make every drop count! 2015 annual report · 2014 to manage sogh uoma nb, provincial division of...

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2015

AN

NU

AL R

EPOR

TMake Every Drop Count!

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A Successful Management Program 04 Standard Flow Cycle of Funds and Products 05 Stability, Development and Implementation 06 SOGHUOMA NB Scoreboard 08 SOGHUOMA PE Scoreboard 10 SOGHUOMA NB Zones 12 SOGHUOMA PE Zones 13SOGHUOMA Members 14SOGHUOMA Committees 16

Financial StatementsIndependent Auditor’s Report 17 Income 18 Appendix A – SOGHUOMA NB and PE Sectorial Income 19 Appendix B – SOGHUOMA NB Income 20 Appendix C – SOGHUOMA PE Income 2 1 Changes in Net Assets 22 Balance Sheet 23 Cash Flow 24 Notes to Financial Statement 25

TABLE OF CONTENTS

4 2015 ANNUAL REPORT

A SUCCESSFUL MANAGEMENT PROGRAM

The ATLANTIC USED OIL MANAGEMENT ASSOCIATION/SOCIÉTÉ DE GESTION DES HUILES USAGÉES DE L’ATLANTIQUE (SOGHUOMA) is a private non-profit organization recognized by Recycle NB and the Department of Communities, Land and Environment Prince Edward Island as the organization that has the skills to manage an integrated program of recovery and processing of products covered by the New Brunswick Designated Materials Regulation 2008-54 established pursuant to the Clean Environment Act (O.C. 2008-180), and Prince Edward Island’s Material Stewardship and Recycling Regulation EC2014-349 established pursuant to the Environmental Protection Act R.S.P.E.I. 1988, Cap. E-9.

The success of the program is attributed to a win-win partnership with Members, Collectors, Processors and Managers of Collection Facilities. Thanks to a system of financial incentives based on the type of products that are covered in all geographical zones in each province which offers the opportunity to collect and reclaim the products free of charge.

Some key points of the program:

• Members f inance and manage the system via SOGHUOMA.

• Generators are the first step of the recovery process.

• Collectors recover applicable products from the Generators.

• Processors give new life to the products.

• Collection Facilities are an essential element offering free disposal services for all citizens.

• Recycle New Brunswick and the Department of Communities, Land and Environment Prince Edward Island support SOGHUOMA and assist in the process in conformity with the Agreement.

A strict auditing process of all Members, Collectors and Processors ensures the tracking of all products sold on the market right up until they are recycled.

The basic principle at the core of the program is to respect the balance between commercial requirements and the needs of the community, which is a principle of sustainable development.

What developed is an industry-led stewardship program model that has been acknowledged worldwide as a model of excellence as it pertains to sustainable development.

Hoping to reach and assist all interested parties throughout this first year of operation, including Members, Collectors, Processors, end-users and the general public, information concerning the Regulations, its obligations and its alternative solutions was sent via mail, e-mail and communicated via telephone. Many printed materials and posters for Collection Facilities were also distributed. A television ad campaign was also produced.

SOGHUOMA would like to thank Recycle NB and the Department of Communities, Land and Environment Prince Edward Island for its participation in promoting the program and in reaching and assisting the general public.

SOGHUOMA is proud to announce that in November 2014, Minister and Attorney General, Mrs. Janice Sherry, approved the Prince Edward Island Oil and Glycol Stewardship Program Plan (2014-2015) submitted by SOGHUOMA.

Activities for the new born SOGHUOMA PE started on April 1st, 2015, and you will see from the results that the first nine months (April to December 2015) of operation were very successful.

We are happy to provide you with the following scoreboards outlining our successes in 2015.

Mr. Gilles Goddard, General Manager of SOGHU and SOGHUOMA, met with Mrs. Janice Sherry, Minister of the Environment, Labour and Justice and Attorney General of Prince Edward Island, on March 5th, 2015.

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GENERATORS

Establishments that generate used products (garages, dealers, commercial, industrial and municipal sectors, forestry, agriculture, transporters, individuals)

COLLECTORS

Establishments that collect the products from Generators and Collection Facilities and receive subsidies from SOGHUOMA NB (for additional information, see page 12) and SOGHUOMA PE (for addit ional, information see page 13).

PROCESSORS

Establishments that give a second life to products

MEMBERS OF SOGHUOMA NB AND MEMBERS OF SOGHUOMA PE

Brand Owners or Primary Importers or Suppliers who fund the system at $0.05 per litre for applicable lubricating oils; $0.10 per litre for oil and glycol (antifreeze) containers of 50 litres or less; $0.17 per litre for non-metal or non-HDPE oil and glycol (antifreeze) containers of 50 litres or less; $0.10 per litre of glycol (antifreeze) mix; $0.16 per litre of glycol (antifreeze) concentrate; $0.50 per filter of 8 inches or less or 203 mm in height; $1.00 per filter of more than 8 inches or 203 mm or more; $0.50 per sump type filters for automatic transmissions and $0.25 per aerosol container

COLLECTION FACILITIES

Establishments registered with SOGHUOMA NB and SOGHUOMA PE to receive from the public, at no cost to them, used oil products governed by the Regulations

PRODUCTS

$ FUNDS

STANDARD FLOW CYCLE OF FUNDS AND PRODUCTS

Communities, Land and Environment


The Richibucto Port Authority is the first Port Authority in the province to register as a Collection Facility for used oil and glycol products. On hand to mark the opening of the facility from left: Richibucto Port Authority Chair Cyril Polchies, Environment and Local Government Minister Brian Kenny, Recycle NB CEO Pat McCarthy, and David Bois, Chair of the Board of SOGHUOMA, which is the industry association that manages the New Brunswick Oil and Glycol Program.

