Cogeco 2012 Annual Report Download - page 20

Management’s Discussion and Analysis (MD&A) COGECO CABLE INC. 2012 19
requirements applicable to the Corporation or to its direct or indirect subsidiaries could adversely affect such upstream flows of funds or the
effectiveness of the Corporation’s existing debt financing structure.
The Corporation’s leverage and corporate risk profile is liable to vary from time to time as a result of new developments in its business activities
and the investments required to support internal growth as well as external growth through acquisitions. More particularly, leverage
may fluctuate as the Corporation completes further business acquisitions domestically or abroad, including the planned acquisition of Atlantic,
and the risk profile may differ from one acquisition to the other depending on the characteristics of the acquired business and its relevant
market. The development of new services or additional lines of business, and the acquisition of new business properties, may not necessarily
generate the anticipated results or benefits. There is no assurance that Cogeco Cable will be able to maintain or increase distributions to
shareholders by way of dividends or otherwise.
The Corporation is exposed to interest rate risks for fixed interest rate instruments as they mature, and for floating interest rate instruments in
the normal course. The Corporation’s debt is however very predominantly subject to fixed rates and its debt maturities are staggered over
several years.
Market conditions may have an impact on the Corporation’s defined benefit pension plans as there is no assurance that the actual rate of
return on plan assets will approximate the assumed rate of return used in the most recent actuarial valuation. Market driven changes
may impact the assumptions used in future actuarial valuations and could result in the Corporation being required to make contributions in the
future that differ significantly from the current contributions to the Corporation’s defined benefit pension plans.
HUMAN RESOURCES
Cogeco Cable recognizes the importance of its employees’ involvement regarding the corporation’s business strategy and the risks associated
with a significant reduction in employee engagement. To mitigate these risks, it offers a competitive remuneration program, maintains good
relationships with its key employees and its unionized employees and establishes talent management and skills development strategies. An
employee engagement survey also allows for measuring their level of involvement and which key elements should be targeted. Within the
scope of a collective agreement renewal process, though results may be difficult to predict, the Corporation ensures that a corporate
governance policy is enacted in order to clearly identify issues.
CONTROLLING SHAREHOLDER AND HOLDING STRUCTURE
Cogeco Cable is controlled by COGECO Inc. (“COGECO”) through the holding of multiple voting shares of Cogeco Cable, and COGECO is in
turn controlled by Gestion Audem Inc., a company controlled by Mr. Henri Audet and members of his family (the “Audet Family”), through the
holding of multiple and subordinate voting shares of COGECO. Both Cogeco Cable and COGECO are reporting issuers with subordinate
voting shares listed on the Toronto Stock Exchange. Pursuant to the Conflicts Agreement in effect between Cogeco Cable and COGECO, all
cable television undertakings must be owned or controlled by Cogeco Cable. COGECO is otherwise free to own and operate any other
business or to invest as it deems appropriate. It is possible that situations could arise where the respective interests of the controlling
shareholder, COGECO, and other shareholders of Cogeco Cable, or the respective interests of the Audet Family and other shareholders of
COGECO, could differ.
ENVIRONMENTAL POLICY
OVERVIEW
Cogeco Cable’s environmental policy provides that respect for the environment is one of the fundamental principles set out in the COGECO
group Corporate Code of Ethics. Cogeco Cable makes a point of adhering to this key principle in all its activities, business relationships and
dealings with other stakeholders. It contributes to the broader application of this principle primarily through the delivery of efficient electronic
communication.
The policy has four main objectives: to ensure a more efficient and responsible use of resources, including energy, water and materials; to
eliminate, reduce and control pollution and waste as much as possible; to make continual improvements by remaining abreast of best practices
applied through benchmarking; and to be an agent of change by collaborating with other stakeholders (partners, suppliers, clients, employees)
in a coordinated implementation of environmentally responsible practices.
The responsibility of Cogeco Cable’s environmental footprint is assigned to an officer of the Corporation and is supported by leaders
throughout the organization. A committee-based approach is in place for corporate as well as for regionally-oriented initiatives in furtherance of
the policy.
As the company has embraced Corporate Social Responsibility, the environmental policy will evolve to take on a more inclusive approach.
Corporate Social Responsibility is based on the three pillars: Environment responsibility, Social responsibility and Economic responsibility.