Ontario Grain Farmer October 2021

27 ONTARIO GRAIN FARMER OCTOBER 2021 6. LIABILITY TO PRODUCERS The liability to producers represents the final payment per pool. The final payment is approved by the Board of Directors of Grain Farmers of Ontario. 2020 2020 Wheat pool A — Soft White $ 0 $ 932 Wheat pool B — Hard Red Winter 2,380 8,077 Wheat pool C — Hard Red Spring 14,588 31,033 Wheat pool E and F — Soft Red and Common Red 89,939 66,898 Wheat pool G — Wheat Graded Feed 0 4,573 $ 106,907 $ 111,513 7. CREDIT FACILITIES The association can borrow to fund operations under its operating line, which bears interest at CIBC prime. The available operating line fluctuates during the year, depending on the need for funds, and $nil was available at May 31, 2021. The association has pledged investments valued at a minimum of $5 million as security on this operating line, in addition to the general security agreement on the facility. The operating line was not utilized at year end. 8. INITIAL PAYMENT GUARANTEE The initial payment to producers participating in the pools is guaranteed by the federal government under the Agricultural Marketing Programs Act. 9. WHEAT MARKETING FUND The balance after wheat acquired is mainly the result of basis and hedging gains and losses on cash forward contracts. Futures are sold to hedge the association's position on the cash forward contracts. The nature of the wheat marketing program will result in residual gains or losses in the cash forward contracting for cash account. The association has determined that gains should be set aside as a reserve to offset future losses. 10. EMPLOYEE BENEFITS The association offers a defined contribution post retirement benefit plan to its employees. The total expense for the association's defined contribution plan is $159,370 (2020 - $152,647). 11. BUDGET FIGURES The budgeted figures are presented for comparison purposes as prepared and approved by the Board. They have not been audited or reviewed by the auditor. 12.ADDITIONAL INFORMATION TO THE STATEMENT OF CASH FLOWS Net Change in non cash working capital 2021 2020 Change in accounts receivable $ 132,656 $ (51,313) Change in prepaid expenses (21,524) 117,679 Change in inventory (94,111) (37,773) Change in open hedge position, current crop year 46,069 0 Change in open hedge position, future crop year 1,268 102,237 Change in accounts payable and accrued liabilities 301,783 (641,230) Change in government remittances payable (21,185) 20,903 Change in deferred revenue 5,640 16,249 Change in deferred hedge revenue (100,245) (145,845) Change in liability to producers (4,606) (161,064) $ 245,745 $ (780,157) 13. CONTRACTUAL OBLIGATIONS The minimum amounts payable under long term operating leases and contracts, exclusive of certain operating costs, including the net research project and market development commitments for which the association is responsible to fund, are as follows: 2022 $ 2,376,902 2023 1,289,966 2024 363,638 2025 172,032 2026 90,313 4,292,851 Thereafter 21,563 $ 4,314,414 14. GENERAL FUND BALANCES The general fund is comprised of the following net asset balances at year end: 2021 2020 Unrestricted net assets $ 11,233,186 $ 9,743,494 Net assets invested in capital assets 4,753,277 5,039,777 Total General Fund net assets $ 15,986,463 $ 14,783,271 15. INVESTMENTS Investments are comprised of a number of individual portfolios all holding low risk investments in accordance with the Farm Products Marketing Act. Investments held in these portfolios include investment savings accounts and guaranteed investment certificates, maturities ranging from November 2021 to April 2024, with interest rates ranging from 0.8% to 3.6%. 16.MATERIAL UNCERTAINTY DUE TO COVID-19 During the year and subsequent to year end, the Novel Coronavirus (COVID-19) significantly impacted the economy in Canada and globally. This global pandemic has disrupted economic activities and has resulted in the organization cancelling events and gatherings. Although the disruption from the virus is expected to be temporary, given the dynamic nature of these circumstances, the duration of business disruption and the related financial impact cannot be reasonably estimated at this time. Further, the timing and amounts realized on the organization’s assets as well as its future ability to deliver all programming may be impacted by the evolving circumstances of the virus. 17. SUBSEQUENT EVENTS Subsequent to year end, on June 1, 2021, the organization discontinued its wheat trading activities. The organization is working with the Farm Products Marketing Commission to amend the regulations to the Farm Products Marketing Act to remove the restrictions relating to the Wheat Marketing Fund.