STABILITY, DEVELOPMENT AND IMPLEMENTATION

SOGHUOMA’s excellent partnership with the Collectors helps make the program a success. Their excellent cooperation and participation helped establish the zones and the amounts of incentives payable in these zones for the products governed by the regulations, and this according to the free market realities in the field.

In 2015, SOGHUOMA NB globally displayed excellent results. In a survey/study on used oil burnt in small furnaces in New Brunswick, it was confirmed and approved that 55% of the used oil is burnt legally in the province. This results in a collection rate for oil of (30.6 + 55.0% = 85.6%) for 2015 vs (32.5% + 55.0% = 87.5%) in 2014. A major increase was observed in the collection of oily containers moving from 34.9% in 2014 to 60.0% in 2015. This increase is mainly due to the major implication of RPM Environment. These excellent results confirm the program is well in place and continues to perform. The development of Collection Facilities, where individuals and small businesses can bring the used products governed by the Regulation free of charge, is in continuous progress and still a priority. SOGHUOMA congratulates the Richibucto Port Authority (see picture) as the first port authority in the province to

register as a Collection Facility for used oil and glycol products and also wants to thank all the Collection Facilities for their involvement in the program.

2015 is also the year that the province of Prince Edward Island joined SOGHUOMA’s program. Though it was in November 2014 that Minister and Attorney General, Mrs. Janice Sherry, approved the Prince Edward Island Oil and Glycol Stewardship Program Plan (2014-2015) submitted by SOGHUOMA. It is April 1st, 2015 that the activities officially started under the name of SOGHUOMA PE.

The implementation of SOGHUOMA PE, with the excellent cooperation of Department of Communities, Land and Environment Prince Edward Island went very smoothly.

We discovered that the vast majority of garages did not deal with Collectors, because most of them burn the oils they produce (and more), send filters to scrap metal dealers or garbage dumps, and burn plastic containers or send them to the dump.

The deployment and development of collection were therefore slowed down, because the Collectors had to visit

SOCIÉTÉ DE GESTION DES HUILES USAGÉES DE L’ATLANTIQUE/ATLANTIC USED OIL MANAGEMENT ASSOCIATION (SOGHUOMA) has been in operation since January 2014 to manage SOGHUOMA NB, provincial division of Atlantic Used Oil Management Association (SOGHUOMA) for the New Brunswick area, and since April 1st, 2015, SOGHUOMA PE, provincial division of Atlantic Used Oil Management Association (SOGHUOMA) for the Prince Edward Island area. The various activities with its many partners (Members, Collectors, Processors, and Collection Facilities) are all managed in accordance with applicable regulations in both provinces. All the recovered products are 100% reclaimed.

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Top row > Mr. Albert Giard – Mr. John Robichaud – Mr. Chris Lesperance – Mr. Gordon O’Neill – Mr. Robert Siddall –Mr. Sheldon Boyd – Mr. Bill Simpkins – Bottom row > Mr. John S. Hughes – Mr. Gilles Goddard – Mr. David Bois, Chairman - Mrs. Loulia Kouchaji – Mr. Jean Duchesneau – Not shown in photo > Mr. Peter Goss – Mrs. Jennifer Gibb – Mr Jamie Seamans

these new customers, explain how the program works and supply the necessary bins and drums. In regards to the development of Collection Facilities, many thanks to the Island Waste Management Corporation for its cooperation in establishing eight (8) Collection Facilities.

Regarding used oils, since there, unfortunately, is no government control of the quantities burned by the Generators, we cannot trust the 10.95% rate, because the number of litres burned, according to the Department of Communities, Land and Environment Prince Edward Island could be as high as 80%. However, SOGHUOMA added to the collected rate of 10.95% the results of the study in NB, which shows that 55% of used oil is burnt legally in small furnaces to calculate the collection/burnt rate of 65.95%. In 2016, SOGHUOMA will conduct a survey/study similar to the one done in NB for PEI in order to get a more representative rate for oil.

Despite these unexpected situations, the results of this first year of SOGHUOMA PE are significant.

Globally, we are proud of this second year of operation, the results of which are evidence of the commitment of SOGHUOMA, our Members and our Board of Directors to achieving the government objectives, and the effectiveness of the model based on extended producer responsibility, a model that has been acknowledged worldwide as a model of excellence as it pertains to sustainable development.

