UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 40-F
¨
REGISTRATION
STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x
ANNUAL REPORT PURSUANT
TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2018
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Commission File Number 333-105024
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CASCADES
INC.
(Exact name of Registrant as specified in
its charter)
Quebec, Canada
(Province or other jurisdiction of incorporation
or organization)
2600
(Primary Standard Industrial Classification
Code Number)
98-0140192
(I.R.S. Employer Identification Number)
404 Marie-Victorin Blvd.
Kingsey Falls, Québec
Canada J0A 1B0
(819) 363-5100
(Address and telephone number of Registrant’s
principal executive offices)
Cascades USA Inc.
148 Hudson River Road
Waterford, New York 12188
(518) 238-1900
(Name, address (including zip code) and
telephone number (including area code)
of agent for service in the United States)
Securities registered or to be registered pursuant to Section
12(b) of the Act:
None.
Securities registered or to be registered pursuant to Section
12(g) of the Act:
None.
Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act:
None.
For annual reports, indicate by check mark the information
filed with this Form:
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x
Annual information form
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x
Audited annual financial statements
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Indicate the number of outstanding shares of each of the issuer’s
classes of capital or common stock as of the close of the period covered by the annual report:
94,987,958 shares of common stock outstanding
as of December 31, 2018
Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements
for the past 90 days.*
Indicate by check mark whether the Registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by
check mark whether the Registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging
growth company
¨
If an emerging growth company that prepares
its financial statements in accordance with U.S. GAAP, indicate by check mark if the Registrant has elected not to use the extended
transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the
Exchange Act.
¨
* The Registrant is currently not required
to file reports, including this report, under Section 13 or 15(d) of the Securities Exchange Act of 1934 but is voluntarily
filing this report with the Securities and Exchange Commission.
Annual Audited Consolidated Financial Statements
For the Annual Audited Consolidated Financial
Statements for the years ended December 31, 2018 and 2017, including the Independent Registered Public Accounting Firm’s
Report with respect thereto, of Cascades Inc. (the “Registrant” or “Cascades” or the “Corporation”),
see the excerpt of Cascades’ 2018 Annual Report attached hereto as Exhibit 13.2.
Management’s Discussion and
Analysis
For management’s discussion and analysis
of the operating results and financial position of Cascades for the years ended December 31, 2018 and 2017 (“Management’s
Discussion and Analysis”), see the excerpt of Cascades’ 2018 Annual Report attached hereto as Exhibit 13.3.
Disclosure Controls and Procedures
Disclosure controls and procedures means
controls and other procedures that are designed to ensure that information required to be disclosed by the Registrant in the reports
that the Registrant files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is
recorded, processed, summarized and reported within the time periods specified under Canadian securities laws and specified in
the United States Securities and Exchange Commission’s (the “SEC”) rules and forms and that such information
required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to
management, including the President and Chief Executive Officer and the Vice-President and Chief Financial Officer, to allow timely
decisions regarding required disclosure.
Evaluation of Disclosure Controls and
Procedures
The Registrant conducted an evaluation
(under the supervision and with the participation of the Registrant’s management, including the Chief Executive Officer and
Chief Financial Officer) as of December 31, 2018, pursuant to Rule 13a-15 promulgated under the Exchange Act and under National
Instrument 52-109 adopted by the Canadian Securities regulatory authorities, of the effectiveness of the design and operation of
the Registrant’s disclosure controls and procedures. Based on this evaluation, the Registrant’s Chief Executive Officer
and Chief Financial Officer concluded that such disclosure controls and procedures were effective as of December 31, 2018. They
have limited the scope of their design of such disclosure controls and procedures to exclude controls, policies and procedures
of certain business combinations completed by the Corporation in 2018. The design and evaluation of the operating effectiveness
of the disclosure controls and procedures of the 2018 business combinations will be completed within 365 days from the date of
acquisition. See “Controls and Procedures” in Management’s Discussion and Analysis, attached hereto as Exhibit
13.3.
It should be noted that while the Registrant’s
Chief Executive Officer and Chief Financial Officer believe that the Registrant’s disclosure controls and procedures provide
a reasonable level of assurance that they are effective, they do not expect that the Registrant’s disclosure controls and
procedures will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Management’s Report on Internal
Control over Financial Reporting
Management’s Report to the shareholders
of Cascades Inc. on internal control over financial reporting for the fiscal year ended December 31, 2018 is included in Exhibit
13.2 to this Annual Report on Form 40-F.
