July 21, 2015 Erica Hamilton Commission Secretary British ......../SPUCL Gas Annual Report F2015 Cover Let.docx Sun Peaks Utilities Co., Ltd. 1280 Alpine Road, Sun Peaks, British Columbia,

../SPUCL Gas Annual Report F2015 Cover Let.docx Sun Peaks Utilities Co., Ltd.

1280 Alpine Road, Sun Peaks, British Columbia, V0E 5N0 T: 250-578-5490 / F: 250-578-7223 / E-mail: [email protected]

www.sunpeaksutilities.com

July 21, 2015 Erica Hamilton Commission Secretary British Columbia Utilities Commission Box 250, 6th Floor, 900 Howe Street Vancouver, BC V6Z 2N3

Via E-mail: [email protected] Dear Madam, Re: Sun Peaks Utilities Co., Ltd. ("SPUCL") Fiscal 2015 Gas Utility Annual Report Please find attached a copy of the Sun Peaks Utilities’ Gas Annual Report for Fiscal 2015 (year ending April 30, 2015). A copy of this report will be available in the Utility’s office and posted on the Utility’s web site located at www.sunpeaksutilities.com for our customers to review. I trust that this information is what the Commission requires. However, should you have any further questions or comments, please contact the undersigned at 250-578-5416 or [email protected]. Sincerely, Sun Peaks Utilities Co., Ltd.

P.A. (Pat) Miller Director, Utility Services Attached: Appendix A – Gas Utility Financial Statements Appendix B – Gas Cost Reconciliation Account (GCRA) May 1, 2014 to April 30, 2015 Appendix C – Sun Peaks Utilities’ Financial Statements as revised by PriceWaterhouseCoopers.

mailto:[email protected]

http://www.sunpeaksutilities.com/




Table of Contents Appendix A – Gas Utility Financial Statements ........................................................................ 3

Schedule 1 – Statement of Revenues and Expenses ................................................................... 4

Schedule 1A – Reconciliation of Net Income to Year End Financial Statements reviewed by PriceWaterhouseCoopers ............................................................................................................ 5

Schedule 2 – Sales Revenue – Propane ...................................................................................... 6

Schedule 3 – Customer and Consumption – Propane ................................................................. 7

Schedule 4 – Sales Rates – Propane ........................................................................................... 8

Schedule 5 – Gross Profit – Propane .......................................................................................... 9

Schedule 6 – Gas Plant, Other Capital & Amortization – Propane .......................................... 10

Schedule 7 – Gas Cost Reconciliation Account (GCRA) – Propane........................................ 11

Appendix B – Gas Cost Reconciliation Account (GCRA) ....................................................... 13

Appendix C – Sun Peaks Utilities Financial Statements ......................................................... 16

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Appendix A – Gas Utility Financial Statements

Page 3 of 41



Schedule 1 – Statement of Revenues and Expenses

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Sun Peaks Utility Co., Ltd.Gas Annual Report for Fiscal 2015Prepared July 7/15

Schedule 1

Statement of Revenues and ExpensesDifference

Year ended April 30th 2014 2015 2014/ 2015

Annual consumption (GJ) Sch 3 78,078 72,271 (5,807)

Total revenues Sch 5 1,567,587 1,836,346 268,759 Cost of Sales Sch 5 Cost of Gas 1,120,426 1,401,123 280,698 Cost of Service & Meter Installations 7,600 11,400 3,800 Cost of Grid Extension - - - Gross Profit 439,561 423,823 (15,739)

Operations and MaintenanceWages & benefits 90,180 83,140 (7,039) Training 1,521 1,130 (391) Utilities & Supplies 5,075 5,165 90 Contract work - Distr. System Maintenance 20,579 8,568 (12,011) Contract work - General & Administrative 3,927 6,722 2,795 Office Rental 2,100 2,100 - Equipment Leases 1,773 1,052 (721) Transportation 12,200 10,048 (2,151) General Insurance 8,669 11,703 3,033 Regulatory - - - Office & Administration 21,860 18,834 (3,026) Bad Debt expense 3,564 4,297 734 Permits, Property & Utility Taxes 22,990 23,580 590

SPUCL Operations and Maintenance costs 194,436 176,338 (18,097)

Billing, Repairs and Maintenance - FortisBCBasic Charge allocation to O&M costs 148,800 149,373 574 Delivery Charges - - - FortisBC Gas Plant O&M charge 56,144 56,144 - FortisBC Distribution O&M charge 36,937 36,905 (31) Less Operating Credit (12,400) (13,600) (1,200)

FortisBC O & M Charges 229,480 228,822 (658)

Total Operations & Maintenance 423,916 405,161 (18,755)

Earnings before interest, taxes & amortization EBITA 15,646 18,662 3,017 Amortization Sch 6 3,423 3,934 511

Net Income Before Tax 12,223 14,728 2,506

Income Taxes @ Statutory tax rate per F/S 26.00% 26.00% 0.00%Income Tax Provision 3,178 3,829 652

Net Income 9,045 10,899 (5,406)

Page 5 of 41

Schedule 1A – Reconciliation of Net Income to Year End Financial Statements reviewed by PriceWaterhouseCoopers

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Schedule 1A

Reconciliation of Net Income to Year End Financial Statements*

Year ended April 30th 2014 2015

Net income (loss) per Schedule 1 of the BC UtilitiesCommission Annual Report 9,045 10,899

Add Amortization per Sch 1 and Sch 6 3,423 3,934 Less Amortization per Price Waterhouse Coopers reviewed financial statements:

Property and equipment (9,304) (9,498) Deferred charges - -

Add back income tax provision per Schedule 1 3,178 3,829 Rounding - -

Income (loss) before income taxes per financialstatements reviewed by Price Waterhouse Coopers,Schedule 1, Gas Division 6,342 9,164

* April 30, 2014 and 2015 year end financial statements reviewed by PriceWaterhouse Coopers, Schedule 1, Gas Division.

Page 7 of 41

Schedule 2 – Sales Revenue – Propane

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Schedule 2

Sales Revenue - PropaneDifference


Gas Sales RevenueGroup 1 residential

Basic charges 185,994 186,876 882 Delivery charges 86,638 76,339 (10,299) Commodity charges 499,806 597,971 98,165

Group 2 small commercialBasic charges 7,200 7,200 - Delivery charges 17,807 16,121 (1,686) Commodity charges 102,723 126,760 24,037

Group 3 large commercialBasic charges 15,840 15,840 - Delivery charges 107,819 104,864 (2,955) Commodity charges 517,890 676,921 159,031

TotalsBasic charge revenue 209,034 209,916 882 Delivery charge revenue 212,264 197,324 (14,940) Commodity revenue 1,120,419 1,401,652 281,233

Total 1,541,717 1,808,892 267,175

Average gas sales revenue per GJ $19.75 $25.03 $5.28Average rate change from previous year -15.9% 26.8%

Gas Sales Revenue by Rate GroupGroup 1 residential 772,438 861,186 88,748 Group 2 small commercial 127,730 150,081 22,351 Group 3 large commercial 641,549 797,625 156,076

Total 1,541,717 1,808,892 267,175

Page 9 of 41

Schedule 3 – Customer and Consumption – Propane

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Schedule 3

Customers & Consumption - Propane

Year ended April 30th 2014 2015

Average consumption by Rate GroupGroup 1 residential # customers, avg over year 859 865 Total avg annual usage (Gj) 40.5 35.5 Group 2 small commercial # customers, avg over year 20.0 20.0 Total avg annual usage (Gj) 358 324 Group 3 large commercial # customers, avg over year 11.0 11.0 Total avg annual usage (Gj) 3,281 3,191