Given that one litre of oil can contaminate one million litres of water, it is easy to understand SOGHUOMA’s motto:

Making every drop count …

David BoisChairman

Gilles GoddardGeneral Manager

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SOGHUOMA NB SCOREBOARDSales and Recovery Summary – January to December 2015

Ratings Legend1 Recoverable oil = 70%2 Percentage of marketed filters Metal filter = 71.63% Carboard filter = 28.37% 3 Average weight for marketed filters Metal filter = 0.561 kg Carboard filter = 0.1165 kg4 5% of oil containers are used more than once/95% recoverable 5 Recoverable glycol (antifreeze) = 45%6 55% of used oil is burnt legally (recycled) in small furnaces according to study

Zone Legend1 Kings, Queens, St-John, Sunbury, Westmorland, York2 Kent3 Northumberland4 Carleton, Gloucester, Madawaska, Restigouche, Victoria5 Albert6 Charlotte

Products Meas. Sales Recoverable Collected Collec. %

Burnt/Recycled6

Burnt%

Collected/Recycled %

Object. Recyc NB

Applicable in the Year

Oils litres 15,448,976 10,814,283 1 3,309,612 30.6% 5,947,856 55.0% 85.6% 50.0% 2015

Filtersunits 1,460,674 2 1,460,674 971,278 3 66.5% 25.0% 2015

kg 429,833 429,833 285,839 66.5% 25.0% 2015

Oil Containerslitres 8,898,577 8,117,743 4,868,705 4 60.0% 25.0% 2015

kg 432,220 410,862 246,419 4 60.0% 25.0% 2015

Glycol (antifreeze) litres 2,158,414 971,286 5 120,063 12.4% 50.0% 2017

Glycol (antifreeze) Containers

litres 1,178,302 1,178,302 191,946 16.3% 50.0% 2017

kg 49,171 49,171 8,010 16.3% 50.0% 2017

Oils

Filters

Containers

Containers

Glycol (antifreeze)

Collection Facilities

Zone RI In litres % RI In kg % RI Oil % Glycol (antifreeze) % Total kg % RI In litres % Commercial Commission Total

1 $0.03 2,703,892 82% $0.80 187,393 66% $2.10 165,378 67% 5,372 67% 170,750 67% $0.35 83,803 70% 57 1 58

2 $0.10 38,480 1% $1.00 10,189 4% $2.25 8,737 4% 285 4% 9,022 4% $0.45 1,669 1% 8 1 9

3 $0.10 70,225 2% $1.00 12,162 4% $2.25 11,079 4% 362 5% 11,441 4% $0.45 1,738 1% 6 1 7

4 $0.06 414,225 13% $0.90 59,951 21% $2.50 49,509 20% 1,612 20% 51,121 20% $0.40 30,224 25% 63 2 65

5 $0.10 16,535 0% $1.00 5,840 2% $2.25 4,506 2% 145 2% 4,651 2% $0.45 1,682 1% 6 0 6

6 $0.10 66,255 2% $1.00 10,304 4% $2.25 7,210 3% 234 3% 7,444 3% $0.45 947 1% 16 1 17

Total $0.037 3,309,612 100% $1.29 285,839 100% $2.36 246 419 100% 8,010 100% 254,429 100% $0.37 120,063 100% 156 6 162

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Note: This information is based on remittances received and RIs paid up to March 30, 2016 in relation to 2015.

Products

Enviromental Handling Charges

(EHC)

Return Incentives (RI) Net Difference Average RI

per quantity collected

Oils 773,070 122,581 650,490 $0.037/l

Filters 777,184 367,839 409,345 $0.379/un. $1.29/kg

Oil Containers 954,861 562,908 391,953 $0.116/un. $2.36/kg

Processing of Containers 0 78,005 (78,005) $0.016/un. $0.30/kg

Glycol (antifreeze) 199,261 44,137 155,124 $0.368/l

Glycol (antifreeze) Containers 117,830 18,265 99,565 $0.095/un. $2.36/kg

2,822,206 1,193,735 1,628,471

Oils

Filters

Containers

Containers

Glycol (antifreeze)


Zone RI In litres % RI In kg % RI Oil % Glycol (antifreeze) % Total kg % RI In litres % Commercial Commission Total

1 $0.03 2,703,892 82% $0.80 187,393 66% $2.10 165,378 67% 5,372 67% 170,750 67% $0.35 83,803 70% 57 1 58

2 $0.10 38,480 1% $1.00 10,189 4% $2.25 8,737 4% 285 4% 9,022 4% $0.45 1,669 1% 8 1 9

3 $0.10 70,225 2% $1.00 12,162 4% $2.25 11,079 4% 362 5% 11,441 4% $0.45 1,738 1% 6 1 7

4 $0.06 414,225 13% $0.90 59,951 21% $2.50 49,509 20% 1,612 20% 51,121 20% $0.40 30,224 25% 63 2 65

5 $0.10 16,535 0% $1.00 5,840 2% $2.25 4,506 2% 145 2% 4,651 2% $0.45 1,682 1% 6 0 6

6 $0.10 66,255 2% $1.00 10,304 4% $2.25 7,210 3% 234 3% 7,444 3% $0.45 947 1% 16 1 17

Total $0.037 3,309,612 100% $1.29 285,839 100% $2.36 246 419 100% 8,010 100% 254,429 100% $0.37 120,063 100% 156 6 162

Members 152 Collectors 5 Processors 8

Year End 2015

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Oils

Filters

Containers

Containers

Glycol (antifreeze)


Zone RI In litres % RI In kg % RI Oil % Glycol (antifreeze) % Total kg % RI In litres % Commercial IWMC Total

1 $0.10 122,755 100% $1.58 23,261 100% $2.34 39,708 100% 1,297 100% 41,005 100% $0.45 14,127 100% 22 6 28

