<SEC-DOCUMENT>0001173382-19-000008.txt : 20190604
<SEC-HEADER>0001173382-19-000008.hdr.sgml : 20190604
<ACCEPTANCE-DATETIME>20190604115806
ACCESSION NUMBER:		0001173382-19-000008
CONFORMED SUBMISSION TYPE:	SD
PUBLIC DOCUMENT COUNT:		2
<RULE>
<RULE-NAME>13p-1
<ITEM>
<ITEM-NUMBER>1.01
<ITEM-PERIOD>20181231
</ITEM>
</RULE>
FILED AS OF DATE:		20190604
DATE AS OF CHANGE:		20190604

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CAE INC
		CENTRAL INDEX KEY:			0001173382
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		SD
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31402
		FILM NUMBER:		19875698

	BUSINESS ADDRESS:	
		STREET 1:		8585 COTE DE LIESSE
		CITY:			ST-LAURENT
		STATE:			A8
		ZIP:			H4T 1G6
		BUSINESS PHONE:		514-341-6780

	MAIL ADDRESS:	
		STREET 1:		8585 COTE DE LIESSE
		CITY:			ST-LAURENT
		STATE:			A8
		ZIP:			H4T 1G6
</SEC-HEADER>
<DOCUMENT>
<TYPE>SD
<SEQUENCE>1
<FILENAME>formsdsignedmay31-19.htm
<DESCRIPTION>FORM SD
<TEXT>
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<div><a name="sF183D6D9453B8D662340E4EED98C22DA"></a></div><div></div><div><br></div><div style="line-height:130%;text-align:center;padding-left:1px;text-indent:-2px;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">UNITED STATES </font></div><div style="line-height:130%;padding-bottom:10px;text-align:center;padding-left:1px;text-indent:-2px;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">SECURITIES AND EXCHANGE COMMISSION</font><font style="font-family:inherit;font-size:18pt;"><sub style="vertical-align:bottom;line-height:120%;font-size:10pt"> </sub>&#160;</font></div><div style="line-height:130%;padding-bottom:16px;text-align:center;padding-left:1px;text-indent:-2px;font-size:16pt;"><font style="font-family:inherit;font-size:16pt;font-weight:bold;">Washington, D.C. 20549</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:130%;text-align:center;padding-left:1px;text-indent:-2px;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">FORM SD</font><font style="font-family:inherit;font-size:18pt;"><sub style="vertical-align:bottom;line-height:120%;font-size:10pt"> </sub>&#160;</font></div><div style="line-height:130%;text-align:center;padding-left:1px;text-indent:-2px;font-size:16pt;"><font style="font-family:inherit;font-size:16pt;font-weight:bold;">Specialized Disclosure Report</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:130%;padding-bottom:29px;text-align:center;padding-left:4px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">&#160;</font></div><div style="line-height:130%;text-align:center;padding-left:1px;text-indent:-2px;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">CAE INC. </font></div><div style="line-height:130%;padding-bottom:14px;text-align:center;padding-left:1px;text-indent:-2px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(exact name or registrant as specified in its charter) </font></div><div style="line-height:130%;text-align:left;text-indent:134px;font-size:12pt;"><font style="font-family:inherit;font-size:11pt;"></font><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Canada</font><font style="font-family:inherit;font-size:12pt;">&#32;&#160;&#160;&#160;&#160;</font><font style="font-family:inherit;font-size:12pt;font-weight:bold;">1-31402&#160;&#160;&#160;&#160;Not Applicable</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:130%;text-align:left;text-indent:158px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">(State of incorporation) &#160;&#160;&#160;&#160;(Commission &#160;&#160;&#160;&#160;(IRS Employer </font></div><div style="line-height:130%;padding-bottom:16px;text-align:left;text-indent:322px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;">File Number)&#160;&#160;&#160;&#160;Identification No.) </font></div><div style="line-height:130%;text-align:center;padding-left:12px;text-indent:-2px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">8585 C&#244;te-de-Liesse, Saint-Laurent, Qu&#233;bec, Canada H4T 1G6</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:130%;padding-bottom:14px;text-align:center;padding-left:1px;text-indent:-2px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(Address of principal executive offices) (Postal Code) </font></div><div style="line-height:130%;text-align:center;padding-left:12px;text-indent:-2px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Mark Hounsell, telephone: (514) 734-5779</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:130%;padding-bottom:14px;text-align:center;padding-left:1px;text-indent:-2px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(Name and telephone number of the person to contact in connection with this report.) </font></div><div style="line-height:125%;padding-bottom:14px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Check the appropriate box to indicate the rule pursuant to which this form is being filed, and provide the period to which the information in this form applies: </font></div><div style="line-height:125%;padding-bottom:14px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:Wingdings;font-size:12pt;">x</font><font style="font-family:inherit;font-size:12pt;">&#32;Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2018. </font></div><div style="line-height:130%;padding-bottom:14px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Section 1 &#160;&#160;&#160;&#160;Conflict Minerals Disclosure</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:130%;padding-bottom:14px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Item 1.01 Conflict Minerals Disclosure and Report</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:125%;padding-bottom:14px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">A copy of CAE Inc.