Downer Group Capital raising presentation 28 F e b rua ry 2011 1 - - PowerPoint PPT Presentation

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Downer Group Capital raising presentation

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

28 F e b rua ry 2011

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Importa nt notic e s

Disclaimer This Presentation has been prepared by Downer EDI Limited (ABN 97 003 872 848) (Downer). Summary information This Presentation contains summary information about the current activities of Downer and its subsidiaries. The information in this Presentation does not purport to be complete nor does it contain all the information which would be required in a disclosure statement or prospectus prepared in accordance with the requirements of the Corporations Act. It should be read in conjunction with Downer’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au. No member of the Downer Group gives any warranties in relation to the statements and information in this Presentation. Not financial product advice This Presentation is for information purposes only and is not a prospectus, disclosure statement, product disclosure statement or other offering document under Australian law or under any other law. This Presentation is not a recommendation to acquire Downer shares (New Shares) and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek appropriate advice, including financial, legal and taxation advice appropriate to their jurisdiction. Downer is not licensed to provide financial product advice in respect of Downer shares. Cooling off rights do not apply to the acquisition of Downer shares. Financial data All dollar values are in Australian dollars (A$) and financial data is presented as at 31 December 2010 unless otherwise stated. The pro forma historical financial information included in this Presentation does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission. Future performance This Presentation contains certain “forward-looking statements”. The words “forecast”, “estimate”, “likely”, “anticipate”, “believe”, “expect', “project”, “opinion”, “predict”, “outlook”, “guidance”, “intend”, “should”, “could”, “may”, “target”, “plan” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements, and include statements in this Presentation regarding the conduct and outcome of the capital raising, the use of proceeds, and Downer’s outstanding debt. You are cautioned not to place undue reliance on forward looking statements. While due care and attention has been used in the preparation of forward-looking statements, forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from forward-looking statements. Downer disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. An investment in Downer shares is subject to investment and other known and unknown risks, including those summarised under “Key Risks” in this Presentation. Downer does not guarantee any particular rate of return or the performance of Downer, nor does it guarantee the repayment of capital from Downer or any particular tax treatment. Persons should have regard to the risks outlined in this Presentation. Past performance Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. The historical information in this Presentation is, or is based upon, information that has been released to the market. For further information, please see past announcements released to ASX. Not an offer This presentation, including the information contained in this disclaimer, is not a prospectus and does not form part of any offer, invitation or recommendation in respect of securities, or an offer, invitation or recommendation to sell, or a solicitation of an offer to buy, securities in the United States or to any person that is, or is acting for the account or benefit of, a “U.S. person” (as defined in Regulation S under the United States Securities Act of 1933 (Securities Act)) (U.S. Person), or in any

• ther jurisdiction in which such an offer would be illegal. The securities referred to herein may not be offered or sold in the United States, or to or for the account or benefit of, any U.S. Person, unless the securities have been registered under the

Securities Act or an exemption from the registration requirements under the Securities Act is available. The offer or sale of the securities referred to herein have not been and will not be registered under the Securities Act. The distribution of this presentation in other jurisdictions outside Australia may also be restricted by law and any such restrictions should be observed. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. Downer and the underwriters The underwriters have not authorised, permitted or caused the issue, lodgement, submission, dispatch or provision of this Presentation and does not make or purport to make any statement in this Presentation and there is no statement in this Presentation which is based on any statement by the underwriters. Downer, the underwriters and their respective affiliates, officers, employees agents and advisors, to the maximum extent permitted by law, expressly disclaim all liabilities, including, without limitation, liability for negligence in respect of, make no representations regarding, and take no responsibility for, any part of this Presentation and make no representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of information in this Presentation.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

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Ba la nc e She e t stre ng th

• Witho ut the ra ising , Do wne r wo uld mo ve b e yo nd the to p e nd o f its inte rna l ta rg e t

g e a ring ra ng e (25-35%)

• Ra ising mo ve s Do wne r to ~20% g e a ring , pro viding fle xibility in ma na g ing the b usine ss

g o ing fo rwa rd

• Do wne r ha s b e e n pla c e d o n Ra ting Wa tc h Ne g a tive b y F

itc h

• Ra ising will suppo rt Do wne r ma inta ining inve stme nt g ra de c re dit ra ting me tric s
• Pro vide s a dditio na l he a dro o m unde r fina nc ing fa c ility c o ve na nts

