make every drop count - soghu

Make every drop

count

2012 annual rEport

table of Contents

04 SOGHU and its partners

05 Standard flow cycle of funds and products

06 SOGHU: an example of efficiency

08 Scoreboard

10 SOGHU Members

12 SOGHU Committees

14 SOGHU Zones

Financial statements

15 Independent auditor’s report

16 Income

17 Changes in net assets

18 Balance sheet

19 Cash flow

20 Notes to financial statements

SOGHU, a private non-profit corporation, manages the recovery and reclamation of products in Québec included in provincial regulations. The Members covered by this regulation are defined as Brand Holders or First Importers who market these products in Québec.

SOGHU is administered by a Board of Directors composed of Members from different sectors, such as oil manufacturers, filter manufacturers, the petroleum industry, the automobile manufacturing industry, the antifreeze manufacturing industry, the cooperative community, major retailers, a representative of RECYC-QUÉBEC and the Chair of the Awareness Committee. You will notice that SOGHU’s new logo now includes 5 icons.

The Collectors pick up the products from the Generators and deliver them to the Processors, who give them a second life.

The Collectors and the Processors registered with SOGHU must prove that their activities are in compliance with the existing regulations. They are audited regularly.

More than 12,000 Generators (mechanical repair shops or industries) benefit from a collection service throughout the province. Of this number, over 950 are registered as Collection Facilities to allow individuals or low-volume businesses to bring back the listed products, free of charge. We ask those who use this service to respect the schedules and to not leave products on the ground. All GM and Toyota dealers, the Monsieur Muffler and Octo mechanical repair shops and several private mechanical repair shops, as well as several municipalities, are volunteers, directly involved in improving the environment and providing better service to their respective customers.

The cost of recovery and reclamation of the hazardous materials for which SOGHU is responsible is low in proportion to the benefits: $0.04/litre for oil, $0.35/filter less than 8 inches in length, $0.85/filter 8 inches and more in length, $0.10/litre of capacity for oil and antifreeze containers, $0.10/litre of mixed antifreeze (50-50) and $0.16/litre of concentrated antifreeze.

Given that one litre of oil can contaminate one million litres of water, SOGHU’s motto -“Making every drop count”- is thus easily understood.

2012 annual rEport04

SoGHu and its partners

COLLECTION FACILITIES Establishments registered with SOGHU to receive from the public, at no cost to them, used oil products governed by the Regulation.

MEMBERSBrand Holders and the First importers or suppliers who fund the system at $0.04 per litre for applicable lubricating oils; $0.10 per litre of antifreeze mix; $0.16 per litre of antifreeze concentrate (antifreeze effective July 1st, 2012); $0.10 per litre for oil and antifreeze containers of 50 litres or less; $0.35 per filter of 8 inches or less (203 mm height); $0.85 for filters of more than 8 inches (203 mm or more); $0.35 cents per sump type filters for automatic transmissions and $0.25 per aerosol container.

PROCESSORS

Establishments that give new life to products.

COLLECTORSEstablishments that collect the products from generators and receive subsidies from SOGHU (additional information see page 14).

GENERATORSEstablishments that create used products (garages, vendors, commercial, industrial and municipal sectors, forestry industry, agriculturists, transporters, individuals).

prOdUCtS

$ FUNdS

Standard flow cycle of funds and products

Thanks to the great involvement and the professionalism of each of its partners (Members, Collectors, Processors, Generators, Collection Facilities, users who return products from their own oil changes), SOGHU continues to present exemplary financial results and recovery rates. After reducing the cost of the Environmental Handling Charge on filters by $0.10 in 2012, SOGHU is glad to introduce new reductions in 2013; another $0.05 on filters and $0.01/litre on oil. Remarkably, these reductions are accompanied by maintenance of the recovery rate between 85% and 90%.

new regulation, new products and changes to the former regulationSince July 1st, 2012, SOGHU manages new products – vehicle and machinery antifreeze and its containers of 50 litres or less, as well as brake cleaner aerosol containers. SOGHU’s advertising thus emphasized the addition of antifreeze to sensitize the Members and Generators as well as the public at large.

Following the publication of this Regulation, it was necessary to negotiate and sign a new agreement with RECYC-QUÉBEC in accordance with this Regulation and new agreements with the Members, Collectors and Processors.

Manufactured goods containing products covered by SoGHuA study of the percentage of oil consumed in use drew our attention to the large volume of products covered by SOGHU that were included in original equipments manufactured. For oil alone, this volume represented 8.8% of the annual sales. In partnership with the Western provinces and in collaboration with associations of automobiles, light trucks, transportation trucks, heavy farm machinery and construction machinery manufacturers, SOGHU undertook to find a simple and equitable formula to quantify the oil, filters and antifreeze marketed annually. Thanks to the great cooperation of Members and their organizations, this study has been completed and, starting in July 2013, Environmental Handling Charges will be remitted to the associations on these volumes.