SOGHUOMA PE SCOREBOARDSales and Recovery Summary – April to December 2015

Ratings Legend1 Recoverable oil = 70%2 Percentage of marketed filters Metal filter = 71.63% Carboard filter = 28.37% 3 Average weight for marketed filters Metal filter = 0.561 kg Carboard filter = 0.1165 kg4 5% of oil containers are used more than once/95% recoverable 5 Recoverable glycol (antifreeze) = 45%6 55% of used oil is burnt legally (recycled) in small furnaces according to study

Zone Legend1 Prince Edward Island

Products Meas. Sales Recoverable Collected Collec. %

Burnt/Recycled6

Burnt%

Collected/Recycled %

Object.SOGHUOMA

PE

Applicable in the Year

Oils litres 1,613,357 1,129,350 1 122,755 10.9% 621 142 55.0% 65.9% 50.0% 2015

Filtersunits 176,385 2 176,385 79,041 3 44.8% 25.0% 2015

kg 51,908 51,908 23,261 44.8% 25.0% 2015

Oil Containerslitres 972,505 923,880 877,872 4 95.0% 25.0% 2015

kg 41,789 41,789 39,708 4 95.0% 25.0% 2015

Glycol (antifreeze) litres 213,097 95,894 5 14,127 14.7% 50.0% 2017

Glycol (antifreeze) Containers

litres 101,543 101,543 33,041 32.5% 50.0% 2017

kg 3,986 3,986 1,297 32.5% 50.0% 2017

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Oils

Filters

Containers

Containers

Glycol (antifreeze)


Zone RI In litres % RI In kg % RI Oil % Glycol (antifreeze) % Total kg % RI In litres % Commercial IWMC Total

1 $0.10 122,755 100% $1.58 23,261 100% $2.34 39,708 100% 1,297 100% 41,005 100% $0.45 14,127 100% 22 6 28

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Note: This information is based on remittances received and RIs paid up to March 30, 2016 in relation to 2015.

Products

Enviromental Handling Charges

(EHC)

Return Incentives (RI) Net Difference Average RI

per quantity collected

Oils 80,668 12,276 68,392 $0.100/l

Filters 92,535 36,701 55,834 $0.464/un. $1.58/kg

Oil Containers 101,324 92,731 8,593 $0.106/un. $2.34/kg

Processing of Containers 0 12,554 (12,554) $0.014/un. $0.30/kg

Glycol (antifreeze) 19,353 6,357 12,996 $0.450/l

Glycol (antifreeze) Containers 10,154 3,038 7,116 $0.762/un. $2.34/kg

304,034 163,657 140 377

Members 94 Collectors 3 Processors 4

Year End 2015


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4

2

1 5

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Note: For information concerning RI rates for Internal Collectors Processors, please contact SOGHUOMA.

Map and RI Table

ZONE 1 2 3 4 5 6

Used oil ($/litre) 0.03 0.10 0.10 0.06 0.10 0.10

Used glycol (antifreeze) (45-55) ($/litre) 0.35 0.45 0.45 0.40 0.45 0.45

Used filters ($/kg) 0.80 1.00 1.00 0.90 1.00 1.00

Used oil and used glycol (antifreeze) containers ($/kg)

2.10 2.25 2.25 2.50 2.25 2.25

Aerosols ($/kg) 3.65 3.95 3.95 3.80 3.95 3.95

Zone Legend1 Kings, Queens, St-John Sunbury, Westmorland, York2 Kent3 Northumberland4 Carleton, Gloucester, Madawaska, Restigouche, Victoria5 Albert6 Charlotte

SOGHUOMA NB ZONES

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SOGHUOMA PE ZONES

Note: For information concerning RI rates for Internal Collectors Processors, please contact SOGHUOMA.

PE Map and RI Table

ZONE 1

Used oil ($/litre) 0.10

Used glycol (antifreeze) (45-55) ($/litre) 0.45

Used filters ($/kg) 1.00

Used oil and used glycol (antifreeze) containers ($/kg) 2.25

Aerosols ($/kg) 3.95

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Zone Legend1 Prince Edward Island


SOGHUOMA MEMBERS

• 1439174 Ont Ltd. (NLS Products)

• ADF Diesel Montréal Inc.

• Affinia Canada ULC

• Agco Parts Division

• Altrom Canada Corp.

• American Grease Stick Co

• Amsoil Inc.

• April Super Flo

• Arctic Cat Sales Inc.

• Arlyn Enterprises LTD DBA Boss Lubricants

• Armored Auto Group

• Asalco Inc.

• Atlantic Tractors & Equipment Ltd

• Atlas Copco Compressors Canada Inc.

• Auto Moto Canada Inc

• Auto-Camping Ltd.

• AutoChoice Parts & Paints Ltd

• Aviall Canada Ltd.

• Baldwin Filters Inc.

• Beck Arnley Worldparts Inc.

• BestBuy Distributors Ltd.

• Blue Water Agencies Limited

• BMW Canada Inc.

• Bosch Rexroth Canada Corporation

• BP Lubricants USA Inc.

• BRP Inc

• Canadian General Filters Ltd.

• Canadian Kawasaki Motors Inc.

• Canadian Tire

• CarQuest Canada Ltd.

• Castrol Industrial North America Inc.

• Chalifour Canada

• Champion Laboratories Inc.

• Chevron Canada Limited

• Chicago Pneumatic Tool Company Canada Ltd.

• CNH Industrial

• Cool Distribution Inc.

