2007 Annual Report

ANNUAL
REPORT 2007
TABLE OF CONTENTS
A FLEXIBLE AND SUCCESSFUL SYSTEM
………………………………………………………………………… 2
ACHIEVEMENTS ………………………………………………………………………………………………… 5
ONCE AGAIN, SOGHU IMPROVES ITS PERFORMANCE …………………………………………………………… 7
SOGHU MEMBERS ……………………………………………………………………………………………… 8
STANDARD FLOW CYCLE OF FUNDS AND PRODUCTS
………………………………………………………… 10
AUDITORS’ REPORT …………………………………………………………………………………………… 11
INCOME ……………………………………………………………………………………………………… 12
BALANCE SHEET ……………………………………………………………………………………………… 13
CASH FLOWS ………………………………………………………………………………………………… 14
NOTES TO FINANCIAL STATEMENTS …………………………………………………………………………… 15
SOGHU COMMITTEES ………………………………………………………………………………………… 20
¬ BOARD OF DIRECTORS
¬ LEGAL COUNCIL
¬ THE AWARENESS COMMITTEE
¬ NAMES AND TITLES OF EMPLOYEES AND CONSULTANTS
¬ AUDITORS
A FLEXIBLE AND SUCCESSFUL SYSTEM
SOGHU is a non-profit organization created to meet the standards set by
the Regulation respecting the recovery and reclamation of used oils, used
oil containers or fluid and used filters. SOGHU is recognized by RECYCQUÉBEC as an organization capable of managing an integrated system
of recovery and reclamation of all Regulation-applicable products and of
educating the users.
SOGHU’s vision is simple: the establishment and management of a program
for the recovery and reclamation of all Regulation-applicable products that
is efficient, self sufficient and environmentally, economically, and socially
conscious. In short, a model of excellence from the view point of sustainable
development.
The success of the program rests on a win-win partnership, thanks to a
system of financial incentives paid to Collectors based on product and
geographical zone, as well as to Processors of plastics who shred and
decontaminate the plastic and ensure that the materials are reintroduced
into the manufacturing of other products.
Here are some key points of the program;
• Generators are the first step of the recovery process.
For this third year of operation, particular attention was paid to
increasing the collection rate of filters and containers and the registration
of new Collection Facilities to serve all over the province of Quebec and
to help meet the objectives in the Regulation. We therefore launched an
advertising campaign aimed at reaching individuals and small businesses
that manage their own used oils and who are generally not serviced by
Collectors due to the small quantities they generate. The campaign’s main
objective was to educate this particular clientele on their responsibility to
recycle and inform them of the hundreds of municipalities or garages
registered as Collection Facilities where they could dispose of the
applicable products free of charge.
A variety of articles published in specialty magazines (transportation,
automotive, agriculture, municipal, construction, forestry, etc), television ad
campaigns on Réseau des sports (RDS) and Météo Media, distribution of a
DVD presentation on SOGHU, participation in two exhibitions for the two
municipal associations (FQM and UMQ) and a booth at the environmental
expo in old Montreal were the principal means used to promote SOGHU.
With the financial assistance of RECYC-QUÉBEC of $42,208.00 the budget
for all of SOGHU’s information campaigns, research and development came
to $377,630.00.
• Collectors recover applicable products from the generators.
• Processors give new life to the products.
• Collection Facilities serve as the bedrock, offering free service
for all citizens.
• RECYC-QUÉBEC joins SOGHU and executes the follow up in
accordance with the Agreement.
• Members finance and manage the system via SOGHU
The basic principal at the core of the program is to respect the balance
between commercial requirements and the needs of the community using
the principal of sustainable development.
A strict auditing process ensures the tracking of all products sold on the
market right up to their reclamation.
2
The first two year’s achievements were excellent but it was imperative for
SOGHU to improve even further, particularly where filters and containers
were concerned, and we’ve succeeded.
We are happy to present, in table format, the achievements of 2007 and our
goals for the years 2008-09-10.