Cre dit ra ting a nd c o ve na nts

Ca pita l ra ising ove rvie w

• Do wne r is unde rta king a fully unde rwritte n $279 millio n c a pita l ra ising b y wa y o f a 1 fo r 4 a c c e le ra te d

re no unc e a b le e ntitle me nt o ffe r

• T

he de c isio n to pursue a c a pita l ra ising o f this size ta ke s into a c c o unt a numb e r o f fa c to rs:

• Do wne r c o ntinue s to se e sig nific a nt o ppo rtunitie s to inve st fo r g ro wth a c ro ss its b usine ss
• Mining divisio n is se e ing pa rtic ula rly stro ng de ma nd with a b ility to g e ne ra te a ttra c tive

re turns o n c a pita l

• Curre nt Mining divisio n c o ntra c ts a re funde d ho we ve r a ttra c tive e xpa nsio n a nd ne w
• ppo rtunitie s ha ve b e e n ide ntifie d with ne w a nd e xisting c lie nts

F unding fo r g ro wth

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

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Offe r size a nd struc ture

• 1 fo r 4 a c c e le ra te d re no unc e a b le pro -ra ta 1 e ntitle me nt o ffe r to ra ise a ppro xima te ly A$279 millio n
• Appro xima te ly 86 millio n ne w Do wne r o rdina ry sha re s to b e issue d (25% o f issue d c a pita l)
• T

he o ffe r is fully unde rwritte n

No te s: 1 T he re will no t b e a ny e ntitle me nts tra d ing o n ASX 2 T he the o re tic a l e x-rig hts pric e is the the o re tic a l pric e a t whic h Do wne r sha re s sho uld tra d e imme dia te ly a fte r the e x-d a te fo r the e ntitle me nt o ffe r a ssuming 100% ta ke -up o f the o ffe r. T he the o re tic a l e x-rig hts pric e is a the o re tic a l c a lc ula tio n o nly a nd the a c tua l pric e a t whic h Do wne r sha re s tra de imme dia te ly a fte r the e x-d a te fo r the e ntitle me nt o ffe r will de p e nd o n ma ny fa c to rs a nd ma y no t b e e q ua l to the the o re tic a l e x-rig hts pric e 3 Da te s a re indic a tive o nly a nd sub je c t to c ha ng e . All time s a nd d a te s re fe r to Austra lia n E a ste rn Da ylig ht Sa ving T ime (AE DT ) while in e ffe c t a nd o the rwise to Austra lia n E a ste rn Sta nd a rd T ime

• A$3.25 pe r sha re
• 17.1% disc o unt to Do wne r’ s c lo sing pric e o n F

rida y 25 F e b rua ry 2011

• 14.2% disc o unt to the o re tic a l e x-rig hts pric e (T

E RP)2

Offe r pric e

• I

nstitutio na l e ntitle me nt o ffe r o pe n fro m 10:00a m Mo nda y 28 F e b rua ry 2011 to 11:00a m (AE DT ) T ue sda y 1 Ma rc h 2011

• E

ntitle me nts no t ta ke n up will b e pla c e d into the institutio na l sho rtfa ll b o o kb uild to b e c o nduc te d fro m 4:30pm (AEDT ) T ue sda y 1 Ma rc h to 11:00a m (AEDT ) We dne sda y 2 Ma rc h 2011

I nstitutio na l e ntitle me nt

• ffe r
• Re ta il e ntitle me nt o ffe r o pe n fro m 9.00a m (AE

DT ) T ue sda y 8 Ma rc h 2011 to 5.00pm (AE DT ) We dne sda y 23 Ma rc h 2011

• E

ntitle me nts no t ta ke n up will b e pla c e d into the re ta il sho rtfa ll b o o kb uild to b e c o nduc te d o n Mo nda y 28 Ma rc h 2011

Re ta il e ntitle me nt

• ffe r
• 7:00pm (AE

DT ) o n T hursda y 3 Ma rc h 2011

Re c o rd da te

Offe r de ta il summa ry

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

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Pro- forma Downe r ba la nc e she e t Ke y c re dit me tric s

31- De c - 2010 Pr

• forma post ra ising

Ge a ring (%) 1 35.7 19.9

• Adj. Ne t de b t/ Adj. E

BI T DAR (x) 2 2.7 2.3 I nte re st Se rvic e Co ve r ra tio (x) 3 3.49 3.49

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Ne t de b t inc luding ma rk-to -ma rke t re va lua tio n a djustme nts o f ($52.6) millio n/ (ne t de b t + swa p a djustme nts + b o o k e q uity) 2 Adjuste d Ne t De b t inc lude s Ne t De b t plus 6x o pe ra ting le a se pa yme nt in the ye a r. Adjuste d E BI T DAR e q ua ls unde rlying E BI T DAR a djuste d fo r

