Newfoundland and Labrador Environmental Industry Association Inc.

Financial Statements
October 31, 2021
 Newfoundland and Labrador Environmental Industry Association Inc.
Contents
For the year ended October 31, 2021

Page

Independent Auditor's Report

Financial Statements

.....................................................................................................................................................................................................................................
Statement of Financial Position 1

.....................................................................................................................................................................................................................................
Statement of Revenue and Expenses 2

.....................................................................................................................................................................................................................................
Statement of Changes in Net Assets 3

.....................................................................................................................................................................................................................................
Statement of Cash Flows 4

.....................................................................................................................................................................................................................................
Notes to the Financial Statements 5

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Core operations (Schedule 1) 9
.....................................................................................................................................................................................................................................
Special projects (Schedule 2) 10
Independent Auditor's Report

To the Board of Newfoundland and Labrador Environmental Industry Association Inc.:

Opinion

We have audited the financial statements of Newfoundland and Labrador Environmental Industry Association Inc.
(the "Association"), which comprise the statement of financial position as at October 31, 2021, and the statements of
revenue and expenses, changes in net assets and cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of

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the Association as at October 31, 2021, and the results of its operations and its cash flows for the year then ended in

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accordance with Canadian accounting standards for not-for-profit organizations.

Basis for Opinion

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We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements

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section of our report. We are independent of the Association in accordance with the ethical requirements that are
relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in

appropriate to provide a basis for our opinion.

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accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and

Other Matter
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The financial statement for the year ended October 31, 2020 were audited by another auditor who expressed an

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unmodified opinion on those statements on May 4, 2021.

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Responsibilities of Management and Those Charged with Governance for the Financial Statements

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Management is responsible for the preparation and fair presentation of the financial statements in accordance with
Canadian accounting standards for not-for-profit organizations, and for such internal control as management

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determines is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Association’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Association or to cease operations, or has no realistic
alternative but to do so.

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

ACCOUNTING › CONSULTING › TAX

SUITE 201, 1090 TOPSAIL ROAD, MOUNT PEARL NL, A1N 5E7
T: (709) 747-7777 F: (709) 747-3841 MNP.ca
 Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
Canadian generally accepted auditing standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:

 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.

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 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness

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of the Association’s internal control.

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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates

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and related disclosures made by management.
 Conclude on the appropriateness of management's use of the going concern basis of accounting and, based

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on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Association’s ability to continue as a going concern. If we conclude that a

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material uncertainty exists, we are required to draw attention in our auditor's report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our

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conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future
events or conditions may cause the Association to cease to continue as a going concern.

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

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and whether the financial statements represent the underlying transactions and events in a manner that

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achieves fair presentation.

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We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we

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identify during our audit.

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Mount Pearl, Newfoundland and Labrador

Chartered Professional Accountants

Suite 201, 1090 Topsail Road, Mount Pearl, Newfoundland and Labrador, A1N 5E7
T: (709) 747-7777 F: (709) 747-3841 MNP.ca
 Newfoundland and Labrador Environmental Industry Association Inc.
Statement of Financial Position
As at October 31, 2021

2021 2020

Assets
Current
Cash 455,139 96,495
Accounts receivable (Note 3) 143,411 162,122
Term deposits (Note 4) 100,113 100,394
Prepaid expenses 14,598 3,454
Harmonized sales tax receivable 92,059 152,210

805,320 514,675

Capital assets (Note 5) 15,192 8,233

820,512 522,908

Liabilities
Current
Accounts payable and accruals 9,096 6,139
Deferred contributions (Note 6) 273,826 -
Wages payable 7,322 6,072
Current portion of long-term debt (Note 7) 40,000 -

330,244 12,211

Economic dependence (Note 8)

Net assets
General fund 490,268 510,697

820,512 522,908

Approved on behalf of the Board

{{esl:Signer1:Signature:size(200,40)}} {{esl:Signer2:Signature:size(200,40)}}

Director Director

The accompanying notes are an integral part of these financial statements

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 Newfoundland and Labrador Environmental Industry Association Inc.
Statement of Revenue and Expenses
For the year ended October 31, 2021