ACHIEVEMENTS
Achievements for 2007 (in percentages) and projections for 2008-09-10
OIL
2007
Achievements
2008
Projections
2009
Projections
2010
Projections
Sales
106 617 546 litres
106 617 546 litres
106 617 546 litres
106 617 546 litres
Collectable portion
71 433 756 litres
71 433 756 litres
71 433 756 litres
71 433 756 litres
Collected portion
66 767 257 litres
66 767 257 litres
66 767 257 litres
66 767 257 litres
Collection rate
93.5%
93.5%
93.5%
93.5%
Regulation goals
70.0%
75.0%
75.0%
75.0%
2008
Projections
2009
Projections
FILTERS
Sales
2007
Achievements
2010
Projections
9 941 470 filters
9 941 470 filters
9 941 470 filters
9 941 470 filters
3 755 765 kilograms
3 755 765 kilograms
3 755 765 kilograms
3 755 765 kilograms
Collected portion
3 107 435 kilograms
3 107 435 kilograms
3 107 435 kilograms
3 107 435 kilograms
Collection rate
82.7%
82.7%
82.7%
82.7%
Regulation goals
50.0%
75.0%
75.0%
75.0%
CONTAINERS
2007
Achievements
2008
Projections
2009
Projections
2010
Projections
Sales
43 268 894 litres
43 268 894 litres
43 268 894 litres
43 268 894 litres
2 343 102 kilograms
2 343 102 kilograms
2 343 102 kilograms
2 343 102 kilograms
Collectable portion
2 208 639 kilograms
2 208 639 kilograms
2 208 639 kilograms
2 208 639 kilograms
Collected portion
1 897 724 kilograms
1 897 724 kilograms
1 897 724 kilograms
1 897 724 kilograms
Collection rate
85.9%
85.9%
85.9%
85.9%
Regulation goals
50.0%
75.0%
75.0%
75.0%
5
1st row
Mr. Pierre L. Comtois,
Mr. Gilles Goddard, GM
Mr. Carol Montreuil, Pres.
Mrs. Ginette Bureau,
Mr. Julian Cininni,
Mr. Michael Paul
2nd row
Mr. Ron Damiani,
Mr. François Gingras,
Mr. Darius Côté,
Mr. Roch Cousineau,
Mr. Pierre-Yves Larose,
Mr. Louis Coulombe
Missing from picture
Mr. Yvan Gagné,
Mr. Robert Huberdeau, V.P.
Mr. Denis Renaud,
Mr. Raymond Savard,
Mr. Charles Touchette,
Mr. Paul Granda
ONCE AGAIN, SOGHU IMPROVES ITS PERFORMANCE
La Société de gestion des huiles usagées (SOGHU) has been operational
since January 2005. It is comprised of numerous partners, including 213
Members (who put oil products on the market), 23 Collectors, 65 Processors,
and 9 Internal Collector/Processors who collect and reclaim their own oil.
All of these activities are performed in conformity with the applicable
regulations. All products collected are 100% reclaimed.
Amazingly, SOGHU continues to improve its achievements for each of the
products that it is responsible for collecting and processing on behalf of
its Members. In fact, the collection rate for oil before SOGHU was at 60%
and climbed to 84% in 2005, 89% in 2006 to reach 93.5% in 2007.
As for filters, the largest collection increase happened the first year in 2005
when the rate went from 20% to 73% and saw a mild increase to 74% in
2006 and went on to surpass the goal for 2008 with a rate of 82.7%
reached in 2007.
Prior to SOGHU’s launch, containers were not collected. Nevertheless
the collection rate increase now is exceptional: 25% in 2005, 55% in
2006 and finally, 82.7% in 2007. These achievements have surpassed
all high hopes.
Furthermore, conscious of the importance of communication and
information, SOGHU invested time and money in numerous media
ventures including specialized magazines that target all interested
parties, including forestry workers, farmers, manufacturers, municipalities,
transporters, garages, the Centres de Formation en Entreprise et
Récupération (CFER) and individuals, through television campaigns on
Réseaux des sports (RDS) and Météo Média, through the distribution of
a DVD presentation on SOGHU, and through attendance at multiple
conferences and participation in exhibitions and meetings.
