VANCOUVER ISLAND SOUTH FILM & MEDIA COMMISSION FINANCIAL STATEMENTS December 31, 2024

VANCOUVER ISLAND SOUTH FILM & MEDIA COMMISSION INDEX TO FINANCIAL STATEMENTS

Year ended December 31, 2024

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INDEPENDENT AUDITOR'S REPORT

200-1137 Yates Street. Victoria, BC V8V 3N1 127-2745 Veterans Memorial Parkway, Victoria, BC V9B 0H4 T 250 381 2400 F 250 381 1816

To: The Members of Vancouver Island South Film & Media Commission

Qualified Opinion

We have audited the financial statements of Vancouver Island South Film & Media Commission (the Commission), which comprise the statement of financial position as at December 31, 2024, and the statements of changes in net assets, operations and cash flow for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying financial statements present fairly, in all material respects, the financial position of Vancouver Island South Film & Media Commission as at December 31, 2024 and its results of operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations (ASNPO).

Basis for Qualified Opinion

In common with many not-for-profit organizations, the Commission derives revenue from fundraising activities, the completeness of which is not susceptible to satisfactory audit verification. Accordingly, verification of these revenues was limited to the amounts recorded in the records of the Commission. Therefore, we were not able to determine whether any adjustments might be necessary to fundraising revenue, excess of revenues over expenses, and cash flows from operations for the years ended December 31, 2024 and 2023, current assets as at December 31, 2024 and 2023, and net assets as at December 31, 2024 and 2023. Our audit opinion on the financial statements for the year ended December 31, 2024 was modified accordingly because of the possible effects of this limitation in scope.

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 section of our report. We are independent of the Commission 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 accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with ASNPO, and for such internal control as management 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 Commission'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 Commission or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Commission's financial reporting process.

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.
• 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 of the Commission's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Commission's ability to continue as a going concern. If we conclude that a 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 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 Commission to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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 identify during our audit.

Report on Other Legal and Regulatory Requirements

As required by the Societies Act (British Columbia), we report that, in our opinion, the accounting principles in Canadian accounting standards for not-for-profit organizations have been applied on a basis consistent with that of preceding year.

Victoria, British Columbia September 15, 2025

Chartered Professional Accountants

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VANCOUVER ISLAND SOUTH FILM & MEDIA COMMISSION

STATEMENT OF FINANCIAL POSITION

December 31, 2024

APPROVED BY THE BOARD

__________________________________ Director (First signature)

__________________________________ Director (Second signature)

See accompanying notes

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VANCOUVER ISLAND SOUTH FILM & MEDIA COMMISSION

STATEMENT OF CHANGES IN NET ASSETS

Year ended December 31, 2024

See accompanying notes

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VANCOUVER ISLAND SOUTH FILM & MEDIA COMMISSION

STATEMENT OF OPERATIONS

Year ended December 31, 2024

See accompanying notes

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VANCOUVER ISLAND SOUTH FILM & MEDIA COMMISSION

CASH FLOW STATEMENT

Year ended December 31, 2024

See accompanying notes

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VANCOUVER ISLAND SOUTH FILM & MEDIA COMMISSION

NOTES TO THE FINANCIAL STATEMENTS

December 31, 2024

1. PURPOSE OF THE COMMISSION

Vancouver Island South Film & Media Commission (the "Commission") is incorporated provincially under the Society Act of British Columbia. As a not-for-profit organization, under Section 149(1) of the Income Tax Act, the Commission is exempt from the payment of income tax.

The Commission's principal activity is to market the South Island area to the film, television, and commercial industry.

2. ACCOUNTING POLICIES

(a) Basis of presentation

These financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations (ASNPO).

(b) Fund accounting

The General Fund reports the revenue and expenses related to administrative and operational activities.

The Internally Restricted Fund is an internally restricted fund that has been established to finance promotional activities, trade shows, human resources, and future capital asset acquisitions.

(c) Cash and cash equivalents

Cash and cash equivalents include cash on hand and highly liquid investments with maturities of three months or less from their date of acquisition, which are readily convertible into a known amount of cash, and are subject to an insignificant risk to changes in their fair value. Long-term portion of cash and cash equivalents include restricted cash received from grant income expected to be used greater than one year after fiscal year end.

(d) Revenue recognition

The Commission follows the deferral method of accounting for contributions. Restricted contributions and sponsorships are recognized as revenue in the year in which the related expenditures are incurred. Unrestricted contributions and sponsorships are recognized as revenue when received or receivable and when the amount to be received can be reasonably estimated and collection is reasonably assured.

Endowment contributions are recognized as direct increases in net assets.

Membership dues are recognized in the year to which they apply. Revenue from events is recognized when the event occurs.

(e) Contributed goods and services

Contributed goods and services are recorded at their fair market value at the time of contribution. During the year, the Commission did not receive any contributed goods and services (2023 - $400), which is reflected in these financial statements. This excludes contribution of time by volunteers, the fair market value of which cannot be reasonably determined.

