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2019 Annual Report.Pdf TABLE OF CONTENTS 1. Letter to Our Shareholders ........................................................................................................................................................................ 2 2. Management Discussion and Analysis .................................................................................................................................................... 14 3. Consolidated Financial Statements ......................................................................................................................................................... 37 Management’s Responsibility for the Consolidated Financial Statements .............................................................................................. 38 Independent Auditor’s Report .................................................................................................................................................................. 39 Consolidated Statements of Financial Position ....................................................................................................................................... 41 Consolidated Statements of Earnings ..................................................................................................................................................... 42 Consolidated Statements of Comprehensive Earnings ........................................................................................................................... 43 Consolidated Statements of Changes in Equity ...................................................................................................................................... 44 Consolidated Statements of Cash Flows ................................................................................................................................................. 45 Notes to the Consolidated Financial Statements 1 General Information ..................................................................................................................................................................................................... 46 2 Basis of Preparation .................................................................................................................................................................................................... 46 3 Significant Accounting Policies .................................................................................................................................................................................... 46 4 Changes in Accounting Policies .................................................................................................................................................................................. 55 5 Critical Accounting Estimates and Judgements .......................................................................................................................................................... 55 6 Sale of Receivables ..................................................................................................................................................................................................... 56 7 Inventories ................................................................................................................................................................................................................... 57 8 Income Taxes .............................................................................................................................................................................................................. 58 9 Property, Plant and Equipment.................................................................................................................................................................................... 60 10 Intangible Assets ......................................................................................................................................................................................................... 62 11 Goodwill ....................................................................................................................................................................................................................... 62 12 Provisions .................................................................................................................................................................................................................... 64 13 Long-Term Debt .......................................................................................................................................................................................................... 64 14 Capital Stock................................................................................................................................................................................................................ 66 15 Revenue from Contracts with Customers .................................................................................................................................................................... 66 16 Expenses by Nature .................................................................................................................................................................................................... 67 17 Employee Benefits ....................................................................................................................................................................................................... 67 18 Share-Based Compensation ....................................................................................................................................................................................... 67 19 Other Income and (Expenses)..................................................................................................................................................................................... 69 20 Finance Income and (Expenses) ................................................................................................................................................................................. 69 21 Earnings per Share ...................................................................................................................................................................................................... 69 22 Commitments............................................................................................................................................................................................................... 69 23 Related Party Transactions ......................................................................................................................................................................................... 69 24 Segmented Information ............................................................................................................................................................................................... 70 25 Business Acquisitions .................................................................................................................................................................................................. 72 26 Supplemental Cash Flow Information ......................................................................................................................................................................... 73 27 Financial Instruments .................................................................................................................................................................................................. 74 4. Annual Meeting of Shareholders ............................................................................................................................................................. 80 5. Officers and Directors .............................................................................................................................................................................. 80 6. Auditors, Transfer Agent and Registrar ................................................................................................................................................... 80 1 LETTER TO OUR SHAREHOLDERS Linamar Corporation 2 LETTER TO OUR SHAREHOLDERS We are pleased to report to you on another successful year at Linamar despite challenging markets. We have meaningfully outperformed our markets, made significant strides in shareholder outreach through our Environmental, Social and Governance (ESG) communication initiative and seen excellent market share gains in each of our businesses. At the same time, we recorded record levels of free cash flow, meaningfully ramped up our employee succession and development programs and secured near record levels of new business in targeted areas. Commercializing Innovation Creating real business opportunities out of our innovation efforts was a key focus for 2019 with excellent success in market share gains, new business wins and strategic diversification. Innovation Innovation continues to play a key role in driving our competitiveness by meeting customer/consumer needs and enabling our growth. Our innovation agenda has 3 key paths; product innovation to develop products our customers need, process innovation to find ways to produce
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