Change in average consumption by Rate Group (Gj)Group 1 residential 9.8% -12.4%Group 2 small commercial 2.5% -9.5%Group 3 large commercial 7.9% -2.7%

Annual consumption by Rate Group (Gj)Group 1 residential 34,830 30,689 Group 2 small commercial 7,158 6,481 Group 3 large commercial 36,090 35,101

Total 78,078 72,271

# Customers, end of yearGroup 1 residential 862 867 Group 2 small commercial 20 20 Group 3 large commercial 11 11

Total 893 898

Customer AdditionsResidential Cust. Additions 6 5 Small commercial. Cust. Additions - - Large commercial. Cust. Additions - -

Total 6 5

Page 11 of 41

Schedule 4 – Sales Rates – Propane

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Sun Peaks Utility Co., Ltd.Gas Annual Report for Fiscal 2015Prepared July 7/15 Schedule 4Sales Rates - Propane

Year ended April 30th 2014 2015Propane Service Fees

Application fees $85.00 $85.00Account turnover 6.3% 5.7%Service line installation - Res. & Sm. Com. $1,980.00 $1,980.00Service line installation - Lg. Com., dependent on site requirements - - Meter Set - Standard Residential $528.00 $528.00Meter Set - Small & Large Commercial, dependent on load - -

RatesGroup 1 residential

Basic charge per month $18.00 $18.00Delivery charge per Gj (at April 30) $2.4875 $2.4875Commodity charge per Gj (average for year) 14.35 19.39

Group 2 small commercialBasic charge per month $30.00 $30.00Delivery charge per Gj (at April 30) $2.4875 $2.4875Commodity charge per Gj (average for year) $14.35 $19.39

Group 3 large commercialBasic charge per month $120.00 $120.00Delivery charge per Gj (at April 30) $2.9875 $2.9875Commodity charge per Gj (average for year) $14.35 $19.39

Cost of Gas SalesCredits to Gas Cost Recovery Account Commodity Cost for Propane /Gj $11.000 $18.639 Commodity Charge for Storage /Gj $3.3500 $1.2868

Percentage of Basic Charge revenue credited to GCRA 0.0% 0.0% FortisBC Administration charge per Gj (ended Aug 31/08) $0.00 $0.00FortisBC (formerly Terasen) Charges

Residential Customer Basic Charge $13.90 $13.89Small Commercial Customer Basic Charge $13.90 $13.89Large Commercial Customer Basic Charge $13.90 $13.89

Gas Price History, as at April 30Commodity Charge History (per Gj) Start Feb 1/13 Start Jul 1/14

Storage facility 3.3500 1.2868 Commodity price 11.0000 16.5600 GCRA recovery - 2.0790 Total gas Commodity Charge 14.3500 19.9258 Residential delivery charge (Lg Com + $.50) 2.4875 2.4875 Total selling price per Gj at April 30 (Lg. Com + $.50) 16.8375 22.4133

Residential Delivery Charge History (per Gj) Start Feb 1/13 Start Feb 1/13SPUCL delivery charge 2.4875 2.4875

Year Over Year price change per Gj as at April 30Total gas Commodity Charge No change 5.5758 Residential delivery charge No change No changeChange in Total selling price per Gj at April 30 No change 5.5758

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Schedule 5 – Gross Profit – Propane

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Sun Peaks Utility Co., Ltd.Gas Annual Report for Fiscal 2015Prepared July 7/15 Schedule 5

Gross Profit - PropaneDifference


RevenuesGas Sales Revenue (Sch 2) Basic charge revenue 209,034 209,916 882 Delivery charge revenue 212,264 197,324 (14,940) Commodity revenue 1,120,419 1,401,652 281,233

Total Gas Sales Revenue 1,541,717 1,808,892 267,175

Other Revenues: Application fees 5,270 4,760 (510) Service Line & Meter Installations 10,032 15,048 5,016 Grid Extensions - - - Late Payment Fees 5,105 8,687 3,582 Other Revenues 5,463 (1,041) (6,504)

Total Revenue 1,567,587 1,836,346 268,759

Cost of Sales

Cost of Gas Sales FortisBC Residential basic charge 143,629 144,206 577 FortisBC Sm Commercial basic charge 3,336 3,334 (2) FortisBc Lg. Commercial basic charge 1,835 1,833 (2) Less: allocation to O & M (148,800) (149,373) (574) Propane/Gas Cost Recovery Charges -

Commodity Charge for Propane 858,862 1,293,912 435,049 Commodity Charge for Storage 261,563 107,212 (154,351)

Cost of Gas Sales 1,120,426 1,401,123 280,698

Administration Charges - - -

Total Cost of Gas 1,120,426 1,401,123 280,698

Average gas cost per Gj sold 14.35 19.39 5.04

Cost of Service Line & Meter Installations 7,600 11,400 3,800 Cost of Grid Extension - -

Total Cost of Sales 1,128,026 1,412,523 284,498

Gross Profit 439,561 423,823 (15,739)

Page 15 of 41

Schedule 6 – Gas Plant, Other Capital & Amortization – Propane

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Schedule 6

Gas Plant, Other Capital & Amortization - Propane

Year ended April 30th 2012 & Prior 2013 2014 2015

Gas Plant Additions FundingPropane Plant Improvements SPUCL 24,395 - - - Service Line Installations Customers 490,992 9,689 6,000 9,000 Service Line & Valve Installations SPUCL 11,077 - 3,000 - Meter connections Customers 269,475 2,000 1,600 2,400 Meter replacement SPUCL 35,869 - - - Grid extensions SPRC 646,859 - - - Sun Peaks Rd Main Replacement SPUCL 72,242 - - -

Gas Plant Additions for year 1,550,909 11,689 10,600 11,400 Amortization (Net of Contributions)

Propane Plant Improvements 35 yrs. 8,364 697 697 697 Service Lines & Valves 70 yrs. 457 158 180 201 Meters 35 yrs. 11,834 1,025 1,025 1,025 Sun Peaks Rd Main Replacement 70 yrs. 9,288 1,032 1,032 1,032

29,943 2,912 2,934 2,955 End of Year Gross Plant cost to date

Propane Plant 24,395 24,395 24,395 24,395 Service Lines 502,069 511,758 520,758 529,758 Meters 305,344 307,344 308,944 311,344 Mains & Grid Extensions 719,101 719,101 719,101 719,101

End of Year Gross Plant cost to date 1,550,909 1,562,598 1,573,198 1,584,598 End of Year Contributions in Aid to Gas Plant

Service Line Installations 490,992 500,681 506,681 515,681 Meters 269,475 271,475 273,075 275,475 Mains & Grid Extensions 646,859 646,859 646,859 646,859

End of Year Contributions 1,407,326 1,419,015 1,426,615 1,438,015 End of Year Net Gas Plant funded by SPUCL

Propane Plant 16,031 15,334 14,637 13,940 Service Lines 10,620 10,461 13,282 13,081 Meters 24,035 23,010 21,985 20,960 Mains 62,954 61,922 60,890 59,858 End of Year Net Gas Plant A 113,640 110,727 110,794 107,839

Other Capital Additions CostGas Plant fencing $4,893 - - 4,893 - Other Capital Additions - - - -

