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
For the fiscal year ended:September 28, 2013 Commission File Number033-172078-02
TEMBEC INC.
(Exact name of registrant as specified in its charter)
| Canada | 2611 | N.A. |
| (Province or Other Jurisdiction of Incorporation | (Primary Standard Industrial Classification | (I.R.S. Employer |
| or Organization) | Code) | Identification No.) |
| 800, René-Lévesque Boulevard West |
| Suite 1050 |
| Montréal, Québec, Canada |
| H3B 1X9 |
| (Address and telephone number of registrant’s principal executive offices) |
| _______________________ |
| CT Corporation System |
| 111 Eight Avenue |
| New York, New York 10011 |
| (212) 894-8940 |
| (Name, address (including zip code) and telephone number (including area code) of agent for service in the United States) |
| _______________________ |
Securities to be registered pursuant to Section 12(b) of the Act:
| Title of Each Class: | Name of Each Exchange On Which Registered: |
| N/A | N/A |
Securities 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:11.25% Senior Secured Notes due 2018
For annual reports, indicate by check mark the information filed with this form:
[X] Annual Information Form [X] Audited Annual Financial Statements
Indicate the number of outstanding shares of each of the registrant’s classes of capital or common stock as of the close of the period covered by the annual report: 100,000,000 Common Shares
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. [X] Yes [_] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). [_] Yes [_] No
FORWARD LOOKING STATEMENTS
The Exhibits incorporated by reference into this Annual Report contain certain “forward-looking statements” within the meaning of securities laws. Such statements relate, without limitation, to Tembec Inc. (the “Company” or the “Registrant”) or management’s objectives, projections, estimates, expectations or predictions of the future and can be identified by words such as “may”, “will”, “could”, “anticipate”, “estimate”, “expect” and “project”, the negative or variation thereof, and expressions of similar nature. Forward looking statements are based on certain assumptions and analyses made by the Registrant in light of its experience, information available to it and its perception of future developments. The forward-looking statements contained in this Annual Report reflect the Registrant’s expectations as of the date hereof and are subject to change after such date. The Registrant disclaims any intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable securities legislation. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Registrant or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those described in the Annual Information Form of the Registrant filed as Exhibit 99.1 to this Annual Report on Form 40-F.
Many of these risks are beyond the control of the Registrant and, therefore, may cause actual actions or results to materially differ from those expressed or implied herein. In addition, other risks could adversely affect the Registrant and it is not possible to predict or assess all risks. The Registrant’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will occur, or if any of them do so, what benefits, including the amount of proceeds, the Registrant will derive from them. Except as otherwise indicated, forward-looking statements do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made may have on the Registrant’s business. Such statements do not, unless otherwise specified by the Registrant, reflect the impact of dispositions, sales of assets, monetizations, mergers, acquisitions, combinations or transactions, asset write-downs or other charges announced or occurring after forward-looking statements are made. The financial impact of these transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them, and cannot be expressed in a meaningful way or in the same way the Registrant presents known risks affecting its business.
DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES
The Registrant is permitted, under a multijurisdictional disclosure system adopted by the United States (“MJDS”), to prepare this report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Registrant’s historical financial statements, which are filed with this Annual Report, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), and are subject to Canadian auditing and auditor independence standards. They may not be comparable to financial statements of the United States companies.
Under MJDS the Registrant is permitted to incorporate by reference into this Annual Report financial statements prepared in accordance with the IFRS.
DOCUMENTS FILED PURSUANT TO GENERAL INSTRUCTIONS
The Registrant hereby incorporates by reference Exhibit 99.1 through Exhibit 99.5, as set forth in the Exhibit Index attached hereto.
The Registrant hereby incorporates by reference Exhibit 99.2, the Annual Audited Financial Statements of the Registrant for the years ended September 28, 2013 and September 29, 2012, as well as Exhibit 99.3, the Registrant’s Management’s Discussion and Analysis for the year ended September 28, 2013, as set forth in the Exhibit Index attached hereto.
The Registrant has filed a written consent of the auditor named in Exhibit 99.6, as set forth in the Exhibit Index attached hereto.
DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the Registrant’s fiscal year ended September 28, 2013, an evaluation of the effectiveness of the Registrant’s “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) was carried out by the Registrant’s principal executive officer and principal financial officer. Based upon the evaluation, the Registrant’s principal executive officer and principal financial officer have concluded that as of the end of the fiscal year, the Registrant’s disclosure controls and procedures were effective. Disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure, at a reasonable assurance level, that information required to be disclosed by the Registrant in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. It should be noted that while the registrant’s principal executive officer and principal 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 or internal control over financial reporting will prevent all errors and fraud. A control 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 ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) under the Exchange Act. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS as issued by the IASB.
A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. It should be noted that a control system, no matter how well conceived or operated, can only provide reasonable assurance, not absolute assurance, that the objectives of the control system are met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.
The Company’s President and Chief Executive Officer and the Company’s Executive Vice-President, Finance and Chief Financial Officer have evaluated, or caused to be evaluated, under their supervision the effectiveness of the Company’s internal control over financial reporting as of September 28, 2013. In making this assessment, management used the criteria set forth in the Internal Control Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on their evaluation, they have concluded that, as of September 28, 2013, the Company’s internal control over financial reporting was effective.
AUDITORS’ ATTESTATION REPORT
The Company is neither an accelerated filer nor large accelerated filer and is not required to provide an auditor’s attestation report on its internal control over financial reporting for the fiscal year ended September 28, 2013 in accordance with Section 989G(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in the Company’s internal control over financial reporting during its fiscal year ended September 28, 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
NOTICE PURSUANT TO REGULATION BTR
None.
