**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 40-F**

 

| **o**      | ** ** | ** ** | **REGISTRATION STATEMENT PURSUANT  TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934**    |
|------------|------------|------------|----------------------------------------------------------------------------------------------|
|       |       |       |                                                                                         |
| **ý** | ** ** | ** ** | **ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF 1934** |

 
| **For the fiscal year ended December 31, 2005** | **Commission File Number 333-105024** |
|-------------------------------------------------|---------------------------------------|

 

**CASCADESINC.**

(Exact name of registrant as specified in its charter)

 

**Not Applicable**

(Translation of Registrant’s name into English)

 

**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, Quebec**

**Canada J0A1B0**

**(819)363-5100**

(Address and telephone number of Registrant’s principal executiveoffices)

 

**CascadesUSA Inc.**

**148 Hudson River Road**

**Waterford, NY 12188**

**(518) 238-1900**

(Name, address (including zip code) and telephone number (includingarea code) of agent for service in the United States)

 

Securities registered or to beregistered pursuant to Section 12(b) of the Act:

 

**NotApplicable.**

 

Securities registered or to be registered pursuant to Section 12(g) ofthe Act:

 

**NotApplicable.**

 

Securities for which there is a reporting obligation pursuant toSection 15(d) of the Act:

 

**71/4% Senior Notes due 2013**

 

For annual reports, indicate bycheck mark the information filed with this Form:

 
|   | ý | Annual  information form | ý | Audited  annual financial statements |
|--------|--------|--------------------------|--------|--------------------------------------|

 

Indicate the number ofoutstanding shares of each of the issuer’s classes of capital or common stockas of the close of the period covered by the annual report:

 

****80,818,540**** shares of common stockoutstanding as of December 31, 2005

 

Indicate by check mark whetherthe Registrant by filing the information contained in this Form is also therebyfurnishing the information to the Commission pursuant to Rule 12g3-2(b) underthe Securities Exchange Act of 1934 (the “Exchange Act”). If “Yes” is marked,indicate the file number assigned to the Registrant in connection with suchRule.

 
| Yes |   | o |   | 82- |   | No |   | ý |
|-----|--------|---|--------|-----|--------|----|--------|--------|

 

Indicate by check mark whetherthe Registrant (1) has filed all reports required to be filed by Section 13 or15(d) of the Exchange Act during the preceding 12 months (or for such shorterperiod that the Registrant was required to file such reports) and (2) has beensubject to such filing requirements for the past 90 days.

 
| Yes |   | ý |   |   |   | No |   | o |
|-----|--------|--------|--------|--------|--------|----|--------|---|

 

 

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# **AnnualAudited Consolidated Financial Statements**

# ** **

For the Annual AuditedConsolidated Financial Statements, including the Auditors’ Report with respectthereto, of Cascades Inc. (the “Registrant” or “Cascades” or the “Company”),see pages 44 to 97, respectively of Cascades’ 2005 Annual Report attachedhereto as Exhibit 13.2. See Note 25 of the Notes to the Audited ConsolidatedFinancial Statements on pages 87 through 97 of Cascades’ 2005 Annual Report,describing the important differences between Canadian and United Statesgenerally accepted accounting principles and reconciling net earnings,shareholders’ equity and balance sheet to United States generally acceptedaccounting principles.

 

#### **Management’s Discussion and Analysis of Financial Position and Resultsof Operation**

#### ** **

For management’s discussion and analysis of financial position andresults of operations, see pages 1 to 43 of Cascades’ 2005 Annual Report attached hereto as Exhibit13.3.

 

## **Evaluationof Disclosure Controls and Procedures**

## ** **

TheRegistrant conducted an evaluation (under the supervision and with theparticipation of the Registrant’s management, including the Chief ExecutiveOfficer and Chief Financial Officer as of December 31, 2005), pursuant to Rule13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the “ExchangeAct”) of the effectiveness of the design and operation of the Registrant’sdisclosure controls and procedures. Based on this evaluation, the Registrant’sChief Executive Officer and Chief Financial Officer concluded that suchdisclosure controls and procedures are effective to ensure that informationrequired to be disclosed by the registrant in reports it files or submits underthe Exchange Act is recorded, processed, summarized and reported within thetime periods specified in the rules and forms of the Securities and ExchangeCommission (“SEC”). It should be noted that while the Registrant’s ChiefExecutive Officer and Chief Financial Officer believe that the Registrant’sdisclosure controls and procedures provide a reasonable level of assurance thatthey are effective, they do not expect that the Registrant’s disclosurecontrols and procedures or internal control over financial reporting willprevent all errors and fraud. A control system, no matter how well conceived oroperated, can provide only reasonable, not absolute, assurance that theobjectives of the control system are met.