Management conducted an assessment of the
effectiveness of the Corporation’s internal control over financial reporting, as at December 31, 2018 based on the framework
and criteria established in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 COSO Framework). Based on this evaluation, management has concluded that the Corporation’s internal control
over financial reporting was effective as at December 31, 2018. They have limited the scope of the internal control over financial
reporting to exclude controls, policies and procedures of certain business combinations completed by the Corporation in 2018. The
design and evaluation of the operating effectiveness of the internal control over financial reporting of the 2018 business combinations
will be completed within 365 days from the date of acquisition. See “Controls and Procedures” in Management’s
Discussion and Analysis, attached hereto as Exhibit 13.3.
It should be noted that while the Registrant’s
Chief Executive Officer and Chief Financial Officer believe that the Registrant’s internal control over financial reporting
provides a reasonable level of assurance that it is effective, they do not expect that the Registrant’s internal control
over financial reporting will prevent all errors and fraud. A control system, no matter how well conceived or operated, can provide
only reasonable, not absolute, assurance that the objectives of the control system are met.
Changes in Internal Control Over Financial
Reporting
There was no change in the Registrant’s
internal control over financial reporting that occurred during the period covered by this report that has materially affected,
or is reasonably likely to materially affect, its internal control over financial reporting.
Code of Ethics
The Corporation has adopted a Code of Ethics
and Business Conduct that applies to all directors, officers and employees, including the Corporation’s principal executive
officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. For
a discussion of the Corporation’s Code of Ethics, see Cascades’ Annual Information Form for the year ended December
31, 2018 (“AIF”) attached hereto as Exhibit 13.1. There were neither amendments to nor waivers, including implicit
waivers, from any provision of the Code of Ethics and Business Conduct during the year ended December 31, 2018 that applied to
the Corporation’s principal executive officer, principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The Code of Ethics and Business Conduct is available on the Corporation’s website at
www.cascades.com
.
Audit Committee
The Registrant has a separately designated
standing audit committee (the “Audit and Finance Committee”) as defined in Section 3(a)(58)(A) of the Exchange Act.
The Audit and Finance Committee is composed entirely of directors who are “independent,” as such term is defined in
the listing standards of the New York Stock Exchange. All members of the Audit and Finance Committee are financially literate
and there are two “audit committee financial experts.” In considering criteria for the determination of financial
literacy, the Board of Directors considers the ability to read and understand a set of financial statements that present a breadth
and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can
reasonably be expected to be raised by the Registrant’s financial statements. In determining whether Audit and Finance Committee
members are “audit committee financial experts,” the Board of Directors and the Audit and Finance Committee have considered
the attributes set forth in Form 40-F. The “audit committee financial experts” are Laurence Sellyn and Michelle Cormier.
The other members of the Audit and Finance Committee are Georges Kobrynsky, Sylvie Vachon and Martin Couture.
Principal Accountant Fees and Services
The aggregate fees for professional services
rendered by our Independent Registered Public Accounting Firm, PricewaterhouseCoopers LLP, for the Corporation for the 2018 and
2017 fiscal years are shown in the table below:
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Fees in Canadian dollars
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Year ended
December 31, 2017
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Year ended
December 31, 2018
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Audit Fees
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$
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1,715,891
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$
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1,550,145
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Audit-Related Fees
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$
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672,135
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$
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24,750
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Tax Fees
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$
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117,149
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$
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262,487
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All Other Fees
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$
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619,668
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$
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130,478
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Total
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$
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3,124,843
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$
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1,967,860
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The nature of each category of fees is
described below:
Audit Fees: Includes professional services
provided by the Independent Registered Public Accounting Firm in connection with statutory and regulatory filings and audit of
the annual financial statements of the Corporation.
Audit-Related Fees: Includes professional
services provided by the Independent Registered Public Accounting Firm in connection with auditing as well as consultations on
accounting and regulatory matters.
Tax Fees: Includes professional services
rendered by the Independent Registered Public Accounting Firm, mainly for compliance to income tax laws.
All Other Fees: Professional services consisting
primarily of transaction support services.
Audit and Non-Audit Services Pre-Approval
Policy
The Corporation’s Audit and Finance
Committee has adopted a Pre-approval Policy and Procedures for services provided by the Corporation’s Independent Registered
Public Accounting Firm, PricewaterhouseCoopers LLP, which sets forth the procedures and the conditions pursuant to which permissible
services proposed to be performed by the Independent Registered Public Accounting Firm are pre-approved. Under the terms of the
policy, services that involve annual fees of less than $25,000 up to an annual limit of $50,000 are pre-approved. The Audit and
Finance Committee has delegated to the Chairman of the Audit and Finance Committee pre-approval authority for any services not
previously approved by the Audit and Finance Committee that involve the payment of unbudgeted fees up to a maximum of $100,000
per mandate. Services that involve fees of more than $100,000 require pre-approval of all the members of the Audit and Finance
Committee. All of the non-audit services set forth above were approved under this pre-approval policy.
