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Consolidated financial statements COGECO CABLE INC. 2015 65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years ended August 31, 2015 and 2014
NATURE OF OPERATIONS
Cogeco Cable Inc. ("Cogeco Cable" or the "Corporation" or the "Parent Corporation") is a Canadian public communications corporation whose
subordinate voting shares are listed on the Toronto Stock Exchange ("TSX") under the trading symbol "CCA". Operating in Canada under the
Cogeco Cable Canada GP Inc. ("Cogeco Cable Canada") name in Québec and Ontario, and in the United States under the Atlantic Broadband
LLC ("Atlantic Broadband") name in western Pennsylvania, southern Florida, Maryland/Delaware, South Carolina and eastern Connecticut, its
two-way broadband fibre networks provide residential and business customers with video, Internet and telephony services. Through its subsidiary
Cogeco Peer 1 Inc. ("Cogeco Peer 1"), the Corporation provides its business customers with a suite of information technology services (colocation,
network connectivity, managed hosting, cloud services and managed IT services), through its data centres, extensive FastFiber NetworkTM and
points-of-presence in North America and Europe.
The Corporation is a subsidiary of COGECO Inc. ("COGECO"), which holds 31.9% of the Corporation’s equity shares, representing 82.4% of the
votes attached to the Corporation’s voting shares.
The Corporation's registered office is located at 5 Place Ville Marie, Suite 1700, Montréal, Québec, H3B 0B3.
1. BASIS OF PRESENTATION
These audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS")
issued by the International Accounting Standards Board ("IASB").
The consolidated financial statements have been prepared on a going concern basis using historical cost, except for financial instruments
and derivative financial instruments (see Note 2 M)), cash-settled share-based payment arrangements (see Note 2 J)) and pension plan
assets (see Note 2 K)), which are measured at fair value, and for the defined benefit obligation (see Note 2K)) and provisions (see Note 2
I)), which are measured at present value.
Financial information is presented in Canadian dollars, which is the functional currency of Cogeco Cable.
The consolidated financial statements were approved by the Board of Directors of Cogeco Cable at its meeting held on October 28, 2015.
2. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in the consolidated financial statements,
unless otherwise indicated.
A) BASIS OF CONSOLIDATION
These consolidated financial statements include the accounts of the Corporation and its subsidiaries.
Subsidiaries are entities controlled by the Corporation. Control is achieved where the Corporation has the power to govern the financial
and operating policies of an entity so as to obtain benefits from its activities. Subsidiaries' financial statements are included in the
consolidated financial statements from the date that control commences until the date that control ceases. Subsidiaries' year-end and
accounting policies are aligned with those adopted by the Corporation. Operating segments and percentage of interest in the principal
subsidiaries at August 31, 2015 are as follows:
Operating segment Principal subsidiaries Percentage of equity interest Voting rights
% %
Canadian cable services Cogeco Cable Canada GP Inc. 100 100
American cable services Atlantic Broadband LLC 100 100
Enterprise data services Cogeco Peer 1 Inc. 100 100
The Corporation has established special purpose entities ("SPEs") with the objective of mitigating the impact of stock price fluctuations
in connection with its Incentive and Performance Share Unit Plans. SPEs are consolidated if, based on an evaluation of the substance
of their relationship with the Corporation and the SPEs' risks and rewards, the Corporation concludes that it controls the SPEs. SPEs
controlled by the Corporation were established under terms that impose strict limitations on the decision-making powers of the SPEs'
management, resulting in the Corporation receiving the majority of the benefits related to the SPEs' operations and net assets, being
exposed to the majority of risks incident to the SPEs' activities, and retaining the majority of the residual or ownership risks related to
the SPEs or their assets.