We are extremely proud of our third year of operation, and the results speak,
in part, to the commitment of SOGHU, its Members and in particular the
Board of Directors, whose goal was to attain the objectives set out by the
government, and also in part to the exceptional partnership between
SOGHU, the Collectors, the Processors, the generators and municipalities
and all in collaboration with RECYC-QUEBEC.
In closing, the program is a prime example of sustainable development,
balancing commercial requirements with the needs of the people.
Make every drop count….
To achieve these results the Collectors serviced between 10,000 and 12,000
customers, 386 of which were registered as Collection Facilities in 2005 to
offer free collection services to the population for all applicable products. In
2006 the number of Collection Facilities reached 486 and continued to
climb to 571 as of December 31, 2007.
SOGHU believes that the closer the services are to the people, the easier
it is for them to use. We thank all of the companies and municipalities
who took the environment’s best interest at heart and we ask the public
to respect their hours and conditions. Many companies and municipalities
understood the advantages of registering as Collection Facilities; being
displayed on the SOGHU’s website therefore benefiting from free publicity
and being able to tell their clients that they are actively participating in
protecting the environment.
Carol Montreuil,
President
Gilles Goddard,
General Manager
7
SOGHU MEMBERS
3M Canada Company
BRP
ECL Services inc.
ABB Inc. (Québec)
Busch Vacuum Technics Inc.
Elso International Inc.
ABB Inc. (Varennes)
Camions Freightliner Rivière-du-Loup Inc.
Engrenage Provincial Inc.
Acklands-Grainger Inc.
Camoplast Industriel Inc.
Entrepôt de Montréal 1470 Inc.
Aerochem Inc.
Campbellton Auto Supply
Entrepôts Carrier Inc.
Affinia Canada Corporation
Canadian General Filters Limited
Équipement Fédéral Div. de Gestion KCL West
AGCO Corporation
Canadian Pacific Railway
Équipements Labrie Ltée
Air BP Canada Ltd.
Carquest Canada Ltd
Équipements Lourds Papineau Inc.
Altrom Canada Corp.
Castrol Industrial North America Inc.
Evans 2000 Ltd
American Agip Company Inc.
Centre du Camion J.L. Inc.
Excel F.I.G. inc.
Amsoil Inc.
Champion Laboratories, Inc.
Federated Co-operatives Limited
April Super Flo
Chauffage Premier Inc.
FL Viscosity Oil Company
Asalco Inc.
Chem-Ecol Ltd.
Ford Motor Company of Canada Ltd.
Assemblage Camaz inc.
Chevron Global Lubricants
For-Min Div. DK Spec Inc.
Atelier PV Hydraulique (2002) inc.
Chicago Pneumatic Tool Co.
Fred Deeley Imports Ltd
Atlas Copco Compressors Canada
Chrysler Canada Inc.
Freightliner LLC
Auto Modena Inc.
CNH America Ltd.
Fuchs Lubricants Canada Ltd.
Auto-Camping Ltd.
COMAIRCO LTEE
G.K. Industries Ltd.
Autolectra Inc.
Compresseurs Québec Div. Inter-Power A.K.
Corp.
Gaetan Hotte Inc.
AutoTrans Transmissions (Québec) Inc.
Baldwin Filters Inc.
Baldwin Filters Inc. (DBA Hastings Filters)
Bardahl Canada
Beck/Arnley World Parts Canada ULC
Bert Dunbar Enterprises Limited
BestBuy Distributors Ltd.
Blue Water Agencies LTD
BMW Canada Inc.
Bosch Rexroth Canada Corporation
Control Chemical (1989) Corporation
Costco Wholesale Canada Ltd.
CPT Canada Power Technology Limited
CRC Canada Inc.