• pe ra ting le a se pa yme nts in the ye a r

3 Ra tio is histo ric o nly (6 mo nths to De c e mb e r 2010) a nd he nc e is no t impa c te d b y ra ising until future pe rio ds

A$m 31- De c - 2010 Adjustme nts1 Pr

• - forma post ra ising

Ca sh a nd c a sh e q uiva le nts 322.5 269.0 591.5 Pro pe rty, pla nt a nd e q uipme nt 971.2 – 971.2 Othe r a sse ts 2,119.7 3.0 2,122.7

T

• ta l a sse ts

3,413.4 272.0 3,685.4

Gro ss de b t (Bo rro wing s) 878.2 – 878.2 T ra de a nd o the r pa ya b le s 1,012.5 – 1,012.5 Othe r lia b ilitie s 427.2 – 427.2

T

• ta l L

ia bilitie s 2,317.9

–

2,317.9 Ne t a sse ts/ E quity 1,095.5 272.0 1,367.5

No te : 1 Assume s pro c e e ds fro m the e ntitle me nt o ffe r o f a p pro xima te ly $279 millio n b a se d o n the o ffe r pric e le ss a ssume d tra nsa c tio n c o sts o f $10 millio n

Ba la nc e she e t impa c t

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

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E ve nt Da te

T ra ding ha lt c o mme nc e s, institutio na l e ntitle me nt o ffe r o pe ns Mo nda y 28 F e b rua ry I nstitutio na l e ntitle me nt o ffe r c lo se s T ue sda y 1 Ma rc h 11:00a m I nstitutio na l sho rtfa ll b o o kb uild T ue sda y 1 Ma rc h 4:30pm to We dne sda y 2 Ma rc h 11:00a m T ra ding ha lt lifte d T hursda y 3 Ma rc h Re c o rd da te T hursda y 3 Ma rc h (7:00pm AE DT ) Re ta il e ntitle me nt o ffe r o pe ns T ue sda y 8 Ma rc h I nstitutio na l e ntitle me nt o ffe r se ttle me nt T ue sda y 15 Ma rc h Allo tme nt o f sha re s unde r the institutio na l e ntitle me nt o ffe r a nd institutio na l sho rtfa ll b o o kb uild 1 We dne sda y 16 Ma rc h Re ta il e ntitle me nt o ffe r c lo se s We dne sda y 23 Ma rc h (5:00pm AE DT ) Re ta il sho rtfa ll b o o kb uild Mo nda y 28 Ma rc h Re ta il e ntitle me nt o ffe r a nd re ta il sho rtfa ll b o o kb uild se ttle me nt T hursda y 31 Ma rc h F ina l a llo tme nt o f sha re s unde r the re ta il o ffe r a nd sho rtfa ll b o o kb uild F rida y 1 April

No te : 1 T ra ding o f Ne w Sha re s und e r the institutio na l e ntitle me nt o ffe r a nd sho rtfa ll b o o kb uild is a lso e xp e c te d to c o mme nc e o n this da te 2 Da te s a nd time s a re indic a tive o nly a nd a re sub je c t to c ha ng e . All da te s a re 2011 a nd time s re fe r to AE DT

Offe r time ta ble

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

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Busine ss Spe c ific Risks

L e ve l of e c onomic a c tivity

Do wne r’ s o p e ra tio na l a nd fina nc ia l p e rfo rma nc e is linke d to b o th the o ve ra ll le ve l o f a c tivity in the e c o no my a nd the le ve l o f o utso urc ing in the se c to rs in whic h Do wne r o p e ra te s. A re duc tio n in e c o no mic a c tivity, a nd pa rtic ula rly a re d uc tio n in d e ma nd fo r the c o mmo ditie s pro duc e d b y ma ny o f Do wne r’ s la rg e r c lie nts, o r a re duc tio n in the le ve l o f o utso urc ing in the se c to rs in whic h Do wne r o p e ra te s, is like ly to ne g a tive ly impa c t the le ve l o f e a rning s g e ne ra te d b y Do wne r.

L e ve l of g ove r nme nt spe nding

Pub lic a utho ritie s in Austra lia , Ne w Ze a la nd a nd Sing a p o re a re ma jo r c lie nts o f Do wne r. Cha ng e s in prio ritisa tio n o f g o ve rnme nt sp e nding o r re stric tio ns o n the le ve l o f spe nding und e rta ke n b y g o ve rnme nts c o uld impa c t the le ve l o f e a rning s g e ne ra te d b y Do wne r.

