PEI Cannabis 2023 Annual Report

PRINCE EDWARD ISLAND CANNABIS MANAGEMENT CORPORATION Notes to Financial Statements Year Ended March 31, 2023

11. RELATED PARTY TRANSACTIONS These financial statements include the results of normal operating transactions with various provincial departments, Crown corporations, and agencies with which the Corporation is related. Operating transactions with related parties, such as insurance of $66,423 (2022 - $61,613) and interest on debentures of $Nil (2022 - $127,112), are recorded at the exchange amount which are rates as determined by the Province of Prince Edward Island. Management and staff of the Prince Edward Island Liquor Control Commission (PEILCC) assisted in the development, management, and ongoing operation of the Corporation. An estimation of the cost of these services has been expensed in various accounts in the amount of $706,824 (2022 - $522,434). Key management received $327,949 (2022 - $270,704) during the period for salaries and benefits. Post-employment benefits are the responsibility of the Province and are not included in these financial statements. The Corporation's employee salaries and benefits are paid by the Province and subsequently reimbursed by the Corporation. Net loss or income incurred during the period is receivable from or payable to the Province. The net income to be paid to the Province at year end is $2,909,096 (2022 - $2,609,580). 12. OTHER OPERATING EXPENSES Other operating expenses include consulting, legal, professional development, bank and credit card fees, and security expenses. Permanent employees of the Corporation participate in the Province of Prince Edward Island Civil Service Superannuation Pension Plan (the Plan) which is a multi-employer contributory defined benefit pension plan. The Plan provides a pension on retirement based on two percent of the average salary for the highest three years times the number of years of pensionable service for service to December 31, 2013, and two percent of the career average salary indexed with cost of living adjustments for service after 2013. Indexing is subject to the funded level of the plan after December 31, 2016. The Plan is administered by the Province of Prince Edward Island. The Corporation's annual portion of contribution's to the Plan of $142,160 (2022 - $134,469) was paid by the Province and is not reflected in these financial statements. Any unfunded liability of the Plan is the responsibility of the Province and therefore no liability has been recognized in these financial statements. For additional information on the Plan, see the Province's consolidated financial statements. Retiring allowance The Corporation provides a retirement allowance to its permanent employees. The amount paid to eligible employees at retirement is based on the number of years of service and the rate of pay in effect at the retirement date. The benefit costs and liabilities related to the allowance are assumed by the Province and are not included in these financial statements. (continues) 13. EMPLOYEE BENEFITS Pension benefits

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PEICMC 2022-2023 Annual Report

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