Cummins Est du Canada SEC
Denis Gauvin Inc.
Distribution M.C. Senc.
Distribution Régionale PML Inc.
Distribution Regitan
Distributions J. Léveillée
8
Gates Canada Inc.
General Motors du Canada Limitée
Gilles Cusson Inc.
Hall-Chem MFG Inc.
Hangsterfer's Laboratories Incorporated
Henkel Canada Corporation
Hewitt Équipement Limitée
Home Hardware Stores Limited
Honda Canada Inc.
Honeywell ASCA Inc.
Houghton Canada Inc.
M & M Fournels Corp. Ltd
Ridge Tool Company
Hudson's Bay Co.
Magnéto Hydraulique et Pneumatique
Robert Bosch Inc.
Husqvarna Canada Corp.
Malmberg Truck Trailer Equipment Ltd
Roby Metal 2000 (Exacta)
Hydralogie Inc.
Matech BTA Inc.
SC CLS Holdings ULC
Hyundai Auto Canada Corp.
Maxim Transportation Services Inc.
Sears Canada Inc.
International Truck & Engine Corporation
Canada
Mazda Canada Inc.
Service de Filtres Sefor Inc.
MCS-Servo Inc.
Simson-Maxwell Ltd.
Mercedes-Benz Canada Inc.
Sinto Inc.
MFTA Canada Inc.
Southwestern Petroleum Canada Ltd.
Milacron Canada Inc.
Spécialité Hydraulique Côte-Nord Inc.
Mitsubishi Motor Sales of Canada
Spécialités Hipertech inc.
Modern Sales Co-op
State Industrial Products
Motion Industries (Canada) Inc.
Stork Bronswerk Inc.
Motor Coach Industries Limited
Subaru Canada Inc.
Motovan Corporation
Suzuki Canada Inc.
Mr. Lube Canada Inc.
Systèmes de Distribution Intégrés LP Div Detroit
Diesel Allison Canada East (1995)
Irving Oil Marketing Limited
J & M Filters and Auto Parts Inc
J. Walter Compagnie Ltée
Jaguar Land Rover Canada
Jig-A-Loo Canada Inc.
John Deere Limited
Kia Canada Inc.
Kimpex Inc.
Kinecor Inc.
King-O-Matic Industries Limited
Kleen-Flo Tumbler Industries Limited
Komatsu International (Canada) Inc.
Krown Corporate
Kubota Canada Ltd.
La Coop fédérée
Laboratoires St-Antoine inc.
Le Groupe GLM Inc.
Le Groupe Harnois Inc.
Le Groupe Pétrolier Olco Inc.
Les Distributions Automont Inc.
Les Distributions R.V.I. Ltée
Les Équipements G. Comeau Inc.
New Flyer Industries Ltd.
Nissan Canada Inc.
NLS Products
Noco Lubrifiants Canada
Nynas Canada Inc.
Oto-Protec Inc.
Paccar Parts, A Division of Paccar of Canada, Ltd
Parker Hannifin Canada
Parts Canada
Pennzoil-Quaker State Canada Inc.
Permatex Canada
Pétro-Canada
Pétroles Petro-Canada Inc.
TEC Automotive Industries Inc.
Technologies de procédé WARCO
Teklub Distribution inc.
Texas Refinery Corp. of Canada Limited
The Clorox Co. of Canada Ltd.
The Sherwin-Williams Co.
Thermal-Lube Inc.
Total Lubrifiants Canada Inc.
Toyota Canada Inc.
Transformateurs Pioneer Ltée
UAP Inc.
Ultramar Ltée
Pétrolière Impériale
VA TECH Tranformateurs Ferranti-Packard
(Québec) Inc.
Pièces d'Autos Jean Leblanc
Valley Napa Auto Parts
Pièces de Camion de la Beauce Inc.
Valvoline Canada Limitée
Porsche Cars North America Inc.
Les Pétroles Sonic
(La Coop Fédérée)
Volkswagen Canada Inc.