IDENTIFICATION OF THE AUDIT COMMITTEE
The required disclosure is included under “Item 8.1.1 – Independence” and “Item 8.2 – Audit Committee” in the Registrant’s Annual Information Form for the fiscal year ended September 28, 2013, filed as Exhibit 99.1 to this Annual Report on Form 40-F.
The Registrant is not a "listed issuer'' as defined in Exchange Act Rule 10A-3, and is therefore not subject to the audit committee requirements set forth in the rules of any national securities exchange registered pursuant to Section 6 of the Exchange Act or any national securities association registered pursuant to Section 15A of the Exchange Act. However, as a reporting issuer in Canada, the Registrant's Board of Directors has established a separately designated Audit Committee of the Board in accordance with Canadian Multilateral Instrument 52-110, Audit Committees (“MI 52-110”), as adopted by the Canadian Securities Administrators. The Audit Committee provides oversight of the Registrant's accounting and financial reporting processes and the audits of the Registrant's annual financial statements. The Audit Committee has adopted an Audit Committee Charter that is annexed as Schedule “A” to the Registrant's Annual Information Form filed as Exhibit 99.1 to this Annual Report on Form 40F.
AUDIT COMMITTEE FINANCIAL EXPERT
The Registrant’s Board of Directors has determined that all members of the Audit Committee are considered “independent” and “financially literate” within the meaning of MI 52-110 and Mr. Norman M. Betts is an audit committee financial expert as that term is defined in Item 407 of Regulation S-K under the Exchange Act.
CODE OF ETHICS
The Registrant has adopted a Code of Ethics (the “Code”) (as that term is defined in paragraph 9(b) of General Instruction B in Form 40-F), that applies to all directors, officers and employees of the Registrant, including the principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. A copy of the Code is posted on the Registrant’s website at http://tembec.com/en/investors/corporate-governance. Any amendments to the Code, and all waivers of the Code with respect to any of the officers covered by it, will be posted to the Issuer’s website within five business days of any amendment or waiver to the Code and shall be provided in print to any shareholder who requests them.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required is included under “Item 8.2.4 – External Auditor Service Fees” in the Registrant’s Annual Information Form for the fiscal year ended September 28, 2013, incorporated by reference as Exhibit 99.1 to this Annual Report on Form 40-F.
POLICIES AND PROCEDURES FOR THE ENGAGEMENT OF AUDIT AND NON-AUDIT SERVICES AND PRE-APPROVAL POLICIES
The information required is included under “Item 8.2.2 – Charter of the Audit Committee” and “Item 8.2.5 – Policies and Procedures for the Engagement of Non-Audit Services” in the Registrant’s Annual Information Form for the fiscal year ended September 28, 2013, incorporated by reference as Exhibit 99.1 to this Annual Report on Form 40-F.
OFF BALANCE SHEET ARRANGEMENTS
The outstanding letters of credit, in the amount of $56 million, constitute security for various operating items, principally the unfunded portion of supplementary retirement plans, future landfill closure liabilities and performance guarantees related to electricity generation agreements. The Registrant does not have any other significant off-balance sheet arrangements as of September 28, 2013.
DISCLOSURE OF CONTRACTUAL OBLIGATIONS
The following table lists as of September 28, 2013 information with respect to the Registrant’s known contractual obligations.
| Contractual Obligations | Total | Less | 2 to 3 Years | 4 to 5 Years | More |
| than 1 Year | than 5 Years | ||||
| Long-Term Debt | 402 | 16 | 13 | 11 | 362 |
| Interest on Long-Term Debt | 214 | 40 | 78 | 77 | 19 |
| Operating Leases | 9 | 4 | 4 | 1 | - |
| Purchase Obligations | 170 | 106 | 54 | 10 | - |
| Pension Obligations: | - | - | - | - | - |
| Normal Cost | 119 | 8 | 15 | 15 | 81 |
| Contractual | 172 | 37 | 65 | 33 | 37 |
| Total(1) | 1,086 | 211 | 229 | 147 | 499 |
| (1) | Excludes $56 million drawn under an asset-based revolving five-year working credit facility expiring March 2017 which has been classified as a current liability. |
The table above shows the Company’s contractual obligations as at September 28, 2013. The Company has long-term debt with contractual maturities and applicable interest. The operating lease obligations relate primarily to property and equipment rentals entered into in the normal course of business. Purchase obligations relate to ongoing normal commercial commitments to purchase timber, wood chips, energy, chemicals and other operating inputs. They also include outstanding obligations relating to capital expenditures. Pension obligations have two components. The current service costs are limited to a 15-year period and are based on estimated future employee service for existing registered defined benefit plans. Past service costs include estimated solvency and going concern amortization payments, based on actuarial evaluations that were filed on or before September 28, 2013.
MINE SAFETY DISCLOSURE
Not applicable.
UNDERTAKINGS
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
The Registrant has previously filed a Form F-X in connection with the class of securities in relation to which the obligation to file this report arises.
Any change 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 registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
| TEMBEC INC. | |
| By:(s) James M. Lopez | By:(s) Michel J. Dumas |
| James M. Lopez | Michel J. Dumas |
| President and Chief Executive Officer | Executive Vice President, Finance and Chief |
| Financial Officer |
Date: December 16, 2013
EXHIBIT INDEX
The following documents are being filed with the Commission as exhibits to this registration statement on Form 40-F.