Services Approved by the Audit and Finance
Committee
For the year ended December 31, 2018, the
services described above requiring pre-approval were approved by the Audit and Finance Committee pursuant to paragraph (c)(7)(i)
of Rule 2-01 of Regulation S-X.
Off-Balance Sheet Arrangements
There were no off-balance sheet arrangements
as of December 31, 2018.
Tabular Disclosure of Contractual Obligations
For a tabular disclosure and discussion
of contractual obligations, see the section entitled “Contractual Obligations and other commitments” in Management’s
Discussion and Analysis attached hereto as Exhibit 13.3.
Forward-Looking Statements
Certain statements in this Annual Report
on Form 40-F or in documents incorporated by reference herein including statements regarding future results and performance, are
forward-looking statements (as such term is defined under the United States Private Securities Litigation Reform Act of 1995) based
on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may
cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions,
decreases in demand and cyclical markets for Cascades’ products, the prices and availability of raw materials and energy
costs, Cascades’ exposure to significant competition, including competition with firms that may enjoy cost advantages or
economies of scale, political, social and exchange rate risks due to its international operations, compliance costs associated
with environmental laws and regulations, including unforeseen expenditures as a result of environmental liabilities, casualty of
other losses that are not fully covered by insurance, labor disputes, work stoppages or increased labor costs, difficulty recouping
its investments in joint ventures of other companies that Cascades does not control, difficulties associated with acquiring companies,
or integrating acquired companies, as part of Cascades’ growth strategy, the impairment of Cascades’ goodwill or other
intangible assets, changes in the control of Cascades‘ equity capital, changes in strategy or management brought about by
its existing shareholders or similar changes relating to its control and management, Cascades’ inability to retain key personnel
or attract and retain other talented employees, Cascades’ significant amount of outstanding indebtedness and its ability
to incur additional debt in the future, the potential for climate change to cause damage to Cascades’ facilities or disrupt
operations, reliance on information technology and maintaining effective cyber security, and fluctuations in currency exchange
rates and market interest rates. Reference is made to the section entitled “Risk Factors” of the AIF and to the section
entitled “Risk Factors” in Management’s Discussion and Analysis (which is incorporated by reference in the AIF),
each of which are attached hereto as Exhibits 13.1 and 13.3, respectively.
Consequently, all of the forward-looking
statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results on developments
anticipated by the Corporation will be realized. The Corporation undertakes no obligation to update or revise any forward-looking
statements, except as required by applicable law.
Website Information
Notwithstanding any reference to the Registrant’s website
in the AIF or in the documents attached as Exhibits hereto, the information contained in the Registrant’s website or any
other website referred to in the Registrant’s website is not a part of this Form 40-F and, therefore, is not filed with the
SEC.
Undertaking
The Registrant undertakes to make available,
in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when
requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities
in relation to which the obligation to file an Annual Report on Form 40-F arises; or transactions in said securities.
Consent to Service of Process
Any change to the
name or address of the Registrant and/or to the name or address of the Registrant’s agent for service shall be communicated
promptly to the Commission by amendment to the Form F-X referencing the file number of the Registrant.
Signatures
Pursuant to the requirements of the Exchange
Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report
to be signed on its behalf by the undersigned, thereto duly authorized.
CASCADES INC.