Produits Chimiques Magnus Ltée
Volvo Cars of Canada Corp.
Les Pièces d'Auto Transbec Inc.
Produits Industriels Kara Inc.
Volvo Trucks Canada Inc.
Les Pièces d'Autos Transit Inc.
Produits Lubri-Delta Inc.
Wakefield Canada Inc.
Les Pièces de Transmission Unitrans Ltée.
Produits Shell Canada Limitée
Wal-Mart Canada Corp.
Les Services Maintech
Prolab Technolub Inc.
WD-40 Products (Canada) Ltd
Lubri-Expert Inc.
Protec Lube Inc.
Westfalia Surge Canada Co.
Lubrifiants et Produits Spécialisés Kenbec Inc.
Radiator Specialty Company of Canada Ltd.
Weston/Loblaws/Provigo
Lubrification Québec Inc.
Recochem Inc.
Worldpac Canada Inc.
Lubri-Lab Inc.
Réfrigération Thermo King Montréal Inc.
Wynn's Canada Ltd
Lucas Oil Products
Réseau C.B. (Div. Canadian Bearings)
Les Industries Spectra/Premium Inc.
Les Industries Wajax Limitée
Les Lubrifiants Sentinel Corp.
Les Pétroles R.L. Inc.
9
STANDARD FLOW CYCLE OF FUNDS
AND PRODUCTS
MEMBERS
brand owners and
the primary importers
or suppliers
___________________
RECYC-QUÉBEC
COLLECTORS
establishments that
collect the products
from generators
___________________
MEMBERS
SOGHU
PROCESSORS
establishments that
give new life to
products
___________________
PROCESSORS
COLLECTORS
Products
___________________
$ Funds
GENERATORS
COLLECTION FACILITIES
Municipal/Commercial
10
GENERATORS
establishments that
create used products
(garages, vendors,
commercial, industrial
and municipal sectors,
forestry industry,
agriculturists,
transporters,
individuals)
COLLECTION
FACILITIES
establishment
registered with SOGHU
to receive from the
public, at no cost to
them, used oil products
governed by the
Regulation
AUDITORS' REPORT
To the Members of Société de gestion des huiles usagées (SOGHU)
We have audited the balance sheet of SOCIÉTÉ DE GESTION DES HUILES USAGÉES (SOGHU) as at December 31, 2007 and the statements of income,
changes in net assets and cash flows for the year then ended. These financial statements are the responsibility of the organization's management.
Our responsibility is to express an opinion of these financial statements based on our audit.
We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an
audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial position of the organization as at December 31, 2007
and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.
Rochon, Thériault & Associés
Rochon, Thériault & Associés, s.e.n.c.r.l.
Chartered Accountants
Saint-Jerome,
March 12, 2008
11
INCOME
Year ended December 31
2007
2006
$ 13 157 257
$ 13 146 511
REVENUE
Environmental Handling Charge
Registration and renewal
Interest
8 400
13 400
293 199
221 314
42 208
51 776
13 501 064
13 433 001
11 383 263
9 467 974
635 660
405 636
Support of Recyc-Québec to the advertisement
and communications expenses
EXPENSES
PROGRAM
Return Incentives
Processor Incentives
Collection Facilities Incentives
75 961
85 091
Advertising and communications
379 949
319 592
Contribution to RECYC-QUÉBEC
318 345
315 946
13 480
10 118
Legal fees
Salaries – management and administration contracts
Compliance reviews and audits
52 343
52 321
107 087
123 334
12 966 088
10 780 012
ADMINISTRATION
187 442
106 377
Legal fees
Office and general expenses
53 921
40 236
Rent
25 500
25 500
Consulting fees
81 148
53 779
256 652
282 398
7 830
7 600
17 196
15 355
629 689
531 245
13 595 777
11 311 257
$ (94 713)
$ 2 121 744
Salaries – management and administration contracts
Professional fees
Depreciation - fixed assets
EXCESS (DEFICIENCY) OF REVENUE OVER EXPENSES
12
BALANCE SHEET
December 31
2007 $
2006 $
$ 1 394 371
$ 1 714 369
2 619 068
2 435 834
126 088
105 867
ASSETS
CURRENT ASSETS
Cash, 4.12 %
Accounts receivable
Accrued interest receivable
Prepaid expenses
5 801
33 791
–$
800 000
4 145 328
5 089 861
INVESTMENTS (Note 5)
4 200 000
3 200 000
FIXED ASSETS (Note 6)
25 787
26 937
$ 8 371 115
$ 8 316 798
$ 1 881 428
$ 1 732 398
