ATS Corp /ATS

FOREIGN OPERATIONS

ATS and its subsidiaries have a presence in Canada, the United States, Italy, Germany, Belgium, Thailand, the United Kingdom, Netherlands, Czech Republic, China, Slovakia, Ireland, India, Singapore, Mexico, Spain, France, Ukraine, Malaysia, Brazil, Switzerland, Austria, Indonesia, Japan, South Korea, and Australia. ATS can deliver localized service through its network of over 85 locations globally. In addition to foreign exchange risk, ATS is also subject to various other risks associated with operating in or servicing customers in foreign countries (see "Risk Factors - Doing business in foreign countries risk"). The Company is dependent upon its foreign subsidiaries to serve its multinational customer base. Management believes that ATS' scale and global footprint provide it with competitive and operational advantages in supporting large, multinational customer programs and in delivering a lifecycle-oriented service platform to customers' global operations. Expanding ATS' business in emerging markets is an important element of its strategy and, as a result, ATS' exposure to the risks of operating in foreign countries may be greater in the future. The likelihood of such occurrences and their potential effect on ATS vary from country to country and may be unpredictable.

In order to address certain of the risks associated with operations in emerging markets, ATS has adopted additional procedures relating to the internal controls of its foreign subsidiaries. For each foreign subsidiary there is a management certification process in place at the divisional General Manager, Controller, and other management levels. This certification process, as well as the entire internal control framework, is similar across all subsidiaries and business units of the Company. Also, the results of each subsidiary are reviewed at the corporate level. This control is designed to highlight any material errors in divisional reporting. Management’s assessment of internal control over financial reporting is more fully described in the Company's Annual MD&A under the heading "Internal Control over Financial Reporting."

Although ATS' operations in China are not considered material in the context of ATS' consolidated operations, the commercial and legal environment described below raises particular risks. See "Risk Factors – Risks related to operations in China". ATS' operations in China are carried out through seven wholly owned subsidiaries, each with its own legal representative (either the Chair of its Board of Directors or Executive Director or the General Manager). The Chair or Executive Director has the statutory power to represent and bind the Company without specific separate authorization. In practice, this means the legal representative will sign contracts, government filings, and other documents on behalf of the Company.

Under Chinese law, each of ATS' Chinese subsidiaries is required to have at least one supervisor. The role of the supervisor is to supervise the directors of the subsidiary and senior management to ensure they are fulfilling their fiduciary duties. In practice, since ATS' Chinese entities are owned by ATS, as sole shareholder, the supervisors of the entities generally do not exercise their powers, leaving the

General Manager to do so. Under Chinese law, a corporation established in China is required to appoint a legal representative. The legal representative may be held personally accountable for actions carried out by the applicable Chinese company. The legal representative is exposed to personal risks for acts and omissions, either individually, or by the company and its employees. The articles of ATS' Chinese subsidiaries do not provide for any variation to the role, powers, and responsibilities of the legal representative, other than those as typically provided under Chinese law. The legal representative represents the company and is responsible for performing duties and powers on behalf of the company in accordance with applicable Chinese laws and the company's articles of association. Most company registration or change filing-related formalities require the wet signature of the legal representative, however the legal representative also is typically provided a personal seal which serves as a formal signature for some other authorities or bank formalities. The legal representative's name is recorded on the Company's business license, which is publicized online.

There are certain procedures to be followed to legally remove a legal representative, directors, and officers of an entity under Chinese law, which may delay the effective date of a change in legal representative.

The minute books, seals (or chops), and records of the six Chinese subsidiaries are kept in a secure location accessible only to authorized personnel. Chinese law requires the use of chops by corporate entities for certain contracts, invoices, legal documents and financial documents. Each of the China subsidiaries has an Official Chop (used for legal documents, and announcement), Financial Chop (used for financial documents such as banking and cheques), Contract Chop (used to sign contracts with external parties), Invoice Chop (used on official company invoices), and Legal Representative Chop (used for company announcements and any other official documents that require it). These chops are essential to Chinese subsidiaries' ability to enter into contracts, conduct banking activities, and undertake day-to-day corporate and business activities.