Ca pita l E xpe nditure

Ce rta in a sp e c ts o f Do wne r's o p e ra tio ns a re re lia nt o n sig nific a nt c a p ita l inve stme nt b e ing ma d e in o rd e r fo r Do wne r to pro vide se rvic e s to its c usto me rs. Do wne r's

• ng o ing a b ility to a ttra c t c usto me rs in re sp e c t o f ne w pro je c ts a nd to c o mply with its o b lig a tio ns in re sp e c t o f e xisting c o ntra c ts ma y b e d e pe nd e nt o n suffic ie nt

funds b e ing a va ila b le to Do wne r in re sp e c t o f this c a pita l e xp e nditure . T he re is no g ua ra nte e tha t Do wne r will b e a b le to ma ke the ne c e ssa ry c a pita l e xp e nditure in a time a nd ma nne r ne c e ssa ry to me e t c usto me r d e ma nds a t the re le va nt time .

Busine ss inte rr uptions

Sig nific a nt b usine ss inte rrup tio ns a s a re sult o f na tura l disa ste rs (suc h a s fire , e a rthq ua ke , flo o d o r c yc lo ne ), g e ne ra l p e rio ds o f pro lo ng e d ra in, unsta b le se rvic e site s o r re g ula to ry inte rve ntio n ma y ha ve a ma te ria lly a dve rse imp a c t o n the b usine ss a c tivitie s o f Do wne r a nd its c lie nts a nd ma y le a d to a d e c re a se in pro fita b ility a nd e a rning s

We t We a the r

Do wne r's a b ility to und e rta ke so me o f its o p e ra tio ns, p a rtic ula rly in the Wo rks Austra lia a nd Mining divisio ns, is d e p e nd e nt o n we a the r c o nditio ns. F

• r the Mining

divisio n, the re is a risk tha t susta ine d p e rio ds o f ra in ma y ha mp e r the mine s' a b ility to ma inta in mining o utp ut le ve ls a nd ma y imp a c t Do wne r's a b ility to a c c e ss the mine a nd unde rta ke o p e ra tio ns. F

• r the Wo rks Austra lia divisio n, the re is a risk tha t susta ine d p e rio ds o f ra in ma y imp a c t Do wne r's a b ility to und e rta ke ro a d

c o nstruc tio n a nd ma inte na nc e se rvic e s, le a ding to re duc e d a c tivity le ve ls.

Industria l inc ide nts a nd ac c ide nts

While Do wne r ma inta ins a rig o ro us fo c us o n Ze ro Ha rm fo r its e mplo ye e s a nd e nviro nme nt, a n ind ustria l inc id e nt ma y o c c ur tha t re sults in se rio us injury o r d e a th, da ma g e to pro p e rty o r c o nta mina tio n o f the e nviro nme nt. Suc h inc id e nts a nd a ny industria l dispute s c a n a dve rse ly impa c t o n pro je c t c o mple tio n. Oc c up a tio na l he a lth a nd sa fe ty me tric s a re impo rta nt b e nc hma rks fo r c lie nts o f Do wne r. T he re is a risk tha t sho uld a n industria l inc ide nt o c c ur within Do wne r’ s o p e ra tio ns tha t re sults in injury o r de a th o r sig nific a nt e nviro nme nta l da ma g e , Do wne r ma y suffe r re puta tio na l da ma g e imp a c ting its a b ility to se c ure o r re ta in c usto me r c o ntra c ts. I n a d ditio n, if Do wne r fa ils to c o mply with the ne c e ssa ry o c c upa tio na l he a lth a nd sa fe ty le g isla tive re q uire me nts a c ro ss the jurisdic tio ns in whic h it o p e ra te s, it c o uld re sult in fine s, p e na ltie s a nd c o mp e nsa tio n fo r da ma g e s a s we ll a s re puta tio na l d a ma g e fo r Do wne r.

Insura nc e

T he a va ila b ility o f insura nc e a t a n a ppro pria te te rm a nd pric e is no t g ua ra nte e d. I t is p o ssib le tha t the o c c urre nc e o f a n e ve nt ma y no t b e fully c o ve re d , o r c o ve re d a t a ll, b y insura nc e .