Other Capital Additions - - 4,893 - End of Year Gross Other Capital - - 4,893 4,893 Less: Amortization

Gas Plant fencing 5 yrs. - - 489 979 Other Capital Additions 5 yrs. - - - -

Other Amortization total - - 489 979 Amortization total for year 2,912 3,423 3,934 End of Year Net Other Capital B - - 4,404 3,425 Ending GCRA Balance C 107,376 (133,945) 292,903 137,765 Working Capital (Avg. 3 Mo. Lag) D 40,117 40,310 48,609 44,085 End of Year Net Capital Employed A+B+C+D 261,133 17,092 456,709 293,113 Amortization for year 2,901 2,912 3,423 3,934

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Schedule 7 – Gas Cost Reconciliation Account (GCRA) – Propane

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Sun Peaks Utility Company Limited

Gas Annual Report for Fiscal 2015Prepared July 7/15 Schedule 7

Gas Cost Reconciliation Account - Propane

Year ended April 30th Ref 2013 2014 2015Commodity CostsUsage per gas meters

Annual consumption (GJ sold from Sch 3) A 71,967 78,078 72,271 Vaporizer Fuel Use (GJ) B 1,225 1,164 1,061 Vaporizer Fuel Use as a % of annual sales B/A 1.70% 1.49% 1.47%

Total consumption (GJ) A+B=C 73,192 79,242 73,332 Usage per gas deliveries

Propane Deliveries (litres) E 2,987,081 3,296,521 3,073,092 (Increase) Decrease in propane inventory F 13,608 (31,752) (27,216) Propane Usage (litres) E+F=G 3,000,689 3,264,769 3,045,876

Propane Usage (GJ) @ 39.4 per L G/39.4=H 76,160 82,862 77,306

Unaccounted For (GJ) H-C=D 2,968 3,620 3,974 Unaccounted For as a % of total consumption D/C 4.05% 4.57% 5.42%

Average Price of propane purchased (cents/litre) N/E=I 29.19 41.48 34.45 Purchase usage/GJ of Sales H/A=J 1.058 1.061 1.070 Commodity Cost of Sales (cents/litre) IxJ=K 30.89 44.02 36.85 Commodity Cost of Sales ($/GJ) Kx39.4/100 $12.170 $17.345 $14.520Net Storage Cost of Sales ($/GJ) (L+M)/A $2.4511 $2.2593 $2.4408

FortisBC GCRA AccountStarting GCRA Balance 107,376 (133,945) 292,903 Storage Facility Charges L 176,400 176,400 176,400 Basic Charge Credit M - - - Propane Cost N 871,874 1,367,395 1,058,743 Gas Cost Recovery (1,061,477) (858,862) (1,294,441) Commodity reduction payment by SPUCL - - - Extra trucking charges due to road conditions 7,824 4,754 - Interest Charges 1,260 (1,276) 11,372 Storage Facility Credit (237,202) (261,563) (107,212)

Ending GCRA Balance (133,945) 292,903 137,765

April 30 Propane Inventory on Hand Tank #1 48% 57% 63% Tank #2 48% 57% 63% Tank #3 50% 55% 61% Tank #4 51% 56% 62%Tank Capacity (litres) 113,400 113,400 113,400 Tank #1 (litres) 54,432 64,638 71,442 Tank #2 (litres) 54,432 64,638 71,442 Tank #3 (litres) 56,700 62,370 69,174 Tank #4 (litres) 57,834 63,504 70,308 Propane inventory at year end (litres) 223,398 255,150 282,366

Inventory Change from previous year (litres) F (13,608) 31,752 27,216 Page 19 of 41

Appendix B – Gas Cost Reconciliation Account (GCRA) May1, 2014 to April 30, 2015

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Sun Peaks Utilities Co., Ltd.Fortis BC - Gas Cost Reconcilation Account (GCRA) May 1/14 - April 30/15

Propane TotalConsumption/ Unit Beginning Current Ending Beginning Current Ending GCRA

Delivery Price Balance Balance Balance Balance Balance

Apr 30/14 Balance Forward (88,742.43) 381,645.10 292,902.67

May'14 Interest Charge @ 4.00% 31 d (88,742.43) (289.20) (89,031.63) 381,645.10 1,112.49 382,757.59 293,725.96 Interest Charge @ 4.00% from May 25 to May 31 6 d (89,031.63) 9.67 (89,021.96) 382,757.59 382,757.59 293,735.63

on $14,700May Storage Facility Recovery 3,568.2 GJ 3.3500$ (89,021.96) (11,953.5) (100,975.43) 382,757.59 382,757.59 281,782.16 May Commodity Reference Recovery 3,568.2 GJ 11.0000$ (100,975.43) (100,975.43) 382,757.59 (39,250.20) 343,507.39 242,531.96 May Storage Facility Charge (due May 25, 2014) (100,975.43) 14,700.00 (86,275.43) 343,507.39 343,507.39 257,231.96 Superior Gas 10 34,560 0.36028$ (86,275.43) (86,275.43) 343,507.39 12,451.28 355,958.67 269,683.24 Superior Gas 11 62,990 0.32070$ (86,275.43) (86,275.43) 355,958.67 20,200.89 376,159.56 289,884.13 Superior Gas 12 62,050 0.32203$ (86,275.43) (86,275.43) 376,159.56 19,981.95 396,141.51 309,866.08

159,600 0.32979$ 52,634.12

Jun'14 Interest Charge @ 4.00% 30 d (86,275.43) (292.67) (86,568.10) 396,141.51 1,258.38 397,399.89 310,831.79 Interest Charge @ 4.00% from June 25 to June 30 5 d (86,568.10) 8.05 (86,560.05) 397,399.89 397,399.89 310,839.84

on $14,700Jun Storage Facility Recovery 3,320.6 GJ 3.3500$ (86,560.05) (11,124.0) (97,684.06) 397,399.89 397,399.89 299,715.83 Jun Commodity Reference Recovery 3,320.6 GJ 11.0000$ (97,684.06) (97,684.06) 397,399.89 (36,526.60) 360,873.29 263,189.23 Jun Storage Facility Charge (due Jun 25, 2014) (97,684.06) 14,700.00 (82,984.06) 360,873.29 360,873.29 277,889.23 Superior Gas 13 62,010 0.30490$ (82,984.06) (82,984.06) 360,873.29 18,906.69 379,779.98 Superior Gas 14 62,051 0.31123$ (82,984.06) (82,984.06) 379,779.98 19,312.18 399,092.16 316,108.10

124,061 0.30807$ 38,218.87

Jul'14 Interest Charge @ 4.00% 31 d (82,984.06) (294.07) (83,278.13) 399,092.16 1,350.07 400,442.23 317,164.10 Interest Charge @ 4.00% from July 25 to July 31 6 d (83,278.13) 9.67 (83,268.46) 400,442.23 400,442.23 317,173.77

on $14,700Jul Storage Facility Recovery 2,750.6 GJ 1.2868$ (83,268.46) (3,539.5) (86,807.93) 400,442.23 400,442.23 313,634.30 Jul Commodity Reference Recovery 2,750.6 GJ 18.6390$ (86,807.93) (86,807.93) 400,442.23 (51,268.43) 349,173.80 262,365.86 Jul Storage Facility Charge (due Jul 25, 2014) (86,807.93) 14,700.00 (72,107.93) 349,173.80 349,173.80 277,065.86 Superior Gas 15 61,498 0.30268$ (72,107.93) (72,107.93) 349,173.80 18,614.19 367,787.99 295,680.05 Superior Gas 16 61,140 0.30368$ (72,107.93) (72,107.93) 367,787.99 18,566.97 386,354.96 314,247.02 Superior Gas 17 60,996 0.30035$ (72,107.93) (72,107.93) 386,354.96 18,319.92 404,674.88 332,566.94