&#8217;s Conflict Minerals Report is filed as Exhibit 1.01 hereto and is publicly available at </font><font style="font-family:inherit;font-size:12pt;font-style:italic;">www.cae.com. </font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:130%;padding-bottom:14px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Item 1.02 Exhibit</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:125%;padding-bottom:30px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">CAE has filed, as an exhibit to this Form SD, the Conflict Minerals Report required by Item 1.01</font><font style="font-family:Arial;font-size:12pt;">. </font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:130%;padding-bottom:14px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Section 2 &#160;&#160;&#160;&#160;Exhibits</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:130%;padding-bottom:14px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Item 2.01 Exhibits</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:125%;padding-bottom:14px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The following exhibit is filed as part of this report: </font></div><div style="line-height:125%;padding-bottom:14px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Exhibit 1.01 &#8212; Conflict Minerals Report as required by Item 1.01 and 1.02 of this Form. </font></div><div style="line-height:130%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">&#160;</font></div><div style="line-height:130%;text-align:left;padding-left:312px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">&#32;&#160;&#160;&#160;&#160; </font></div><div style="line-height:130%;text-align:left;padding-left:312px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:130%;padding-bottom:14px;text-align:center;padding-left:12px;text-indent:-2px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">SIGNATURES</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:125%;padding-bottom:14px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned. </font></div><div style="line-height:130%;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">CAE INC.</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:130%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">&#32;&#160;&#160;&#160;&#160; &#160;&#160;&#160;&#160; </font></div><div style="line-height:130%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">&#32;&#160;&#160;&#160;&#160; &#160;&#160;&#160;&#160; </font></div><div style="line-height:125%;padding-bottom:1px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">By: &#160;&#160;&#160;&#160;/s/ Mark Hounsell &#160;&#160;&#160;&#160;Date: May 31, 2019</font></div><div style="line-height:130%;padding-bottom:1px;text-align:left;padding-left:48px;font-size:11pt;"><font style="font-family:inherit;font-size:11pt;"><br></font></div><div style="line-height:125%;padding-bottom:1px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Name: Mark Hounsell </font></div><div style="line-height:125%;padding-bottom:1px;text-align:left;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Title:  General Counsel, Chief Compliance Officer and </font></div><div style="line-height:125%;padding-bottom:14px;text-align:left;padding-left:49px;text-indent:-2px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Corporate Secretary  </font></div><div style="line-height:130%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">&#160;</font></div><div><br></div><div></div>	</body>
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<DOCUMENT>
<TYPE>EX-1.01
<SEQUENCE>2
<FILENAME>formsdexhibitmay31-19.htm
<DESCRIPTION>EXHIBIT 2.01
<TEXT>
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		<title>Exhibit</title>
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<div><a name="s6AD2E4F1098DCB615585E4F1031D676B"></a></div><div></div><div><br></div><div style="line-height:130%;padding-bottom:17px;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Exhibit 1.01</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div><div style="line-height:125%;padding-bottom:18px;text-align:left;padding-left:238px;text-indent:-234px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Conflict Minerals Report of CAE Inc. in Accordance with Rule 13p-1 under the Securities Exchange Act of 1934 </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:1px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:125%;font-size:12pt;padding-left:0px;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">I.</font></div></td><td style="vertical-align:top;"><div style="line-height:125%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Introduction </font></div></td></tr></table><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">This Conflict Minerals Report (this &#8220;Report&#8221;) of CAE Inc. (&#8220;CAE&#8221;) has been prepared for the reporting period from January 1, 2018 to December 31, 2018 pursuant to Rule 13p-1 and Form SD (the &#8220;Rule&#8221;) promulgated under the Securities Exchange Act of 1934, as amended. The Rule imposes certain reporting obligations on the Securities and Exchange Commission (&#8220;SEC&#8221;) registrants who manufacture or contract to manufacture products containing conflict minerals which are necessary to the functionality or production of their products. &#8220;Conflict Minerals&#8221; are defined as cassiterite, columbite-tantalite (coltan), gold, wolframite, or their derivatives, which are limited to tantalum, tin, tungsten and gold for the purposes of this assessment. The &#8220;Covered Countries&#8221; for the purposes of the Rule are the Democratic Republic of the Congo, the Republic of the Congo, the Central African Republic, South Sudan, Uganda, Rwanda, Burundi, Tanzania, Zambia and Angola. </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">If a registrant has reason to believe that any of the Conflict Minerals necessary to the functionality or production of its products may have originated in the Covered Countries, or if it is unable to determine the country of origin of those Conflict Minerals, then the registrant must exercise due diligence on the Conflict Minerals&#8217; source and chain of custody and submit a Conflict Minerals Report to the SEC that includes a description of those due diligence measures. </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">This Report is not audited by an independent private sector auditor in reliance on SEC guidance to the effect that the requirement of such an audit has been stayed except if the registrant elects to describe its products as &#8220;DRC conflict-free&#8221; in its Conflicts Minerals Report. </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">This Report has been prepared by management of CAE. The information includes the activities of all majority-owned subsidiaries and variable interest entities that are required to be consolidated.   </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:125%;font-size:12pt;padding-left:0px;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">II.</font></div></td><td style="vertical-align:top;"><div style="line-height:125%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Product Overview</font><font style="font-family:inherit;font-size:12pt;">&#32;</font><font style="font-family:inherit;font-size:12pt;font-weight:bold;">&#32;</font></div></td></tr></table><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">CAE is a global leader in training for the civil aviation, defence and security, and healthcare markets. As a company in the simulator manufacturing business, the supply chain with respect to CAE&#8217;s products is complex and includes many third parties between the ultimate manufacturer of the products and the original sources.  </font><font style="font-family:inherit;font-size:12pt;font-weight:bold;">&#32;</font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Our simulators contain electronic and mechanical parts that are provided by a wide range of suppliers. CAE is several levels removed from the mining of Conflict Minerals and does not make purchases of raw ore or unrefined Conflict Minerals and makes no purchases in the Covered Countries. We rely on suppliers within our supply chain, whose components may contain Conflict Minerals, to provide us with information about the source of potential Conflict Minerals contained in the components supplied to us. In addition, we use internal expertise and follow a rigorous process to evaluate the accuracy of and verify the information provided by our suppliers.  Consequently, our due diligence measures provide reasonable, not absolute, assurance regarding the source and chain of custody of Conflict Minerals. Our due diligence processes seek data from our direct suppliers and those suppliers seek similar information within their supply chains to identify the original sources of Conflict Minerals. Such sources of information may produce inaccurate or incomplete information. </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:46px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:125%;font-size:12pt;padding-left:0px;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">III.</font></div></td><td style="vertical-align:top;"><div style="line-height:125%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Reasonable Country of Origin Inquiry </font></div></td></tr></table><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Since 2013, CAE has put in place and executed a formal Conflict Minerals program by communicating its Conflict Minerals Policy (as defined below) to its suppliers and conducting supply-chain surveys to determine the reasonable country of origin of Conflict Minerals used in its products. CAE has established a reasonable country of origin inquiry (&#8220;RCOI&#8221;) process which is refreshed every year by which it surveys its suppliers on the source of Conflict Minerals and verifies smelters reported in supplier surveys for participation in the Responsible Minerals Initiative (&#8220;RMI&#8221;) (formerly the Conflict-Free Sourcing Initiative) flagship program, the Responsible Minerals Assurance Process (&#8220;RMAP&#8221;, formerly the Conflict-Free Smelter Program) as conformant or active. CAE utilizes supplier information to create a CAE product Conflict Minerals Reporting Template (the &#8220;Reporting Template&#8221;).  </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Reporting Template contains questions about the origin of Conflict Minerals included in suppliers&#8217; products, as well as a supplier due diligence questionnaire. The Reporting Template was developed to facilitate disclosure and communication of information regarding smelters that provide materials to CAE&#8217;s supply chain. It also includes questions regarding the CAE supplier&#8217;s conflict-free policy, engagement with its direct suppliers and a list of the smelters the supplier and its suppliers use. </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:125%;font-size:12pt;padding-left:0px;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">IV.</font></div></td><td style="vertical-align:top;"><div style="line-height:125%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Due Diligence Process</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div></td></tr></table><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Our due diligence process with respect to the source and chain of custody of the necessary Conflict Minerals used in components for manufacturing CAE&#8217;s products has been designed to conform to the Organization for Economic Co-operation and Development&#8217;s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (Third Edition) (the &#8220;OECD Guidelines&#8221;), which refers to an internationally recognized five-step framework. </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:14px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:130%;font-size:12pt;padding-left:72px;"><font style="font-family:inherit;font-size:12pt;">a.</font></div></td><td style="vertical-align:top;"><div style="line-height:130%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Establish strong company management systems</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div></td></tr></table><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">We have established a Conflict Minerals Policy (the &#8220;Conflict Minerals Policy&#8221;) which is approved by the Audit Committee of CAE&#8217;s Board of Directors. The Conflict Minerals Policy states, among other things, (i) that CAE shall not use Conflict Minerals originating from the Covered Countries in, or to produce, its products; (ii) that CAE shall not specify or negotiate contractual terms with a manufacturer or other sub-component supplier so as to exercise a degree of influence over the manufacturing of the product to dictate the use of Conflict Minerals unless their use represents a special technique or requirement deemed necessary; and (iii) that CAE shall ensure that its manufacturing group limits the use of Conflict Minerals to applications where no substitute exists.  </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Conflict Minerals Policy is implemented by a cross-functional team comprised of representatives of CAE&#8217;s Global Strategic Sourcing, Global Quality Assurance, Hardware Engineering, Finance and Legal departments. CAE&#8217;s implementation efforts are reviewed on an annual basis with the General Counsel, Chief Compliance Officer &amp; Corporate Secretary and the senior management of the sourcing and procurement department. </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Conflict Minerals Policy is available on our website. In addition, we communicate our Conflict Minerals Policy to our suppliers through our standard purchase order terms and conditions, which contain a clause that reflects the requirements set out in our Conflict Minerals Policy. We also ensure that all material documentation relating to Conflict Minerals is maintained for a period of at least five (5) years. </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:14px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:130%;font-size:12pt;padding-left:72px;"><font style="font-family:inherit;font-size:12pt;">b.</font></div></td><td style="vertical-align:top;"><div style="line-height:130%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Identify and assess risks in the supply chain</font><font style="font-family:inherit;font-size:12pt;">&#32;&#32;</font></div></td></tr></table><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Through its due diligence process, CAE has determined that some of its products do include Conflict Minerals. For the period of January 1, 2018 to December 31, 2018, small elements of tantalum, tin, tungsten and gold were found in the following sub-components which are necessary in CAE&#8217;s supply chain: computer circuit board solder and plating, cable solder and a special application tungsten alloy counterweight.  </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">We have conducted a supply-chain survey with direct suppliers of the components and subcomponents containing Conflict Minerals using the Reporting Template to identify the smelters and refiners, including a RCOI, in order to ascertain the origin of the minerals used in these subcomponents.  </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">A careful review of each Reporting Template returned by our suppliers was performed by our procurement and sourcing department for completeness and accuracy of information provided based on pre-defined criteria. When incomplete or potentially inaccurate information was contained in these surveys or any inconsistencies were identified, we contacted the relevant suppliers to seek clarification and obtain additional information. Of the 24 surveys that were sent to our suppliers, we received responses from all of them. </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">All of our suppliers who indicated using Conflict Minerals in their products were asked to provide a list of their smelters or refiners. We then compared the smelters and refiners that were identified by our supply chain survey against the list of facilities that comply with responsible sourcing validation programs such as the RMAP.  </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">While some suppliers indicated that some of the smelters in their supply chain were sourcing from the Covered Countries, these were reported as being compliant with the RMAP. Furthermore, CAE has suspended or terminated its business relationship with certain suppliers who failed to respond or to provide complete responses to the supply-chain survey. </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:14px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:130%;font-size:12pt;padding-left:72px;"><font style="font-family:inherit;font-size:12pt;">c.</font></div></td><td style="vertical-align:top;"><div style="line-height:130%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Design and implement a strategy to respond to identified risks</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div></td></tr></table><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The results from our supply chain survey and risk assessment findings are analyzed by our sourcing and procurement team and discussed with the senior management. Strategies are then designed and implemented to address any concern with respect to Conflict Minerals and to mitigate the risk that the Conflict Minerals contained in our products directly or indirectly benefit or finance armed groups in the Covered Countries. Senior management also report to the Audit Committee of CAE&#8217;s Board of Directors the findings of the RCOI and due diligence process as well as the risks associated with our supply chain regarding the Conflict Minerals used in our products. </font></div><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">We endeavor to maintain good communication channels with our suppliers and always stress the importance of responsible mineral sourcing practices. When a supplier fails to cooperate sufficiently with our due diligence investigation, does not follow requests for remediation or otherwise violates our Conflict Minerals Policy, CAE takes the necessary actions, including without limitation, terminating business with such supplier by stopping new orders. </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:14px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:130%;font-size:12pt;padding-left:72px;"><font style="font-family:inherit;font-size:12pt;">d.