SoGHu:an example of efficiency


1st row > Mr. Laurent Gagnon, Mr. L. Pierre Comtois, Mr. Julian Cininni, Mr. Gilles Goddard, g.m., Mr. Carol Montreuil, chairman, Mr. Michael Paul, Mr. Pierre Yves Larose

2nd row > Mr. Paul Granda, Mr. Claude Bourque, Mr. Jean-François Lacasse, Mr. Paul Lefebvre, Mr. François Gingras, Mr. Luc Lortie, Mr. Robert Huberdeau, v.p., Mr. Marc-André Arsenault, Mr. Raymond Savard, Mr. Guy Bélanger, Mr. Roch Cousineau

Missing > Mr. André Buisson

the atlantic provinces harmonize their regulations with Québec and Western canadaSOGHU worked with New Brunswick for nearly three years on the preparation of a Regulation harmonized with the Québec Regulation. Due to the very open-minded approach of the New Brunswick Government representative, we can declare “mission accomplished”. In the past few months, we learned that Newfoundland and Prince Edward Island, influenced by New Brunswick’s approach, had finally decided to submit a similar Regulation. We are also delighted that, after agreement among the provinces, there is only one Board of Directors to manage the Atlantic provinces. ‘SOGHU Atlantic UOMA’, which will have four distinct branches to respect each province, based on budget and recovery rate. SOGHU will be the manager.

The Atlantic program, including the Environmental Handling Charges and recovery, should begin on January 1st, 2014 for the above-mentioned provinces. In collaboration with the provinces, we are already laying the foundations of the system.

The Board of Directors and SOGHU’s staff are very proud of all the projects and results of this 8th year of activities. The approach based on exceptional ‘win-win’ partnerships among SOGHU, the Collectors, the Processors, the Generators and the municipalities continues to be relevant and highlights the excellent work of all the partners for the past year. Finally, we wish to recognize and thank RECYC-QUÉBEC for its excellent cooperation with SOGHU.

In short, we believe that our program represents a module of sustainable development, the balance between business needs and the needs of society.

Carol Montreuil

Chairman

Gilles Goddard

General Manager

ZONe LeGeNdZone 1: MontréalZone 2: QuébecZone 3: Centre-du-QuébecZone 4: Outaouais - LaurentidesZone 5: Saguenay - Lac-St-JeanZone 6: Bas-St-Laurent - GaspésieZone 7: AbitibiZone 8: Côte-NordZone 9: Nord-du- Québec Zone 10: Iles-de-la-MadeleineZone 11: Nord du Nord-Québec Basse

Côte-Nord Île d’Anticosti Zone 12: Municipal

NOtatIONS LeGeNd1 - 72.9% of oils are recyclable2 - Average weight of filters marketed

< 8” = 0.31487 kg and > 8“ = 1.11053 kg 3 - Actual collections X 0.69

(0.69 = Actual weight of crushed filters)4 - 95% of containers are recyclable5 - Actual collections X 94.2% following

the segregation of containers6 - 43.7% of antifreeze is recyclable7 - Actual collections X 3.4% following

the segregation of containers

BreakdOwN: On december 31, 2012 Members 278 Collectors 26 Processors 68 Internal Collector 4

ScoreboardSummary of sales and collections for 2012


products Sales Collectable Collected Collection rate Objective r-QOils (litres) 92 126 966 67 160 5581 63 408 990 94.4% 75.0%

Filters (units) 9 676 239 9 676 239 7 981 002 82.5% 75.0%

Filters (kg) 3 620 7372 3 620 737 2 986 3993 82.5% 75.0%

Oil Containers (litres) 38 802 567 36 862 439 35 176 905 95.4% 75.0%

Oil Containers (kg) 2 107 945 2 002 5484 1 910 9825 95.4% 75.0%

Antifreeze (litres) 5 321 268 2 325 3946 735 174 31.6% 25.0%†

Antifreeze Containers (litres) 2 691 003 2 556 453 1 504 8957 58.9% 25.0%†

Antifreeze Containers (kg) 114 043 108 3414 63 776 58.9% 25.0%†

Oils Filters Containers Containers antifreezerI In litres % rI In kg % rI Oils % antifreeze % total kg % rI In litres %

Zone 1 $0.03 31 353 384 49.45% $0.65 1 473 932 49.35% $1.27 708 370 37.07% 23 379 36.66% 731 749 37.06% $0.16 391 044 53.19%

Zone 2 $0.04 7 023 140 11.08% $0.65 357 849 11.98% $1.70 176 667 9.24% 5 901 9.25% 182 568 9.25% $0.18 110 164 14.98%

Zone 3 $0.07 9 197 923 14.51% $0.80 510 078 17.08% $1.95 332 819 17.42% 11 166 17.51% 343 984 17.42% $0.23 120 700 16.42%

Zone 4 $0.07 2 967 587 4.68% $0.82 174 426 5.84% $1.95 176 313 9.23% 6 097 9.56% 182 410 9.24% $0.23 35 891 4.88%

Zone 5 $0.07 2 904 139 4.58% $0.85 137 889 4.62% $2.25 124 099 6.49% 4 388 6.88% 128 487 6.51% $0.30 20 525 2.79%

Zone 6 $0.09 2 184 934 3.45% $0.90 137 189 4.59% $2.33 87 164 4.56% 2 980 4.67% 90 144 4.56% $0.34 20 228 2.75%

Zone 7 $0.07 2 803 254 4.42% $0.90 87 620 2.93% $2.33 126 646 6.63% 4 478 7.02% 131 124 6.64% $0.32 9 797 1.33%

Zone 8 $0.10 2 685 417 4.24% $0.95 50 271 1.68% $2.55 54 050 2.83% 1 838 2.88% 55 888 2.83% $0.45 8 072 1.10%

Zone 9 $0.10 995 110 1.57% $0.95 15 141 0.51% $2.55 29 576 1.55% 1 054 1.65% 30 630 1.55% $0.45 18 753 2.55%