183,634 0.30224$ 55,501.08

Aug'14 Interest Charge @ 4.00% 31 d (72,107.93) (282.88) (72,390.81) 404,674.88 1,360.41 406,035.29 333,644.47 Interest Charge @ 4.00% from Aug 25 to Aug 31 6 d (72,390.81) 9.67 (72,381.14) 406,035.29 406,035.29 333,654.14

on $14,700Aug Storage Facility Recovery 2,400.2 GJ 1.2868$ (72,381.14) (3,088.6) (75,469.72) 406,035.29 406,035.29 330,565.57 Aug Commodity Reference Recovery 2,400.2 GJ 18.6390$ (75,469.72) (75,469.72) 406,035.29 (44,737.33) 361,297.96 285,828.24 Aug Storage Facility Charge (due Aug 25, 2014) (75,469.72) 14,700.00 (60,769.72) 361,297.96 361,297.96 300,528.24 Superior Gas 18 60,054 0.30197$ (60,769.72) (60,769.72) 361,297.96 18,134.62 379,432.58 318,662.86 Superior Gas 19 63,001 0.29931$ (60,769.72) (60,769.72) 379,432.58 18,856.53 398,289.11 337,519.39

123,055 0.30061$ 36,991.15

Sep'14 Interest Charge @ 4.00% 30 d (60,769.72) (237.97) (61,007.69) 398,289.11 1,334.91 399,624.02 338,616.33 Interest Charge @ 4.00% from Sep 25 to Sep 30 5 d (61,007.69) 8.05 (60,999.64) 399,624.02 399,624.02 338,624.38

on $14,700Sep Storage Facility Recovery 3,545.6 GJ 1.2868$ (60,999.64) (4,562.48) (65,562.12) 399,624.02 399,624.02 334,061.90 Sep Commodity Reference Recovery 3,545.6 GJ 18.6390$ (65,562.12) (65,562.12) 399,624.02 (66,086.44) 333,537.58 267,975.46 Sep Storage Facility Charge (due Sep 25, 2014) (65,562.12) 14,700.00 (50,862.12) 333,537.58 333,537.58 282,675.46 Superior Gas 20 64,492 0.31664$ (50,862.12) (50,862.12) 333,537.58 20,420.74 353,958.32 303,096.20 Superior Gas 21 61,190 0.32997$ (50,862.12) (50,862.12) 353,958.32 20,190.86 374,149.18 323,287.06

125,682 0.32313$ 40,611.60

Oct'14 Interest Charge @ 4.00% 31 d (50,862.12) (207.23) (51,069.35) 374,149.18 1,357.63 375,506.81 324,437.46 Interest Charge @ 4.00% from Oct 25 to Oct 31 6 d (51,069.35) 9.67 (51,059.68) 375,506.81 375,506.81 324,447.13

on $14,700Oct Storage Facility Recovery 4,225.0 GJ 1.2868$ (51,059.68) (5,436.73) (56,496.41) 375,506.81 375,506.81 319,010.40 Oct Commodity Reference Recovery 4,225.0 GJ 18.6390$ (56,496.41) (56,496.41) 375,506.81 (78,749.78) 296,757.04 240,260.63 Oct Storage Facility Charge (due Oct 25, 2014) (56,496.41) 14,700.00 (41,796.41) 296,757.04 296,757.04 254,960.63 Superior Gas 22 61,497 0.34578$ (41,796.41) (41,796.41) 296,757.04 21,264.42 318,021.46 276,225.05 Superior Gas 23 60,237 0.31711$ (41,796.41) (41,796.41) 318,021.46 19,101.76 337,123.22 295,326.81 Superior Gas 24 61,980 0.29911$ (41,796.41) (41,796.41) 337,123.22 18,538.84 355,662.06 313,865.65

183,714 0.32063$ 58,905.02

Storage Facility Account Commodity Reference Account

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Nov'14 Interest Charge @ 4.00% 30 d (41,796.41) (167.87) (41,964.28) 355,662.06 1,234.54 356,896.60 314,932.32 Interest Charge @ 4.00% from Nov 25 to Nov 30 5 d (41,964.28) 8.05 (41,956.23) 356,896.60 356,896.60 314,940.37

on $14,700Nov Storage Facility Recovery 8,704.6 GJ 1.2868$ (41,956.23) (11,201.08) (53,157.31) 356,896.60 356,896.60 303,739.29 Nov Commodity Reference Recovery 8,704.6 GJ 18.6390$ (53,157.31) (53,157.31) 356,896.60 (162,245.04) 194,651.56 141,494.25 Nov Storage Facility Charge (due Nov 25, 2014) (53,157.31) 14,700.00 (38,457.31) 194,651.56 194,651.56 156,194.25 Superior Gas 25 62,697 0.39356$ (38,457.31) (38,457.31) 194,651.56 24,675.02 219,326.58 180,869.27 Superior Gas 28 62,991 0.39356$ (38,457.31) (38,457.31) 219,326.58 24,790.74 244,117.32 205,660.01 Superior Gas 26 64,010 0.39356$ (38,457.31) (38,457.31) 244,117.32 25,191.78 269,309.10 230,851.79 Superior Gas 27 62,008 0.39356$ (38,457.31) (38,457.31) 269,309.10 24,403.87 293,712.97 255,255.66 Superior Gas 29 31,000 0.39356$ (38,457.31) (38,457.31) 293,712.97 12,200.36 305,913.33 267,456.02 Superior Gas 30 36,992 0.39356$ (38,457.31) (38,457.31) 305,913.33 14,558.57 320,471.90 282,014.59

319,698 0.39356$ 125,820.34

Dec'14 Interest Charge @ 4.00% 31 d (38,457.31) (142.54) (38,599.85) 320,471.90 1,212.47 321,684.37 283,084.52 Interest Charge @ 4.00% from Dec 25 to Dec 31 6 d (38,599.85) 9.67 (38,590.18) 321,684.37 321,684.37 283,094.19

on $14,700Dec Storage Facility Recovery 11,394.2 GJ 1.2868$ (38,590.18) (14,662.06) (53,252.23) 321,684.37 321,684.37 268,432.13 Dec Commodity Reference Recovery 11,394.2 GJ 18.6390$ (53,252.23) (53,252.23) 321,684.37 (212,376.49) 109,307.87 56,055.64 Dec Storage Facility Charge (due Dec 25, 2014) (53,252.23) 14,700.00 (38,552.23) 109,307.87 109,307.87 70,755.64 Superior Gas 31 62,033 0.39406$ (38,552.23) (38,552.23) 109,307.87 24,444.72 133,752.59 95,200.36 Superior Gas 32 61,997 0.39406$ (38,552.23) (38,552.23) 133,752.59 24,430.53 158,183.12 119,630.89 Superior Gas 33 61,990 0.39406$ (38,552.23) (38,552.23) 158,183.12 24,427.78 182,610.90 144,058.67 Superior Gas 34 60,991 0.39406$ (38,552.23) (38,552.23) 182,610.90 24,034.11 206,645.01 168,092.78 Superior Gas 35 61,996 0.39406$ (38,552.23) (38,552.23) 206,645.01 24,430.14 231,075.15 192,522.92 Superior Gas 36 62,000 0.39406$ (38,552.23) (38,552.23) 231,075.15 24,431.72 255,506.87 216,954.64 Superior Gas 37 52,724 0.19516$ (38,552.23) (38,552.23) 255,506.87 10,289.62 265,796.49 227,244.26 Superior Gas 37A 9,295 0.39406$ (38,552.23) (38,552.23) 265,796.49 3,662.79 269,459.28 230,907.05 Superior Gas 38 61,989 0.18483$ (38,552.23) (38,552.23) 269,459.28 11,457.43 280,916.71 242,364.48