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By:
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/s/
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Allan Hogg
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Name:
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Allan Hogg
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Title:
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Vice-President and Chief Financial
Officer
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Date:
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March 28, 2019
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Exhibit
Index
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Exhibit
Number
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Description of
Exhibit (and document from
which incorporated by reference, if applicable)
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Note
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3.1
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Articles of Amalgamation of Cascades Inc. filed with the Inspector General of Financial Institutions of Quebec on January 10, 2004
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(A)
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3.2
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Articles of Amendment of Cascades Inc. filed with the Registrar of Companies of Quebec on July 27, 2011
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(B)
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3.3
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By-law No. 2011-1 of Cascades Inc., adopted by the Board of Directors of Cascades Inc. on March 14, 2011 and ratified by the Shareholders on May 12, 2011
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(B)
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4.1
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Indenture, dated as of June 19, 2014, among Cascades Inc., the Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee
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(C)
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4.2
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First Supplemental Indenture, dated as of March 16, 2015, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee
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(C)
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4.3
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Second Supplemental Indenture, dated as of September 23, 2015, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee
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(D)
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4.4
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Third Supplemental Indenture, dated December 9, 2015, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee
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(D)
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4.5
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Fourth Supplemental Indenture, dated September 30, 2016, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee
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(E)
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4.6
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Fifth Supplemental Indenture, dated March 29, 2017, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantor named therein and Wells Fargo Bank, National Association, as Trustee
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(F)
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4.7
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Sixth Supplemental Indenture, dated December 14, 2017, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantor named therein and Wells Fargo Bank, National Association, as Trustee
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(F)
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4.8
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Indenture, dated as of June 19, 2014, among Cascades Inc., the Subsidiary Guarantors named therein and Computershare Trust Company of Canada, as Trustee
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(C)
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4.9
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First Supplemental Indenture, dated as of March 16, 2015, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantors named therein and Computershare Trust Company of Canada, as Trustee
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(C)
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4.10
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Second Supplemental Indenture, dated as of September 23, 2015, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantors named therein and Computershare Trust Company of Canada, as Trustee
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(D)
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4.11
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Third Supplemental Indenture, dated as of December 9, 2015, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantors named therein and Computershare Trust Company of Canada, as Trustee
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(D)
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4.12
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Fourth Supplemental Indenture, dated as of September 30, 2016, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantors named therein and Computershare Trust Company of Canada, as Trustee
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(E)
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4.13
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Fifth Supplemental Indenture, dated as of March 29, 2017, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantor named therein and Computershare Trust Company of Canada, as Trustee
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(F)
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4.14
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Sixth Supplemental Indenture, dated as of December 14, 2017, to the Indenture dated as of June 19, 2014, among Cascades Inc., the New Subsidiary Guarantor named therein and Computershare Trust Company of Canada, as Trustee
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(F)
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4.15
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Indenture dated May 19, 2015, among Cascades Inc., the Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee
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(D)
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Exhibit
Number
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Description of
Exhibit (and document from
which incorporated by reference, if applicable)
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Note
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4.16
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First Supplemental Indenture, dated September 23, 2015, to the Indenture dated May 19, 2015, among Cascades Inc., the Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee
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(D)
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4.17
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Second Supplemental Indenture, dated December 9, 2015, to the Indenture dated May 19, 2015, among Cascades Inc., the Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee
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(D)
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4.18
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Third Supplemental Indenture, dated September 30, 2016, to the Indenture dated May 19, 2015, among Cascades Inc., the Subsidiary Guarantors named therein and Wells Fargo Bank, National Association, as Trustee
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(E)
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4.19
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Fourth Supplemental Indenture, dated March 29, 2017, to the Indenture dated May 19, 2015, among Cascades Inc., the Subsidiary Guarantor named therein and Wells Fargo Bank, National Association, as Trustee
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(F)
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4.20
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Fifth Supplemental Indenture, dated December 14, 2017, to the Indenture dated May 19, 2015, among Cascades Inc., the Subsidiary Guarantor named therein and Wells Fargo Bank, National Association, as Trustee
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(F)
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10.1
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Fourth Amended and Restated Credit Agreement, dated as of December 21, 2018, among Cascades Inc. and Cascades USA Inc., as borrowers, National Bank of Canada, as administrative agent, The Bank of Nova Scotia, as collateral agent, American AgCredit, PCA, as term facility agent and a syndicate of lenders named therein, as lenders
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(G)
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13.1
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Annual Information Form for the year ended December 31, 2018
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(G)
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13.2
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Audited Consolidated Financial Statements for the year ended December 31, 2018 together with Management’s Report and the Independent Registered Public Accounting Firm’s Report
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(G)
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13.3
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Management’s Discussion and Analysis for the year ended December 31, 2018
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(G)
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23.1
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Consent of Independent Registered Public Accounting Firm
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(G)
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31.1
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CEO Section 302 Certification
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(G)
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31.2
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CFO Section 302 Certification
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(G)
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32.1
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CEO and CFO Certification pursuant to Rule 13(a)-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).
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(G)
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101
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Interactive Data File
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(G)
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(A)
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Previously filed as an exhibit to Cascades Inc.’s
Annual Report on Form 40-F, filed on March 24, 2005 and incorporated herein by reference.
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(B)
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Previously filed as an exhibit to Cascades Inc.’s
Annual Report on Form 40-F, filed on March 29, 2012 and incorporated herein by reference.
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(C)
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Previously filed as an exhibit to Cascades Inc.’s
Annual Report on Form 40-F, filed on March 27, 2015 and incorporated herein by reference.
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(D)
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Previously filed as an exhibit to Cascades Inc.’s
Annual Report on Form 40-F, filed on March 30, 2016 and incorporated herein by reference.
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(E)
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Previously filed as an exhibit to Cascades Inc.’s
Annual Report on Form 40-F, filed on March 30, 2017 and incorporated herein by reference.
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(F)
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Previously filed as an exhibit to Cascades Inc.’s
Annual Report on Form 40-F, filed on March 29, 2018 and incorporated herein by reference.
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