Zone 10* $0.28 382 633 0.60% $1.35 3 954 0.13% $5.25 4 674 0.24% 167 0.26% 4 841 0.25% $0.50 0 0.00%

Zone 11** $0.28 400 531 0.63% $1.50 24 067 0.81% $5.25 15 544 0.81% 528 0.83% 16 071 0.81% $0.50 0 0.00%

Zone 12*** $0.20 510 938 0.81% $0.55 13 984 0.47% $1.20 75 057 3.93% 1 800 2.82% 76 857 3.89% $0.50 0 0.00%

Total $0.05 63 408 990 100.00% $1.05 2 986 399 100.00% $1.96 1 910 980 100.00% 63 776 100.00% 1 974 756 100% $ 0.20 735 174 100.00%

* Note: For zone 10, Les Iles-de-la-Madeleine, a special transportation rI of $0.18 per litre is allowed for used oils carried to the mainland.** Note: For zone 11, Nord du Nord-Québec Basse Côte-Nord Île d’anticosti, a special transportation rI of $0.28 per litre is allowed for used oils

carried to the mainland.*** Note: Zone 12 is privileged from a particular functioning following a contract with Laurentide re/sources for a specific service to municipalities.† these rates will be applicable in 2015.

Note: this information is based on remittances received and rIs paid up to March 25, 2013. these figures can change if additional remittances and incentives are added to this period.

products eHC rI Net difference

average rI per quantity collected

Oils $$ 4 606 348 3 322 954 1 283 394 $0,052/ltr

Filters $$ 4 235 300 3 148 627 1 086 673 $0,395/un. $1,05/kg

Oil Containers $$ 4 059 194 3 616 517 442 677 $0,103/un. $1,89/kg

Decontaminations $$ 0 594 709 (594 709) $0,017/un. $0,30/kg

Antifreeze $$ 479 663 146 654 333 010 $0,199/ltr

Antifreeze Containers $$ 269 100 129 433 139 667 $0,086/un. $2,03/kg

13 649 606 10 958 894 2 218 035

Oils Filters Containers Containers antifreezerI In litres % rI In kg % rI Oils % antifreeze % total kg % rI In litres %

Zone 1 $0.03 31 353 384 49.45% $0.65 1 473 932 49.35% $1.27 708 370 37.07% 23 379 36.66% 731 749 37.06% $0.16 391 044 53.19%

Zone 2 $0.04 7 023 140 11.08% $0.65 357 849 11.98% $1.70 176 667 9.24% 5 901 9.25% 182 568 9.25% $0.18 110 164 14.98%

Zone 3 $0.07 9 197 923 14.51% $0.80 510 078 17.08% $1.95 332 819 17.42% 11 166 17.51% 343 984 17.42% $0.23 120 700 16.42%

Zone 4 $0.07 2 967 587 4.68% $0.82 174 426 5.84% $1.95 176 313 9.23% 6 097 9.56% 182 410 9.24% $0.23 35 891 4.88%

Zone 5 $0.07 2 904 139 4.58% $0.85 137 889 4.62% $2.25 124 099 6.49% 4 388 6.88% 128 487 6.51% $0.30 20 525 2.79%

Zone 6 $0.09 2 184 934 3.45% $0.90 137 189 4.59% $2.33 87 164 4.56% 2 980 4.67% 90 144 4.56% $0.34 20 228 2.75%

Zone 7 $0.07 2 803 254 4.42% $0.90 87 620 2.93% $2.33 126 646 6.63% 4 478 7.02% 131 124 6.64% $0.32 9 797 1.33%

Zone 8 $0.10 2 685 417 4.24% $0.95 50 271 1.68% $2.55 54 050 2.83% 1 838 2.88% 55 888 2.83% $0.45 8 072 1.10%

Zone 9 $0.10 995 110 1.57% $0.95 15 141 0.51% $2.55 29 576 1.55% 1 054 1.65% 30 630 1.55% $0.45 18 753 2.55%

Zone 10* $0.28 382 633 0.60% $1.35 3 954 0.13% $5.25 4 674 0.24% 167 0.26% 4 841 0.25% $0.50 0 0.00%

Zone 11** $0.28 400 531 0.63% $1.50 24 067 0.81% $5.25 15 544 0.81% 528 0.83% 16 071 0.81% $0.50 0 0.00%

Zone 12*** $0.20 510 938 0.81% $0.55 13 984 0.47% $1.20 75 057 3.93% 1 800 2.82% 76 857 3.89% $0.50 0 0.00%

Total $0.05 63 408 990 100.00% $1.05 2 986 399 100.00% $1.96 1 910 980 100.00% 63 776 100.00% 1 974 756 100% $ 0.20 735 174 100.00%