495,015 0.34667$ 171,608.84

Jan'15 Interest Charge @ 4.00% 31 d (38,552.23) (131.10) (38,683.33) 280,916.71 1,092.85 282,009.56 243,326.23 Interest Charge @ 4.00% from Jan 25 to Jan 31 6 d (38,683.33) 9.67 (38,673.66) 282,009.56 282,009.56 243,335.90

on $14,700Jan Storage Facility Recovery 10,827.6 GJ 1.2868$ (38,673.66) (13,932.96) (52,606.62) 282,009.56 282,009.56 229,402.94 Jan Commodity Reference Recovery 10,827.6 GJ 18.6390$ (52,606.62) (52,606.62) 282,009.56 (201,815.64) 80,193.93 27,587.31 Jan Storage Facility Charge (due Jan 25, 2015) (52,606.62) 14,700.00 (37,906.62) 80,193.93 80,193.93 42,287.31 Superior Gas 39 61,000 0.18149$ (37,906.62) (37,906.62) 80,193.93 11,070.89 91,264.82 53,358.20 Superior Gas 40 59,996 0.39296$ (37,906.62) (37,906.62) 91,264.82 23,576.03 114,840.85 76,934.23 Superior Gas 41 61,998 0.39296$ (37,906.62) (37,906.62) 114,840.85 24,362.74 139,203.59 101,296.97 Superior Gas 42 61,997 0.39296$ (37,906.62) (37,906.62) 139,203.59 24,362.34 163,565.93 125,659.31 Superior Gas 43 62,002 0.39296$ (37,906.62) (37,906.62) 163,565.93 24,364.30 187,930.23 150,023.61 Superior Gas 44 61,996 0.39296$ (37,906.62) (37,906.62) 187,930.23 24,361.94 212,292.17 174,385.55 Superior Gas 45 42,011 0.39296$ (37,906.62) (37,906.62) 212,292.17 16,508.64 228,800.81 190,894.19 Superior Gas 45A 18,982 0.16206$ (37,906.62) (37,906.62) 228,800.81 3,076.22 231,877.03 193,970.41 Superior Gas 46 61,996 0.16206$ (37,906.62) (37,906.62) 231,877.03 10,047.07 241,924.10 204,017.48

491,978 0.32873$ 161,730.17

Feb'15 Interest Charge @ 3.85% 28 d (37,906.62) (114.22) (38,020.84) 241,924.10 832.89 242,756.99 204,736.15 Interest Charge @ 3.85% from Feb 25 to Feb 28 3 d (38,020.84) 4.65 (38,016.19) 242,756.99 242,756.99 204,740.80

on $14,700Feb Storage Facility Recovery 8,897.9 GJ 1.2868$ (38,016.19) (11,449.82) (49,466.01) 242,756.99 242,756.99 193,290.98 Feb Commodity Reference Recovery 8,897.9 GJ 18.6390$ (49,466.01) (49,466.01) 242,756.99 (165,847.96) 76,909.03 27,443.02 Feb Storage Facility Charge (due Feb 25, 2015) (49,466.01) 14,700.00 (34,766.01) 76,909.03 76,909.03 42,143.02 Superior Gas 47 31,991 0.41135$ (34,766.01) (34,766.01) 76,909.03 13,159.50 90,068.53 55,302.52 Superior Gas 48 34,990 0.41135$ (34,766.01) (34,766.01) 90,068.53 14,393.14 104,461.67 69,695.66 Superior Gas 49 61,999 0.41135$ (34,766.01) (34,766.01) 104,461.67 25,503.29 129,964.96 95,198.95 Superior Gas 50 32,158 0.41135$ (34,766.01) (34,766.01) 129,964.96 13,228.20 143,193.16 108,427.15 Superior Gas 51 30,995 0.41135$ (34,766.01) (34,766.01) 143,193.16 12,749.80 155,942.96 121,176.95 Superior Gas 52 31,997 0.41135$ (34,766.01) (34,766.01) 155,942.96 13,161.96 169,104.92 134,338.91 Superior Gas 53 31,993 0.41135$ (34,766.01) (34,766.01) 169,104.92 13,160.33 182,265.25 147,499.24 Superior Gas 54 31,991 0.41135$ (34,766.01) (34,766.01) 182,265.25 13,159.50 195,424.75 160,658.74 Superior Gas 55 31,992 0.41135$ (34,766.01) (34,766.01) 195,424.75 13,159.91 208,584.66 173,818.65 Superior Gas 56 29,894 0.41135$ (34,766.01) (34,766.01) 208,584.66 12,296.90 220,881.56 186,115.55 Superior Gas 56A 6,027 0.17812$ (34,766.01) (34,766.01) 220,881.56 1,073.53 221,955.09 187,189.08 Superior Gas 57 30,999 0.17812$ (34,766.01) (34,766.01) 221,955.09 5,521.55 227,476.64 192,710.63

387,026 0.38904$ 150,567.61 Page 22 of 41





Mar'15 Interest Charge @ 3.85% 31 d (34,766.01) (124.31) (34,890.32) 227,476.64 793.78 228,270.42 193,380.10 Interest Charge @ 3.85% from Mar 25 to Mar 31 6 d (34,890.32) 9.30 (34,881.02) 228,270.42 228,270.42 193,389.40

on $14,700Mar Storage Facility Recovery 7,772.9 GJ 1.2868$ (34,881.02) (10,002.17) (44,883.18) 228,270.42 228,270.42 183,387.23 Mar Commodity Reference Recovery 7,772.9 GJ 18.6390$ (44,883.18) (44,883.18) 228,270.42 (144,879.08) 83,391.34 38,508.15 Mar Storage Facility Charge (due Mar 25, 2015) (44,883.18) 14,700.00 (30,183.18) 83,391.34 83,391.34 53,208.15 Superior Gas 58 32,000 0.18012$ (30,183.18) (30,183.18) 83,391.34 5,763.84 89,155.18 58,971.99 Superior Gas 59 31,000 0.18012$ (30,183.18) (30,183.18) 89,155.18 5,583.72 94,738.90 64,555.71 Superior Gas 60 30,998 0.41146$ (30,183.18) (30,183.18) 94,738.90 12,754.44 107,493.33 77,310.15 Superior Gas 61 31,991 0.41146$ (30,183.18) (30,183.18) 107,493.33 13,163.01 120,656.34 90,473.16 Superior Gas 62 31,996 0.41146$ (30,183.18) (30,183.18) 120,656.34 13,165.07 133,821.42 103,638.23 Superior Gas 63 32,000 0.41146$ (30,183.18) (30,183.18) 133,821.42 13,166.72 146,988.14 116,804.95 Superior Gas 64 31,999 0.41146$ (30,183.18) (30,183.18) 146,988.14 13,166.31 160,154.45 129,971.26 Superior Gas 65 31,005 0.41146$ (30,183.18) (30,183.18) 160,154.45 12,757.31 172,911.76 142,728.57 Superior Gas 66 31,988 0.41146$ (30,183.18) (30,183.18) 172,911.76 13,161.78 186,073.54 155,890.36 Superior Gas 67 31,000 0.41146$ (30,183.18) (30,183.18) 186,073.54 12,755.26 198,828.80 168,645.62