• Co-Op Atlantic

• Coop Fédérée – Énergie Sonic (La)

• Coop Fédérée (La)

• Costco Wholesale Canada Ltd.

• Crevier Lubrifiants Inc

• Cummins Eastern Canada

• Daimler Trucks Canada Ltd

• Davanac inc.

• Distributions RVI (Les)

• Echo Power Equipment (Canada)

• Équipement SMS Inc.

• Fastenal Canada Ltd.

• FCA Canada Inc.

• Ford Motor Company of Canada Ltd.

• Fram Group (Canada) Inc.

• Fullbore Marketing Ltd

• G.F. Thompson Company Ltd.

• G.K. Industries Ltd.

• Gamma Sales Inc.

• General Motors of Canada Company

• Groupe BMR Inc.

• Groupe Environnemental Labrie inc.

• Hall-Chem MFG Inc.

• Harley-Davidson Canada L.P.

• Hastings Filters

• Henkel Canada Corp.

• Home Depot of Canada Inc.

• Home Hardware Stores Limited

• Honda Canada Inc.

• Husqvarna Canada Corp.

• Hyundai Auto Canada Corp.

• Imperial Oil

• Importations Thibault Ltée

• Integrated Distribution Systems LP DBA Wajax Power Systems

Integrated Distribution Systems LP DBA Wajax Power Systems (NB)

Integrated Distribution Systems LP DBA Wajax Power Systems (NS)

• Irving Blending & Packaging

• ITW Permatex Canada

• Jacques Larochelle Inc.

• John Deere Canada ULC

• Kaeser Compresseurs Canada Inc.

• Kia Canada Inc.

• Kimpex Inc.

• SOGHUOMA NB SOGHUOMA PE

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• Kleen-Flo Tumbler Industries Limited

• KTM Canada Inc.

• Kubota Canada Ltd.

• Loblaws Inc.

• Lucas Oil Products (Canada) Company

• Machinerie R. Gagnon Inc.

• Mack Trucks Canada and Volvo Trucks Canada Division of Volvo Group Canada Inc.

• Mahle Aftermarket Inc. ULC

• Marindustrial Inc.

• Matech BTA Inc.

• Mazda Canada Inc.

• Mercedes-Benz Canada Inc.

• MFTA Canada Inc.

• Mitsubishi Motor Sales of Canada Inc.

• Modern Sales Co-Op

• Motion Industries (Canada) Inc.

• Motovan Corporation

• National Energy Equipment Inc.

• Navistar Canada Inc.

• NCH Canada Inc.

• Nissan Canada Inc.

• Paccar Parts, A Division of Paccar of Canada Ltd.

• Parker Canada Division

• Parkland Industries Ltd.

• Parts Canada Development Co.

• Parts for Trucks Inc.

• Petro-Canada Lubricants Inc

• Pièces d’Auto Transit Inc. (Les)

• Pièces de Transmission Unitrans Ltée (Les)

• Polaris Industries Inc.

• Prévost, une division de Groupe Volvo Canada Inc.

• Pro Form Products Ltd.

• Produits Automobiles Laurentide Inc.

• Produits Lubri-Delta Inc.

• Prolab Technolub Inc.

• Radiator Specialty Company of Canada Ltd.

• Recochem Inc.

• Ridge Tool Company

• Robco Inc.

• Robert Bosch Inc.

• Rona Inc.

• SC CLS Holdings ULC Complete Lube Supply

• Sears Canada Inc.

• Services Maintech / Maintech Services (Les)

• Shell Canada Products

• Shoreline Lube Distribution Inc.

• Sinto Racing Inc.

Sobeys Capital Inc.

• Southwestern Petroleum Canada Ltd.

• Spectra Premium Industries

• State Industrial Products DBA State Chemical Ltd.

• Stihl Ltd.

• Subaru Canada Inc.

• Suzuki Canada Inc.

• Texas Refinery Corp. of Canada Ltd.

• The Sherwin-Williams Co.

• Total Canada Inc.

• Toyota Canada Inc.

• UAP Inc.

• Uni-Sélect Eastern Inc.

• Univar Canada Ltd.

• Valvoline Canada a div. of Ashland Canada Corp.

• Vast-Auto Distribution Atlantic

• Verco International Inc.

• Volkswagen Group Canada Inc.

• Volvo Cars of Canada Corp.

• Wainbee Limited

• Wakefield Canada Inc.

• Walmart Canada Corp.

• Walter Surface Technologies Inc.

• WD-40 Company (Canada) Ltd.

• Worldpac Canada Inc.

• Yamaha Motor Canada Ltd.

• Yvan Brake & Clutch Industrial Parts Ltd.

