FINANCIAL STATEMENTS: CONSTRUCTION FOUNDATION OF BC (2012) SOCIETY

Contents

Independent Auditor's Report

To the Members of Construction Foundation of BC (2012) Society

Opinion

We have audited the financial statements of Construction Foundation of BC (2012) Society, which comprise the statement of financial position as at September 30, 2024, and the statements of operations, 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 the Organization as at September 30, 2024, and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for private enterprises.

Basis for opinion

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 Organization 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 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 Canadian accounting standards for private enterprises, 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 Organization'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 Organization or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Organization'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 Organization'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 Organization'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 Organization 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 of British Columbia, we report that, in our opinion, the account principles in the Canadian accounting standards for not-for-profit organizations have been applied on a consistent basis.

Victoria, Canada January 23, 2025

Chartered Professional Accountants

Statement of Operations

Year ended September 30

Statement of Changes in Net Assets

Year ended September 30

Statement of Financial Position

September 30

Commitments (Note 8)

Statement of Cash Flows

Year ended September 30

Notes to the Financial Statements

September 30, 2024

1. Purpose of the Society

Construction Foundation of BC (2012) Society (the "Society") is a not-for-profit organization incorporated under the Societies Act of British Columbia. As a registered charity the society is exempt from the payment of income tax under Section 149(1) of the Income Tax Act.

The Society operates to provide scholarships, bursaries and prizes for scholastic achievement to students pursuing construction trades and apprenticeship programs.

2. Significant accounting policies

The Society has prepared these financial statements in accordance with Canadian Accounting Standards for Not-for-Profit Organizations (“ASNPO”) and include the following significant accounting policies.

Revenue recognition The Society follows the deferral method of accounting for grants and contributions.

Restricted contributions and donations are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions and donations are recognized as revenue when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured.

Interest income generated by term deposits is recognized as revenue when earned.

Use of estimates Management reviews the carrying amounts of items in the financial statements at each balance sheet date to assess the need for revision or any possibility of impairment. Many items in the preparation of these financial statements require management’s best estimate. Management determines these estimates based on assumptions that reflect the most probable set of economic conditions and planned courses of action.

These estimates are reviewed periodically and adjustments are made to net income as appropriate in the year they become known.

Items subject to significant management estimates include the recoverability of accounts receivable, useful life of property and equipment, amount of accrued liabilities, and deferred contributions.

Property and equipment Property and equipment are initially measured at cost and subsequently measured at cost less accumulated amortization. Amortization is provided on a straight-line basis over the estimated useful life of the asset. The amortization rates used for each class of property, plant and equipment are:

• Furniture and fixtures: 3 years
• Leasehold improvements: 3 years
• Computer equipment: 3 years

Impairment of long-lived assets The Society tests long-lived assets for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. An impairment loss is recognized when the carrying amount of the asset exceeds the sum of the undiscounted cash flows resulting from its use and eventual disposition. The impairment loss is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value.

Financial instruments The Society considers any contract creating a financial asset, liability or equity instrument as a financial instrument, except in certain limited circumstances. The Society accounts for the following as financial instruments:

• cash and cash equivalents
• accounts receivable
• short term investments
• payables and accruals

Financial instruments in arm's length transactions

Initial measurement The Society initially measures financial assets and financial liabilities originating, acquired, issued or assumed in arm’s length transactions at fair value.

Subsequent measurement The Society subsequently measures these 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 financial instruments measured at fair value are recognized in net income.

Derecognition The Society removes financial liabilities, or a portion of, when the obligation is discharged, cancelled or expires.

Impairment Financial assets measured at cost or amortized cost are tested for impairment when indicators of impairment exist at the end of the reporting period. Previously recognized impairment losses are reversed to the extent of the improvement provided the financial asset is not carried at an amount, at the date of the reversal, greater than the amount that would have been the carrying amount had no impairment loss been recognized previously. The amounts of any write-downs or reversals are recognized in net income.

Contributed services The operations of the Society depend on the contribution of time and services by various volunteers. The fair value of donated services cannot be reasonably determined and are therefore not reflected in these financial statements.

3. Investments allocation

Included in cash at September 30, 2024 was $228 (2023: $407,461) that was held in the Coast Capital and TD accounts and not yet reinvested. The Coast Capital and TD investment accounts are comprised of the following balances as at September 30, 2024:

4. Accounts receivable

5. Property and equipment

6. Deferred contributions

Contributions received relate to funding from industry and Government sources which has been restricted for the use in specific programs. Restricted contributions are recognized as revenue in the period in which the restrictions on the funding have been met. The balance of deferred contributions at year end represents funding received for programs above the amount that has been spent on those programs to September 30, 2024.

7. Internally restricted net assets

Internally restricted net assets include $200,000 that was approved by the Board on April 6, 2023 for use as a one-time allocation to Donor Advised Funds, within control and management of the CFBC. As of September 30, 2024, $15,000 of the funding was distributed for grants and scholarships.

8. Commitments

The Society's leases office space to support its operations. Future minimum lease payments are as follows:

9. Remuneration

Under the British Columbia Societies Act there is a requirement to disclose the remuneration paid to all directors, and certain employees and contractors who are paid at least $75,000 annually.

During the year, there were seventeen (2023: sixteen) employees and contractors who met this criterion, and the total amount of remuneration paid to these persons was $1,904,286 (2023: $1,775,438), this includes salary, and benefits paid to the employees and contractors.

10. Financial instruments

The Society exposed to the following risks through its financial instruments:

(a) Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Society's main credit risks relate to its accounts receivable and cash. Receivables are generally the result of amounts due from government agencies and other credible organizations. Accordingly, it is management's opinion that the credit risk associated with these amounts are minimal. The Society strives to mitigate the risk associated with cash by maintaining balances in highly liquid accounts or deposits with major Canadian financial institutions. It is management's opinion that there is no significant credit risk as of March 31, 2024.

(b) Liquidity risk Liquidity risk arises from the possibility that the Society might encounter difficulty in settling its debts or in meeting its obligations related to financial liabilities. In the normal course of business, the Society is exposed to liquidity risk. The Society's primary risk management objective is to protect earnings and cash flow in order to support its operations. Risks are managed within limits ultimately established by the Society's Board of Directors and implemented by management.

(c) Market risk Market risk is the risk that the fair value or expected future cash flows of a financial instrument will fluctuate because of changes in market prices. The carrying value of cash, short-term investments, receivables, and payables and accruals approximates fair value due to the relatively short-term maturity of these financial instruments. Unless otherwise noted, it is management's opinion that the Society is not exposed to significant interest, currency or credit risk arising from these financial instruments.