2021 2020

Revenue
Grant revenue 1,430,989 1,911,665
Interest income 595 1,421

1,431,584 1,913,086

Expenses
Advertising and promotion 35,278 20,749
Amortization 3,054 2,138
Bad debts 600 1,035
Bank charges and interest 3,448 4,598
Conferences, workshops and seminars 33,689 20,146
Equipment rental - 5,143
Fees and dues 12,130 11,418
Insurance 9,425 2,317
International consultants 317,601 464,303
Office 43,107 10,312
Professional fees 584,919 540,715
Property tax - 2,734
Rent 42,710 33,075
Salaries and benefits 377,447 374,329
Service in-kind - 20,016
Training and education 4,053 54
Travel 4,552 38,232
Utilities - 117

1,472,013 1,551,431

Excess (deficiency) of revenue over expenses before other items (40,429) 361,655

Other income
Government assistance 20,000 -

Excess (deficiency) of revenue over expenses (20,429) 361,655

The accompanying notes are an integral part of these financial statements

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 Newfoundland and Labrador Environmental Industry Association Inc.
Statement of Changes in Net Assets
For the year ended October 31, 2021

General Fund Restricted 2021 2020

Fund

Net assets beginning of year 510,697 - 510,697 149,042

Excess (deficiency) of revenue over expenses (20,429) - (20,429) 361,655

Net assets, end of year 490,268 - 490,268 510,697

The accompanying notes are an integral part of these financial statements

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 Newfoundland and Labrador Environmental Industry Association Inc.
Statement of Cash Flows
For the year ended October 31, 2021

2021 2020

Cash provided by (used for) the following activities

Operating
Excess (deficiency) of revenue over expenses (20,429) 361,655
Amortization 3,054 2,138

(17,375) 363,793
Changes in working capital accounts
Accounts receivable 18,711 (120,734)
Harmonized sales tax receivable 60,151 (114,004)
Prepaid expenses (11,144) 752
Accounts payable and accruals 2,957 (22,138)
Deferred contributions 273,826 (485,231)
Increase in wages payable 1,250 1,214

328,376 (376,348)

Financing
Advances of long-term debt 40,000 -

40,000 -

Investing
Purchase of capital assets (10,013) -

Increase (decrease) in cash resources 358,363 (376,348)

Cash resources, beginning of year 196,889 573,237

Cash resources, end of year 555,252 196,889

Cash resources are composed of:

Cash total 455,139 96,495
Term deposit 100,113 100,394

555,252 196,889

The accompanying notes are an integral part of these financial statements

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 Newfoundland and Labrador Environmental Industry Association Inc.
Notes to the Financial Statements
For the year ended October 31, 2021

1. Incorporation and nature of the organization

Newfoundland and Labrador Environmental Industry Association Inc. (the “Association”) was incorporated without share
capital and is registered as a not-for-profit organization and thus is exempt from income taxes under section 149(1) of the
Income Tax Act.
The Association operates to provide programs promoting the growth and development of the environmental industry in
Newfoundland and Labrador.

Impact on operations of COVID-19 (coronavirus)

In early March 2020 the impact of the global outbreak of COVID-19 (coronavirus) began to have a significant impact on
businesses through the restrictions put in place by the Canadian, provincial and municipal governments regarding travel,
business operations and isolation/quarantine orders.

The Association’s operations were impacted by COVID-19 due to reduced ability to administer its programs.

The impact of COVID-19 has been partially offset by available Government programs for which the Association was eligible.
The Association has received the Canada Emergency Bank Account Loan. See Note 7 for details. Eligibility requirements
under this program has evolved since first announced and can be subject to changes in legislation or administrative
positions, further, there is significant uncertainty of the period of time into the future that the Government will continue these
programs.

At this time, it is unknown the extent of the impact the COVID-19 outbreak may have on the Association as this will depend
on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise
from the inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the
duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may
be put, in place by Canada and other countries to fight the virus. While the extent of the impact is unknown, we anticipate
this outbreak may cause reduced ability to administer programs, and increased government regulations, all of which may
negatively impact the Association’s financial condition.