• SOGHUOMA NB SOGHUOMA PE


SOGHUOMA COMMITTEES

SOGHUOMA’s Board of DirectorsAffinia Group John Robichaud

Atlantic CAT, Atlantic Tractors & Equipment Sheldon Boyd

Canadian Fuel Association Bill Simpkins

Co-op Atlantic Gordon O’Neill

Global Automakers of Canada Loulia Kouchaji

Home Hardware Stores Limited David Bois

North Atlantic Refining Limited, Mobile Peter Gosse

Parts for Trucks, Inc. Robert Siddall

SOGHUOMA General Manager Gilles Goddard

UNI-SELECT Chris Lesperance

Wakefield Canada Inc. Jennifer Gibb

Department of Communities, Land and Environment PE John S. Hughes

RECYCLE NB Jamie Seamans

Industry Advisory Committee Oil & Glycol Program (OAG) of New BrunswickAshland, Valvoline Bruce Trethewey

Atlantic Industrial Services Glen Anderson

Home Hardware Stores Limited David Bois

Recycle New Brunswick Gildard Chiasson, Jamie Seamans

Regional Service Commission (Péninsule acadienne) Gary Leblanc

Retail Council of Canada Jim Cormier

RPM Environnement inc. Bianca Cormier

SOGHUOMA Gilles Goddard, Jean Duchesneau or Albert Girard

Terrapure Environmental Adam Hayes

Employees and Consultants Gilles Goddard General Manager

Jean Duchesneau, CPA, CMA Assistant General Manager

Albert Girard Consultant

Magalie Morrissette, CPA, CMA Controller

Diane Caron Assistant to the General Manager

Kim DeMaisonneuve Administrative Assistant

Nathalie Télénis Administrative Assistant

Auditors

Lehoux Boivin, CPA, SENCRL4255, boul. Lapinière, bureau 300 Brossard (Québec) J4Z 0C7

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RAPPORT DE L’AUDITEUR INDÉPENDANT

1 By Martin Fontaine, CPA auditor, CGA, public accountancy permit No A127955

INDEPENDENT AUDITOR’S REPORT

To the Members of ATLANTIC USED OIL MANAGEMENT ASSOCIATION INC. (SOGHUOMA)We have audited the accompanying financial statements of the ATLANTIC USED OIL MANAGEMENT ASSOCIATION INC. (SOGHUOMA), which comprise the balance sheet as at December 31, 2015 and the statements of income, changes in net assets and cash flow for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, 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.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accouting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of the ATLANTIC USED OIL MANAGEMENT ASSOCIATION INC. (SOGHUOMA) as at December 31, 2015, and the results of its operations and its cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

Lehoux Boivin1

Brossard, March 31, 2016


INCOME for the year ended December 31, 2015

REVENUES (appendix A)

2015 2014

Environmental Handling Charges 3,126,241 2,656,494

Registration and renewal 23,600 30,600

Interest 13,030 4,506

3,162,871 2,691,600

EXPENSES (appendix A)

Program

Return incentives 1,265,068 834,541

Process incentives 92,326 41,987

Collection facilities incentives 7,588 18,780

Advertising and communications 201,686 202,512

Contribution to RECYCLE-NB 260,000 517,968

Contributions to PEI Minister of Environment 5,000 ―

Management fees (note 3) 98,774 63,615

Legal fees ― 2,710

Office and general expenses 31,988 61,173

Consulting fees 33,617 45,926

Compliance reviews and audits 33,921 ―

2,029,968 1,789,212

Administration


Legal fees 12,723 25,075

Professional fees 10,554 ―


Depreciation – intangible assets 9,483 3,903

140,002 113,047

EXCESS OF REVENUE OVER EXPENSES 992,901 789,341

The accompanying notes are an integral part of the financial statements

19

APPENDIX A – SOGHUOMA NB & PE SECTORAL INCOME for the year ended December 31, 2015

REVENUES

New Brunswick (appendix B)

2015 (12 months)

Prince Edward Island

(appendix C) 2015 (9 months)

