UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
8585 Côte-de-Liesse, Saint-Laurent, Québec, H4T 1G6 514-341-6780 (Address and Telephone Number of Registrant’s principal executive office)
CT Corporation System, 111 Eighth Avenue, 13th Floor, New York, NY 10011 (212) 894-8700(Name, Address and Telephone Number of Agent for Service in the United States)
DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures are designed to ensure that information required to be disclosed by CAE Inc. (“CAE”) in reports filed with securities regulatory agencies is recorded, processed, summarized and reported on a timely basis and is accumulated and communicated to CAE’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Internal control over financial reporting are procedures designed to provide reasonable assurance that transactions are properly authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and reported. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation. Accordingly, CAE’s management, including our Chief Executive Officer and our Chief Financial Officer, does not expect that CAE’s internal control over financial reporting will prevent or detect all error and all fraud.
There has been no change in CAE’s internal control over financial reporting during the year ended March 31, 2006 that materially affected, or that is reasonably likely to materially affect, CAE’s internal control over financial reporting.
CAE will continue to periodically review its disclosure controls and procedures and internal control over financial reporting and may make modifications from time to time as considered necessary or desirable. CAE is reviewing its existing internal control over financial reporting in preparation for the reporting and attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 becoming effective. In connection with such review, modifications were made to CAE’s disclosure controls and procedures and internal control over financial reporting and further modifications will, as appropriate, be made to CAE’s disclosure controls and procedures or internal control over financial reporting in the future.
AUDIT COMMITTEE FINANCIAL EXPERT
CAE’s board of directors has determined that it has at least one audit committee financial expert serving on its audit committee. The board of directors has determined that Mr. James F. Hankinson is an audit committee financial expert and is independent, as that term is defined by the New York Stock Exchange’s corporate governance standards applicable to CAE.
The Securities and Exchange Commission (the “Commission”) has indicated that the designation of a person as an audit committee financial expert does not impose on such person any duties, obligations or liability that are greater than those imposed on such person as a member of the audit committee and the board of directors in the absence of such designation and does not affect the duties, obligations or liability of any other member of the audit committee or board of directors.
CODE OF ETHICS
CAE has a code of ethics entitled, “Code of Business Conduct”. The Code of Business Conduct applies to all officers and employees of CAE, including CAE’s principal executive officer, principal financial officer, principal accounting officer, agents, representatives, contractors, suppliers and consultants. The Code of Business Conduct is available at CAE’s Internet website, www.cae.com, in the About CAE - Corporate Governance section. Amendments to the Code of Business Conduct and waivers, if any, for executive officers will be disclosed on CAE’s website.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following PricewaterhouseCoopers LLP aggregate fees were billed to CAE in each of the years ended March 31, 2006 and 2005 for professional services rendered to CAE:
1 Audit fees are comprised of fees billed for professional services for the audit of CAE’s annual financial statements and services that are normally provided by PWC in connection with statutory and regulatory filings.
2 Audit-related fees are comprised of fees relating to work performed in connection with CAE’s divestitures.3 Tax fees are related to tax compliance support.
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
CAE’s Audit Committee has adopted a pre-approval policy with respect to permitted non-audit services. Under this policy, subject to certain conditions, specified audit-related services, tax compliance, audit services and tax services may be presented to the Audit Committee for pre-approval as a category of services on an annual or project basis. On a quarterly basis, management of CAE is required to update the Audit Committee in respect of the actual amount of fees in comparison to the pre-approved estimate. All non-audit services not otherwise pre-approved by the Audit Committee must be pre-approved by the Audit Committee on an individual basis. Non-audit services may be approved by the Chairman of the Audit Committee, provided that any such pre-approval is reported to the full Audit Committee at its next meeting. None of the services described above under the captions “Audit-Related Fees” or “Tax Fees” were approved pursuant by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
OFF-BALANCE SHEET ARRANGEMENTS
The disclosure provided under sections 12.9 and 12.10 on pages 54-55 of Exhibit 3, Management’s Discussion and Analysis, is incorporated by reference herein.
CONTRACTUAL OBLIGATIONS
The disclosure provided under section 11.3 “Contractual Obligations” on page 53 of Exhibit 3, Management’s Discussion and Analysis, is incorporated by reference herein.
IDENTIFICATION OF THE AUDIT COMMITTEE
CAE’s Audit Committee is, as of the date hereof, comprised of the following directors: John A. Craig, Paul Gagné, James F. Hankinson and James W. McCutcheon. CAE has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act.
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.
Date: June 28, 2006
CAE INC.
By: /s/ Hartland Paterson
EXHIBIT INDEX