Unrestricted
1 463 900
1 557 463
Restricted (Note 6)
5 000 000
5 000 000
25 787
26 937
6 489 687
6 584 400
$ 8 371 115
$ 8 316 798
Current portion of investments (Note 5)
LIABILITIES
CURRENT LIABILITIES
Accounts payable (Note 7)
NET ASSETS
Invested in fixed assets
COMMITMENTS (Note 8)
On behalf of the board
Mr. Carol Montreuil,
Director
Mr. Robert Huberdeau,
Director
13
CASH FLOWS
Year ended December 31
2007 $
2006 $
OPERATING ACTIVITIES
Cash receipts – Members
$ 13 045 740
$ 12 027 865
315 186
115 447
(13 464 878)
(11 323 189)
(103 952)
820 123
Acquisition of investments
(200 000)
(4 000 000)
Acquisition of fixed assets
(16 046)
(2 400)
(216 046)
(4 002 400)
CASH AND CASH EQUIVALENTS DECREASE
(319 998)
(3 182 277)
CASH, BEGINNING OF YEAR
1 714 369
4 896 646
$ 1 394 371
$ 1 714 369
Cash receipts – interest and other
Cash paid – suppliers
INVESTING ACTIVITIES
CASH, END OF YEAR
14
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2007
1. STATUTES OF INCORPORATION AND NATURE OF ACTIVITIES
The organization is incorporated under Part III of the Quebec Companies Act. According to the Federal and Provincial Income
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 administer
a program for recovery and reclamation of used oils, oil or fluid containers and used filters.
2. SIGNIFICANT ACCOUNTING POLICIES
Use of estimates
The presentation of financial statements in accordance with Canadian generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies at the
date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could
differ from those estimates.
Revenues recognition
Environmental Handling Charge revenue are recognized when the lubricating oil and/or oil containers and oil filters are sold by
Members, except for revenue from prior years received in the current year following a new registration, because the Environmental
Handling Charge must be remitted retroactively from January 1st, 2004, and for additionnal revenue determined following a
compliance review. These Environmental Handling Charges are recognized in the year during which they are determined.
Return Incentives
Return Incentives expenses are recognized when the lubricating oil and/or oil containers and oil filters are collected by a SOGHU
registred Collector.
Processor Incentives
Processor Incentives expenses are recognized when the lubricating oil containers are processed by a SOGHU registred Processor.
Financial assets and liabilities
Financial assets and financial liabilities held for trading
Financial instruments held for trading represent assets acquired or liabilities assumed principally for the purpose of selling
or repurchasing in the near term. They are recognized at fair value for each balance sheet date using the fair market value
method. Any change in the fair value is recognized in the statement of operations in the year they occur.
15
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2007
Held-to-maturity investments, loans and receivables and other financial liabilities
Financial instruments classified as loans and receivables, held-to-maturity investments and other financial liabilities are
accounted for at amortized cost using the effective interest method. The interest income or the interest charge is included in
the statement of operations through the expected life of the financial instrument.
Available-for-sale financial assets
Financial instruments classified as available-for-sale are accounted for at fair value at each balance sheet date and any change
in the fair value is accounted for in the statement of operations at each balance sheet date of the year during which these
changes arise. Investments securities classified as available-for-sale and that are not actively traded are accounted for at cost.
Investments available-for-sale are written down at the fair value when it is necessary to reflect a permanent impairment.