TOTAL 2015

TOTAL 2014

Environmental Handling Charges 2,822,206 304,035 3,126,241 2,656,494

Registration and renewal 3,922 19,678 23,600 30,600

Interest 12,035 995 13,030 4,506

2,838,163 324,708 3,162,871 2,691,600

EXPENSES

Program

Return incentives 1,115,731 149,337 1,265,068 834,541

Process incentives 78,005 14,321 92,326 41,987

Collection facilities incentives 4,160 3,428 7,588 18,780

Advertising and communications 178,537 23,149 201,686 202,512

Contribution to RECYCLE-NB 260,000 ― 260,000 517,968

Contributions to PEI Minister of Environment ― 5,000 5,000 ―

Management fees (note 3) 89,290 9,484 98,774 63,615

Legal fees ― ― ― 2,710

Office and general expenses 27,669 4,319 31,988 61,173

Consulting fees 31,713 1,904 33,617 45,926

Compliance reviews and audits 33,921 ― 33,921 ―

1,819,026 210,942 2,029,968 1,789,212

Administration


Legal fees 11,584 1,139 12,723 25,075

Professional fees 10,554 ― 10,554 ―

Management fees (note 3) 78,995 8,391 87,386 66,114

Depreciation of intangible assets 8,573 910 9,483 3,903

127,413 12,589 140,002 113,047

EXCESS OF REVENUE OVER EXPENSES 891, 724 101,177 992,901 789,341


APPENDIX B – SOGHUOMA NB INCOME for the year ended December 31, 2015

REVENUES

2015 2014

Environmental Handling Charges 2,822,206 2,656,494


Interest 12,035 4,506

2,838,163 2,691,600

EXPENSES

Program

Return incentives 1,115,731 834,541

Process incentives 78,005 41,987

Collection facilities incentives 4,160 18,780

Advertising and communications 178,537 202,512

Contribution to RECYCLE-NB 260,000 517,968


Legal fees ― 2,710


Consulting fees 31,713 45,926

Compliance reviews and audits 33,921 ―

1,819,026 1,789,212

Administration


Legal fees 11,584 25,075

Professional fees 10,554 ―


Depreciation of intangible assets 8,573 3,903

127,413 113,047

EXCESS OF REVENUE OVER EXPENSES 891, 724 789,341

21

APPENDIX C – SOGHUOMA PE INCOME for the year ended December 31, 2015

REVENUES

2015 2014

Environmental Handling Charges 304,035 ―

Registration and renewal 19,678 ―

Interest 995 ―

324,708 ―

EXPENSES

Program

Return incentives 149,337 ―

Process incentives 14,321 ―

Collection facilities incentives 3,428 ―

Advertising and communications 23,149 ―

Contributions to PEI Minister of Environment 5,000 ―

Management fees (note 3) 9,484 ―

Office and general expenses 4,319 ―

Consulting fees 1,904 ―

210,942 ―

Administration

Office and general expenses 2,149 ―

Legal fees 1,139 ―

Management fees (note 3) 8,391 ―

Depreciation of intangible assets 910 ―

12,589 ―

EXCESS OF REVENUE OVER EXPENSES 101,177 ―


CHANGES IN NET ASSETSChanges in Net Assets for the year ended December 31, 2015

Unrestricted New Brunswick

Unrestricted Prince Edward

IslandReserve Funds

New Brunswick

2015

Balance, Beginning of Year 789,341 ― ― 789,341

Excess of revenue over expenses 891,724 101,177 ― 992,901

Affectation to reserve fund (500,000) ― 500,000 ―

Balance, End of Year 1,181,065 101,177 500,000 1,782,242

Unrestricted New Brunswick

Unrestricted Prince Edward

IslandReserve funds

New Brunswick

2014

Balance, Beginning of Year ― ― ― ―

Excess of revenue over expenses 789,341 ― ― 789,341

Balance, End of Year 789,341 ― ― 789,341


23

ASSETS

2015 2014

Current Assets

Cash 983,854 779,709

Accounts receivable 839,443 685,009

Prepaid expenses 1,703 1,433

1,825,000 1,466,151

Investments (note 4) 501,952 ―

Intangible assets (note 5) 20,099 19,512

2,347,051 1,485,663

LIABILITIES

Current Liabilities

Accounts payable (note 6) 510,279 662,970

Advances from an organization (note 7) 54,530 33,352

564,809 696,322

NET ASSETS

Unrestricted 1,282,242 789,341

Reserve funds New Brunswick 500,000 ―

1,782,242 789,341

2,347,051 1,485,663


On behalf of the Board:Mr. David Bois, ChairmanMrs Loulia Kouchaji, Vice-Chairman

BALANCE SHEETat December 31, 2015


OPERATING ACTIVITIES

2015 2014

Cash receipts – members 2,995,407 2,002,085

Cash receipts – interest and others 11,078 4,506

Cash paid – service providers (2,313,448) (1,236,819)

693,037 769,772

INVESTING ACTIVITIES

Acquisition of intangible assets (10,070) (23,415)

Acquisition of investments (500,000) ―

Advances from an organization 21,178 33,352

(488,892) 9,937

Increase in cash and cash equivalents 204,145 779,709

Cash and cash equivalents, beginning of year 779,709 ―

Cash and cash equivalents, end of the year 983,854 779,709


CASH FLOWfor the year ended December 31, 2015

25

NOTES TO FINANCIAL STATEMENTSfor the year ended December 31, 2015

1 Governing Statutes and Nature of BusinessThe organization was incorporated on November 18, 2013 under Part I of New Brunswick Companies Act. According to the Federal and Provincial Income Tax Acts, it is a non-profit organization and is therefore exempt from income taxes.

The organization has the mandate to establish and manage an integrated program of recovery and reclamation for used oils and antifreeze and also for oil, fluid and antifreeze containers in an efficient and responsible manner.

2 Significant Accounting PoliciesThe financial statements were prepared in accordance with Canadian accounting standards for not-for-profit organizations (ASNFPO) and include the following significant accouting policies:

Use of estimatesThe preparation of these 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, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the current period. Actual information could differ from that determined based on these estimates and assumptions. These estimates are reviewed periodically and adjustments are made to income in the year they become known.

Return incentivesReturn incentives expenses are recognized when the lubricating oil and antifreeze and/or containers and filters are collected by a SOGHUOMA organization’s registered Collector.

Processing incentivesProcessing incentives expenses are recognized when the lubricating oil containers are processed by a SOGHUOMA organization’s registered Processor.

Financial instruments Measurement of financial instrumentsThe organization initially measures its financial assets and liabilities at fair value, except for certain non-arm’s length transactions. They are subsequently measured at amortized cost, except for other investments and advances from shareholders which are measured at cost and investments in quoted shares which are measured at fair value. Changes in fair value are recognized in net income.

ImpairmentFinancial assets measured at cost are tested for impairment when there are indicators of impairment. The amount of the write-down is recognized in net income. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account, provided it is no greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously. The amount of the reversal is recognized in net income.

InvestmentsInvestments are accounted for at market value.


2 Significant Accounting Policies (continued)Cash and cash equivalentsCash and cash equivalents include cash and other highly liquid financial instruments with maturities of three months or less from date of purchase. Term deposits with maturities exceeding three months from date of purchase are not included in cash and cash equivalents. They are considered as an investing activity.