Collection FacilitiesCommercial Municipal total

171 87 258

60 52 112

111 131 242

24 73 97

30 20 50

44 73 117

18 33 51

13 17 30

3 2 5

6 0 6

0 3 3

0 0 0

480 491 971

3M Canada Company7593180 Canada Inc.T/A Pepco Inc.7729570 Canada Inc. / Thermo King Montréal9169-1931 Québec Inc. (VAG Motorsport)9189-0731 Québec inc. / Envirolin CanadaABB Inc. (Québec)ABB Inc. (Varennes)Acklands-Grainger Inc.ADF Diesel Toronto Ltee.Aerochem Inc.Affinia Canada ULCAGCO CorporationAgnico-Eagle Mines Ltd, Division MeadowbankALFA Services Conseils inc.Altrom Canada Corp.American Grease Stick Co.Amsoil Inc.Antirouille MétropolitainApril Super FloArctic Cat Sales IncArmored Autogroup Canada ULCAsalco Inc.Assemblage Camaz inc.Atelier HP LtéeAtelier PV Hydraulique (2004) inc.Atlas Copco Compressors CanadaAuto Modena Inc.Auto-Camping Ltd.Autolectra Inc.Auto-Moto Canada Inc.Baldwin Filters Inc.Baldwin Filters Inc. (DBA Hastings Filters)Barjan LLCBarnes DistributionBASF Canada Inc.Beck/Arnley Worldparts, Inc.Benson Group Inc.BestBuy Distributors Ltd.Black Dog Lubricants Ltd.Blue Water (Quebec) LTDBlue Water Agencies LTDBluewave Energy

BMW Canada Inc.Bock Inc.Bosch Rexroth Canada CorporationBP Lubricants USA Inc.Bronswerk Marine Inc.BRPBusch Vacuum Technics Inc.Camions Freightliner Rivière-du-Loup Inc.Campbellton Auto SupplyCanadian General Filters LimitedCanadian Kawasaki Motors, Inc.Canadian Pacific RailwayCarquest Canada LtdCastrol Industrial North America Inc.Centre du Camion J.L. Inc.Centre Hydraulique Hydrep Inc.Chalifour CanadaChampion Laboratories, Inc.Chauffage Premier Inc.Chem-Ecol Ltd.Chevron Canada LimitedChicago Pneumatic Tool Co.Chrysler Canada Inc.CNH America Ltd.Coastal Blending & PackagingCOMAIRCO LTEECompresseurs Québec Div. Inter-Power A.K. Corp.Control Chemical (1989) CorporationContrôle-air Compresseur 2010 Inc.Cool Distribution incCostco Wholesale Canada Ltd.CPT Canada Power Technology LtdCRC Canada Inc.Cummins Est du Canada SECD.A.S. Distributors, Inc.D.D. Distributions Lubrifiants inc.Daimler Trucks North America LLCDenis Gauvin Inc.Distribution M.C. Opéré par 9222-2850 Québec Inc.Distribution RegitanDistributions J. Pilon enr.Echo Power Equipment (Canada)ECL Services inc.

Elso Ltée/LtdEmpack Spraytech inc.Engrenage Provincial Inc.Eni USA R&M Co. Inc.Entrepôt de Montréal 1470 Inc.Entreprises Électriques Nadco Inc.Équipement SMS Inc.Équipements E.M.U. ltéeÉquipements Labrie LtéeÉquipements Lourds Papineau Inc.Evans 2000 LtdFastenal Canada, LTDFederated Co-operatives LimitedFord Motor Company of Canada Ltd.For-Min Div. DK Spec Inc.FRAM Group (Canada) Inc.Fred Deeley Imports LtdFuchs Lubricants Canada Ltd.Fullbore Marketing LtdG.F. Thompson Company LimitedG.K. Industries Ltd.Gamma Sales Inc.Garage Guy AudetGarage R. NadeauGates Canada Inc.Gauvin Équipement Inc.GEA WestfaliaSurge, Inc.General Electric Canada - Transportation SystemsGeneral Motors du Canada LimitéeGilles Cusson Inc.Granby Industries Limited PartnershipGrenier Poulin inc.Groupe BMR inc.Hall-Chem MFG Inc.Hangsterfer’s Laboratories IncorporatedHenkel Canada CorporationHewitt Équipement LimitéeHome Depot of Canada Inc.Home Hardware Stores LimitedHonda Canada Inc.Houghton Canada Inc.HP AutosportHudson’s Bay Co.

SoGHuMembers


Husqvarna Canada Corp.Hydralogie Inc.Hydromec Inc.Hyundai Auto Canada Corp.Importations Thibault LtéeInter Outaouais Inc.J. Walter Compagnie LtéeJacques Larochelle Inc.Jaguar Land Rover CanadaJig-A-Loo Canada Inc.John Deere Canada ULCKaeser Compresseurs Canada incKia Canada Inc.Kimpex Inc.Kinecor Inc.King-O-Matic Industries LimitedKleen-Flo Tumbler Industries LimitedKrown CorporateKubota Canada Ltd.La Coop fédéréeLaboratoires St-Antoine inc.Le Groupe GLM Inc.Le Groupe Harnois Inc.Le Groupe Pétrolier Olco Inc.Les Compagnies Loblaw LimitéesLes Distributions Automont Inc.Les Distributions R.V.I. LtéeLes Entreprises Ethier Hi-Tech Inc.Les Équipements Industriels IBS Inc.Les Industries Gotham inc.Les Industries Spectra/Premium Inc.Les Industries Technika IncLes Industries Wajax LimitéeLes Lubrifiants Sentinel Corp.Les Pétroles R.L. Inc.Les Pétroles Sonic (Coopérative Fédérée de Québec)Les Pièces d’Auto T.D.G. Inc.Les Pièces d’Auto Transbec Inc.Les Pièces d’Auto Transit Inc.Les Pièces de Transmission Unitrans Ltée.Les Services MaintechLubri-Expert Inc.Lubrifiants et Produits Spécialisés Kenbec Inc.Lubrifiants Petro-Canada inc.Lubrification Québec Inc.Lubri-Lab Inc.Lucas Oil ProductsM & M Fournels Corp. LtdMacEWEN PETROLEUM INC.Machinerie R. Gagnon inc.Magnéto Hydraulique et Pneumatique

