Cogeco 2014 Annual Report Download - page 49

48 COGECO CABLE INC. 2014 MD&A
FISCAL 2015 CORPORATE SOCIAL RESPONSIBILITY FOCUS
In fiscal 2015, our focus will continue to be the integration of newly acquired business units into our CSR program. We will monitor and report
on our CSR performance to the CSR Steering Committee and to the Corporate governance Committee. We will also work with the various business
units to develop an environmental management system that will enable us to ensure we manage our environmental risks appropriately.
In order to have a better understanding of the sustainability issues that are critical to our business, we will undergo our first stakeholder engagement
exercise, through which we will engage with our internal and external stakeholders.
The Corporation recognizes that there are risks and opportunities arising from sustainability challenges such as climate change, resources scarcity,
volatility in energy prices, supply chain risks, etc. The Corporation will be working in the upcoming year on two topics that are currently receiving
a lot of attention in the telecommunications industry are the energy consumption of the equipments (such as set top boxes) and conflict minerals.
Other initiatives will include the reduction of air travel, the development of a Suppliers Code of Conduct and the strengthening of our responsible
purchasing practices throughout the Corporation.
MEASUREMENT
To achieve its Corporate Social Responsibility goals of continually reducing energy consumption and improving energy efficiency, Cogeco Cable
has developed key performance indicators, for social, economic and environment objectives which are tracked and reported on a monthly or
quarterly basis, as appropriate. The indicators are communicated to the Management level employees.
The Corporation continues to believe that the Canadian cable, American cable and Enterprise data services segments have a smaller environmental
impact as compared to many other industries. However, Cogeco Cable is committed to progressively reducing its environmental footprint in
respect of the communities in which it operates and further improving balance between its environmental, social and economic objectives.
CONTROLS AND PROCEDURES
Internal control over financial reporting ("ICFR") is a process designed to provide reasonable, but not absolute, assurance regarding the reliability
of financial reporting and of the preparation of financial statements for external purposes in accordance with IFRS. The President and Chief
Executive Officer (“CEO”) and the Vice President, Corporate Controller, who, in absence of a Chief Financial Officer since the departure of the
Corporation's Chief Financial Officer on July 21, 2014, is performing similar functions to those of a Chief Financial Officer (" interim CFO"), together
with Management, are responsible for establishing and maintaining adequate disclosure controls and procedures ("DC&P") and ICFR, as defined
in National Instrument 52-109. Cogeco Cable’s internal control framework is based on the criteria published in the updated version released in
May 2013 of the report Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The CEO and interim CFO, supported by Management, evaluated the design and effectiveness of the Corporation's DC&P and ICFR as at
August 31, 2014, and concluded that, as described below, there exists a material weakness in ICFR at Peer 1 Hosting. A material weakness in
ICFR exists if there exists a deficiency or combination of deficiencies in ICFR such that there is a reasonable possibility that a material misstatement
of the annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
Cogeco Cable acquired 96.57% of the issued and outstanding shares of Peer 1 Hosting on January 31, 2013 pursuant to the public offer made
by Cogeco Cable, through its indirectly wholly-owned subsidiary 0957926 B.C. LTD. The remaining shares of Peer 1 Hosting were acquired on
April 3, 2013. Management has been working diligently since the acquisition to complete its review of the design of ICFR at Peer 1 Hosting. As
of August 31, 2014, a significant portion of the design review has been completed and Management has identified certain deficiencies in ICFR
at Peer 1 Hosting principally relating to the financial statement close process and inadequate segregation of duties over certain information system
access controls.
Management has committed additional resources in order to remediate the deficiencies identified through the design review exercise. The
remediation exercise is currently in progress and aims to ensure the implementation of a system of key controls that will be in line with Cogeco
Cable's design standards by the end of 2014 calendar year. Good progress has been achieved to date in terms of the implementation of a number
of measures to address the deficiencies identified. More specifically, Management has implemented several detailed review processes that
provide for a more granular level of analysis. Moreover, access rights are currently being reviewed and adjusted accordingly to reflect proper
segregation of duties. The Corporation cannot currently assess the potential impact of any further design deficiencies which may be identified
during the completion of its review of Peer 1 Hosting's ICFR.
Based on the review completed to date, the CEO and the interim CFO believe that (i) the Corporation's consolidated filings for the year ended
August 31, 2014 do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary
to make a statement not misleading in light of the circumstances under which it was made, and (ii) the annual consolidated financial report together
with the other financial information included in the consolidated filings fairly present, in all material respects, the financial condition, financial
performance and cash flows of Cogeco Cable for the year ended August 31, 2014.
Peer 1 Hosting represents 10% of revenue, -16% of profit for the period, 15% of total assets, 16% of current assets, 15% of non current assets,
6% of current liabilities and 18% of non current liabilities of the consolidated financial statements for the year ended August 31, 2014.