Revenue recognitionRevenue from Environmental Handling Charges are recognized when the lubricating oil and/or oil containers, oil filters and glycol (antifreeze) and/or glycol (antifreeze) containers are sold by members, based on their remittance forms, except for revenue from prior years received in the current year following a new registration, because Environmental Handling Charges must be remitted retroactively from seven years, and for additional revenue determined following a compliance review. These Environmental Handling Charges are recognized in the year during which they are determined.

Intangible assetsThe websites are accounted for at cost and depreciation on the basis of their useful life using the straight-line method at 33%.

Expense allocationThe organization displayed its expenses by functions.

Management fees shared by program and administration functions are allocated proportionally to hours spent as follows:

Program Administration

Management fees from 10% to 90% from 10% to 90%


27

3 Management FeesThe organization SOGHUOMA retains the services of the organization Société de gestion des huiles usagées (SOGHU) for the purposes of assisting the organization SOGHUOMA in the conception, implementation and operation of the recovery and reclamation program required to ensure the appropriate recovery and reclamation of the applicable products in accordance with Atlantic Provinces legislative and regulatory requirements. For the year ended December 31, 2015, the prorata used is 90.4% for New Brunswick (100% in 2014) and 9.6% for Prince Edward Island (0% in 2014).

New Brunswick

(2015)Prince Edward

Island (2015)

TOTAL 2015 TOTAL 2014

Program 89,290 9,484 98,774 63,615

Administration 78,995 8,391 87,386 66,114

168,285 17,875 186,160 129,729

Operating expenses incurred during the year with this organization are as follows:

PROGRAM

Container segregation 11,436 1,216 12,652 11,789

Advertising and communication 1,876 200 2,076 247

Salaries, fringe benefits, and management and administration contracts 64,334 6,832 71,166 45,125

Consulting service 307 32 339 ―


89,290 9,484 98,774 63,615


4 Investments2015 2014

Term deposits, bearing interests at 2.5%, maturing in November 2020 501,952 ―

5 Intangible Assets2015 2014

DEPRECIABLE CostAccumulated amortization Net value Net value

Website 33,485 13,386 20,099 19,512

6 Accounts Payable

2015 2014

Trade 277,651 447,042

Trade – SOGHU 210,359 146,593

Sales taxes payable 22,269 69,335

510,279 662,970

3 Management Fees (continued)

ADMINISTRATION

New Brunswick

(2015)Prince Edward

Island (2015)

TOTAL 2015 TOTAL 2014


Rent 4,797 509 5,306 4,374

Salaries, fringe benefits, and management and administration contracts 54,134 5,751 59,885 47,924

Depreciation of fixed assets 8,521 905 9,426 4,144

78,995 8,391 87,386 66,114

168,285 17,875 186,160 129,729


29

7 Advances from an Organization

Cash and the current managements of the organizations SOGHUOMA and SOGHU were assured by a common general manager. The advances from the other organization consist of cash flow advances and expenses assuming related to the management of the organization, based on an agreement renewable in 2018. These loans are interest-free and do not include terms of repayment. The balance owed is $54,530 as at December 31, 2015.

8 CommitmentsContribution at Recycle NBUnder the designated material regulation Clean Environment Act of New Brunswick, the organization must cover annual administrative costs incurred by Recycle NB, with regard to oil, oil filters, oil containers, glycol and glycol containers. The estimated amount for 2016 is $210,000.

Contribution to PEI Minister of EnvironmentUnder the Materials Stewardship and Recycling Regulations of the PEI Environmental Protection Act, the organization must pay an annual fees of $5,000.

Management and administration servicesThe organization has reached an agreement with the organization SOGHU until December 31, 2018. Under this agreement, the organization must pay a management fee to the organization SOGHU, calculated on a pro rata basis of total budgeted environmental handling charges for each organization. For the year ended December 31, 2015, the prorata used is 83.45% for the organization SOGHU (85.3% in 2014) and 16.55% for the organization SOGHUOMA (14.7% in 2014).


9 Related Party TransactionsIn regular course of its business, the organization receives Environmental Handling Charges from its members and pays Return Incentives to Collectors and Processors. Some members and one Collector (without voting right) have representatives who are part of the Board of Directors. These transactions are measured at the exchange amount and are subject to the usual commercial conditions or the organization.

The principal transactions concluded with companies or organizations members of the Board of Directors of the organization during the year are as follows:

REVENUES

2015 2014

Environmental Handling Charges 243,636 203,088


Finally, the accounts receivable include an amount of $42,823 to be received from companies managed by members of the Board of Directors.

10 Financial InstrumentsThe organization is exposed to various risks through its financial intruments. The following analysis provides a measure of the Organization’s risk exposure and concentrations as at December 31, 2015.

Credit riskIn the regular course of its operations, the organization monitors the members that did not produce monthly remittance forms and did not remit Environmental Handling Charges.

The organization is not exposed to any significant risk with respect to a credit concentration.

11 Comparative FiguresComparative figures and opening balance sheet have been reclassified to conform to the presentation adopted for the current year.


1101 Brassard Blvd., Suite 214 Chambly, Quebec J3L 5R4Phone: 450.447.9996 Fax: 1.855.497.7505E-mail: [email protected]

SOGHUOMA.COM I 1.877.987.6448

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