Malmberg Truck Trailer Equipment LtdMatech BTA Inc.Maxim Transportation Services Inc.Mazda Canada Inc.MCS-Servo Inc.Mechanick Pieces d’Autos (144597 Canada Inc.)Mercedes-Benz Canada Inc.MFTA Canada Inc.Milacron Canada, division of Milacron Canada CorpMitsubishi Motor Sales of CanadaModern Sales Co-opMontreal 4 Cylindres - Pièces Inc.Motion Industries (Canada) Inc.Motor Coach Industries LimitedMotovan CorporationNational Energy Equipment Inc.National Pneumatic incNavistar Canada, Inc.New Flyer Industries Ltd.Nissan Canada Inc.NLS ProductsNynas Canada Inc.Oto-Protec Inc.Paccar Parts, A Division of Paccar of Canada, LtdPara-Performance incParker Hannifin CanadaParts CanadaPennzoil-Quaker State Canada Inc.Permatex CanadaPétroles Petro-Canada 6989641 Canada IncPétrolière ImpérialePhilippe Gosselin & Associés LimitéePièces d’Auto J.L. LtéePièces d’Autos Jean LeblancPièces d’Autos Ultra Chateauguay inc.Pièces de Camion de la Beauce Inc.Polaris Industries Ltd.Porsche Cars North America Inc.Prévost, une division de Groupe Volvo Canada Inc.PRINOTH LTDProduits Chimiques Magnus LtéeProduits Industriels Kara Inc.Produits Lubri-Delta Inc.Produits Shell Canada LimitéeProlab Technolub Inc.Radiator Specialty Company of Canada Ltd.Recochem Inc.Regional Automotive Warehousing Ltd

Réseau C.B. (Div. Canadian Bearings)Ridge Tool CompanyRobco Inc.Robert Bosch Inc.Rona inc.SC CLS Holdings ULCSears Canada Inc.Service de Filtres Sefor Inc.Shoreline Lube Distribution Inc.Siemens Transformateurs Canada Inc.Sinto Inc.Société Laurentide Inc.Southwestern Petroleum Canada Ltd.Spécialités Hipertech inc.State Industrial ProductsSTIHL LimitedSubaru Canada Inc.Suzuki Canada Inc.Systèmes de Distribution Intégrés LP Div Detroit Diesel Allison Canada East (1995)Target Canada Co.TEC Automotive Industries Inc.Technologies de procédé WARCOTeklub Canada LtéeTeklub Distribution inc.Texas Refinery Corp. of Canada Ltd.The North West Company Inc.The Sherwin-Williams Co.Thermal-Lube Inc.Total Lubrifiants Canada Inc.Toyota Canada Inc.Transformateurs Pioneer LtéeTruServ Canada Inc.UAP Inc.Ultramar LtéeUni-Sélect Québec inc.Valley Napa Auto PartsValvoline Canada LimitéeVerco International inc.Vermeer Canada IncViscosity Oil CompanyVolkswagen Canada Inc.Volvo Cars of Canada Corp.Volvo Group Canada Inc.Wainbee LimitedWakefield Canada Inc.Wal-Mart Canada Corp.WD-40 Company (Canada) Ltd.Westpier Marine & Industrial Supply inc.Worldpac Canada Inc.Wynn’s Canada LtdYamaha Motor Canada Ltd.

SOGHU’S BOARD OF DIRECTORS

Affinia Canada ULC Marc-André Arsenault

Association canadienne des constructeurs de véhicules (ACCV) L. Pierre Comtois

Beck/Arnley (Division Uni-Select) Raymond Savard

Costco Wholesale Canada Ltd Luc Lortie

Association canadienne des carburants Carol Montreuil

La Coop fédérée François Gingras

Lufrifiants Chevron Canada inc. Pierre-Yves Larose

Pétrolière Impériale Jean-François Lacasse

Produits Shell Canada Limitée Guy Bélanger

Recochem inc. Paul Lefebvre

Robert Bosch Inc. Roch Cousineau

Société Laurentides inc. André Buisson

Total Lubrifiants Canada inc. Julian Cininni

Valvoline Canada Limitée Michael Paul

Wakefield Canada Inc. Robert Huberdeau

RECYC-QUÉBEC Claude Bourque

Awareness Committee President Laurent Gagnon

General Manager Gilles Goddard

Legal advisor, Gowling, Lafleur, Henderson s.r.l. Paul Granda

LEGAL COUNCIL

Gowling, Lafleur, Henderson s.r.l.

SoGHuCommittees


SOGHU’S AWARENESS COMMITTEE

CAA-Québec Paula Landry

Campor Environnement inc. Laurent Gagnon

Conseil Québecois du Commerce de Détail Françoise Paquet

SOGHU’s General Manager Gilles Goddard

Front Commun Québecois pour une Gestion écologique des Déchets

Karel Ménard

Gaudreau Environnement inc. Réal Fortin

Ministère du Développement durable de l’Environnement et des Parcs

Darijo Bosnjak

RECYC-QUÉBEC Claude Bourque

Union des Municipalités du Québec Marieke Cloutier

EMPLOYEES AND CONSULTANTS

Gilles Goddard General Manager

Diane Caron Assistant to General Manager

Magalie Morrissette, CPA, CMA Controller

Carmen Mensher Accounting Manager

Kim DeMaisonneuve Administrative Assistant

Joël Ouimet Field Inspector

AUDITORS

LEHOUX BOIVIN COMPTABLES AGRÉÉS SENC 4255, Blvd. Lapinière, Suite 300, Brossard (Québec) J4Z 0C7