When the instrument is derecognized, all cumulated unrealized gains and losses are derecognized in the unrestricted net
asset and all realized gains and losses on available-for-sale financial assets are then accounted for in the statement of
operations as realized gain or loss on disposal of investments.
Fixed assets
Fixed assets are accounted for at cost.
Depreciation is calculated using the straight-line basis over the estimated useful lives at the following rates:
Computer hardware
Computer software
Furniture and fixtures
33%
100%
20%
Cash and cash equivalents
The organization's cash and cash equivalents include cash and term deposits maturing within three months.
3. CHANGE IN ACCOUNTING POLICIES
January 1st, 2007, the organization has adopted the new recommendation of the Canadian Institute of Chartered Accountants,
relating to recognition, measurement and presentation of financial instruments according to sections 3855, Financial instruments recognition and measurement, 3862, Financial instruments - disclosure and 3863, Financial instruments - presentation. These new
handbook sections provide requirements as to the recognition and measurement of financial instruments. The application of
these new sections had no impact on the financial statements of the organization as of January 1st, 2007. The significant
modifications in the reporting of financial instruments resulting of the adoption of these new standards are described below.
Further to the adoption of these new standards, the organization has classified its cash as assets held for trading. Term deposits
with maturation periods exceeding three months are classified as available-for-sale financial assets. Accounts receivable and
accrued interest receivable are classified as loans and receivables. Accounts payable are classified as other financial liabilities
which are measured, in each case, at amortized cost.
16
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2007
4. NEW ACCOUNTING STANDARDS NOT YET IMPLEMENTED
The Canadian Institute of Chartered Accountants ("CICA") issued a new standard, Section 1535, Capital Disclosures, which
requires an organization to disclose qualitative and quantitative information to enable users of the financial statements to
evaluate its capital management objectives, policies and procedures. This section applies to annual financial statements for years
beginning on or after October 1st, 2007. The organization does not anticipate any significant effect on financial statements
further to the adoption of this new standard.
5. INVESTMENTS
Portfolio investments: Term deposits, bearing interest at rates from 4.22% to
4.60%, maturing from November 2007 to May 2011.
Held for trading investments: Term deposits, bearing interest at rates from 4.22%
to 4.60%, maturing from May 2009 to January 2012
Current portion of investments
6. FIXED ASSETS
Computer hardware
2007
2006
$–
$ 4 000 000
4 200 000
–
4 200 000
4 000 000
–$
800 000
$ 4 200 000
$ 3 200 000
2007 $
2006 $
Cost
Accumulated
depreciation
Net Value
Net Value
$ 32 742
$ 28 842
$ 3 900
$ 11 887
Computer software
1 495
1 495
–
–
Furniture and fixtures
38 556
16 669
21 887
15 050
$ 72 793
$ 47 006
$ 25 787
$ 26 937
17
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2007
7. ACCOUNTS PAYABLE
2007 $
Trade
2006 $
$ 1 630 860
$ 1 474 125
5 351
–
245 217
258 273
$ 1 881 428
$ 1 732 398
Payroll, withholding taxes and contributions
Other
8. COMMITMENTS
Agreement
The organization has a consent agreement with RECYC-QUÉBEC until December 31, 2008, which is renewable. In accordance
with this agreement, the organization must collect an Environmental Handling Charge from its Members and pay a financial
contribution to RECYC-QUÉBEC.
Management and administration services
Under the terms of a management agreement, the organization is charged a fee for provision of management services until
June 2012.
Rent
The organization has a lease commitment until November 2009 for the rental of office space.
Contribution to environmental organizations
The board of directors has decided to finance the activities of the "Caravane de la récupération".
