b'4. Accounts payable and accrued liabilities: (b) Market risk:Included in accounts payable and accrued liabilitiesEPRA is exposed to financial risk that arises from are government remittances payable of $802,127fluctuations in the sale of consumer electronic (2018 - $628,074), which includes amounts payable forproducts within the provincial regions in which harmonized sales tax. EPRA operates. This risk is minimized by the corresponding decreases in program delivery and 5. Restricted funds: recycling process expenses and by regulation (a) Effectiveness and Efficiency Fund: through each regional Department of the The EPRA Board of Directors established anEnvironment. There has been no change to theEffectiveness and Efficiency Fund to promote bestrisk exposure from 2018.practices for the collection, transportation and(c) Interest rate risk:processing of end-of-life electronics and to ensureEPRA is exposed to interest rate risk arising from the overall continued reduction of the environmentalpossibility that changes in interest rates will affect impact of the EPRA program. the value of fixed income securities held by the The intent of the fund is for the enhancementAssociation. EPRA manages this risk by holding of non-funded program elements, such asGICs and staggering the terms of the investments ensuring that there is adequate capacity toheld. There has been no change to the risk properly handle end-of-life electronics collectedexposure from 2018.through the program, providing improvements to the metrics of the program and ensuring that7. Commitments:best practices are employed for the handlingThe Association has entered into a lease for office of substances of concern. Up to 10% of directpremises. Minimum future payments required under this operational expenses incurred by EPRA may beoperating lease are as follows:transferred to the fund annually when there is an excess of revenue over expenses in the year.2020$97,800(b) Contingency reserve:The EPRA Board of Directors established a8.Subsequent event and contingencies:Contingency reserve to accumulate sufficient funds to ensure stable program operationsSubsequent to December 31, 2019, the COVID-19 continued through variable economic conditions. outbreak was declared a pandemic by the World Health Organization and has had a significant financial, market The targeted amount for the reserve is theand social dislocating impact. At the time of approval equivalent of one year of projected operatingof these financial statements, the entity has experienced costs. All excess of revenue over expenses notthe following indicators of financial implications and used for the purchase of capital assets and afterundertaken the following activities in relation to the transfers to the Effectiveness and Efficiency FundCOVID-19 pandemic.are transferred to the fund until the targeted amount is reached. In a year where an operating Limited accessibility of office facilities from March 24 to deficit occurs, a transfer is made from thethe date of the auditors report based on public health Contingency reserve to the general fund to recommendations; andcover the current year operating deficit.Mandatory working from home requirements for those able to do so.6. Risk management: Management estimates that due to social distancing,(a) Credit risk: the in-store sales of electronics will be decreasing and EPRA is exposed to credit risk that arises fromthe drop-off of end-of-life electronics at collection depots the quality of its stewards. Credit risk arises fromacross the country will also be decreasing as depots the possibility that the registrants of EPRA will bereport reduced hours and or temporary closure. Given unable to fulfill their obligations. EPRA stewardsthat online sales of electronics as well as the eventual are numerous and diverse which reduces thereturn of end-of-life electronics may offset some of the concentration of credit risk. Management closelydecrease, an estimate of the financial effect is not evaluates the collectability to mitigate this risk.practical at this time.There has been no change to the risk exposure from 2018.28 EPRA ANNUAL REPORT 2019'