ZONE LEGEND

Zone 1 MontréalZone 2 QuébecZone 3 Central QuébecZone 4 Outaouais – LaurentidesZone 5 Saguenay – Lac-St-JeanZone 6 Bas-St-Laurent – GaspésieZone 7 AbitibiZone 8 Côte-NordZone 9 Nord-du-Québec Zone 10 Les Îles-de-la-Madeleine Zone 11 Nord du Nord-Québec Basse Côte-Nord Île d’Anticosti

ZONE

USED OIL

($/litre)

USED ANTIFREEZE

(45-55)($/litre)(Starting

July 1st, 2012)

USEDFILTERS

($/kg)

USED OIL AND USED ANTIFREEZE

CONTAINERS($/kg)

(Rate as of February 1st, 2008 and used antifreeze containers

starting July 1st, 2012)

AEROSOL ($/kg)

(As of August 1st, 2006)

1 0.03 0.16 0.65 1.27 3.67

2 0.04 0.18 0.65 1.70 3.67

3 0.07 0.23 0.80 1.95 3.84

4 0.07 0.23 0.82 1.95 3.84

5 0.07 0.30 0.85 2.25 3.87

6 0.09 0.34 0.90 2.33 3.92

7 0.07 0.32 0.90 2.33 3.97

8 0.10 0.45 0.95 2.55 3.97

9 0.10 0.45 0.95 2.55 3.97

101 0.10 0.50 1.35 5.25 4.37

112 (Boundary post to zone as of January 1st, 2012)

0.10 0.50 1.50 5.25 4.37

123 Municipal 0.20 0.50 0.55 1.20 0.55

1 For zone 10, Les Îles-de-la-Madeleine, a special transportation return incentive of $0.18/litre is allowed for used oils and used ntifreeze (antifreeze starting July 1st, 2012) carried to the mainland.

2 For zone 11, Nord du Nord-Québec Basse Côte-Nord Île d’Anticosti, a special transportation return incentive of $0.28/litre is allowed for used oils and used antifreeze (antifreeze starting July 1st, 2012) not processed in Zone 11/ Zone 11 cities: Blanc-Sablon, Brador, Chevey, Fermont, Harrington Harbourg, Kefaska, La Romaine, La Tabaièere, lourdes-de-Blanc-Sablon, Middle Bay, Mutton Bay, Old for Bay, Pakua Shipi, Port Menier (Île d’Anticosti), St-Augustin, St-Paul’s River, Tête-à-la-Baleine.

3 Zone 12 is privileged from a particular functioning following a contract with Laurentide re/sources for a specific service to municipalities.

NOTE: For information concerning RI rates for Internal Collectors Processors, please contact SOGHU.


SoGHuZones

Subsidy Table

TO THE MEMBERS OF SOCIÉTÉ DE GESTION DES HUILES USAGÉES (SOGHU)

We have audited the accompanying financial statements of SOCIÉTÉ DE GESTION DES HUILES USAGÉES (SOGHU), which comprise the balance sheet as at December 31, 2012 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 internai 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 Responsibility

Our 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. These 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 on 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. ln 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 accounting 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.

Opinion

ln our opinion, the financial statements present fairly, in all material respects, the financial position of the SOCIÉTÉ DE GESTION DES HUILES USAGÉES (SOGHU) as at December 31, 2012, and the results of its operations and cash flows for the year then ended in accordance with Canadian accounting standards for not-for-profit organizations.

Comparative Information

Without modifying our opinion, we draw attention to Note 13 of the financial statements, which explains that the SOCIÉTÉ DE GESTION DES HUILES USAGÉES (SOGHU) adopted Canadian accounting standards for not-for-profit organizations on January 1st, 2012 with a transition date of January 1st, 2011. These standards were applied retrospectively by management to the comparative information in these financial statements, including the statements of financial position as at December 31, 2011 and January 1st, 2011, and the statements of operations, changes in net assets and cash flow for the year ended December 31, 2011 and related disclosures. We were not mandated to report on the restated comparative information, and as such, it is unaudited.

Lehoux BoivinBrossard, April 8, 2013

1 CPA auditer, CA, public accountancy permit No A103967

Independent Auditor’s report

1

IncomeFOR THE YEAR ENDED DECEMBER 31, 2012 2012

$2011

$ reVeNUeS

Environmental handling charges 13 730 626 14 037 089

Registration and renewal 8 000 9 400

lnterest 359 881 322 440

Support of RECYC-QUÉBEC to the advertisingand communications expenses 39 676 25 399

Support of RECYC-QUÉBEC to the container segregation and studies 58 118 24 270

14 196 301 14 418 598

eXpeNSeS Program

Return incentives 10 459 291 10 330 364

Process incentives 594 709 543 870

Collection facilities incentives 50 053 27 643

Container segregation 53 170 48 539

Advertising and communications 449 806 260 725

Contribution to RECYC-QUÉBEC 296 943 336 521

Legal fees 50 562 8 052

Salaries, fringe benefits and management & administration contracts 250 071 198 609