Minimum payments
The estimated minimum annual payments required under these agreements are as follows:
2008
2009
2010
2011
2012
18
Management
and administration
services
Rent
Contribution
to environmental
organizations
$ 142 260
142 260
142 260
142 260
71 130
$ 25 500
23 375
–
–
–
$ 30 000
–
–
–
–
$ 640 170
$ 48 875
$ 30 000
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
DECEMBER 31, 2007
9. RELATED PARTY TRANSACTIONS
In the ordinary course of its business, the organization receives an Environmental Handling Charge from its Members and pays
incentive returns to Collectors and Processors. Some Members and one Collector (without voting rights) have representatives
who are part of the board of directors. These transactions are measured at the exchange amount and are subjected to the usual
commercial conditions of the organization.
The principal transactions concluded with related party during the year are as follow:
2007
2006
$ 4 182 888
200
$ 4 400 831
200
150 443
–
$ 74 211
439 168
263 610
$–
Revenue
Environmental Handling Charge
Renewal
Expenses
Return Incentives
Processing Incentives
Collection Facilities Incentives
10. FINANCIAL INSTRUMENTS
Available-for-sale financial assets
For the long-term investments consisting of term deposits, the fair values approximate the carrying values because of their interest
rates which represent the interest rates the organization could obtain for investments with similar terms and maturity dates.
Credit risk
In the normal course of its operation, the organization monitors the Members that did not produce monthly remittance forms
and did not remit the Environmental Handling Charge.
The organization is not exposed to any significant risk with respect to a single Member.
19
SOGHU COMMITTEES
BOARD OF DIRECTORS
Ginette
Bureau
RECYC-QUÉBEC
Julian
Cininni
Total Lubrifiants Canada inc.
Pierre L.
Comtois
Général Motors du Canada Limitée
Darius
Côté
Pétrolière Impériale
Louis
Coulombe
Peintures Récupérées du Québec inc.
Roch
Cousineau
Robert Bosch Inc.
Ron
Damiani
Costco Wholesale Canada Ltd
François
Gingras
La Coop fédérée
Robert
Huberdeau
Wakefield Canada Inc.
Pierre-Yves
Larose
Lufrifiants Mondiaux Chevron Texaco
Carol
Montreuil
Institut Canadien des Produits Pétroliers
Michael
Paul
Valvoline Canada Ltée
Denis
Renaud
Pétro Canada
Raymond
Savard
Carquest Canada Ltd
Charles
Touchette
Afffinia Canada Corporation
Gilles
Goddard
General Manager
Paul
Granda
Legal Adviser - Gowling, Lafleur, Henderson s.r.l.
LEGAL COUNCIL
Gowling, Lafleur, Henderson s.r.l.
20
THE AWARENESS COMMITTEE
Denis Bergeron
Fédération Québecoise des Municipalités
Claude Bourque
RECYC-QUÉBEC
Marieke Cloutier
Union des Municipalités du Québec
Louis Coulombe
Peintures Récupérées du Québec Inc.
Gilles Goddard
SOGHU General Manager
Paula Landry
CAA-Québec
Karel Ménard
Front commun québécois pour une gestion écologique des déchets
Françoise Paquet
Conseil Québecois du Commerce de Détail
Patrice Savoie
Ministry of Sustainable Development, Environment and Parks
André Turgeon
RPM Environnement
NAMES AND TITLES OF EMPLOYEES AND CONSULTANTS
Gilles Goddard
General Manager
Diane Caron
Assistant to the General Manager
Jean Duchesneau
Controller
Carmen Mensher
Assistant to the Controller
Barbie Mensher
Administrative Assistant
AUDITORS
ROCHON THÉRIAULT & ASSOCIÉS, S.E.N.C.R.L.
298, rue De Martigny Ouest, bureau 10
Saint-Jérôme (Québec) J7Y 4C9
21
Société de Gestion des Huiles Usagées
1101, blvd. Brassard, suite 214, Chambly (Québec) J3L 5R4
Phone : (450) 447-9996 | Fax: (450) 447-9988
Toll free: 1-877-98 SOGHU (1-877-987-6448)
E-mail: [email protected] | www.soghu.com
MAKE EVERY DROP COUNT…
Printed in Canada
on 100% recycled paper.