Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32May 31 2015 26 AUDITED FINANCIAL STATEMENTS Ontario Electronic Stewardship Notes to Financial Statements December 31, 2015 1. Significant Accounting Policies The following is a summary of significant accounting policies of the Organization: (a) Business Organization and Operations The Ontario Electronic Stewardship ("Organization") is set up to act as the Industry Funding Organization for the administration of provincial programs for the reduction, reuse and recycling of waste electrical and electronic equipment ("WEEE") pursuant to the Waste Diversion Act, 2002. The Organization is a not-for-profit organization and as such is not subject to income taxes. On September 20, 2007, the Organization was formally incorporated in the province of Ontario as a corporation without share capital. On July 9, 2008, the Organization was designated as the Industry Funding Organization for WEEE by regulation under the Waste Diversion Act, 2002. The Phase 1 WEEE Program officially commenced April 1, 2009. The Phase 1 WEEE Program was expanded to include the Phase 2 materials and to reflect the Revised (Phase 1 and 2) Program Plan components which commenced April 1, 2010. The Revised Plan encompasses 44 materials grouped into 8 categories. The Organization operates the WEEE Program under the terms of a Program Agreement dated July 10, 2009 with Waste Diversion Ontario. On February 19, 2013, the Minister of the Environment approved an amendment to the WEEE Program Plan giving effect to the new cost recovery principles for steward fee- setting. Effective May 1, 2013, steward fees are based on the principal of full cost recovery, with provision for appropriate operating reserves, material category past deficit recovery over a five year period and annual reconciliation to actual operating costs. (b) Basis of Accounting The financial statements have been prepared using Canadian accounting standards for not-for-profit organizations. (c) Revenue Recognition Steward fees are recognized as revenue as stewards register with the Organization and submit unit details. Revenues resulting from compliance and enforcement activities are recognized when the amount can be reasonably estimated and collection is reasonably assured. Investment income is recognized on an accrual basis.