Office and general expenses 56 211 65 223

Consulting fees 80 800 6 186

Compliance reviews and audits 108 170 44 735

Depreciation - fixed assets 26 280 37 360

12 476 366 11 907 827

AdministrationOffice and general expenses 145 230 168 979

Legal fees 11 184 26 555

Rent 27 900 30 225

Salaries, fringe benefits and management & administration contracts 239 973 253 381

Professional fees 12 075 1 287

Depreciation - fixed assets 8 807 12 348

445 169 492 775

12 921 535 12 400 602

eXCeSS OF reVeNUe OVer eXpeNSeS 1 274 766 2 017 996

1616 2012 annual rEport

The accompanying notes are an integral part of the financlal statements

changesin net assetsFOR THE YEAR ENDED DECEMBER 31, 2012

2012$

2011$Unrestricted

Reserve fund

lnvested in fixed assets

BaLaNCe, BeGINNING OF Year 2 412 597 9 200 000 64 784 11 677 381 9 659 385Excess {deficiency) of revenue over expenses

1 309 853 – (35 087) 1 274 766 2 017 996

lnvestment in fixed assets (19 170) – 19 170 – –

Amount restricted on October 22, 2012 {Note 7)

(1 000 000) 1 000 000 – – –

BaLaNCe, eNd OF Year 2 703 280 10 200 000 48 867 12 952 147 11 677 381

The accompanying notes are an integral part of the financial statements

AT DECEMBER 31, 2012 December 312012

$

December 312011

$

January 1st

2011$

(note 13) aSSetS Current assets

Cash 715 696 891 001 913 511

Accounts receivable (Note 3) 3 957 191 3 591 215 3 875 819

Prepaid expenses 2 675 3 106 7 610

Current portion of investments 800 000 1 500 000 800 000

5 475 562 5 985 322 5 596 940

lnvestments (Note 4) 9 400 000 7 700 000 5 900 000

Fixed assets (Note 5) 48 867 64 784 106 838

14 924 429 13 750 106 11 603 778

LIaBILItIeSCurrent liabilities

Accounts payable (Note 6) 1 972 282 2 072 725 1 944 393

Net aSSetS 12 952 147 11 677 381 9 659 385

14 924 429 13 750 106 11 603 778

rapport annuEl 201218

On behalf of the Board,

Mr. Carol Montreuil, Director

Mr. Robert Huberdeau, Director

Balance Sheet



FOR THE YEAR ENDED DECEMBER 31, 2012 2012$

2011$

OperatING aCtIVItIeS

Cash receipts – members 13 453 947 14 414 482

Cash receipts – interest and others 343 259 288 719

Cash paid – suppliers and employees (12 953 341) (12 218 057)

843 865 2 485 144

INVeStING aCtIVItIeS

Acquisition of investments (2 500 000) (3 300 000)

Cashing of investments 1 500 000 800 000

Acquisition of fixed assets (19 170) (7 654)

(1 019 170) (2 507 654)

deCreaSe IN CaSH aNd CaSH eQUIVaLeNtS (175 305) (22 510)

CaSH aNd CaSH eQUIVaLeNtS, BeGINNING OF Year 891 001 913 511

CaSH aNd CaSH eQUIVaLeNtS, eNd OF Year 715 696 891 001

cash Flow


FOr tHe Year eNded deCeMBer 31, 2012

1. StatUteS aNd NatUre OF aCtIVItIeS

The organization is incorporated under Part Ill of Quebec Companies Act. According to the Federal and Provincial lncome Tax Acts, it is a non-profit organization and is therefore exempt from income taxes.

According to the terms of a consent agreement with RECYC-QUÉBEC, the company has the mandate to establish and manage a program for recovery and reclamation of used oils and antifreeze, oil or fluid containers and used filters.

2. SIGNIFICaNt aCCOUNtING pOLICIeS

The financial statements were prepared in accordance with Canadian accounting standards for not-for-profit organizations (ASNFPO) and include the following significant accounting 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 SOGHU registered Collecter.

Processing incentivesProcessing incentives expenses are recognized when the lubricating oil containers are processed by a SOGHU registered Processor.

notesto financial statements


2. SIGNIFICaNt aCCOUNtING pOLICIeS (CONtINUed)

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.

lmpairmentFinancial 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.

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 and oil filters 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.


2. SIGNIFICaNt aCCOUNtING pOLICIeS (CONtINUed)

Fixed assets

Fixed assets are accounted for at cost and depreciation on the basis of their useful life using the following method and rates.

Computer hardware 33% Computer software 100% Collection equipment 20% Furniture and fixtures 20%

Expense allocation

The society displayed its expenses by function.

Salaries, fringe benefits and management & administration contracts shared by program and administration functions are allocated proportionally to hours spent as follow:

Program Administration

Management & administration contracts – manager 70% 30% Salaries, fringe benefits and management & administration contracts from 10% to 30% from 70% to 90%

Legal fees, which are not specifically allocated to the program or administration are allocated on 20% to legal fees – program and 80% to legal fees – administration.


rapport annuEl 201218 2012 annual rEport22

3. aCCOUNtS reCeIVaBLe 2012$

2011$

Accounts receivable 3 659 878 3 367 181

Sales taxes receivable 95 616 38 959

Accrued interest receivable 201 697 185 075

3 957 191 3 591 215

4. INVeStMeNtS 2012$

2011$

Term deposits, bearing interest at rate from 2.6% to 4.7%,maturing from February 2013 to October 2017 10 200 000 9 200 000