2. Significant accounting policies

The financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit
organizations set out in Part III of the CPA Canada Handbook - Accounting, as issued by the Accounting Standards Board
in Canada, which are part of Canadian generally accepted accounting principles, and include the following significant
accounting policies:
Cash and cash equivalents
Cash and cash equivalents include balances with banks and short-term investments with maturities of one year or less.
Term deposits
Term deposits consist of Guaranteed Investment Certificates (GICs) that have maturities of one year or more. They are
recorded at cost.
Capital assets
Purchased capital assets are initially recorded at cost.
Amortization is provided using the declining balance method at rates intended to amortize the cost of assets over their
estimated useful lives.

The Association regularly reviews its capital assets to eliminate obsolete items. Government grants are treated as a
reduction of capital assets cost.

Computer equipment 55 %
Furniture and fixtures 20 %

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 Newfoundland and Labrador Environmental Industry Association Inc.
Notes to the Financial Statements
For the year ended October 31, 2021

Revenue recognition
The Association follows the deferral method of accounting for contributions. Restricted contributions are recognized as
revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when
received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured.
Unrestricted investment income is recognized as revenue when earned.
Membership fees are recognized as revenue over the fiscal year to which they relate.

Rental revenue is recognized in the period covered by the rental payment which is on a monthly basis.

Government funding is recognized in the period in which the related expenditures are incurred.

Seminar and luncheon registrations, sponsorships, and event funding are recognized as revenue when received or
receivable.
Deferred contributions
Revenues received and that have been set aside for specific purposes by legislation, regulation or agreement are included
in deferred contributions and reported on the Statement of Financial Position.
Government assistance
Government assistance is recognized when there is reasonable assurance that the Association has complied and will
continue to comply with all the conditions of assistance.
Measurement uncertainty (use of estimates)
The preparation of financial statements in conformity with Canadian accounting standards for not-for-profit organizations
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues
and expenses during the reporting period.
Accounts receivable are stated after evaluation as to their collectability and an appropriate allowance for doubtful accounts
is provided where considered necessary. Amortization is based on the estimated useful lives of capital assets.
By their nature, these judgments are subject to measurement uncertainty, and the effect on the financial statements of
changes in such estimates and assumptions in future years could be material. These estimates and assumptions are
reviewed periodically and, as adjustments become necessary they are reported in excess of revenues over expenses in the
years in which they become known.
Financial instruments
The Association recognizes its financial instruments when the Association becomes party to the contractual provisions of
the financial instrument. All financial instruments are initially recorded at their fair value, including financial assets and
liabilities originated and issued in a related party transaction with management.
At initial recognition, the Association may irrevocably elect to subsequently measure any financial instrument at fair value.
Transaction costs and financing fees directly attributable to the origination, acquisition, issuance or assumption of financial
instruments subsequently measured at fair value are immediately recognized in the excess of revenues over expenses for
the current period. Conversely, transaction costs and financing fees are added to the carrying amount for those financial
instruments subsequently measured at cost or amortized cost.

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 Newfoundland and Labrador Environmental Industry Association Inc.
Notes to the Financial Statements
For the year ended October 31, 2021

3. Accounts receivable
2021 2020

Accounts receivable 57,914 14,382

Accrued funding receivable 85,497 147,798

143,411 162,180

Allowance for doubtful accounts - (58)

143,411 162,122

4. Term deposits
2021 2020

Measured at cost:
Guaranteed investment certificate at an interest rate of 0.15% per annum, maturing May 21, 35,652 35,788
2022
Guaranteed investment certificate at an interest rate of 0.11% per annum, maturing July 11, 6,203 6,178
2022
Guaranteed investment certificate at an interest rate of 0.10% per annum, maturing May 21, 58,258 58,428
2022

100,113 100,394

5. Capital assets
2021 2020
Accumulated Net book Net book
Cost amortization value value

Computer equipment 17,911 16,311 1,600 82

Furniture and fixtures 35,834 22,242 13,592 8,151

53,745 38,553 15,192 8,233

6. Deferred contributions

Revenues received and that have been set aside for specific purposes by legislation, regulation or agreement are included
in deferred revenue and reported on the Statement of Financial Position. Recognition of these amounts as revenue is
deferred to periods when the specified expenditures are made. Changes in the deferred contribution balance are as follows:

2021 2020

Balance, beginning of year - 485,231

Amount received during the year 273,826 -
Less: Amount recognized as revenue during the year - (485,231)

Balance, end of year 273,826 -

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 Newfoundland and Labrador Environmental Industry Association Inc.
Notes to the Financial Statements
For the year ended October 31, 2021

7. Long-term debt
2021 2020

Canada Emergency Bank Account loan, which is interest free until December 31, 2023.
$60,000 was received in total, and of that amount, $40,000 was a loan and $20,000 was
eligible as a non-repayable grant if the principal portion of the loan was repaid by December
31, 2023. 40,000 -

Less: Current portion 40,000 -

- -

Subsequent to year end the Association repaid the loan and as such has recognized the $20,000 grant associated with the
Canada Emergency Bank Account loan in other income in the year.

8. Economic dependence

The Association's primary source of revenue is received from Atlantic Canada Opportunities Agency and the Department of
Tourism, Culture, Industry & Innovation. The Association's ability to continue viable operations is dependent upon
maintaining its compliance with the criteria within the funding agreements. As at the date of these financial statements the
Association believes that it is in compliance with the funding agreement criteria.

9. Financial instruments

The Association, as part of its operations, carries a number of financial instruments. It is management's opinion that the
Association is not exposed to significant interest, currency, credit, liquidity or other price risks arising from these financial
instruments except as otherwise disclosed.
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The
organization is exposed to this risk mainly in respect of its receipt of funds from its customers and other related sources,
long-term debt, and accounts payable.
Credit risk
Credit risk arises from the potential that a counter party will fail to perform its obligations. The organization is exposed to
credit risk from customers. An allowance for doubtful accounts is established based upon factors surrounding the credit risk
of specific accounts, historical trends and other information. The organization has a significant number of customers which
minimizes concentration of credit risk.

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Newfoundland and Labrador Environmental Industry Association Inc.
Core Operations
For the year ended October 31 2021

2021 2020

Revenue
Atlantic Canada Opportunities Agency 170,451 188,462
Cost shared expense recovery 11,756 1,146
Department of Tourism, Culture, Industry and Innovation 149,500 100,000
Interest revenue 595 1,421
Luncheon and seminar registration 45,405 42,166
Membership fees 49,028 50,117
Other revenue 15,652 10,652
Project administration - 19,350
Rental income 24,750 13,146
Sponsorship 54,951 9,514
522,087 435,974

Expenses
Advertising and promotion 5,773 41
Amortization 3,054 2,138
Bank charges and interest 3,404 4,596
Conferences, workshops, seminars 865 7,919
Fees and dues 10,927 9,883
Insurance 9,425 2,317
Municipal taxes - 2,734
Office 38,994 10,091
Professional development 16,042 54
Professional fees 45,756 56,135
Rental 42,710 33,075
Salaries and wages 317,822 317,555
Travel 4,434 5,495
499,206 452,033
Net income (loss) from Core Operations 22,881 (16,059)

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Newfoundland and Labrador Environmental Industry Association Inc.
Special Projects
For the year ended October 31 2021

2021 2020

Revenue
Atlantic Canada Opportunities Agency 386,847 554,074
Canadian Federation of Municipalities 286,044 173,119
Department of Advanced Education, Skills and Labour - 475,428
Department of Tourism, Culture, Industry and Innovation 77,500 124,750
International business company fees 6,000 27,307
Luncheon and seminar registration 534 4,934
Other funding 71,871 -
Sponsorship 80,700 117,500
909,497 1,477,112

Expenses
Advertising and promotion 29,504 20,708
Conferences, workshops, seminars 54 5,955
Fees and dues 1,202 1,535
International consultants 317,601 257,099
Office 19,474 7,183
Professional fees 523,040 691,284
Salaries and wages 65,259 57,274
Services in kind - 19,350
Travel 16,673 39,010
972,807 1,099,398
Net income (loss) from Special Projects (63,310) 377,714

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