315,977 0.36534$ 115,437.47

Apr'15 Interest Charge @ 3.85% 30 d (30,183.18) (110.38) (30,293.56) 198,828.80 722.34 199,551.14 169,257.58 Interest Charge @ 3.85% from Apr 25 to Apr 30 5 d (30,293.56) 7.75 (30,285.81) 199,551.14 199,551.14 169,265.33

on ($14,700) (30,285.81) (30,285.81) 199,551.14 199,551.14 169,265.33 Apr Storage Facility Recovery 4,863.9 GJ 1.2868$ (30,285.81) (6,258.87) (36,544.68) 199,551.14 199,551.14 163,006.46 Apr Commodity Reference Recovery 4,863.9 GJ 18.6390$ (36,544.68) (36,544.68) 199,551.14 (90,658.23) 108,892.91 72,348.23 Apr Storage Facility Charge (due Apr 25, 2015) (36,544.68) 14,700.00 (21,844.68) 108,892.91 108,892.91 87,048.23 Superior Gas 68 31,995 0.41146$ (21,844.68) (21,844.68) 108,892.91 13,164.67 122,057.58 100,212.90 Superior Gas 69 33,465 0.41441$ (21,844.68) (21,844.68) 122,057.58 13,868.23 135,925.81 114,081.13 Superior Gas 70 31,563 0.41441$ (21,844.68) (21,844.68) 135,925.81 13,080.02 149,005.83 127,161.15 Superior Gas 70A 427 0.16316$ (21,844.68) (21,844.68) 149,005.83 69.67 149,075.50 127,230.82 Superior Gas 71 32,190 0.16118$ (21,844.68) (21,844.68) 149,075.50 5,188.39 154,263.89 132,419.21 Superior Gas 72 34,012 0.15718$ (21,844.68) (21,844.68) 154,263.89 5,346.01 159,609.90 137,765.22

163,652 0.30991$ 50,716.99

Total propane delivered for period 3,073,092 L Av Cost per L 0.34452$

Total propane billed for period 72,271.3 GJ

May 1/14 - April 30/15 GCRA Summary Beginning balance (88,742.43) Begin balance 381,645.10 292,902.67 Interest Charges (2,290.57) Interest Charges 13,662.76

Storage facility recovery (107,211.68) Com'dty recovery (1,294,441.22) Storage facility charge 12 mo @ $14,700 /mo 176,400.00 Com'dty charges 1,058,743.26

Change for period 66,897.75 Change for period (222,035.20) (155,137.45)

Ending balance April 30/15 (21,844.68) 159,609.90 137,765.22

Page 23 of 41

Appendix C – Sun Peaks Utilities Financial Statements as reviewed by PriceWaterhouse Coopers

Page 24 of 41



Sun Peaks Utilities Co., Ltd.

Financial Statements(Unaudited)April 30, 2015

Page 25 of 41

PricewaterhouseCoopers LLPPricewaterhouseCoopers Place, 250 Howe Street, Suite 700, Vancouver, British Columbia, Canada V6C 3S7T: +1 604 806 7000, F: +1 604 806 7806

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

June 19, 2015

Review Engagement Report

To the Shareholder of

Sun Peaks Utilities Co., Ltd.

We have reviewed the balance sheet of Sun Peaks Utilities Co., Ltd. as at April 30, 2015 and the statements

of operations and retained earnings and cash flows for the year then ended. Our review was made in

accordance with Canadian generally accepted standards for review engagements and, accordingly,

consisted primarily of inquiry, analytical procedures and discussion related to information supplied to us

by the company.

A review does not constitute an audit and, consequently, we do not express an audit opinion on these

financial statements.

Based on our review, nothing has come to our attention that causes us to believe that these financial

statements are not, in all material respects, in accordance with Canadian accounting standards for private

enterprises.

Chartered Accountants

Page 26 of 41

Sun Peaks Utilities Co., Ltd.Balance Sheet(Unaudited)As at April 30, 2015

Approved by the Board of Directors

___________________________________ Director ________________________________ Director

The accompanying notes are an integral part of these financial statements.

2015$

2014$

Assets

Current assetsCash 114,702 69,303Accounts receivable (note 10) 562,503 658,887Prepaid expenses 8,471 7,101Income taxes receivable 3,266 16,021

688,942 751,312

Replacement reserve trust fund (note 4) 155,153 57,114

Property and equipment (note 3) 863,547 939,605

1,707,642 1,748,031

Liabilities

Current liabilitiesDemand loans (note 6) 336,540 439,905Accounts payable and accrued liabilities (notes 5 and 10) 517,387 516,511

853,927 956,416

Replacement reserve liabilities (note 4) 155,153 57,114

Due to Sun Peaks Resort Corporation (note 8) 484,488 509,488

1,493,568 1,523,018

Shareholder’s Equity

Capital stock (note 7) 2 2

Retained earnings 214,072 225,011

214,074 225,013

1,707,642 1,748,031

Economic dependence (note 11)

Commitments (note 12)

Page 27 of 41

Sun Peaks Utilities Co., Ltd.Statement of Operations and Retained Earnings

(Unaudited)For the year ended April 30, 2015


2015$

2014$

Revenue 3,362,130 3,039,878

Operating expensesChemicals 18,224 27,695Cost of gas sold 1,656,229 1,370,796Electricity 66,721 61,297Employee benefits 85,064 79,992Materials and supplies 83,585 72,142Wages 523,341 511,475

2,433,164 2,123,397

Gross profit 928,966 916,481

General and administration expensesAccounting and legal 18,048 19,475Analysis 19,297 19,154Bad debt expense 28,118 56,840Contract work 117,256 124,509Depreciation of property and equipment 97,612 95,871Engineering 111,291 39,630Insurance 35,108 26,007Interest 15,536 18,050Office and administration 106,793 104,139Permits 3,647 3,786Property and utility taxes 32,335 31,314Rental equipment 11,556 13,719Repairs and maintenance 141,738 134,198Replacement reserve 125,000 91,667Sewage treatment plant (STP) disposal 3,638 4,183Transportation 41,198 47,652

908,171 830,194

Earnings before income taxes 20,795 86,287

Income tax expense (note 9) 31,734 23,682

(Loss) net earnings for the year (10,939) 62,605

Retained earnings - Beginning of year 225,011 162,406

Retained earnings - End of year 214,072 225,011

Page 28 of 41

Sun Peaks Utilities Co., Ltd.Statement of Cash Flows

(Unaudited)For the year ended April 30, 2015


2015$

2014$

Cash flows from operating activities(Loss) net earnings for the year (10,939) 62,605

Items not affecting cashDepreciation of property and equipment 97,612 95,871Bad debt expense 28,118 56,840Replacement reserve 125,000 91,667

239,791 306,983Changes in non-cash working capital items

Accounts receivable 68,266 (98,786)Prepaid expenses (1,370) 7,957Income taxes receivable 12,755 15,293Accounts payable and accrued liabilities 876 (7,813)

80,527 (83,349)

320,318 223,634

Cash flows from financing activitiesRepayment of due to Sun Peaks Resort Corporation (25,000) (25,000)Proceeds of demand loans - 50,000Repayment of demand loans (103,365) (91,702)

(128,365) (66,702)

Cash flows from investing activitiesRelease of replacement reserve funds by maintenance activities (27,359) (63,999)Funding of replacement reserve fund (125,000) (91,667)Release of replacement reserve fund to cash 27,359 63,999Purchase of property and equipment (21,554) (87,768)

(146,554) (179,435)

Increase (decrease) in cash 45,399 (22,503)

Cash - Beginning of year 69,303 91,806

Cash - End of year 114,702 69,303

Page 29 of 41

Sun Peaks Utilities Co., Ltd.Notes to Financial Statements

(Unaudited)April 30, 2015

(1)

1 Nature of operations

Sun Peaks Utilities Co., Ltd. (the company) is a wholly owned subsidiary of Sun Peaks Resort Corporation and

provides gas, water and sewer utility services to the Municipality of Sun Peaks.

