the handling of substances of concern. Up to 10% of direct operational expenses incurred by the EPRA may be transferred to the fund annually when there is an excess of revenue over expenses in the year. (b) Contingency Fund: The EPRA Board of Directors established a Contingency Fund to accumulate sufficient funds to ensure stable program operations continued through variable economic conditions. The targeted amount for the fund is the equivalent of one year of projected operating costs. All excess of revenue over expenses not used for the purchase of capital assets and after transfers to the Effectiveness and Efficiency Fund are transferred to the fund until the targeted amount is reached. In a year where an operating deficit occurs, a transfer is made from the Contingency Fund to the general fund to cover the current year operating deficit. 7. Risk management: (a) Credit risk: The EPRA is exposed to credit risk that arises from the quality of its stewards. Credit risk arises from the possibility that the registrants of the EPRA will be unable to fulfill their obligations. The EPRA stewards are numerous and diverse which reduces the concentration of credit risk. Management closely evaluates the collectability to mitigate this risk. There has been no change to the risk exposure from 2016. (b) Market risk: The EPRA is exposed to financial risk that arises from fluctuations in the sale of consumer electronic products within the provincial regions in which the EPRA operates. This risk is minimized by the corresponding decreases in program delivery and recycling process expenses and by regulation through each regional Department of the Environment. There has been no change to the risk exposure from 2016. (c) Interest rate risk: The EPRA is exposed to interest rate risk arising from the possibility that changes in interest rates will affect the value of fixed income securities held by the Association. EPRA manages this risk by holding GICs and staggering the terms of the investments held. There has been no change to the risk exposure from 2016. 8. Commitments: The Association has entered into a lease for office premises. Minimum future payments required under this operating lease are as follows: 2018 $ 195,700 2019 195,700 2020 97,800 $ 489,200