 

**Changesin Internal Controls**

 

There wasno change in the Registrant’s internal control over financial reporting thatoccurred during the period covered by this report that has materially affected,or is reasonably likely to materially affect, its internal control overfinancial reporting.

 

**Code ofEthics**

 

For adiscussion of the Company’s Code of Ethics, see page 13 of Cascades’ AnnualInformation Form for the year ended December 31, 2005 (“AIF”) attached heretoas Exhibit 13.1. There were neither amendments to nor waivers, includingimplicit waivers, from any provision of the Code of Ethics during the fiscalyear ended December 31, 2005 that applied to the Company’s principal executiveofficer, principal financial officer, principal accounting officer orcontroller, or persons performing similar functions. The Code of Ethics isavailable on the Company’s website at www.cascades.com.

 

**AuditCommittee**

 

TheRegistrant has a separately designated standing audit committee (the “AuditCommittee”) established in accordance with Section 3(a)(58)(A) of the ExchangeAct. The Audit 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 Committee are financially literate and there are three“audit committee financial experts”. In considering 

 

 

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criteriafor the determination of financial literacy, the Board of Directors considers theability to read and understand a set of financial statements that present abreadth and level of complexity of accounting issues that are generallycomparable to the breadth and complexity of the issues that can reasonably beexpected to be raised by the Registrant’s financial statements. In determiningwhether Audit Committee members are “audit committee financial experts”, theBoard of Directors and the Audit Committee have considered the attributesdescribed by the SEC. The “audit committee financial experts” are AndréDesaulniers, Robert Chevrier and James B.C. Doak. The other member of the AuditCommittee is Laurent Verreault.

 

**PrincipalAccountant Fees and Services**

 

Theaggregate fees for professional services rendered by PricewaterhouseCoopers LLPfor the Company for the 2005 and 2004 fiscal years are shown in the tablebelow:

 
| **Fees in Canadian dollars** | ** ** | **Year Ended  December 31, 2005** | ** ** | **Year ended  December 31, 2004** | ** ** |
|---------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------|------------|
| Audit Fees                                  |       | $                                                | 1,617,005  |                                             | $          | 1,525,000 |   |
| Audit-Related  Fees                         |       | $                                                | 411,407    |                                             | $          | 288,267 |   |
| Tax Fees                                    |       | $                                                | 130,152    |                                             | $          | 293,370 |   |
| All Other Fees                              |       | N/A                                              |       | N/A                                              |       |
| Total                                       |       | $                                                | 2,158,564  |                                             | $          | 2,106,637 |   |

 

Thenature of each category of fees is described below :

 

AuditFees: Includes services provided by the independent auditor in connection withstatutory and regulatory filings and audit of the annual financial statementsof the Company.

 

Audit-RelatedFees: Includes services provided by the independent auditor in connection withthe Company’s issuance of Senior Notes as well as consultations on accountingand regulatory matters.

 

Tax Fees:Includes services rendered by the independent auditor mainly for taxcompliance.

 

All OtherFees: Includes products and services provided by the independent auditor notcovered above. Not applicable.

 

**AuditAnd Non-Audit Services Pre-Approval Policy**

 

TheCompany’s Audit Committee has adopted a Pre-approval Policy and Procedures forservices provided by the Company’s independent auditors, PricewaterhouseCoopersLLP which sets forth the procedures and the conditions pursuant to whichpermissible services proposed to be performed by external auditors arepre-approved. Under the terms of the policy, services that involve annual feesof less than $35,000 are pre-approved. The Audit Committee has delegated to theChairman of the Audit Committee pre-approval authority for any services notpreviously approved by the Audit Committee that involve the payment ofunbudgeted fees in excess of $35,000 up to a maximum of $50,000. Services thatinvolve fees of more than $50,000 require pre-approval of all the members ofthe Audit Committee.

 

**Off-BalanceSheet Arrangements**

 

For adiscussion of off-balance sheet arrangements, see the section entitled “Off-BalanceSheet Arrangements” on page 31 of Cascades’ Management’s Discussion andAnalysis of Financial Position and Operating Results (which is incorporated byreference in Cascades’ AIF) and attached hereto as Exhibit 13.3.

 

**TabularDisclosure of Contractual Obligations**

 

For atabular disclosure and discussion of contractual obligations, see the sectionentitled “Contractual Obligations and other commitments” on page 31 of Cascades’Management Discussion and Analysis of Financial Position and Operating Results(which is incorporated by reference in the AIF) and attached hereto as Exhibit13.3.

 

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**Forward-LookingStatements**

 

Certain statements in this annual report on Form 40-For in documents incorporated by reference herein are forward-looking statements(as such term is defined under the United States Private Securities LitigationReform Act of 1995) based on current expectations. The accuracy of suchstatements is subject to a number of risks, uncertainties and assumptions thatmay cause actual results to differ materially from those projected, including,but not limited to, the effect of general economic conditions, decreases indemand for the Company’s products, increases in raw material costs, changes inthe relative values of certain currencies, fluctuations in selling prices andadverse changes in general market and industry conditions. Reference is made tothe section entitled “Business Risks” on page 13 of theAIF and to the section entitled “Risk management” on pages 34 to 36 in Cascades’ Management’sDiscussion and Analysis of Financial Position and Operating Results” (which isincorporated by reference in the AIF) and attached hereto as Exhibit 13.3.

 

Consequently,all of the forward-looking statements made herein are qualified by thesecautionary statements and there can be no assurance that the actual results ondevelopments anticipated by the Company will be realized. The Companyundertakes no obligation to update or revise any forward-looking statements.

 

# **WebsiteInformation**

# ** **

Notwithstanding any reference to the Registrant’swebsite on the internet in the AIF or in the documents attached as Exhibitshereto, the information contained in the Registrant’s website or any otherwebsite on the internet referred to in the Registrant’s website is not a partof this Form 40-F and, therefore, is not filed with the SEC.

 

# **Undertaking**

# ** **

The Registrant undertakes tomake available, in person or by telephone, representatives to respond toinquiries made by the staff of the SEC, and to furnish promptly, when requestedto do so by the SEC staff, information relating to: the securities registeredpursuant to Form 40-F; the securities in relation to which the obligation tofile an annual report on Form 40-F arises; or transactions in said securities.

 

**Consent to Service of Process**

 

TheRegistrant has previously filed with the SEC a written consent to service ofprocess and power of attorney on Form F-X/A. Any change to the name or addressof the Registrant’s agent for service shall be communicated promptly to the SECby amendment to the Form F-X referring the file number of the Registrant.

 

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**Signatures**

 

Pursuantto the requirements of the Exchange Act, the Registrant certifies that it meetsall of the requirements for filing on Form 40-F and has duly caused this annualreport to be signed on its behalf by the undersigned, thereto duly authorized.

 

 
| CASCADES  INC. |                                        |
|----------------|---------------------------------------------|
|           |                                        |
|           |                                        |
| By :           | /s/  Christian Dubé                    |   |
| Name :         | Christian Dubé                         |   |
| Title :        | Vice  President and Chief Financial Officer |   |
| Date :         | March  24, 2006                             |   |
|                |                                             |  |  |

 

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**EXHIBITINDEX**

** **
| **Exhibit  Number** | ** ** | **Description of Exhibit (and document from   which incorporated by reference, if applicable)**                                                                                                                                                                                       | ** ** | **Note**   |
|---------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|
| ** **          | ** ** | ** **                                                                                                                                                                                                                                                                                                                                   | ** ** | ** ** |
| 3.1                 |       | Articles of Amalgamation of Cascades Inc. filed with the Inspector  general of financial institutions of Quebec on January 10, 2004                                                                                                                                                                                                          |       | (C)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 3.2                 |       | By-laws of Cascades Inc., as amended                                                                                                                                                                                                                                                                                                         |       | (B)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 4.1                 |       | Indenture, dated as of February 5, 2003, among Cascades Inc., the  Subsidiary Guarantors named therein and The Bank of New York, as Trustee                                                                                                                                                                                                  |       | (A)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 4.2                 |       | First Supplemental Indenture, dated May 30, 2003, to the Indenture,  dated February 5, 2003, among Cascades Inc., the Existing Subsidiary  Guarantors named therein, the New Subsidiary Guarantors named therein and The  Bank of New York, as Trustee                                                                                       |       | (B)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 4.3                 |       | Second Supplemental Indenture, dated December 30, 2003, to the  Indenture, dated February 5, 2003, among Cascades Inc., the Existing  Subsidiary Guarantors named therein, the New Subsidiary Guarantors named  therein and The Bank of New York, as Trustee                                                                                 |       | (C)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 4.4                 |       | Third Supplemental Indenture, dated March 16, 2004, to the Indenture,  dated February 5, 2003, among Cascades Inc., the Existing Subsidiary  Guarantors named therein, the New Subsidiary Guarantor named therein and The  Bank of New York, as Trustee                                                                                      |       | (C)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 4.5                 |       | Fourth Supplemental Indenture, dated July 8, 2004, to the Indenture,  dated February 5, 2003, among Cascades Inc., the Existing Subsidiary  Guarantors named therein, the New Subsidiary Guarantor named therein and The  Bank of New York, as Trustee                                                                                       |       | (C)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 4.6                 |       | Fifth Supplemental Indenture, dated August 26, 2004, to the  Indenture, dated February 5, 2003, among Cascades Inc., the Existing  Subsidiary Guarantors named therein, the New Subsidiary Guarantors named  therein and The Bank of New York, as Trustee                                                                                    |       | (C)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 4.7                 |       | Sixth Supplemental Indenture, dated November 30, 2004, to the  Indenture, dated February 5, 2003, among Cascades Inc., the Existing  Subsidiary Guarantors named therein, the New Subsidiary Guarantors named  therein and The Bank of New York, as Trustee                                                                                  |       | (C)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 10.1                |       | Amended and Restated Credit Agreement, dated as of October 31, 2005,  among Cascades Inc., Cascades USA Inc., Cascades Europe SAS, Cascades  Arnsberg GmbH, The Bank of Nova Scotia, as administrative and collateral  agent, National Bank of Canada, as co-administrative agent, and the financial  institutions named therein, as lenders |       | (D)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 10.2                |       | Asset Purchase Agreement, dated November 16, 2005, among Cascades  Fine Papers Group Inc., Cascades Inc. and Coast Paper Limited (now known as  PaperlinX Canada Limited)                                                                                                                                                                    |       | (E)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 13.1                |       | Annual Information Form for the year ended December 31, 2005                                                                                                                                                                                                                                                                                 |       | (E)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 13.2                |       | Audited Consolidated Financial Statements for the year ended December  31, 2005 together with the Auditors’ Report thereon                                                                                                                                                                                                              |       | (E)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 13.3                |       | Management’s Discussion and Analysis of Financial Position and  Operating Results for the year ended December 31, 2005                                                                                                                                                                                                                  |       | (E)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 23.1                |       | Independent Auditors’ Consent                                                                                                                                                                                                                                                                                                           |       | (E)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 31.1                |       | CEO Section 302 Certification                                                                                                                                                                                                                                                                                                                |       | (E)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 31.2                |       | CFO Section 302 Certification                                                                                                                                                                                                                                                                                                                |       | (E)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 32.1                |       | CEO and CFO Section 906 Certification                                                                                                                                                                                                                                                                                                        |       | (E)        |
|                |       |                                                                                                                                                                                                                                                                                                                                         |       |       |
| 99.1                |       | Comments by Auditors for U.S. Readers on Canada-U.S. Reporting  Differences                                                                                                                                                                                                                                                                  |       | (E)        |

 

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(A)    Previously filed as an exhibit to Cascades Inc.’sRegistration Statement on Forms F-4 and S-4 (Reg. No. 333-105024), filed on May6, 2003 and incorporated herein by reference.

 

(B)     Previously filed as an exhibit to Amendment No. 1 toCascades Inc.’s Registration Statement on Forms F-4 and S-4 (Reg. No.333-105024), filed on July 18, 2003 and incorporated herein by reference.

 

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(C)     Previously filed as an exhibit to Cascades Inc.’s AnnualReport on Form 40-F, filed on March 24, 2005 and incorporated herein byreference.

 

(D)    Previously filed as an exhibit to Cascades Inc.’s CurrentReport on Form 6-K, filed on February 21, 2006 and incorporated herein byreference.

 

(E)     Filed herewith.

 

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