On May 1, 2015, Sun Peaks Corporation transferred its resort operating assets and liabilities to its newly created

subsidiary, Sun Peaks Resort Limited Liability Partnership (LLP). The company’s share was transferred to the

LLP.

2 Summary of significant accounting policies

These financial statements are prepared in accordance with Canadian accounting standards for private

enterprises (ASPE) as issued by the Canadian Accounting Standards Board.

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and balances with banks.

Revenue recognition

Revenue is recognized when the services are provided to customers and ultimate collection is reasonably

assured.

Property and equipment

Property and equipment are recorded at cost and depreciated over their estimated useful lives using the

straight-line method:

Office and other equipment 3 yearsSewage 3 - 20 yearsWater 3 - 20 yearsGas 3 - 20 years

The company recognizes impairment losses for a long-lived asset to be held and used when events or changes in

circumstances cause its carrying value to exceed the total undiscounted cash flows expected from its use and

eventual disposition. An impairment loss, if any, is determined as the excess of the carrying value of the asset

over its fair value.

Replacement reserve trust fund

The company is required to make annual contributions into the water and sewer division replacement reservefunds. The funds consist of cash and term deposits and are measured at amortized cost on the balance sheetdate. The use of the fund is restricted to the replacement or repairs to the water and sewer infrastructure andany withdrawal must be approved by the relevant regulatory body.

Page 30 of 41



(2)

Replacement reserve liabilities

The company records a constructed liability that arises from setting aside a replacement reserve trust fund that

must be used for the purpose of addressing any major repairs or required changes to water and wastewater

collection and treatment facilities. The liability is recorded as the required funding of the replacement reserve

trust fund occurs based on the instructions from the Comptroller of Water Rights (the Comptroller). The

liability ceases to exist once the funding is released from the replacement reserve trust fund.

Use of estimates

The preparation of financial statements in conformity with ASPE requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and

liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the

reported period. Actual results could differ from those estimates.

Estimating the collectability of accounts receivable requires management to make estimates and assumptions

due in part to the uncertainties associated with the price charged for the company’s products and the economic

conditions affecting customers. It is possible that changes may occur that could materially affect the estimated

amounts.

Financial instruments - measurement

Financial assets and liabilities are initially measured at fair value. At each reporting date, financial assets and

financial liabilities are measured at amortized cost.

Financial instruments - impairment

At each reporting date, the company assesses whether there are any indications that the financial assets may be

impaired. Where there is an indication of impairment when the company identifies a significant adverse change

in the expected timing or amount of future cash flows from the financial assets, the carrying amounts of the

financial assets are reduced. The amount of reduction is recognized as an impairment loss in net earnings.

When the extent of the impairment of a previously written-down asset decreases and the decrease can be

related to an event occurring after the impairment was recognized, the previously recognized impairment loss is

reversed to the extent of the improvement. The amount of the reversal is recognized in net earnings in the

period the reversal occurs.

Capital disclosures

The company’s externally imposed capital requirements are disclosed in note 4. The company has complied

with these requirements throughout the year.

Page 31 of 41



(3)

Income taxes

The company accounts for income taxes using the taxes payable method and accordingly does not recognize

future income tax expense (recovery) resulting from different treatment of income and expense items as

determined in accordance with rules established by taxation authorities.

3 Property and equipment

2015 2014

Cost$

Accumulateddepreciation

$Net

$Net

$

Office and other equipment 71,823 61,556 10,267 15,278Sewage 1,214,316 474,867 739,449 811,528Water 242,297 179,567 62,730 53,565Gas 143,689 92,588 51,101 59,234

1,672,125 808,578 863,547 939,605

4 Replacement reserve trust fund

The Comptroller of Water Rights requires that the company maintain a replacement reserve bank account for

the deposit of trust funds designated for the future replacement or repair of significant water system

components. The use of the fund is restricted and cash can only be withdrawn by authority of the Comptroller.

In 2014, the Comptroller increased the annual contribution requirement to the replacement reserve fund from

$57,500 to $75,000.

In a letter dated February 26, 2014, the BC Ministry of the Environment has ordered that the company make

annual contributions of $50,000 to a replacement reserve maintenance fund for the sewer division up to a

maximum of $1,000,000. Money can only be withdrawn from the fund pursuant to a work plan prepared by a

‘Qualified Professional’ as defined in the Municipal Wastewater Regulations. Funds are to be used for the

purpose of addressing any major repairs or required changes to wastewater collection and treatment facilities.

Page 32 of 41



(4)

The movements of trust funds during the year are as follows:

2015 2014

WaterDivision

$

SewerDivision

$Total

$Total

$

Replacement reserve trust fundbalance - Beginning of year 40,447 16,667 57,114 29,037

Interest earned 250 148 398 409Contributions 75,000 50,000 125,000 91,667Release of funds (27,359) - (27,359) (63,999)

Replacement reserve trust fundbalance - End of year 88,338 66,815 155,153 57,114

5 Government remittances

Government remittances consist of amounts (such as sales taxes and worker’s compensation premiums)

required to be paid to government authorities and are recognized when the amounts become due. In respect of

government remittances, $5,990 (2014 - $8,647) is included within accounts payable and accrued liabilities.

6 Demand loans

The demand loan facility consists of four loans as follows:

2015$

2014$

Demand loan 1, non-revolving, bearing interest at bank primerate plus 1%, repayable in monthly blended payments of$2,800, maturing September 1, 2018 109,538 138,167

Demand loan 2, non-revolving, bearing interest at bank primerate plus 1%, repayable in monthly blended payments of$1,800, maturing September 1, 2026 178,035 192,272

Demand loan 3, non-revolving, bearing interest at bank primerate plus 1.25%, repayable in monthly blended paymentsof $4,400, maturing July 16, 2015 9,777 60,976

Demand loan 4, non-revolving, bearing interest at bank primerate plus 1%, repayable in monthly blended payments of$921, maturing March 31, 2019 39,190 48,490

336,540 439,905

Page 33 of 41



(5)

The loan facilities are secured by way of a general security agreement creating a first priority charge over all

personal property and a floating charge over all real property. A guarantee limited to $610,000 of the

indebtedness has been provided by certain related parties as additional security.