</font></div></td><td style="vertical-align:top;"><div style="line-height:130%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Carry out independent third-party audit of supply chain due diligence</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div></td></tr></table><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Given that we are several steps removed from the mining and processing of the Conflict Minerals used in the components of our products and that we do not interface directly with the smelters and refiners who provide the Conflict Minerals used in these components, we rely on RMI and other third-party organizations to conduct audits of smelters and refiners. </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:14px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:96px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:130%;font-size:12pt;padding-left:72px;"><font style="font-family:inherit;font-size:12pt;">e.</font></div></td><td style="vertical-align:top;"><div style="line-height:130%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Report annually on supply chain due diligence</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div></td></tr></table><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">We publicly file a Form SD and, if applicable, a Conflict Minerals Report, with the SEC, including an annual report of our supply chain due diligence activities. We also communicate our Conflict Minerals Policy on our website. </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:73px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:125%;font-size:12pt;padding-left:25px;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">V.</font></div></td><td style="vertical-align:top;"><div style="line-height:125%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Conclusion</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div></td></tr></table><div style="line-height:119%;padding-bottom:16px;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">After conducting the RCOI and the due diligence exercises described above, CAE has reasonably determined that while some of the Conflict Minerals necessary to the functionality or production of its products originated from a Covered Country, CAE has no reason to believe that any of such Conflict Minerals directly or indirectly financed or benefited armed groups. </font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:73px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:125%;font-size:12pt;padding-left:25px;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">VI.</font></div></td><td style="vertical-align:top;"><div style="line-height:125%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Future Due Diligence Measures and Improvements</font><font style="font-family:inherit;font-size:12pt;">&#32;</font></div></td></tr></table><div style="line-height:119%;text-align:justify;padding-left:1px;text-indent:0px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">In the last years, we have worked extensively on the issue of Conflict Minerals and the responsible sourcing of such minerals and we continue to take steps towards improving our due diligence process. In the next compliance period, CAE intends on enhancing the following steps to improve the information gathered from its due diligence measures to further mitigate the risk that its limited but necessary use of Conflict Minerals does not benefit armed groups.  These steps include, but are not limited to: </font></div><div style="line-height:130%;padding-bottom:20px;text-align:left;padding-left:1px;font-size:2pt;"><font style="font-family:inherit;font-size:2pt;">&#160;</font></div><table cellpadding="0" cellspacing="0" style="padding-bottom:8px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:76px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:130%;font-size:12pt;padding-left:48px;"><font style="font-family:Arial;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:130%;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Continuing to drive our suppliers to obtain current, accurate, and complete information about their smelters and refiners of Conflict Minerals. </font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-bottom:8px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:76px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:130%;font-size:12pt;padding-left:48px;"><font style="font-family:Arial;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:130%;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Increasing participation in third-party programs to encourage further improvement and reliability in traceability programs. </font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-bottom:8px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:76px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:130%;font-size:12pt;padding-left:48px;"><font style="font-family:Arial;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:130%;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Continuing to inform our suppliers of CAE&#8217;s corporate policy on responsible sourcing.  </font><font style="font-family:inherit;font-size:10pt;">&#8226;</font><font style="font-family:Arial;font-size:10pt;">&#32;</font><font style="font-family:inherit;font-size:12pt;">Only carrying on business with suppliers who complete in a satisfactory fashion our supply-chain survey. Each responding supplier must indicate to CAE that its smelters are in the RMAP &#8211; validated as conformant or active.  </font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-bottom:16px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:76px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:130%;font-size:12pt;padding-left:48px;"><font style="font-family:Arial;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;"><div style="line-height:130%;text-align:justify;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Investigating potential tools to automate certain aspects of the due diligence process to identify opportunities for improved efficiency. </font></div></td></tr></table><div><br></div><div></div>	</body>
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