Current portion of investments 800 000 1 500 000

9 400 000 7 700 000

5. FIXed aSSetS 2012$

2011$

CostAccumulated amortization Net value Net value

Computer hardware 21 514 17 764 3 750 7 074 Computer software 10 470 – 10 470 –Collection equipment 248 000 220 840 27 160 45 440

Furniture and fixtures 50 334 42 847 7 487 12 270

330 318 281 451 48 867 64 784

6. aCCOUNtS paYaBLe 2012$

2011$

Trade 1 845 013 1 813 414

Wage payable 1 164 1 734

Benefits payable 7 446 7 928

Others 118 659 249 649

1 972 282 2 072 725

7. reStrICted aSSet

On October 22, 2012, the Board of Directors internally restricted an increase of the reserve of $1,000,000, for the total amount of $10,200,000, from unrestricted net assets to be held in case of proceedings against the society, program dissolution, unexpected changes in programs or mandate or other unexpected situations. This internally restricted amount is not available for other purposes without approval of the Board of Directors.

8. COMMItMeNtS

Agreement

The society has a consent agreement with RECYC-QUÉBEC until December 31, 2015, which is renewable annually. The new agreement was approved on October 22, 2012. ln accordance with this agreement, the society must collect Environmental Handling Charges from its members and pay a financial contribution to RECYC-QUÉBEC. Also, the society must obtain compliance reviews for selected firms by SOGHU and has to pay its fees.

Management and administration services

Under the terms of a management agreement, the society is charged a fee for provision of management services until June 2015.

Software and technology services

The organization is committed for 2013 and 2014 regarding the execution of software and technology services.

Compliance reviews

The organization is committed until 2015 regarding the execution of the compliance reviews. The estimated minimum annual payments under this commitment cannot be determined at this time.

Rent

The society has a lease commitment until November 2014 for the rental of office space.

Minimum payments

The estimated minimum annual payments required under these agreements are as follows:

Management andadministration

$Rent

$

2013 222 220 27 9002014 197 900 25 5752015 91 800 –

511 920 53 475




9. reLated partY traNSaCtIONS

In the regular course of its business, the society receives Environmental Handling Charges from its members and pays Return lncentives to Collectors and Processors. Some members and one Collecter (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 of the society.

The principal transactions concluded with members of the Board of Directors of the society during the year are as follows:

2012$

2011$

reVeNUeS

Environmental handling charges 3 225 605 3 437 408

Registration and renewal 200 200

Support of RECYC-QUÉBEC to expenses 97 794 49 669

eXpeNSeS

Return incentives 709 572 851 352

Contribution to RECYC-QUÉBEC 296 943 336 521

Finally, the accounts receivable include an amount of $774,755 (2011: $560,985) to be received from companies managed by members of the Board of Directors and the accounts payable include $242,032 (2011: $297,936) to be paid to companies and organizations managed by members of the Board of Directors.

10. eXpeNSeS aLLOCatION

Salaries, fringe benefits and management & administration contracts and legal fees were allocated as follows:

Legal fees Salaries, fringe benefits

and management &administration contracts

2012$

2011$

2012$

2011$

Program 50 862 8 052 250 071 198 609

Administration 11 184 26 555 239 937 253 381

62 046 34 607 490 044 451 990

11. FINaNCIaL INStrUMeNtS

Credit risk

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

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

Market risk

The society is exposed to the interest rate risk, which is the risk on which the fair value of a financial instrument will fluctuate because of changes in market interest rates.

12. reCLaSSIFIed aCCOUNtS

Some accounts in the financial statements of the previous year have been reclassified to conform with disclosure adopted in the current year.

notesto financial statementsFOr tHe Year eNded deCeMBer 31, 2012


13. IMpaCt OF tHe CHaNGe IN tHe BaSIS OF aCCOUNtING

These financial statements are the first financial statements prepared in accordance with Canadian accounting standards for not-for-profit organizations (ASNFPO).

The financial statements for the year ended December 31, 2012 were prepared in accordance with the accounting principles described and the provisions set out in Section 1501, First-time Adoption, of the CICA Handbook – Accounting for first-time adopters of this basis of accounting.

The adoption of these standards impacted the net assets at the time of transition, being January 1st, 2011.

$

reconciliation of net assets at January 1st, 2011

Net assets at January 1st, 2011 9 659 385

Accumulated gains directly recorded at changes in net assets 76 525

Net assets at January 1st, 2011 according to the previous financial statements 9 735 910

Changes in net assets

Write-off of the accumulated gains directly recorded at changes in net assetson investments held for trading (A) (76 525)

Net assets at January 1st, 2011 according to the ASNFPO 9 659 385

(A) Investments

According to the previous basis of accounting, its investments were recorded at the fair value as financial assests held for trading and accumulated gains were directly presented at changes in net assets. As the organization did not designate its investments as financial assets at the fair value following the first-time adoption of these standards, the organization initially measures its investments at fair value and subsequently measures them at amortized cost. lnvestments were adjusted but there was no impact on the excess of revenue over expenses.

$

According to previous financial

statements

Variations at changes

in net assetsAccording to

ASNFPO

lnvestments 5 976 525 (76 525) 5 900 000

SOCIÉTÉ DE GESTION DES HUILES USAGÉES 1101 Blvd. Brassard, Suite 214, Chambly (Québec) J3L 5R4 Phone: 450 447-9996 | Fax: 450 447-9988 E-mail: [email protected] | www.soghu.com

Toll free: 1 877 98-SOGHU (1 877 987-6448)

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