V. James Sardo,  Chairman of the Board of Directors A few highlights of our approach to governance include: Indeed, the development, improvement and delivery of core  infrastructure services in Canada and internationally is a critical  task requiring a long-term focus and commitment. Canada’s  infrastructure deficit alone — the investment needed in roads,  transportation, electricity, water and other essential services —  is estimated to be as high as $570 billion. The magnitude of this deficit is echoed globally in OECD countries. Private sector  involvement will increasingly be required to maintain, rejuvenate  and build the critical, essential infrastructure upon which economic  growth and quality of life depends. As a result, I am confi dent  there are tremendous opportunities for Capstone to grow  and diversify its portfolio while delivering increasing value for  shareholders. And we are fortunate to have talented, disciplined  employees at all levels of the organization who are ready to  take on new challenges and who are motivated to succeed. “BUILDING TODAY FOR  TOMORROW IS THE FOUNDATION  OF OUR APPROACH TO MANAGING  AND GOVERNING CAPSTONE.” ▶ Audit and Corporate Governance and Compensation  committees composed entirely of independent directors  (as defined by applicable securities laws); ▶ Governance policies and procedures that apply equally to  the individual businesses in Capstone’s portfolio, ensuring  consistency and reliability in reporting and risk management; ▶ A Code of Business Conduct and Ethics that encourages and  promotes a culture of ethical business conduct and must be  followed by all directors, executive officers, employees and  contractors of Capstone; ▶ An annual evaluation of the effectiveness of the Board  and individual directors to ensure the Board is fulfi lling its  oversight role in the most effective manner; and ▶ A majority voting policy, which requires director nominees  to be elected by a majority of shareholder votes.  In 2014, Capstone is poised to build on its successes. We have a  strong financial foundation, a growing portfolio of quality businesses,  and a seasoned management team with more than 100 years  of combined experience in acquiring, fi nancing, developing  and managing diverse infrastructure businesses in Canada and  internationally. This team has a deeply personal interest in Capstone’s success. A significant proportion of management’s  short- and long-term incentive compensation is bound to  financial performance metrics as well as to share price  performance and the total return we deliver to shareholders.  This structure promotes prudent decision-making that  maximizes long-term shareholder value. Simply, we are building Capstone to stand the test of time: for  today, tomorrow, the next 10 years, and decades beyond. As we  execute our strategy, we are committed to serving shareholders’  interests with integrity, discipline and transparency. The people of Capstone and I deeply appreciate the investment you have made in our company and thank you for your continuing support.  Sincerely, V. JAMES SARDO Chairman of the Board of Directors Performance Integrity and Professionalism We seek out directors who have demonstrated integrity and  high ethical standards, a proven record of sound business judgment  and who are committed to representing the long-term interests of  Capstone’s shareholders. We seek to build a Board with a diversity of backgrounds, skills and  experience and annually review the competencies, skills and personal  qualities of each director to maintain the composition of the Board  in a way that bolsters the overall stewardship of the company. 2013 ANNUAL REPORT  9