Aggregate estimated minimum repayments, at current interest rates, for each of the next five years ending

April 30 for the demand loans are as follows:

Principal$

Interest$

Total$

2016 64,375 11,707 76,0822017 56,763 9,487 66,2502018 58,987 7,263 66,2502019 42,012 5,096 47,1082020 17,491 4,109 21,600Thereafter 96,912 9,658 106,570

336,540 47,320 383,860

7 Capital stock

Authorized

10,000 common shares without par value

Issued

2015$

2014$

2 common shares 2 2

8 Due to Sun Peaks Resort Corporation

2015$

2014$

Non-interest bearing advances repayable on demand. Sun PeaksResort Corporation has agreed that any repayment will be made13 months from date of demand. 484,488 509,488

Page 34 of 41



(6)

9 Income taxes

2015%

2014%

Income tax at statutory rate 26.00 26.00

Property and equipment, capital lease and deferred chargestiming differences 4.52 (6.89)

Replacement reserve fund timing difference 122.08 8.34

Effective tax rate 152.60 27.45

10 Related party transactions

During the year, the company had the following transactions with related parties in the normal course of

business:

2015$

2014$

Sun Peaks Resort CorporationSales of utility services and other 227,936 231,640Office rent expense (8,400) (8,400)Consulting fee revenue 8,400 8,400Insurance reimbursement expense (35,108) (26,007)Administration expense (24,000) (24,000)

SP Hotel CorporationSales of utility services 384,172 273,118

At the end of the year, balances with related parties were as follows:

2015$

2014$

Sun Peaks Resort CorporationAccounts receivable 16,263 55,461Accounts payable and accrued liabilities (51,025) (50,394)

SP Hotel CorporationAccounts receivable 67,360 63,105

The related party transactions were conducted in the normal course of business and were measured at exchange

values which were established and agreed to by the related parties. SP Hotel Corporation is related to the

company by way of common control.

Page 35 of 41



(7)

11 Economic dependence

The company is economically dependent upon the financing provided by Sun Peaks Resort Corporation.

12 Commitments

The company has minimum annual operating lease payments for the next three years as follows:

$

2016 11,4902017 10,6302018 6,789

Additional commitments are disclosed within note 4.

13 Financial instruments

Credit risk exposure

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 company’s exposure to credit risk is as indicated by the carrying amount

of its cash, accounts receivable and replacement reserve trust fund. The company mitigates its credit risk to its

cash and replacement reserve trust fund by dealing with Canadian financial institutions with no publicly known

liquidity problems. The company monitors the collectability of accounts receivable as part of their ongoing

monitoring of the company’s credit risk exposures. The company records an allowance for doubtful accounts

receivable when collectability is not certain.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate

because of changes in market interest rates. All of the company’s financial instruments are non-interest bearing

except for cash and the replacement reserve trust fund (note 4) which earn interest at a nominal rate; and

demand loans (note 6) which bear interest at a rate that varies with the prime interest rate. Changes in this rate

can cause fluctuations in the company's interest payments and cash flows. The company mitigates interest rate

risk by utilizing funding from Sun Peaks Resort Corporation that is non-interest bearing.

Page 36 of 41



(8)

Liquidity risk

Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated with its

financial liabilities that are settled by delivery of cash or another financial asset. The company is exposed to

liquidity risk arising primarily from the accounts payable and accrued liabilities, replacement reserve liabilities,

due to Sun Peaks Resort Corporation and demand loans. The company's ability to meet obligations depends on

the receipt of funds from its operating activities and the ability to obtain financing from Sun Peaks Resort

Corporation if required. The company has current liabilities in excess of its current assets and the company

manages liquidity risk by maintaining adequate cash balances and timing of payments. The company regularly

monitors and reviews both actual and forecasted cash flows to ensure their adequacy. The company monitors

the demand loan covenants closely to reduce the risk of the bank demanding repayment outside of the payment

terms established in the agreements.

Currency risk

Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of

changes in foreign exchange rates. The company is not exposed to significant currency risk as all transactions

are carried out in Canadian currency.

Page 37 of 41

Sun Peaks Utilities Co., Ltd.Gas Division

(Unaudited)For the year ended April 30, 2015 Schedule 1

2015$

2014$

Revenue 1,849,946 1,579,987

Operating expensesCost of goods sold 1,654,946 1,369,905Electricity 2,077 1,520Employee benefits 14,508 14,874Materials and supplies 3,088 3,554Wages 68,632 75,306

1,743,251 1,465,159

Gross profit 106,695 114,828

General and administration expensesAccounting and legal 3,937 3,199Bad debt expense 4,297 3,564Contract work 3,795 13,670Depreciation of property and equipment 9,498 9,304Engineering 2,785 728Insurance 11,702 8,669Office and administration 19,964 23,380Permits 1,386 1,147Property and utility taxes 22,194 21,843Rental equipment 3,152 3,873Repairs and maintenance 4,773 6,909Transportation 10,048 12,200

97,531 108,486

Earnings before income taxes - Gas division 9,164 6,342

Page 38 of 41

Sun Peaks Utilities Co., Ltd.Water Division


2015$

2014$

Revenue 659,616 636,736

Operating expensesChemicals 12,916 12,372Cost of goods sold 1,283 891Electricity 20,185 17,874Employee benefits 31,123 29,338Materials and supplies 37,020 34,733Wages 200,792 198,022

303,319 293,230

Gross profit 356,297 343,506

General and administration expensesAccounting and legal 7,055 9,628Analysis 12,554 11,536Bad debt expense 11,304 23,530Contract work 43,322 28,455Depreciation of property and equipment 14,671 15,669Engineering 34,470 15,163Insurance 11,703 8,669Office and administration 37,036 39,793Permits 1,666 1,992Property and utility taxes 6,874 7,225Rental equipment 3,152 3,873Repairs and maintenance 62,568 43,861Replacement reserve 75,000 75,000Transportation 15,637 17,788

337,012 302,182

Earnings before income taxes - Water division 19,285 41,324

Page 39 of 41

Sun Peaks Utilities Co., Ltd.Sewer Division


2015$

2014$

Revenue 841,158 804,894

Operating expensesChemicals 5,308 15,323Electricity 44,459 41,903Employee benefits 38,619 34,946Materials and supplies 43,469 33,855Wages 248,637 230,309

380,492 356,336

Gross profit 460,666 448,558

General and administration expensesAccounting and legal 7,056 6,648Analysis 6,743 7,618Bad debt expense 12,517 26,183Contract work 70,139 82,384Depreciation of property and equipment 73,443 70,898Engineering 74,036 23,739Insurance 11,703 8,669Interest 15,536 18,050Office and administration 49,676 40,958Permits 595 647Property taxes 3,267 2,246Rental equipment 3,152 3,873Repairs and maintenance 74,397 83,428Replacement reserve 50,000 16,667STP disposal 3,638 4,183Transportation 15,513 17,664

471,411 413,855

(Loss) earnings before income taxes - Sewer division (10,745) 34,703

Page 40 of 41

Sun Peaks Utilities Co., Ltd.Other Division


2015$

2014$

Revenue 11,410 18,261

Operating expensesEmployee benefits 814 834Materials and supplies 8 -Wages 5,280 7,838

6,102 8,672

Gross profit 5,308 9,589

General and administration expensesBad debt expense - 3,563Office and administration 117 8Rental equipment 2,100 2,100

2,217 5,671

Earnings before income taxes - Other division 3,091 3,918

Page 41 of 41

Documents

July 21, 2015 Erica Hamilton Commission Secretary British ......../SPUCL Gas Annual Report F2015 Cover Let.docx Sun Peaks Utilities Co., Ltd. 1280 Alpine Road, Sun Peaks, British Columbia,