(f) Tangible capital assets

Tangible capital assets are recorded as an expense in the year they are acquired. Major categories of capital assets held by the Commission are computers, office furniture and equipment. The amount of capital assets expensed during the year is $0 (2023 - $2,858).

(g) Financial instruments

The Commission initially measures its financial assets and liabilities at fair value. The Commission subsequently measures all its financial assets and financial liabilities at amortized cost, except for investments in equity instruments that are quoted in an active market, which are measured at fair value. Changes in fair value are recognized in the statement of operations. The Commission has not designated any financial asset or financial liability to be measured at fair value. Transaction costs on the acquisition, sale, or issue of financial instruments are expensed when incurred for financial instruments which are measured at fair value.

Financial assets measured at amortized cost include cash and cash equivalents, short-term investments, accounts receivable, and goods and services tax recoverable.

Financial liabilities measured at amortized cost include accounts payable and accrued liabilities, and employee deductions payable.

(h) Measurement uncertainty

The preparation of financial statements in accordance with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Such estimates are periodically reviewed and any adjustments necessary are reported in income in the period in which they become known. Actual results could differ from these estimates.

Significant estimates include establishing the fair value of accounts receivable and accrual of liabilities.

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3. SHORT-TERM INVESTMENTS

Short term investments consist of cashable guaranteed investment certificates (GICs) invested as follows:

4. BANK INDEBTEDNESS

The Commission has an authorized line of credit facility to a maximum of $50,000 with Royal Bank of Canada. The loan is secured by a General Security Agreement and bears interest at the bank's prime rate. As at December 31, 2024, the Commission has not drawn against this facility (2023 - nil).

5. DEFERRED REVENUE

The deferred revenue balance consists of externally restricted grants received that have not yet been spent and membership fees received in advance for future years.

There were no externally restricted grants received in 2024 or 2023.

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6. CASH AND CASH EQUIVALENTS

Cash and cash equivalents are comprised of the following:

Effective December 31, 2018, the VISFMC board of directors restricted $30,000 to provide for promotional activities including trips to trade shows, the hiring of a summer student, future operations, and future capital asset acquisitions. In this fiscal year these funds were spent for the transition of the film commissioner.

7. REMUNERATION OF EMPLOYEES, CONTRACTORS AND DIRECTORS

The British Columbia Societies Act requires the disclosure of remuneration paid to all directors, the ten highest paid employees and all contractors who are paid over $75,000 annually. During the current year the Society had no employees with annual remuneration greater than $75,000. In prior year there was one employee and the total paid to the employee in 2023 was $83,095.

8. RELATED PARTY TRANSACTIONS

Related party transactions consist of cash donations as well as contributed goods and services received from companies significantly influenced by Directors of the Commission. The contributed goods and services are also recorded in the financial statements as expenses.

Related party transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

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9. ECONOMIC DEPENDENCE

The Commission derives approximately 83% (2023 - 83%) of its revenue from different levels of government. Should these government bodies substantially reduce their funding, management is of the opinion that continued viable operations would be doubtful.

10. FINANCIAL INSTRUMENTS

The Commission is exposed to various risks through its financial instruments and has a comprehensive risk management framework to monitor, evaluate, and manage these risks. The following analysis provides information about the Commission's risk exposure and concentration as of December 31, 2024.

(a) Liquidity risk

Liquidity risk is the risk that the Commission may not be able to meet its obligations. The Commission is exposed to this risk mainly in respect of its receipt of funds from its funding partners and sponsors and accounts payable. The Commission has a comprehensive plan in place to meet their obligations as they come due which is primarily from cash flow from operations.

(b) Credit risk

Credit risk is the risk that one party to a transaction will fail to discharge an obligation and cause the other party to incur a financial loss. Credit risk arises from the potential that a counter party will fail to perform its obligations. The Commission does not extend credit to its members or customers.

(c) Market risk

Market risk is the risk that the fair value of a financial instrument will fluctuate as a result of changes in market prices, whether the factors are specific to the instrument or all instruments traded in the market. The Commission does not have any financial instruments which are traded on the market.

(d) Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Commission does not have any cash, accounts receivable or accounts payable held in foreign currency.

(e) Interest rate risk

The Commission is exposed to interest rate risk. Interest rate risk is the risk that the Commission has interest rate exposure on its bank indebtedness, which are variable based on the bank's prime rates. This exposure may have an effect on its earnings in future periods. The Commission does not use derivative instruments to reduce its exposure to interest rate risk. In the opinion of management the interest rate risk exposure to the Commission is not material.

(f) Price risk

Price risk is the risk that the commodity prices that the Commission charges are significantly influenced by its competitors and the commodity prices that the Commission must charge to meet its competitors may not be sufficient to meet its expenses. The management closely monitors expenses and matches capital outlays to its revenue streams. In the opinion of management the price risk exposure to the Commission is not material.

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11. LEASE COMMITMENTS

The Commission has a long-term lease with respect to its premises. The rent is calculated at $1,200 plus GST per month with the lease expiring on August 31, 2027. Future minimum lease payments are as follows: