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ANNUAL INFORMATION FORM

For the year ended December 31, 2014

March 13, 2015

2 2014 ANNUAL INFORMATION FORM

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SECTION 1 Corporate Structure .......................................................................................................................05 1.1 Name and Incorporation ..........................................................................................................05 1.2 Intercorporate Relationships ....................................................................................................05

2 General Development of the Business ........................................................................................05 2.1 Overview....................................................................................................................................05 2.2 Facilities Expansion and New Programs ...................................................................................06 2.3 SignificantAcquisitionsandDispositions ..................................................................................07 2.4 Credit Facilities ..........................................................................................................................08 2.5 Government Grants ...................................................................................................................08 2.6 Trends ........................................................................................................................................09

3 Description of Company’s Business ............................................................................................10 3.1 General ......................................................................................................................................10 3.2 Powertrain/DrivelineSegment ...................................................................................................10 3.3 IndustrialSegment..................................................................................................................... 11 3.4 Sales and Marketing ..................................................................................................................12 3.5 QualityControl ...........................................................................................................................13 3.6 ResearchandDevelopment ......................................................................................................13 3.7 IntellectualPropertyRights .......................................................................................................14 3.8 EngineeringandDesign ............................................................................................................14 3.9 OperatingPhilosophy ................................................................................................................15 3.10 Employees .................................................................................................................................16 3.11 ManufacturingFacilities .............................................................................................................17 3.12 Contingencies ............................................................................................................................17

4 Risk Management ........................................................................................................................... 17

5 Dividends......................................................................................................................................... 17

6 Description of Capital Structure ...................................................................................................18 6.1 GeneralDescriptionofCapitalStructure...................................................................................18

7 Market for Securities ......................................................................................................................19

8DirectorsandOfficers ...................................................................................................................20

TABLE OF CONTENTS

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TABLE OF CONTENTS

PAGESECTION9 Audit Committee .............................................................................................................................21 9.1 AuditCommitteeCharter ...........................................................................................................21 9.2 CompositionoftheAuditCommittee .........................................................................................21 9.3 RelevantEducationandExperience .........................................................................................22 9.4 Pre-ApprovedPoliciesandProcedures ....................................................................................22 9.5 ExternalAuditorServiceFees ...................................................................................................22

10 Interest of Management and Others in Material Transactions .................................................23

11 Transfer Agents and Registrars ..................................................................................................23

12 Interests of Experts ......................................................................................................................23

13 Additional Information ..................................................................................................................24

Appendix A ........................................................................................................................................25 PurposeofAuditCommittee .....................................................................................................25 AuditCommittee,MeetingsandOrganization ...........................................................................25 AuditCommitteeResponsibilitiesandDuties ...........................................................................26 CurrencyoftheAuditCommitteeMandate ...............................................................................28

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1. CORPORATE STRUCTURE1.1 Name and IncorporationLinamar Corporation (“Linamar” or the “Company”)wasincorporatedpursuanttotheBusinessCorporationsAct(Ontario)onAugust17,1966.Linamarhassubdivided itsoutstandingcommonsharesseveral timessince incorporation,most recentlybyArticlesofAmendmentdatedMay1,1998whenitsubdividedeachofitsissuedandoutstandingcommonsharesintothreeissuedandoutstandingcommonshares.Linamarhasalsoundertakenanumberofamalgamationswithoneormoreofitswholly-ownedsubsidiariessinceincorporation.TheCompany’sregisteredandheadofficeislocatedat287SpeedvaleAvenueWest,Guelph,Ontario, N1H 1C5.

Unlessthecontextrequiresotherwise,theterms“Linamar” and “Company”usedhereinrefertoLinamarCorporationanditssubsidiaries.

1.2 Intercorporate RelationshipsThefollowing isa listof theprincipalsubsidiariesof theCompanyasofDecember31,2014andtheir respective jurisdictionsofincorporation.ThepercentagesofvotingsecuritiesownedbytheCompany,oroverwhichtheCompanyexercisescontrolordirection, are indicated.

Subsidiary Jurisdiction of Incorporation Ownership PercentageLinamar Holdings Inc. Ontario 100SkyjackInc. (“Skyjack”) Ontario 100Linamar Holding Nevada Inc. US 100Linamar Holdings de Mexico Mexico 100LinamarAntriebstechnikGmbH Germany 100Linamar(Barbados)HoldingInc. Barbados 100

2. GENERAL DEVELOPMENT OF THE BUSINESS2.1 OverviewLinamarCorporation(TSX:LNR)isadiversifiedglobalmanufacturingCompanyofhighlyengineeredproductspoweringvehicles,motion,workandlives.TheCompanyismadeupof2operatingsegments–thePowertrain/DrivelinesegmentandtheIndustrialsegment,whicharefurtherdividedinto3operatinggroups–Machining&Assembly,ForgingandSkyjack,allworldleadersinthedesign,developmentandproductionofhighlyengineeredproducts.TheCompany’sMachining&AssemblyandForgingoperatinggroupsfocusonprecisionmetalliccomponents,modulesandsystemsforengine,transmissionanddrivelinesystemsdesignedforglobalvehicleandindustrialmarkets.TheCompany’sSkyjackdivisionisnotedforitsinnovative,high-qualitymobileindustrialequipment,notablyitsclass-leadingaerialworkplatformsandtelehandlers.

TheCompanyconductsitsoperationsinfivegeographicregions,Canada,theUnitedStates,Mexico,AsiaPacificandEurope.Withmorethan18,470(1) employeesin48(2) manufacturinglocations,5Research&Development(“R&D”) centers and 15 sales officesalllocatedin14differentcountriesinNorthAmerica,Europe,AustraliaandAsia,Linamargeneratedsalesof$4.2billionin2014.For2014, theCompany’s four largestcustomers(Ford,GM,ChryslerandCaterpillar“CAT”)accountedfor56.5%ofconsolidatedrevenue.

(1)ThisdoesnotincludetheSeissenschmidtemployeecount,asthetransactiondidnotofficiallycloseuntilJanuary2015.(2)Thisincludesallofthemanufacturingfacilitiesfromacquisitions.


TheCompanyhasgroupedfacilitiesmainlyinthreekeydivisions;Machining&Assembly,ForgingandSkyjack.EachdivisionhasaGroupPresident,DirectorofFinance,DirectorofHumanResourcesandaVicePresidentofSales.LinamarbelievesthisstructurewillfullysupporttheexpectedfuturegrowthoftheCompany.

ThereportableoperatingsegmentsarethePowertrain/DrivelineandIndustrialSegments.PleaserefertoSection3ofthisAnnualInformationFormforamoredetaileddescriptionoftheseoperatingandgeographicsegments

2.2 Facilities Expansions and New Programs

Powertrain / Driveline Segment

Throughitsprecisionmachiningbusinesses,Linamarprincipallyengagesinmachiningandassemblyfortheautomotiveindustryandotherglobalvehiclemarkets,onandoffhighway,whichgenerallyinvolveslong-runprocessesforlong-termcontracts.Linamarhascontinuedtoaddmanufacturingspaceforitsprecisionmachiningbusinessoverthepastseveralyearsinordertofacilitatethelaunchofnewprograms.Linamarcontinuestodevelopitsmanufacturingprocessestoincludemultiplecomponentassemblies,anddevelopitsproductdesigncapabilitiesaswell.

SalesintheAsiaPacificregioncontinuedtogrowthroughout2014.TheAsiaPacificheadquartersareinWuxi,China,withtheAsiaPacificGroupPresidentlocatedtheretooverseetheworkandexpansioninthisregion.TheCompanyalsoexpandeditspresenceinChinabybuildinganotherfacilityinTianjinandsecuringanothermanufacturingsiteinWuxi.Someprogramswerelaunchedin2013,andin2014,programswerelaunchedintheTianjinfacility.

OnJune4th,2013,theCompanyannouncedthatithasreachedanagreementwithMuhrundBenderKG(“MKG”)andMubeaMotorkomonentenGmbH(“MMKG”) forLinamar’spurchaseofMMKG’sbusinessofmanufacturinganddistributingassembledcamshafts, located inHildburghausen,ThaleandThale-Warnstedt,Germany.ThepurchaseclosedonOctober1,2013.Thecamshaftbusinessisoperatedoutof3locationsinGermanyandemployedapproximately110people.

OnSeptember26,2014,theCompanyannouncedthatCarolinaForgeCompany,LLC(“CFC”)signedadefinitiveagreementforLinamar’spurchaseofCFC’sbusinessofhighvolumehot-forgedproduct,locatedinWilson,NorthCarolina.ThepurchaseofCFCclosedonSeptember30,2014.

AlsoonSeptember26,2014,theCompanyannouncedthatthemajorityshareholdersofSeissenschmidtAG (“SEI”) signed a definitiveagreementforLinamar’spurchaseof66%ofthesharesofSEI,whichalsospecializesinhigh-volumehotforgings.SEIhas3primarylocationsinGermany,Hungary,andtheUnitedStates.OnNovember21,2014,theCompanyannouncedthattheyhadsignedadefinitiveagreementtoacquiretheremaining34%ofSEIshares.TheacquisitionoftheremainingsharesenablesLinamartofullyconsolidateoperationsandcontrolofSEIcreatingamoreeffectiveentitybetterpositionedtoexecuteonLinamar’sstrategyofofferingintegratedmetalforming/machinedsolutionstoitscustomersincertaintargetedproductssuchasgears.ThisentiretransactionclosedonJanuary15,2015.

CombinedannualsalesofbothCFCandSEIareexpectedtobecloseto$450millionCADandthecombinedemployeebaseisapproximately1,150people.

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Industrial Segment

Linamar’sIndustrialSegmentiscomprisedofitsSkyjackdivisionandanenergyplantinCanadanamedLinergyManufacturing(3) andaHungarianfabricationfacilitynamedOROSwhichprimarilymanufacturesequipmentfortheagriculturalsector.

In2012,SkyjackexpandeditspresenceinAustraliaandBrazil.TheremainingpartsoftheConsumerProductsdivision(thetrailerbusiness)weresold in2012.Skyjackcontinued toexperiencesignificant increases inprofitability in2014.Thiswasprimarilydueto1)highermarginsresultingfromfavourablechangesinforeignexchangerates;2)increaseddemandandmarketsharegrowthintheaccessequipmentmarkets;and3)favourableproductmixtohighermarginproducts;partiallyoffsetbyincreasedmanagementandsalescostssupportinggrowth.

TheOROSdivisioncontinuestoincreaseitsscopeofworkinthecontractassemblybusinessforavarietyofcustomers,newandexisting.LinamarHungary’sOROSdivisionexperiencedasignificantdeclineintheagriculturalandturfmarketsitsupplieswhichhadasmallimpactontheIndustrialSegmentsalesin2014.

TheenergysectorrequiresproductsandservicestheCompanyiswellsuitedtoprovide.LinamarcontinuestopursueopportunitiesintheenergymarketsthatleveragetheCompany’smachining,assemblyanddesigncapabilities.Atpresent,marketopportunitiesarelimited,particularlyintheresourcesectors,suchasmining.

2.3SignificantAcquisitionsandDispositionsTheCompanycontinues topursuebusinessopportunities thatwill furtherdevelop itsproductandprocess technologyand/orutilizeitsmachiningandmanufacturingexpertisebothoutsideandwithintheautomotivesector.

Skyjack’sConsumerProductsdivision(trailerbusiness)wassoldin2012.

OnSeptember26,2014,theCompanyannouncedthatCarolinaForgeCompany,LLC (“CFC”)signedadefinitiveagreementforLinamar’spurchaseofCFC’sbusinessofhighvolumehotforgedproduct,locatedinWilson,NorthCarolina.ThepurchaseofCFCclosedonSeptember30,2014.

AlsoonSeptember26,2014,theCompanyannouncedthatthemajorityshareholdersofSEIsignedadefinitiveagreementforLinamar’spurchaseof66%of thesharesofSEI,whichalsospecializes inhighvolumehot forgings.OnNovember21,2014,theCompanyannouncedthattheyhadsignedadefinitiveagreementtoacquiretheremaining34%ofSEIshares.ThisentiretransactionclosedonJanuary15,2015.

LinamardidnotfileaForm51-102F4–BusinessAcquisitionReport(“BAR”) onSEDARforanyoftheacquisitionsdiscussedinthissection,asnoneofthemexceededthesignificancethresholdsforfilingaBAR.

(3)LinergyManufacturingtransitionedintothePowertrain/DrivelineSegmentduringthecourseof2014.


2.4 Credit FacilitiesAtDecember31,2014cashandcashequivalentswas$194.1million,includingunpresentedchequesof$9.0million.AtDecember31,2014,theCompany’ssyndicatedrevolvingfacilityhadavailablecreditof$603.9million.

OnMarch21,2012theCompanyincreasedthefacility limitby$100milliontoamaximumavailableunderthefacilityof$700million.OnApril24,2013,theCompanyannouncedthatithadamendedandrestateditsrevolvingcreditfacilitytotakeadvantageofcurrentmarketpricingandtoextendthefacilityafurtherthreeyears.ThenewagreementwillexpireonApril23,2018.Thefacilitysizeremainsunchangedat$700millionandtherewerenochangestothefinancialcovenants.

2.5 Government GrantsAgrantfromtheOntariogovernmentofupto$44.5millionisdependentupontheCompanysatisfyingvariousprograminvestmentcriteriaandachievingacumulativejobtargetoverthetermofanagreementbetweentheCompanyandtheOntariogovernment.Todate, the variousprogram investment criteriahavebeensatisfied.To theextent job targetsarenotmet, apro-rata claw-backarrangementexists.ThetermoftheoriginalagreementwasJanuary14,2005throughJanuary14,2015.ThetermoftheagreementhasbeenextendedforafurtherthreeyearstoJanuary14,2018.

SkyjackandtheOntariogovernmentreachedagreementforagrantofupto$6.2millionrelatedtovariousprogramexpendituresincurredbySkyjack,achievingacumulativejobtargetintheperiodfromMay2008toDecember2011andmaintainingaminimumjobthresholdthereafterto2015.Todate,thevariousprograminvestmentcriteriaandthecumulativejobtargethavebeensatisfied.Totheextenttheminimumjobthresholdisnotmaintainedto2015,apro-rataclaw-backarrangementexists.

The Company and theOntario government reached agreement for a grant of up to $1.5million related to various programexpendituresincurredandachievingacumulativejobtargetintheperiodfromApril2013toMarch31,2017.ThegrantisdependentupontheCompanysatisfyingvariousprogramexpenditurecriteriaandachievingjobtargetsoverthetermoftheagreement.Totheextenttheprogramexpendituresand/orjobtargetsarenotmet,apro-rataclaw-backarrangementexists.

TheCompanyandtheOntariogovernmentreachedagreementforagrantofuptoapproximately$50millionrelatedtovariousprogramexpendituresincurredandachievingjobtargetsintheperiodfromApril2014toMarch31,2024.ThegrantisdependentupontheCompanysatisfyingvariousprogramexpenditurecriteriaandachievingjobtargetsoverthetermoftheagreement.Totheextenttheprogramexpendituresand/orjobtargetsarenotmet,apro-rataclaw-backarrangementexists.

Linamarhasalsoarrangedtoreceivegrantsbasedoninvestmentcriteriaandjobtargetswithseveralforeigngovernments,asfollows:

•StateofNorthCarolinaandlocalgovernments $27,750,000 •GovernmentofGermany $50,850,000 •GovernmentofHungary $14,930,000

Generally,totheextentthattheprograminvestmentcriteriaand/orjobtargetsarenotachieved,afullorpartialrefundofthegrantsisrequired.

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2.6 TrendsLinamarisimpactedbyvariouseconomic,industryandtechnologicaltrendsoccurringwithintheCompany’sexternalenvironment. Automotiveproduction levelsareoneof the largestsignificant factors impacting results. In2014, lightvehicleproductionwasstrongglobally,postinga2.8%increaseover2013.DespitecertainrisksandsomeeconomicuncertaintyinEuropeandSouthAmerica,thistrendisexpectedtocontinuethroughthefive-yearforecasthorizonwithglobalautomotiveproductionincreasingfrom87.2million in2014 toover101millionvehiclesby2019. (The foregoingestimatesareaccording to industry forecastingserviceIHSAutomotive,January2014.)

TheCompanyexpectsthattheindustrywillincreaseitsfocusongreenandenvironmentallyfriendlytechnologiesasautomakersand governments set a course for a future of sustainablemobilitywithin the transportation sector. This is in spite of recentdownwardpressureonthepriceofoilandgasoline.Thelong-termpathtowardsthereductionofgreenhousegasemissionsandaggressive fueleconomy improvement targetswill drivecontinueddevelopment inLinamar’s coreproductareas.Hybridandbatteryelectricpoweredvehicleswillbecomemoreprevalentwithintheindustrybutwillonlyoccupyanichesegmentofthetotalvehiclemarketoverthenext5-10years.

Incrementalimprovementsinconventionalpowertraintechnologiessuchasenginesandtransmissionsareviewedastheprimaryresponsetomeetingmuchof thenewlegislatedCAFE(U.S.CorporateAverageFuelEconomy)andemissionsrequirements.Hybrid and battery electric powered vehicleswill continue to play a role, but increased penetration of such technologies asgasolinedirect injection,variablevalve timing, turbocharging,stop/start,and the introductionofadvanced8,9and10speedautomatictransmissionswillbemuchmoresignificant.Theconventionalinternalcombustionenginewillcontinueitsdominancein the North American market.

Original EquipmentManufacturer (“OEM”) outsourcing of Linamar’s key powertrain and driveline products andmodules stillpresentsasignificantopportunity for theCompanyover thenext10-20years.Availabilityof capitalandselective investmentwillnecessitatethefutureoutsourcingofnon-coreoperationssuchasmachiningandpowertrainassemblyworkcurrentlydonein-housebytheOEMsandmegaTier1stocapablesupplierssuchasLinamar,whoarewellpositionedtomanufacturethesecomponents,modulesandsystems.Linamarhasbenefitedfromthistrendoverthepastseveralyears,whichitexpectstocontinue.

RationalizationoftheautomotivesupplychainwillpersistasOEMsseektoreducethenumberofsupplierstheypurchasefromto forge closer relationshipswith key partners. Increasingly, automotiveOEMs are creating common vehicle and powertrainarchitecturesacrossallgeographicregionstoachievegreatereconomiesofscale.AutosuppliercompanieswithabroadglobalfootprintandclosetieswithexistingOEMcustomerswillbenefitfromthis.LinamarisseeingopportunitiestolaunchnewbusinessinotherregionsoftheworldbasedoffexistingNorthAmericanplatformdesigns.Thistrendisexpectedtocontinue.

In2014,Linamarcontinued toexecute itsstrategyofbothgeographicandprocessdiversification inorder to fuel futuresalesgrowth.WiththeacquisitionsofCFCandSEI,Linamarisnowabletooffer integratedmetalforming/machinedsolutionstoitscustomersincertaintargetedproductssuchasgears.TheseacquisitionswillsupplementLinamar’scorepowertrainbusinessandenableLinamartoaddressmarkettrendsinlightweightingandNoiseVibrationHarshnessdesignforproductslikegears,differentials,wheelbearings,hubsandsprocketswithhigh-speedforgingprocesses.


SalesgrowthforLinamarAsiaGroupisexpectedtocontinueasChina’sautoproductionandeconomicoutlookremainstrong.LinamaropenedanewChinesefacilityinTianjinin2013andcontinuestolaunchnewprogramsasautoproductionintheregionexpands.Additionally,LinamaropeneditsfirstfacilityinIndiain2014whichisexpectedtoreachfull-scaleproductionin2015.

Linamarhasalsobeen increasing itsEuropeanmanufacturing footprintwith theacquisitionofMubea’scamshaftbusiness inGermanyin2013andtheopeningofanewfacilityinReinsdorf,Germanyin2014toproducevariousenginecomponentsforOEMcustomers.

Linamar’sSkyjackdivisioncontinuestoperformverywellinitstraditionalscissorliftmarket.During2014,Skyjackhelditsleadingmarketsharepositioninthissegmentanditsexpandingboomandtelehandlerlinescontinuedtogainmarketacceptance,withsalesupmorethan30%forbothlines.Theaerialworkplatformbusinessisheavilyreliantonthenon-residentialconstructionsector.Skyjackcontinuedtoexperiencesignificantincreasesinprofitabilityin2014.Additionally,theSkyjackdivision’sgrowingnetworkofglobalsalesanddistributionofficesisexpectedtopositivelyimpactsaleswithpenetrationofnewregionalmarkets.In2012,SkyjackopenednewfacilitiesinbothAustraliaandinBrazil.During2014,Skyjackcontinuedtoexperiencesalesgainsfromthoseregionsdespitebeingrelativelynewtothemarket.

3. DESCRIPTION OF THE COMPANY’S BUSINESS3.1 GeneralLinamarisadiversifiedglobalmanufacturingCompanyofhighlyengineeredproductspoweringvehicles,motion,workandlives.TheCompany’sPowertrain/Drivelinesegmentfocuseddivisionsareworldleadersinthecollaborativedesign,developmentandmanufacture of precisionmetallic components,modules and systems for global vehicle and power generationmarkets. TheCompany’sIndustrialsegmentisaworldleaderinthedesignandproductionofinnovativemobileindustrialequipment,notablyitsclass-leadingaerialworkplatformsandtelehandlers.

Withmorethan18,470(4)employeesin48manufacturinglocations,5Research&Development(“R&D”) centers and 15 sales officesalllocatedin14differentcountriesinNorthAmerica,Europe,AustraliaandAsia,Linamargeneratedsalesof$4.2billionin2014.FormoreinformationaboutLinamarCorporationanditsindustryleadingproductsandservices,visitwww.linamar.com.

3.2 Powertrain / Driveline SegmentThePowertrain/Drivelinesegmentderives revenuesprimarily from thecollaborativedesign,developmentandmanufactureofprecisionmetalliccomponents,modulesandsystemsforglobalvehicleandpowergenerationmarkets. ThePowertrain/Drivelinesegmentmanufacturesprecision-machinedcomponentsandassembliesthatareusedinhigh-efficiencytransmissions,enginesanddrivelinesystems.Itsfocusontransmissionsiscenteredongears,transmissioncases,shafts,shaftsandshellassemblies,clutchmodulesandclutchsubcomponents,valvebodies,pumps,planetarygearassemblies,aswellashousings/covers. In the driveline systems segment, the core product areas are power transfer units (PTUs), rear drive units(RDUs),andengineeredgears.ThePowertrain/Drivelinesegmentalsomanufactureskeycomponents,systemsandmodulesfortoday’smodernengine.Theprimaryenginecomponentsitmanufacturesarecylinderblocksandassemblies,cylinderheadsandcompleteheadassemblies,camshaftassemblies,connectingrods,flywheels,fuelrailsandfuelbody/pumpassembliesaswellashousings/covers,liners,vacuumpumps,oilpumpsandwaterpumps.Inaddition,ithasthecapabilitytoprovidefullyassembledniche engine programs.

(4)ThisdoesnotincludetheSeissenschmidtemployeecount,asthetransactiondidnotofficiallycloseuntilJanuary2015.

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ThePowertrain/Drivelinesegmenthas43manufacturing locations,3R&Dcentersand7salesoffices in7countries inNorthAmerica,EuropeandAsia.

TheprincipalcustomersforthePowertrain/DrivelineSegmentareOEMswithoperationsinNorthAmericaandtheirsuppliers,includingCAT,Chrysler,FordandGM.

TheCompany’sPowertrain/Drivelinehasoperations inEurope.TheseEuropeanoperations focuson full-serviceengineeringandmanufacturingsupportforallthePowertrain/DrivelineproductsfortheentireEuropeanautomotiveandcommercialvehiclemarket.Thesameadvancedmanufacturingandleading-edgetechnologiesarealsoemployedin itsagriculturalandindustrialproducts.TheseEuropeanoperationshave17manufacturingfacilities(inHungary,France,andGermany),2developmentcentres(inGermanyandHungary)and2salesoffices(inHungaryandFrance). LinamarHungary,partof theCompany’sEuropeanoperations,machinesandassembleshighlyengineeredcomponentsandassemblies for theautomotive industry,andmanufacturescornheadsandotheragriculturalcomponents,subassembliesandequipment. It alsomanufacturesandassemblesother industrialproducts.LinamarHungaryoperates through threeseparatedivisions, twoofwhichmanufactureproductsprimarily for theautomotive sector andoneofwhichmanufacturesagriculturalequipmentandotherindustrialequipment.TheautomotivedivisionsoperateintwonewfacilitiesandoneoriginalbuildingfromthedateLinamarHungarywasfirstpurchased.LinamarHungary’smanufacturingfacilitiesarelocatedinOrosházaandBékéscsaba,Hungary.

SalesforthePowertrain/DrivelineSegmentincreasedbyapproximately$445.3million,or14.7%to$3.5billionin2014comparedwith$3.0billion2013.The2014salesincreasewasprimarilyimpactedby: 1)highersalesresultingfromfavourablechangesinforeignexchangerates; 2)increasedNorthAmericansalesasaresultofthesignificantlevelsofnewlylaunchedprograms; 3)increasedEuropeanandAsiansalesasaresultoftherampupofprogramsinlaunchandhighervolumesonmatureprograms; 4)increasedvolumesfromtheCompany’scommercialvehicleandpowergenerationbusinessinEurope; 5)theacquisitionofournewforgingbusinessinNorthCarolinaacquiredinQ42014;and 6)ournewGermancamshaftbusinessacquiredinQ42013.

3.3 Industrial SegmentTheIndustrialSegmentservesavarietyofmarketsasnotedabovebut ismostnotablya leadingmanufacturerofaerialworkplatforms,focusedonproductionoftheindustry’smostreliablescissorlifts.Skyjackoffersinnovativeproductsthroughcreativeengineering driven designs, complete customer and product support and the Skyjack commitment to exceed customers’expectations.ThemajorityofSkyjack’s salesare in theNorthAmericanmarket.Products includebothbattery-poweredandcombustionenginepoweredscissorlifts,telescopicboomlifts,telehandlersandotheraerialworkplatforms.

TheIndustrialSegmenthas5manufacturinglocations,2R&Dcentersand8salesofficesin8countriesinNorthAmerica,Europe,AustraliaandAsia.

TheIndustrialSegment’sEnergydivisionwasestablishedtofocusonenergyandheavymachiningmarketsandismakinginroadsin each driving sales growth in 2013 and 2014.


TheConsumerProductsdivision(trailerbusiness)wassoldin2012.LinamarHungary’sOROSdivisionexperiencedasignificantdeclineintheagriculturalandturfmarketsitsupplieswhichhadasmallimpactontheIndustrialSegmentsalesin2014.

TheIndustrialSegment’sproductsalesincreased23.3%or$130.8millionin2013to$692.3millionin2014.Thesalesincreasewasprimarilydueto:1)highersalesresultingfromfavourablechangesinforeignexchangerates;2)significantincreasesindemandintheaccessequipmentmarketsinNorthAmerica,EuropeandAsia;3)marketsharegrowthforboomsinNorthAmerica,AsiaandEurope;4)marketsharegrowthforscissorliftsinEuropeandAsia;and5)partiallyoffsetbylowerdemandforagriculturalequipmentinEurope.

3.4 Sales and MarketingLinamar’sprecisionmanufacturingoperationssellsitsproductsdirectlytoitscustomersinCanadaandtheUnitedStatesthroughitsCanadianandU.S.salesoffices.TheCompanyhasnowestablishedsalesofficesintheUnitedStates,Mexico,theUnitedKingdom,Germany,JapanandChina.ThevariousinternaldivisionsandsubsidiariesoftheOEMsgenerally initiatetheirownpurchasingdecisionsandthuseachOEMmayconstitute,ineffect,severaldifferentpurchasers.

AsignificantportionofLinamar’ssalesinitsprecisionmanufacturingoperationsaretotheautomotiveindustry.CompanieswhichsupplydirectlytotheOEMsandwhichmaybeinvolvedinthedesign,engineering,manufactureandqualitycontroltestingaregenerallyreferredtointheautomotiveindustryas“Tier 1”suppliers.Tier1suppliers(includingLinamar)maybeawardedlongertermpurchaseordersbyOEMsasaresultoftheirinvolvementinthedevelopmentofcomponentswiththeOEMs.Manypartsarenowbeingmanufacturedandassembledintocomponents,assemblies,modulesorsystemsbyTier1suppliers.OEMspurchasecomponents,assemblies,modulesorsystemsand thencomplete theassemblyof theengine, transmissionorvehicle.Tier1suppliersgenerallyhavethecapabilitytosupplythesecomponents,assemblies,modulesorsystemstotheOEMsonajust-in-timebasis,whichhelpsOEMsreduceorotherwisemanageinventorylevels.

Inproducingassemblies,modulesorsystemsforOEMs,Tier1suppliersmayrelyonothersuppliersforsomecomponentsorparts.Dependingontheirlevelofsophisticationinrespectofengineering,manufacturingandotherrelevantskills,theseandothersuppliersaregenerallyreferredtoaseither “Tier 2” or “Tier 3”suppliers.

LinamarbelievesthattherearesignificantopportunitiesforgrowthasaresultofthecontinuedtrendforOEMstooutsourcetosuppliersagreaterproportionofthesupplyofcomponents,assemblies,modulesandsystemswithinthepowertrainandotherareas, and in particular larger andmore complex productswith increased content and features. Additionally, as the productlifecyclesofenginesandtransmissionstendtoberelativelylongerthanthoseofotherautomotivesystems,managementbelievesthatwhereLinamarhasbeenabletoobtainproductioncontractsforneworredesignedproductintroductionsfromitscustomers,itwillhaveanopportunitytosupplysuchproductsforlongerlifecycles.TheproductionrunsorlifecyclesforengineandtransmissioncomponentsofthetypeproducedbyLinamartypicallycontinueforbetweenfiveandtenyears.

TheCompanyusuallyreceivescontractstoproduceparticularpartsformultiplemodelyears.FirmordersareusuallyonlycreatedwhenLinamarreceivesareleaseundersuchacontract,authorizingittoproduceanddeliverspecificquantitiesoftheproduct.Such releasesaregenerally issued forplanning, rawmaterial andproductionpurposesovera three to fourmonthperiod inadvanceofanticipateddeliverydates.TheactualnumberofpartsproducedbytheCompanyunderanyspecificcontractinanygivenyearisdependentuponthenumberofvehiclesproducedbytheOEMofthespecificmodelormodeltypeinwhichthepartisincorporated.OEMproductionlevelsofaparticularvehiclemodelorengineortransmissiontypemayvarysignificantlyfromOEM

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estimatesandsuchproductionmaybedelayedorcancelled,sometimeswithlittlecompensationtoLinamar.AlthoughOEMsarenotusuallycontractuallycommittedtousingaparticularmanufacturertosupplyaproductthroughoutthetimetheOEMrequiressuchproduct,ithasbeenLinamar’sexperiencethat,onceithasreceivedacommercialproductionordertoproduceapartforaparticularvehiclemodelormodeltype,itwillordinarilycontinuetoproducethepartthroughoutthetimetheOEMutilizessuchpartforthatvehicle.

TheCompanyalsoobtainsproductionprogramsonare-sourcingbasis.Suchprogramsaretypicallyalready inproductionatOEMfacilitiesoratthefacilitiesofoneoftheCompany’scompetitorsandare,forvariousreasons,suchascapacityorproductionproblems,re-sourcedtoLinamarforproductionatitsfacilities.

3.5 Quality ControlLinamarhasidentifiedandpursuesqualitycontrolasakeydriverofitsbusiness.TheCompanyhasinvestedheavilyinadvancedmeasuringandmonitoringequipmentandutilizesaprogramknownas“StatisticalProcessControl”.Thisprogramgivesamachineoperatortheabilitytorectifydeviationsthatmightotherwiseleadtoqualityproblemsorunnecessarymachinewear.TheCompanyalsoperformsongoingmachine,processandgaugecapabilitystudiestoensurethatqualityandproductivityaremaintainedorimprovedwherepossible.AtDecember31,2014,theCompanyhadacombinedtotalof42facilityregistrationsforISO-9000orTS16949asregisteredsuppliers.Linamar’sactivepursuitoftheseregistrationsdemonstratestoitscustomerstheCompany’sdedicationtoquality.Linamar’sdedicationtothequalityoftheenvironmentisalsodemonstratedbythefactthatLinamaralsomaintainsacombinedtotalof40facilityISO-14001registrations.

TheCompanytraditionallyhasexperiencedaverylowlevelofwarrantyclaims.AsLinamarbecomesmoreinvolvedinthedesignofproducts,however,itispossiblethatinthefuturethenumberofsuchclaimsmayrise.

Linamarhas,since2002,followedtheLinamarProductionSystem(“LPS”),whichisbasedupontheToyotaProductionSystem.LPSisaimedateliminatingwastebothintheproductionprocessandthroughouttheorganizationtohelptheCompanyachieveitsgoalofbeingalean,costeffectiveentity.LPScanbedividedintothreesteps.ThefirststepinthesystemistodevelopvaluestreammapswhichallowtheCompanytodetermineitscurrentprocesses,thechangesitwantstoimplementtoimprovetheseprocessesand themethod for implementing the changes.Thesecondstep involves theestablishmentof standardizedworkinstructionsandthedevelopmentof thebestpossiblework instructionsforanactivity toeliminatewaste.Thelaststepof thissystem is the implementationofa5SWorkPlaceOrganizationPlan.The5Ssare letters fromwords that lead toworkplaceorganization–sort,straighten,sweep,standardizeandsustain.Throughout2014,LPShasbeensuccessfully implementedateachfacilityandcontinuestobeanongoingfocusofactivity.

3.6 Research and DevelopmentLinamar’sresearchanddevelopmentactivitiesencompassbothprocessandproductdevelopment.Muchactivityisundertakenateachfacilitybytheregularlinepersonnelinresponsetoopportunitiesastheyarise.

TheCompanyhasfourdevelopmentcentres–oneinOntarioandoneeachinMichigan,GermanyandHungary.TheCompany’sMcLarenPerformancedevelopmentcentreprovidesmuchneededcapabilitiesintermsofproductdesign,development,testingandanalysis.McLarenPerformanceishistoricallyknownforitsexpertiseintheengineareabuthasgainedextensiveknowledgeintransmissionanddrivelinesystemswithinthelastseveralyearsmostlyduetotheinvestmentsandgrowingproductexpertiseoftheCompany’sdrivelinesystemsoperatinggroup.

Asnoted in section2.5,both theCompanyandSkyjackhaveentered intoan investmentagreementwith thegovernmentofOntario,thefocusofwhichwillbeonresearchanddevelopment.Pleaserefertosection2.5forafulldescriptionthereof.


3.7 Intellectual Property RightsLinamarusesitspatents,trademarksandcopyrightsinitsmanufacturingbusinesses,andbothlicensestothirdparties,andislicensedtousethirdparty,intellectualproperty.TheCompany’sintellectualpropertyrightsareanimportantasset,butthelossofanyparticularrightwouldnothaveamaterialeffectonitsbusiness.

3.8 Engineering and DesignLinamar’semployeesandsales representativesattempt tobecome involvedasearlyaspossible in theOEMvehicle,engineandtransmissiondevelopmentprogramsandtodevelopcomponents,modulesorsystemsthateitherreplaceproductscurrentlyproducedbyLinamarorrepresentstrategicallyimportantproductopportunitiesforLinamar.IthasbeentheCompany’sexperiencethatearlyinvolvementbyasupplierinthedevelopmentcycleofanewvehiclemodelornewengineortransmissiontypeoftenleadstoordersforcommercialproductionofthecomponents,modulesorsystemsforsuchvehicles,enginesortransmissions.

IthasbecomeincreasinglycommonforOEMstoidentifyasupplierasthesourceforacomponent,moduleorsystemduringtheproductdesignphase,providedthesuppliermeetsvariousprice,serviceandqualitystandards.Whenasupplierispre-sourcedinthismanner,theOEMandsuppliercooperateondesign,productandprocessengineeringandestablishthesellingpriceandotherrelevantconsiderationsthroughanegotiationprocess.

LinamarrecognizesthatinordertoremainaTier1supplier,itmustmaintainitsabilitytoprovidecompleteengineering,development,prototype,testingandproductioncapabilities.AsofDecember31,2014,McLarenPerformance,plustheengineeringanddesignstaff,consistedofapproximately1,235peopleinallLinamarplants.ThetechnicalexpertiseoftheCompanycontinuestoplayakeyfactorinbeingawardedsignificantdesignprogramsfortheBigThreeOEM’s,includingmajorPTUandRDU(PowerTransferUnits /RearDriveUnit) programs. Thiswork has beenwonas a result of Linamar’s increased focus on people and testingcapabilitiesintheengineeringanddesignarea.

Linamar’sengineeringemployeesuseavarietyofCAD/CAMsystemsandworkcloselywithproductionpersonnelinprovidingengineeringsupportasrequired.Largeprojectssometimesrequiresupplementingin-houseengineeringcapabilitiesthroughtheuseofsubcontractorsandotherexternalservices.Linamarstrivestomaintainitstechnicalandengineeringstaffatapproximately4,600or25%ofitsworkforce.Linamarinitiallyworkedwithnon-automotivecustomersinordertogaintheexperiencenecessaryforautomotivecomponents.Forexample,theCompanyhasbeensuccessfulindesigninganddevelopingaxlesfortheaccessequipmentindustryandtrans-axlesfortheutilityvehicleindustry.Linamarisnowrecognizedasafullservicesupplierforpowertransferunits,transmissionshafts,differentialassemblies,clutchstructuralcomponentsandtransmissionsupportassemblies. OEMs, particularly in North America, provide varying levels of engineering specifications to suppliers when sourcing parts,components,modulesorsystems.Insomeinstances,theOEMswillprovidebasicfunctionalparametersandthesupplierwillbeexpectedtotaketotalresponsibilityforengineeringandtherelatedtechnologies.Theseprojectstypicallyinvolveagreaterinvestment by Linamar in engineering and related costs andmay, depending on the value added and other factors, yield ahighermargin thanotherprojects.At theotherextreme,OEMsmay retaincompleteengineeringcontroland require that thesuppliermanufacturetheparticularproducttotheOEM’sspecifications.InbetweenthesetwoextremesareprojectswhereOEMsprovidefunctionalandspaceparametersandcertainspecificationstothesupplier,buttheengineeringresponsibilityremainsacooperativeeffortbetweentheOEMandthesupplier.

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3.9 Operating PhilosophyLinamar Corporation is organized along product/process and geographic lines in order to maximize customer satisfaction,efficiencyandoperational results.TheCompany isstructured into individualoperatinggroupseach ledbyaGroupPresidentreportingintoourPresidentandChiefOperatingOfficer.Inaddition,theCompanyalsoutilizesafunctionalstructuretoreinforceitspoliciesandstandardizationacrosstheorganization.CurrentlytheCompanyutilizesnineglobalfunctional.Eachareaspecializesinprovidingtechnicalexpertise,standardoperatingpoliciesandsharedbestpracticesacrossallLinamaroperations.Theseninefunctionalareasareidentified:

1.BusinessDevelopment 2.CorporateDevelopment 3.ManufacturingandProductLaunch 4.PurchasingandSupplierQuality 5. Finance 6.InformationTechnology 7.HumanResources 8. Sales 9.Quality

Linamar’sorganizationalstructureallowstheCompanytofocusonperformance,opportunityandinnovation.ThecreationoftheCompany’stwooperatingsegments,Powertrain/DrivelineandIndustrial,alignfacilitiesaroundspecificcomponents,assembliesandmodules.TheCompanyhasorganizeditsdivisionstocreate“centresofexcellence”todeliversuperiorquality,development,andproductlaunchcapabilities.Eachfacilityinagroupisoperatedasaseparateprofitcentremanagedbyageneralmanagerwithproductionexpertisewhohasdiscretion,withinbroadguidelinesestablishedbytheGroup’smanagement,todetermineratesofpay,hoursofwork,sourcesofsupplyandcontractstobeperformed.

TheindependenceofeachfacilitywithinagroupallowsLinamartoreactquicklytonewbusinessopportunities. Italsoallowsoperationaldecision-makingandcostcontroltooccuratthegroupandfacilitylevel,thuspermittingthemonitoringofeachprofitcentreandtheeffectiveimplementationofmanagementincentiveprograms.TheCompanyencouragesitsgroupsandeachoftheirfacilitiestouseCostAttackTeams(“CATs”) topromoteefficiencyandcontinuousimprovement.CATsfocusonaparticularproductorprocessandanalyzesuchfactorsastheutilizationofequipment,toolsandmanpower,interactionwithsub-contractorsandthemovementofpartsandproductsaroundthefacilitytoidentifypotentialefficiencygains.CATshavebeenknowntoachieveapproximately5–10%incostsavings.

Linamarcoordinatesitsquotingprocessfornewbusinessthroughtheindividualoperatinggroupstargetedtoproducetheprogram.TheOperatingGroupOfficewill coordinate this quoting activity,with input fromapplicable facilities, and have final approvalauthority.TheCompanycontinuestoexpanditsestimating,quotingandproductdevelopmentresourcesinordertobettermeettheexpandingneedsandexpectationsofitscustomers.

Linamarutilizesprogrammanagementsystems in itsmanufacturingoperations tomanageproductsupply frominitialconcepton through tocommercialproductionand in respectof continuous improvementprocesses.Thesesystemsgenerally involvecross-functionalteamsineachplantandincorporatepoliciesandprocedureswhichmeetorexceedTS-16949(Qualityoperatingstandardforautomotiveindustry)qualityguidelines.LinamarhasalsoestablishedaTechnicalReviewBoardcomprisedofateamofcross-functionalexpertsfrommanufacturingfacilitieswhichdeterminesandtestsbestpracticesandoptimumuseoftechnology.


3.10 EmployeesAtDecember31,2014,theCompanyhad18,470employeesworldwideworkingmainlyinthefollowingcountriesandreportableoperating segments:

By Country Approximate No. of EmployeesCanada 8,465Germany 1,139Hungary 2,467France 352Mexico 3,763United States 1,002AsiaPacific 1,225Europe(Other) 57

By Reportable Operating Segment Approximate No. of EmployeesPowertrain/DrivelineSegment 14,611IndustrialSegment 1,745

TheCompanystrivestomaintaingoodrelationshipswithitsemployeesandhasahistoryofresolvinglabourissuesamicably.AllfacilitieshaveregularemployeemeetingstokeepemployeesinformedofchangeswithintheCompany.TheCompanyutilizesa“balancedscorecard”incentiveprogramaspartofaprogramtheCompanyreferstoasits“SteppingStoolofSuccess”.Thisprogrammonitorshoweachseparatefacilityisperformingagainstkeymeasurablesinthethreeareasofcustomersatisfaction,employeesatisfactionandfinancialsatisfaction.Thisprogramlinksthecompensationofallemployeestoachievementofspecificgoalsandprovidesfeedbackonsuccessesandareasforimprovement.

Thehealthandsafetyofallemployeesintheworkplaceisapriority.Linamar’sglobaltotalinjuryfrequencyrateis3.00versusanindustryrateof6.73(5).Thisis55%lowerthantheaverageindustryrate.LinamarhasalsomandatedthatallplantsberegisteredundertheOHSAS18001.AsatDecember31,2014,37outof45or82%ofitsplantsweresuccessfullyregistered,withtheothersscheduledtoberegisteredwithinthenext12-18months.Thisregistrationrequiresallfacilitiestohaveanindependentthirdpartyauditannuallyataminimumwiththeinternalauditrequirementsinplacetomaintainregistration.

EmployeesworkinginthefacilitieslocatedinMexico,France,HungaryandChinaarecoveredbylaborcontracts.NoemployeesworkinginCanada,theUnitedStatesorGermanyaresubjecttoacollectiveagreement.

(5)Thisglobaltotalinjuryfrequencyrate=(thenumberofincidencesdividedbythetotalproductivehoursx200,000)[200,000representsthenumberofhours100employeesworkinoneyearasdefinedbytheIndustrialAccidentPreventionAssociation.]

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3.11 Manufacturing FacilitiesThePowertrain/DrivelineSegmenthas43manufacturinglocations,3R&Dcentersand7salesofficesin7countries inNorthAmerica,EuropeandAsia.

TheprincipalfacilitiesutilizedbythePowertrain/DrivelineSegmentrangeinsizefrom70,000to150,000squarefeetandgenerallyoperateatornear90 to95%ofproductioncapacity.MostofLinamar’sexistingmanufacturing facilitiescanbeadapted toavarietyofmanufacturingprocesseswithoutsignificantcapitalexpenditures,otherthanfornewequipment.Importantly,Linamarfocuses on utilizing flexible, modular CNC (Computer Numerical Control) programmable machines to tool up its programs,meaningequipmentcanbeeasilyandforlowcostretooledforanotherprogramasrequiredtomeetchangingcustomercapacityrequirements.Thismeansproductionlinesarescalabletomatchcustomerdemandasitmightincreaseordecrease,allowingthecompanytoreallocateequipmenttonewprograms,shiftingwhatarenormallyfixedcostsandallowinggrowthevenintimesoflimited capital spend.

3.12 ContingenciesLinamarisinvolvedincertainlawsuitsandclaims.ManagementisoftheopinionthattheCompanywillnotincuranyadditionalmaterialliabilityfromsuchlawsuitsandclaimsotherthantheamountsalreadyprovidedforintheCompany’sfinancialstatementsfortheyearendedDecember31,2014.

4. RISK FACTORS AND RISK MANAGEMENTTheCompany’sdiscussionof riskand riskmanagement iscontained in thepages13 to17RiskManagementsectionof theCompany’sManagement’s Discussion and Analysis (“MD&A”) for the year ended December 31, 2014, which discussion isincorporatedhereinbyreference.AcopyoftheMD&AcanbeaccessedonSEDARatwww.sedar.com.

5. DIVIDENDSSince1995,Linamarhaspaidquarterlydividendsbasedonperformanceinprioryearsandexpectedperformance.InrespecttothequarterendedDecember31,2014,theBoardofDirectorsapprovedaneligibledividendof$0.10pershareonthecommonsharesoftheCompany,payableonorafterApril16,2015toshareholdersofrecordonApril2,2015.

TheCompanydeclaredcashdividendsof$0.32persharefor2012,$0.34persharefor2013and$0.40persharein2014(though,asmentionedabove,thelastquarter’sdividendispaidoutin2015).

ThepaymentandamountoffuturedividendsisinthediscretionoftheBoardofDirectorsandissubjectto,amongotherthings,prevailingfinancial,economic,operatingandotherrelevantcircumstances, includingearnings,cashflow,capitalrequirementsandthefinancialconditionoftheCompany.


6. DESCRIPTION OF CAPITAL STRUCTURE6.1 General Description of the Capital StructureTheCompany isauthorizedto issueanunlimitednumberofcommonsharesandanunlimitednumberofspecialsharesissuableinseries.

Thematerialcharacteristicsofthecommonsharesare:aholderofanycommonshares(a)shallbeentitledtoreceivenoticeof,toattendandtovoteatallmeetingsofshareholdersandtoonevoteforeachcommonshareheldatanysuchmeeting,exceptmeetingsatwhichonlyholdersofaspecifiedclassofshares(otherthancommonshares)oraspecifiedseriesofsharesareentitled tovote; (b)shallbeentitled,subject to the rights,privileges, restrictionsandconditionsattaching toanyotherclassofsharesoftheCompany,toreceiveanydividendif,asandwhendeclaredbytheBoardofDirectorsoftheCompany,properlyapplicabletothepaymentofdividendsinsuchamountsandpayableinsuchmannerastheBoardofDirectorsmayfromtimetotimedetermine;and(c)shallbeentitledtotherights,privileges,restrictionsandconditionsattachingtoanyotherclassofsharesoftheCompany,toreceivetheremainingpropertyoftheCompanyupondissolution.

Thematerialcharacteristicsofthespecialshares,asaclass,are:thespecialsharesmaybeissuedatanytimeorfromtimetotimeinoneormoreseries,eachseriestobeafixednumbersetbytheCompany’sBoardofDirectors.Withrespecttoeachseries:(a)theCompany’sBoardofDirectorsshalldeterminethedesignation,rights,privileges,restrictions,conditionsandotherprovisionstobeattachedtothespecialsharesofeachsuchseries;(b)thespecialsharesofeachseriesshallrankonaparitywiththespecialsharesofeveryotherserieswithrespecttopriorityinthepaymentofdividendsandwithrespecttopriorityonreturnofcapital,oranyotherdistributionofassetsof theCompany, intheeventof the liquidation,dissolutionorwinding-upoftheCompany,whethervoluntaryor involuntary(“liquidationdissolution”);and(c)thespecialsharesofeachseriesshallbeentitledtoapreferenceoverthejuniorsharesoftheCompany(ashereinafterdefined)withrespecttopriorityinthepaymentofdividendsonliquidationdissolution,and,theDirectorsmaygivethespecialsharesofanyseriessuchotherpreferencesoverthejuniorshares,astheyseefit.“Juniorshares”meanthecommonsharesoftheCompanyandanyothersharesof theCompanythatmayrank junior tothespecialshareswithrespect topriority inthepaymentofdividendsandwithrespecttopriorityonaliquidationdissolution.

Todate,onlycommonsharesoftheCompanyhavebeenissued.AsofDecember31,2014,therewere65,082,210commonsharesoftheCompanyoutstanding.Therearenospecialsharesofanyseriesissuedoroutstanding.

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7. MARKET FOR SECURITIESThecommonsharesoftheCompanyarelistedandpostedfortradingontheTorontoStockExchangeunderthetradingsymbol“LNR”.

ThepricerangeandtotalvolumeoftradingofthecommonsharesofLinamarCorporationontheTorontoStockExchangefortheperiodfromJanuary2014toDecember2014areasfollows:

High Price($/share)

Low Price($/share)

Close Price (1)

($/share)Total Volume

January 46.43 41.39 42.78 2,605,954February 48.50 42.15 48.13 1,866,640March 51.89 46.81 51.00 3,176,520April 56.98 51.01 54.87 2,667,706May 63.77 52.01 60.25 3,302,839June 67.67 59.56 62.95 3,595,350July 65.56 59.28 59.36 3,026,455August 66.00 58.10 62.76 3,526,576September 63.60 55.69 57.80 2,967,095October 58.46 48.13 57.57 4,533,308November 67.99 57.00 67.24 3,815,500December 72.60 62.48 70.95 2,700,963

(1)Closingpriceonthelasttradingdayofthemonth.


8. DIRECTORS AND OFFICERSThefollowingtablesetsforthinformationwithrespecttoeachofthedirectorsofLinamar.EachdirectorwillholdofficeuntilthecloseofthenextannualmeetingofshareholdersoftheCompanyoruntilhisorhersuccessoriselectedorappointed.TheBoardofDirectorshasestablishedtwostandingcommittees,anAuditCommitteeandaHumanResourcesandCorporateGovernanceCommittee,andhasprescribedtheirrespectiveresponsibilitiesandmandates.TheAuditCommitteeandtheHumanResourcesand Corporate Governance (“HRCG”)Committeearebothcomprisedofentirelyoutsidedirectors.

Name, Address, Occupation and Security Holdings

Name & Municipality of Residence

Director Since (3)

OtherPositionsandOfficescurrently held with the Company

Principal Occupation

Frank Hasenfratz Ariss, Ontario, Canada

1966 ChairmanoftheBoard ChairmanoftheBoardoftheCompany

Linda HasenfratzGuelph,Ontario,Canada

1998 ChiefExecutiveOfficer ChiefExecutiveOfficeroftheCompany

Mark Stoddart Guelph,Ontario,Canada

1999 ChiefTechnologyOfficerandExecutiveVicePresidentofSales&Marketing

ChiefTechnologyOfficerandExecutiveVicePresidentofSales&MarketingoftheCompany

William Harrison (1) (2) Puslinch,Ontario,Canada

1990 None RetiredChairmanandChiefExecutiveOfficerofLiftTechnologiesInc.(manufacturing)

Terry Reidel (1) (2) Kitchener,Ontario,Canada

2003 None RetiredPresidentandChiefOperatingOfficerofKuntzElectroplatingInc.(manufacturing)

Dennis Grimm (1) (2) Kitchener,Ontario,Canada

2014 None RetiredPartneratPriceWaterhouseCoopers(“PwC”)–ManagingPartnerWaterlooRegionandChairmanofitsGovernanceCommittee(accountingfirm)

(1)MemberofAuditCommittee(2)MemberofHumanResourcesCorporateandGovernanceCommittee

Duringthelastfiveyears,alloftheCompany’sdirectorshaveheldtheprincipaloccupationsnotedabove,withtheexceptionofMr.GrimmwhowastheManagingPartnerofPwCWaterlooRegionuptohisretirementin2010.

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OfficersThefollowingtablesetsforthinformationwithrespecttothecurrentexecutiveofficersoftheCompany.

Name & Municipality of Residence Principal Occupation Linda Hasenfratz Guelph,Ontario,Canada

ChiefExecutiveOfficer

Jim Jarrell Guelph,Ontario,Canada

President&ChiefOperatingOfficer

Mark Stoddart Guelph,Ontario,Canada

ChiefTechnologyOfficerandExecutiveVicePresidentofSales&Marketing

Roger Fulton Burlington,Ontario,Canada

ExecutiveVicePresident,HumanResources,GeneralCounselandCorporateSecretary

Dale Schneider Guelph,Ontario,Canada

ChiefFinancialOfficer

Brad Boehler London, Ontario, Canada

President,SkyjackInc.

Ken McDougall Guelph,Ontario,Canada

GroupPresidentLinamarManufacturingAmericas

Brian Ahlborn BloomfieldHills,Michigan,USA

GroupPresidentLinamarDrivelineSystemsGroup-GlobalandLinamarIndustrial,CommercialandEnergyGroup-NorthAmerica

Wenzhang (Henry) HuangShanghai, China

GroupPresident,LinamarManufacturing,AsiaGroup

Duringthelastfiveyears,theCompany’sexecutiveofficershaveheldtheprincipaloccupationsnotedaboveexceptfor:(i)Mr.Schneider,whowasCorporateControlleruntilDecember2010andEVPofFinanceuntilhisappointmenttothepositionofChiefFinancialOfficerinNovember2011;(ii)Mr.Boehler,whowasVicePresident,Engineeringuntil2011.InApril2011,Mr.BoehlertookontheadditionalresponsibilitiesofVicePresident,SalesandMarketingandinJuly2011becametheinterimPresidentofSkyjack,untilhisformalappointmentinthatpositioninJanuary2012.(iii)Mr.McDougall,whowasGroupPresidentPowertrainMexicofromSeptember2009toDecember31,2010.(iv)Mr.Ahlborn,whowastheChiefExecutiveOfficeratTransonicCombustionInc.fromJanuary2008toSeptember2010andtheGroupPresidentLinamarDrivelineSystemsfromDecember2010toNovember2012.and(v)Mr.Huang,whowasVicePresidentandGeneralManagerofEMCONTechnologiesfromOctober2006toMarch2010.ThenheoperatedhisownconsultingfirmfromApril2010toOctober2011.InNovember2011,hewashiredbytheCompanyasGroupPresident,LinamarManufacturing,AsiaGroup

Asat thedatehereof, thedirectorsandexecutiveofficersof theCompany,asagroupof 13persons,ownedbeneficially orexercisedcontrolordirectionoveratotalof19,218,970commonshares(representingapproximately29.53%oftheoutstandingsharesoftheCompanyasofDecember31,2014).(6)

9. AUDIT COMMITTEE9.1 Audit Committee CharterAttachedasAppendix“A”tothisAnnualInformationFormisthecharterfortheCompany’sAuditCommittee(the“AuditCommittee”). 9.2 Composition of the Audit CommitteeMembersoftheAuditCommitteeareTerryReidel,WilliamHarrisonandDennisGrimm.EachmemberoftheAuditCommitteeisindependentandfinanciallyliterate.Formoreinformation,pleaseseetheCorporation’sManagementInformationCircularfortheannualmeetingofshareholdersoftheCompanyscheduledforMay7,2015,whichcircularwillbefiledatwww.sedar.com.

(6)Excluding the largeminorityshareholdingpositionsofMr.andMs.Hasenfratz, theremaining11directorsandexecutiveofficersof theCompanyasagroupowned99,653commonsharesrepresentingapproximately0.15%oftheoutstandingsharesoftheCompanyasofDecember31,2014.


9.3 Relevant Education and ExperienceMr.Reidelhasextensivefinancialexperience.HeistherecentlyretiredPresidentandChiefOperatingOfficerofKuntzElectroplatingInc.,aKitchener-Waterloocompanyfoundedin1948.Mr.ReideljoinedKuntzinMarchof2001asVicePresident-Finance.PriortojoiningKuntz,Mr.Reidelspent39yearswithaccountingfirmofErnstandYoungandwasOfficeManagingPartneroftheirWaterlooRegionOffice.Mr.ReidelearnedhisC.A.designationfromQueen’sUniversityin1967.Mr.Reidelisalsoadirectoronseveralpublicboards.Mr.Reidelholdsthefollowingdesignations,FCPAandFCA.

Mr. Harrison attended the University of Guelph and the University of Toronto, receiving degrees in Honours Science andMechanicalEngineering.Mr.Harrison then joined theAllisChalmersCorporationworking inCanada, theUnitedStates andEuropeasaGeneralManagerandVicePresident.HeattendedYorkUniversity’sFacultyofBusinesspostgraduatestudies.Mr.Harrisonthenspent21yearsasPresidentandChiefExecutiveOfficerofKenharCorporation,aglobalsupplierofcomponentstotheMaterialsHandlingandIndustrialMobileEquipmentIndustry,withoperationsinNorthAmerica,Europe,China,KoreaandJapan.Mr.HarrisonthentookontheresponsibilitiesofExecutiveVicePresidentandDirectorofCascadeCorporationin1997and1998andfrom1999to2008wasChairmanandCEOofLiftTechnologiesInc,manufacturersofmastsandattachmentsfortheMaterialHandlingandContainerHandlingIndustries,withoperationsinNorthAmerica,Italy,GermanyandSweden.Currently,Mr.Harrison involveshimself inbusinessactivities throughhis investment company,RahnekLtd.Hisother interests include:fundraisingfortheGuelphGeneralHospital,theUniversityofGuelphandSunriseEquestrianCentre.

Mr.Grimm is aCharteredAccountant and also has hisCPA, FCPAandFCAdesignations.He attendedWaterloo LutheranUniversity(WilfredLaurier)andgraduatedwithaBachelorofArtsdegreeinHistoryandPoliticalScience.In1972,hecompletedanMBA in Accounting and Finance atMcMaster University.Mr.Grimmwas an activemember of theCanadian Institute ofCharteredAccountantsfrom1976-2012andtheAmericanInstituteofCertifiedPublicAccountantsfrom1995-2012.Duringhiscareer,hewasapartneratKPMGinthefirm’sauditgroupfor23yearsfrom1972to1995.HethenpracticedasanauditpartneratPwCfor15yearsstartingin1995.Ofnote,hewastheManagingPartnerofPwCWaterlooRegionuptohisretirementin2010andchaireditsGovernanceCommittee.Mr.GrimmdoesnotcurrentlysupplyservicestoLinamarandhasnotdonesointhepastthreeyears.

9.4 Pre-Approved Policies and ProceduresAllnon-auditservicestobeprovidedtotheCompanyoritssubsidiaryentitiesmustbeapprovedbytheAuditCommitteepriortotheauditorsprovidingsuchservices.

9.5 External Auditor Service FeesFor the financial years endedDecember 31, 2014 andDecember 31, 2013, the auditors of theCompany,PwC charged thefollowingfeestotheCompany:

Type of service Fiscal 2014 ($) Fiscal 2013 ($)Auditfees 811,628 922,693Auditrelatedfees 36,952 21,481Taxfees 57,687 57,391Allotherfees 55,132 116,198Total 961,399 1,117,763

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10. INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONSDuringtheyearendedDecember31,2014,otherthanasdescribedbelow,noDirector,executiveofficerorprincipalshareholderoftheCorporation,noranyassociateoraffiliatethereof,hashadanymaterialinterest,directorindirect,inanytransactionwhichhasmateriallyaffectedorwillmateriallyaffecttheCorporationoranyofitsshareholders.

Includedinthecostsofproperty,plantandequipmentistheconstructionofbuildings,buildingadditionsandbuildingimprovementsintheaggregateamountof$6.8million(2013-$4.3million)paidtoacompanyownedbythespouseofanofficeranddirector.Included in cost of sales ismaintenance costsand rent of $1.0million (2013 - $0.8million) paid to the samecompany.Themaintenance and construction costs represent general contracting and construction activities related to plant construction,improvements,additionsandmaintenanceforanumberoffacilities.AmountsowedtothiscompanyatDecember31,2014were$2.4million(2013-$1.3million).

TheCorporationhasdesignedanindependentprocesstoensurebuildingconstructionandimprovementsaretransactedatfairvalue.

11. TRANSFER AGENTS AND REGISTRARSTheCompany’stransferagentandregistrarisComputershareInvestorServicesInc.,locatedat100UniversityAvenue,8thfloor,Toronto,OntarioM5J2Y1.

12. INTERESTS OF EXPERTSTheauditorsoftheCompanyarePwC.TheCompanybelievesthatPwCdoesnotholdanyinterestsinthesecuritiesofLinamar.


13. ADDITIONAL INFORMATIONAdditionalinformationrelatingtotheCompanymaybefoundonSEDARatwww.sedar.com.

Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of the Company’ssecurities,optionstopurchasesecuritiesandinterestsofmanagementandothersinmaterialtransactions,iscontainedintheCompany’s management information circular for the annual meeting of shareholders scheduled for May 7, 2015. Additionalfinancialinformation,includingthecomparativeconsolidatedfinancialstatements,andmanagement’sdiscussionandanalysisofthefinancialconditionandresultsofoperationsoftheCompanyisprovidedintheCompany’sAnnualReportfortheyearendedDecember31,2014.

TheCompanywillprovidetoanyperson,uponrequesttotheSecretaryoftheCompany,acopyofthisAnnualInformationForm,togetherwithacopyofanydocuments,or thepertinentpagesofanydocument, incorporatedby referenceherein,acopyofthecomparativefinancialstatementsoftheCompanyfortheyearendedDecember31,2014,togetherwiththeaccompanyingreportoftheauditorsandacopyofanyinterimfinancialstatementsoftheCompanysubsequenttosuchfinancialstatements,acopyoftheManagementInformationCircularwithrespecttothemostrecentmeetingofshareholdersthatinvolvedtheelectionofDirectorsandonecopyofanyannualfilinginsteadoftheManagementInformationCircular.TheCompanymayrequirethepaymentofareasonablechargebeforeprovidingsuchdocumentstoapersonthatisnotashareholder.IfthesecuritiesoftheCompanyareinthecourseofadistributionpursuanttoashortformprospectusorifapreliminaryshortformprospectushasbeenfiledinrespectofadistributionoftheCompany’ssecurities,theCompanywillprovidetoanyperson(withoutcharge),uponrequesttotheSecretaryoftheCompany,anyofthedocumentsreferredtoaboveandacopyofanyotherdocumentnotreferredtoabovethatisincorporatedbyreferenceintothepreliminaryshortformprospectusortheshortformprospectus.

A Note on Forward Looking Information.CertaininformationprovidedbyLinamarinthisAnnualInformationFormandotherdocumentsissuedthroughouttheyearthatarenotrecitationofhistoricalfactsmayconstituteforward-lookingstatements.Thewords “may”, “would”, “could”, “will”, “likely”, “estimate”, “believe”, “expect”, “plan”, “forecast” and similar expressions are intendedto identify forward-lookingstatements.Readersarecautionedthatsuchstatementsareonlypredictionsandtheactualeventsorresultsmaydiffermaterially.Inevaluatingsuchforward-lookingstatements,readersshouldspecificallyconsiderthevariousfactorsthatcouldcauseactualeventsorresultstodiffermateriallyfromthoseindicatedbysuchforward-lookingstatements.

Suchforward-lookinginformationmayinvolveimportantrisksanduncertaintiesthatcouldmateriallyalterresultsinthefuturefromthoseexpressedorimpliedinanyforward-lookingstatementsmadeby,oronbehalfof,Linamar.SomeofthefactorsandrisksanduncertaintiesthatcauseresultstodifferfromcurrentexpectationsdiscussedinthisAnnualInformationForminclude,butarenotlimitedto,changesinthevariouseconomiesinwhichLinamaroperates,fluctuationsininterestratesandcurrencyexchangerates,environmentalemissionandsafetyregulations,theextentofOEMoutsourcing,industrycyclicality,tradeandlabourdisruptions,worldpoliticalevents,pricingconcessionsandcostabsorptions,delays inprogram launches, theCompany’sdependenceoncertain engine and transmission programs and major OEM customers, currency exposure, technological developments byLinamar’scompetitors,governmental,environmentalandregulatorypoliciesandchangesinthecompetitiveenvironmentinwhichLinamar operates.

TheforegoingisnotanexhaustivelistofthefactorsthatmayaffectLinamar’sforwardlookingstatements.TheseandotherfactorsshouldbeconsideredcarefullyandreadersshouldnotplaceunduerelianceonLinamar’sforward-lookingstatements.Linamarassumesnoobligationtoupdatetheforward-lookingstatements,ortoupdatethereasonswhyactualresultscoulddifferfromthosereflectedintheforward-lookingstatements.

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PURPOSE OF AUDIT COMMITTEETheAuditCommitteehasbeenformedbytheBoardofDirectorstoassisttheBoardinfulfillingitsoversightresponsibilities.TheAuditCommittee’sprimarydutiesandresponsibilitiesareto:

• reviewandreporttotheBoardonthefinancialstatements,relatedMD&AandotherfinancialdisclosuresoftheCompany;

• monitor the integrity of the financial reportingprocessand systemof internal controls in respect of theCompany’s financialreportingandaccountingcompliance;

• monitorthemanagementoftheprincipalrisksthatcouldimpactthefinancialreportingandrelateddisclosureofthe Company;and

• monitortheindependence,qualificationsandperformanceoftheCompany’sexternalauditorsandinternalauditingdepartment.

• monitor theCompany’scompliancewith legalandregulatory requirements inall jurisdictions inwhich theCompany carriesonbusiness.

• establishandmonitorproceduresforadherencetoreportingrequirements.

TheAuditCommitteehas theauthority to conduct any investigationappropriate to fulfilling its responsibilitiesandhasdirectaccesstotheexternalauditorsaswellasanyofficeroremployeeoftheCompany.

AUDIT COMMITTEE COMPOSITION, MEETINGS AND ORGANIZATIONComposition:TheAuditCommitteemembersshallmeettherequirementsoftheBusinessCorporationsAct(Ontario)(the“OBCA”) and National Instrument52-110.TheAuditCommitteeshallbecomprisedofthreeormoredirectorsasdeterminedbytheBoard,amajorityofwhommustberesidentCanadians(asdefinedintheOBCA),eachofwhomshallbeindependentdirectors(asdefinedinSchedule“A”)andnoneofwhomshallbeofficersoremployeesoftheCompanyoritsaffiliates.AllmembersoftheAuditCommitteeshallbefinanciallyliterate(asdefinedinSchedule“A”).AdirectorwhoisnotfinanciallyliteratemaybeappointedtotheAuditCommitteeprovidedthatsuchdirectorbecomesfinanciallyliteratewithinareasonableperiodoftimefollowinghisorherappointment.

Appointment of Members and Chair:MembersoftheAuditCommitteeshallbeappointedbytheBoardontherecommendationoftheHumanResourcesandCorporateGovernanceCommitteeandshallserveatthepleasureoftheBoard,oruntilthecloseofthenextannualmeetingofshareholdersoftheCompany.IftheChairoftheAuditCommitteeisnotdesignatedorpresentatadulycalledmeetingoftheAuditCommittee,themembersoftheAuditCommitteemaydesignateaChairbyamajorityvoteoftheAuditCommitteemembership.

Meetings:TheAuditCommitteeshallmeetatleastfourtimesannually,ormorefrequentlyascircumstancesdictate.TheAuditCommitteeChair,anymemberoftheAuditCommittee,theexternalauditorsortheChairmanoftheBoardmay,withreasonablenotice,callameetingoftheAuditCommitteebynotifyingthesecretaryoftheBoardwhowillnotifythemembersoftheAuditCommittee.TheexternalauditorsareentitledtoreceivenoticeofeverymeetingoftheAuditCommitteeandtoattendandbeheardatsuchmeetings.AmajorityofthemembersoftheAuditCommitteeshallconstituteaquorum.TheAuditCommitteeChairshallprepareandapproveanagendainadvanceofeachmeeting.

APPENDIX AMandate of the Audit Committee


TheAuditCommitteeshouldmeetprivatelyat leastannuallywithmanagement, theexternalauditors,andasacommittee todiscussanymattersthattheAuditCommitteeoranyofthesegroupsbelieveshouldbediscussed.

Access to Outside Advisors:TheAuditCommitteeshallhavetheauthoritytoretainexternallegalcounselandotheradvisorstoassistitinfulfillingitsresponsibilities.TheCompanyshallprovideappropriatefunding,asdeterminedbytheAuditCommittee,fortheservicesoftheseadvisors.

AUDIT COMMITTEE RESPONSIBILITIES AND DUTIESTheAuditCommitteeshallreviewandreporttotheBoardontheCompany’sannualauditedfinancialstatements,unauditedquarterlyfinancialstatements,relatedMD&A,annualandinterimearningspressreleasesandotherrelatedfinancialdisclosures(includingfinancialdisclosuresoftheCompanyprovidedinprospectuses)priortofilingordistribution.TheAuditCommittee’sreviewshouldincludediscussionswithmanagementandtheexternalauditorsofsignificantissuesregardingaccountingprinciples,practices,andsignificantmanagementestimatesandjudgments.

Atleastannually,inconsultationwithmanagementandtheexternalauditors,theAuditCommitteeshallconsidertheintegrityoftheCompany’sfinancialreportingprocessesandinternalcontrols.TheAuditCommitteeshalldiscusssignificantfinancialriskexposuresandthestepsmanagementhastakentomonitor,control,andreportsuchexposures.TheAuditCommitteeshallalsoreviewsignificantfindingspreparedbytheexternalauditorstogetherwithmanagement’sresponses.

TheAuditCommitteeshallreviewtheeffectivenessoftheoverallprocessforidentifyingtheprincipalrisksaffectingfinancialreportingandthestepsManagementhastakentomonitor,controlandreportthereonandprovidetheAuditCommittee’sviewtotheBoard.TheAuditCommitteeshallreviewandassesstheadequacyofthisMandateatleastannuallyandsubmitthisMandatetotheBoardforapproval.

TheAuditCommitteewillreviewanymaterialchangesinaccountingstandardsandsecuritiespoliciesorregulationrelevanttotheCompany’sfinancialstatements.

TheAuditCommittee shall reviewwithmanagement and the external auditors allmatters required to be communicated to theCommitteeundergenerallyacceptedauditingstandards.

TheAuditCommitteeshallreviewtheprocessrelatingtoandthecertificationsoftheChiefExecutiveOfficerandtheChiefFinancialOfficerontheintegrityoftheCompany’squarterlyandannualconsolidatedfinancialstatements.

TheCommitteeshallreviewannuallyaletterofcertificationfromtheChiefExecutiveOfficerontheCompany’scompliancewiththeCodeofConduct.


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External AuditorsTheAuditCommitteeisresponsibleforoverseeingtheworkoftheexternalauditorswhoreportdirectlytotheCommittee.TheAudit Committee shall, at least annually, review the independence and performance of the external auditors, including thequalificationsandperformanceoftheleadpartnersoftheexternalauditors,andrecommendtotheBoardtheappointmentandthecompensationoftheexternalauditorsorapproveanydischargeoftheexternalauditorswhencircumstanceswarrant.

TheAuditCommitteeshallpre-approveallnon-auditservices tobeprovided to theCompanyor itssubsidiaryentitiesby theexternalauditors.

Atleastannually,theAuditCommitteeshallreviewanddiscusswiththeexternalauditorsallsignificantrelationshipstheyhavewiththeCompanythatcouldimpairtheexternalauditors’independence.

At leastannually,theAuditCommitteeshallreviewtheexternalauditors’auditplananddiscussandapprovetheauditscope,staffing,locations,relianceuponmanagement,andgeneralauditapproach.

Priortoreleasingtheyear-endfinancialresults,theAuditCommitteeshalldiscusstheresultsoftheauditwiththeexternalauditorsanddiscussanymattersrequiredtobecommunicatedtoauditcommitteesinaccordancewiththestandardsestablishedbytheCanadianInstituteofCharteredAccountants.

TheAuditCommitteeshallconsider theexternalauditors’ judgmentsabout thequalityandappropriatenessof theCompany’saccountingprinciplesasappliedintheCompany’sfinancialreporting.

TheAuditCommitteeshallreviewwiththeexternalauditorsanyauditproblemsordifficultiesandmanagement’sresponsethereto.

Internal Audit Department and ComplianceAt leastannually, theAuditCommitteeshall reviewthe independenceof the internalauditdepartment frommanagementandreviewanydifficultiesencounteredbytheinternalauditdepartmentinthecourseofitsinternalaudit.

Atleastannually,theAuditCommitteeshallreviewwiththeCompany’scounselanylegalmattersthatcouldhaveasignificantimpactontheorganization’sfinancialstatements,theCompany’scompliancewithapplicablelawsandregulations,andinquiriesreceivedfromregulatorsorgovernmentagencies.

At least annually, theAuditCommittee shall review the report on compliancewith theCompany’sCodeofConduct andanyinstancesofmaterialdeviationtherefromwithcorrectiveactionstaken.


Other Audit Committee ResponsibilitiesAtleastannually,theAuditCommitteeshallassessitseffectivenessandeachofitsmembersagainstthisMandateandreporttheresultsoftheassessmenttotheBoard.

Atleastannually,theAuditCommitteeshalldisclosethisMandatetoshareholders,asrequiredbyapplicablelaw.TheAuditCommittee shallmaintainminutes of itsmeetings and periodically report to theBoard on significant results of itsactivitiesanddeliberations.

TheAuditCommitteeshallreviewseniorfinancialandaccountingpersonnelsuccessionplanningwithintheCompany.

TheAuditCommitteeshallreviewandapprovetheCompany’shiringpoliciesregardingpartners,employeesandformerpartnersandemployeesof thepresentand formerexternalauditorsof theCompany. Thispolicy isdefined in theStandardPracticeManual,#4-000X.

TheAuditCommitteeshallreceivereportsfrommanagementinrespectofproceduresestablishedforthereceipt,retentionandtreatmentofcomplaintsreceivedbytheCompanyregardingaccounting,internalaccountingcontrols,orauditingmatters,includingtheconfidential,anonymoussubmissionsbyemployeesofconcernsregardingquestionableaccountingorauditingmatters.

TheChair of theAuditCommittee shall coordinate orientation and continuing director development programs relating to thisMandateforAuditCommitteemembers

CURRENCY OF THE AUDIT COMMITTEE MANDATE:This Mandate was last approved by the Board of Directors on August 7, 2014.

(1)DerivedfromNationalInstrument52-110–AuditCommittees


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Meaning of Independence1.AmemberoftheAuditCommitteeisindependentifthememberhasnodirectorindirectmaterialrelationshipwiththeCompany.

2.ForthepurposesofSection1,amaterialrelationshipmeansarelationshipwhichcould,intheviewoftheCompany’sBoardof Directors,reasonablyinterferewiththeexerciseofamember’sindependentjudgment.

3.DespiteSection2,thefollowingindividualsareconsideredtohaveamaterialrelationshipwiththeCompany:

a.anindividualwhois,orhasbeenwithinthelastthreeyears,anemployeeorexecutiveofficeroftheCompany;

b.anindividualwhoseimmediatefamilymemberis,orhasbeenwithinthelastthreeyears,anexecutiveofficeroftheCompany;

c.anindividualwhoisapartneroremployeeofafirmthatistheinternalorexternalauditoroftheCompany,orwaswithinthe lastthreeyearsapartneroremployeeofthatfirmandpersonallyworkedontheCompany’sauditwithinthattime;

d.anindividualwhosespouse,minorchildorstepchild,orchildorstepchildwhosharesahomewiththeindividual,isapartner oremployeeofafirmthatistheinternalorexternalauditoroftheCompany;orisanemployeeofthatfirmandparticipatesin itsaudit,assuranceortaxcompliance(butnottaxplanning)practice;orwaswithinthelastthreeyearsapartneroremployee ofthatfirmandpersonallyworkedontheCompany’sauditwithinthattime;

e.anindividualwho,orwhoseimmediatefamilymember,isorhasbeenwithinthelastthreeyears,anexecutiveofficerofanentity if anyof theCompany’s currentexecutiveofficers serveor servedat that same timeon theentity’s compensation committee;and f. an individualwho received,orwhose immediate familymemberwho isemployedasanexecutiveofficerof theCompany received,morethan$75,000indirectcompensationfromtheCompanyduringany12monthperiodwithinthelastthreeyears;

g.anindividualwho: i.accepts,directlyorindirectly,anyconsulting,advisoryorothercompensatoryfeefromtheCompanyoranysubsidiaryentity oftheCompany,otherthanasremunerationforactinginhisorhercapacityasamemberoftheBoardofDirectorsoranyBoard committee,orasapart-timechairorvice-chairoftheBoardoranyBoardcommittee;or ii.isanaffiliatedentityoftheCompanyoranyofitssubsidiaryentities.

4.DespiteSection3,anindividualwillnotbeconsideredtohaveamaterialrelationshipwiththeCompanysolelybecause: a. heorshehadarelationshipidentifiedinSection3ifthatrelationshipendedbeforeMarch30,2004;or b. heorshehadarelationshipidentifiedinSection3byvirtueofSection9.

5.ForthepurposesofSections3(c)and(d),apartnerdoesnotincludeafixedincomepartnerwhoseinterestintheinternalor externalauditorislimitedtothereceiptoffixedamountsofcompensation(includingdeferredcompensation)forpriorservice withaninternalorexternalauditorifthecompensationisnotcontingentinanywayoncontinuedservice.

SCHEDULE “A”Definitions (1)

(1)DerivedfromNationalInstrument52-110–AuditCommittees


6.ForthepurposesofSection3(f),directcompensationdoesnotinclude(i)anyremunerationforactinginhisorhercapacity asamemberoftheBoardofDirectorsoranyBoardcommitteeor(ii)anyfixedamountsofcompensationunderaretirement plan(includingdeferredcompensation)forpriorservicewiththeCompanyifthecompensationisnotcontingentinanywayon continuedservice.

7.ForthepurposesofSection3(g): a. the indirect acceptance by an individual of any consulting, advisory or other compensatory fee includes acceptance of afeeby i.anindividual’sspouse,minorchildorstepchild,orachildorstepchildwhosharestheindividual’shome;or ii.anentityinwhichsuchindividualisapartner,member,anofficersuchasamanagingdirectoroccupyingacomparable positionorexecutiveofficer,oroccupiesasimilarposition(exceptlimitedpartners,non-managingmembersandthose occupyingsimilarpositionswho,ineachcase,havenoactiveroleinprovidingservicestotheentity)andwhichprovides accounting,consulting,legal,investmentbankingorfinancialadvisoryservicestotheCompanyoranysubsidiaryentityof theCompany;and b.compensatoryfeesdonot includethereceiptoffixedamountsofcompensationunderaretirementplan(includingdeferred compensation)forpriorservicewiththeCompanyifthecompensationisnotcontingentinanywayoncontinuedservice.

8.DespiteSection3,apersonwillnotbeconsideredtohaveamaterialrelationshipwiththeCompanysolelybecauseheorshe: a. haspreviouslyactedasaninterimChiefExecutiveOfficeroftheCompany;or b. acts,orhaspreviouslyacted,asachairorvice-chairoftheBoardofDirectorsoranyBoardcommitteeonapart-timebasis.

9.Forthepurposesherein(otherthanSections3(g)and(7),referencetotheCompanyincludesasubsidiaryentityoftheCompany.

MeaningofFinancialLiteracy--An individual isfinancially literate ifheorshehastheability toreadandunderstandasetoffinancialstatements thatpresentabreadthand levelofcomplexityofaccounting issues thataregenerallycomparable to thebreadthandcomplexityoftheissuesthatcanreasonablybeexpectedtoberaisedbytheCompany’sfinancialstatements.

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