ManageMent’s Discussion anD analysis IFRS 9  Financial Instruments  – The standard will replace IAS 39,  Financial Instruments: Recognition and Measurement  with a  proposed single model for only two classification categories: amortized cost and fair value. The standard is currently  required to be adopted for annual periods beginning January 1, 2015. The extent of the impact on the consolidated financial  statements of the Company has not yet been determined. The Company’s policy is to meet all applicable government requirements with respect to environmental matters.  Management believes that the Company is in compliance in all material respects with environmental laws and regulations. The Vancouver facility has a lengthy history of industrial use, and fill materials have been used on the property in the  normal course of business. No assurance can be given that material expenditures will not be required in connection with  contamination from such industrial use or fill materials. The Montreal facility has a lengthy history of industrial use. Contamination has been identified on a vacant property acquired  in 2001, and Lantic has been advised that additional soil and ground water contamination is likely to be present. Given  the industrial use of the property, and the fact that Lantic does not intend to change the use of that property in the future,  Lantic does not anticipate any material expenditures being required in the short term to deal with this contamination, unless  off-property impacts are discovered or parking lot expansion requires containment or disposal of contamination. During  the year, the Company spent $0.7 million to remove an unused oil tank. In fiscal 2014, the Company will remove any soil  determined as contaminated under the tank. The Company recorded a provision under asset retirement obligations for this  purpose, which is expected to be sufficient.  Although the Company is not aware of any specific problems at its Toronto distribution centre, no assurance can be given  that expenditures will not be required to deal with known or unknown contamination at the property or other facilities or  offices currently or formerly owned, used or controlled by Lantic. The Company’s currently inactive subsidiary, Chatterton Petrochemical Corporation (“Chatterton”), previously managed  the production and sale of specialty chemicals in Canada. Kalama Chemical, Inc. (“Kalama”), a former subsidiary of Rogers  Sugar Ltd. (“RSL”) (which is one of Lantic’s predecessors) previously managed the production and sale of specialty chemicals  in the United States. Chatterton ceased operations in June 1992 and Chatterton’s property was transferred to Lantic Real  Property Limited Partnership (“Lantic Realco”) in 1998. Kalama was sold in May 1994.  On October 8, 1997, OMI Lantic Holdings and BAI Lantic Holdings (collectively “Lantic Holdings Companies”) and Lantic  Realco provided a joint and several indemnity in favour of RSL against any claim imposing liability under environmental law  resulting from the presence, discharge, release or threatened release of any hazardous substance at three Kalama properties,  at four U.S. “superfund” sites involving Kalama, or at a British Columbia property formerly owned by Chatterton, and any  claims relating to environmental matters arising under the Kalama sale agreement. RSL’s liability for environmental matters under the Kalama sale agreement was terminated as a result of a settlement  completed on June 30, 2008.  Lantic Realco has completed the environmental remediation of the Chatterton property and the British Columbia Ministry  of Environment has issued certificates of compliance confirming that no further remediation is required. As a result of the termination of liabilities under the Kalama Sale Agreement and completion of remediation of the Chatterton  property, Lantic’s management believes Lantic has no significant risk of material loss or expense as a result of historic  environmental issues relating to the Kalama or Chatterton properties. Annual Report 2013 29 ENVIRONMENT 