K e y Risk F a c to rs

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

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Busine ss Spe c ific Risks (Co nt)

Ke y c ontra c ts

A numb e r o f c o ntra c ts tha t Do wne r e nte rs into a re lo ng te rm c o ntra c ts with re c urring re ve nue s b ut a re te rmina b le o n sho rt no tic e . T he re is a risk tha t ke y c o ntra c ts ma y no t b e re ne we d , ma y b e re ne we d o n le ss fa vo ura b le te rms o r ma y b e c a nc e lle d , whic h ma y le a d to a d e c re a se in pro fita b ility a nd e a rning s. I n a d ditio n, due to the na ture o f its b usine ss, Do wne r is fro m time to time no t in c o mplia nc e with a ll the te rms o f its ke y c o ntra c ts. Co rre sp o nding ly, no t a ll pa rtie s who d e a l with Do wne r a re in full c o mplia nc e with the te rms o f c o ntra c ts whe re the y ha ve c o ntra c tua l o b lig a tio ns to Do wne r. Whe re this a rise s, it is usua l in the ind ustry fo r ne g o tia tio ns to

• c c ur b e twe e n c o ntra c ting p a rtie s a nd , in so me c a se s fo r this to b e fo llo we d b y me dia tio n, a rb itra tio n o r litig a tio n. T

he c o nse q ue nc e s o f a pa rty te rmina ting a ke y c o ntra c t o r se e king o the r re me die s c o uld ha ve a ma te ria l a d ve rse imp a c t o n Do wne r. Ho we ve r, the e xp e rie nc e o f this o c c urring is unusua l in the industry a nd the Co mpa ny's b usine ss re la tio nships.

Compe tition a nd c ontr a c t r e te ntion

T he ma rke ts in whic h Do wne r o p e ra te s a re c o mp e titive , with the ma jo rity o f the se rvic e s pro vide d b y Do wne r a lso a va ila b le fro m c o mp e ting c o mp a nie s. I nc re a sing c o mp e titio n c o uld imp a c t o n Do wne r’ s a b ility to win ne w wo rk a nd the ma rg in it re c e ive s o n the ne w wo rk. Do wne r ma y lo se b usine ss to its c o mp e tito rs if it is una b le to d e mo nstra te c o mp e titive pric ing , re lia b le p e rfo rma nc e , a nd te c hnic a l c o mp e te nc e to its c usto me rs.

Ke y supplie r r isk

Whe re Do wne r is re lia nt o n o ne o r a sma ll se t o f ke y supplie rs to pro vide g o o d s a nd se rvic e s, the p e rfo rma nc e o f the se sup p lie rs will impa c t Do wne r’ s a b ility to c o mple te pro je c ts a nd e a rn pro fits. Whe re sup plie rs d o no t fulfil c o ntra c tua l o b lig a tio ns o r do no t ro ll o ve r pre -e xisting c o ntra c ts, the a b ility o f Do wne r to c o mple te pro je c ts a nd win ne w wo rk ma y b e re duc e d . I n a d ditio n, the re a re p a rtic ula r supplie rs with who m Do wne r ha s a lo ng te rm re la tio nship whic h sup po rt Do wne r’ s b usine ss a c tivitie s. A c ha ng e in re la tio nship with the se sup plie rs c o uld ne g a tive ly impa c t Do wne r’ s fina nc ia l p e rfo rma nc e . Do wne r ha s e xpo sure to the p ric e o f c o mmo ditie s use d in its o pe ra tio ns. Any a dve rse c ha ng e in the pric ing o f the se ite ms c o uld impa c t unfa vo ura b ly o n the pro fita b ility o f the b usine ss. Do wne r a lso ha s a la rg e c a pita l e q uipme nt fle e t whic h is sub je c t to a va ila b ility o f ma jo r spa re pa rts suc h a s tyre s fo r mining e q uipme nt. Ne w c o ntra c ts o fte n re q uire the a c q uisitio n o f ne w e q uipme nt a nd the timing o f purc ha se is d e pe nd e nt upo n a va ila b ility fro m supplie rs in a wo rld ma rke t.

F ixe d pric e c ontra c t risk

So me o f the c o ntra c ts tha t Do wne r e nte rs into inc lude pro visio ns c a p ping the ma ximum tha t Do wne r c a n c ha rg e the c lie nt und e r the c o ntra c t. T

• the e xte nt tha t the

c o st o f d e live ring o n its c o ntra c tua l o b lig a tio ns e xc e e ds the a g re e d c a p , the n Do wne r is like ly to inc ur lo sse s.

Ke y pe rsonne l a nd la bour shorta g e

Do wne r’ s g ro wth a nd pro fita b ility ma y b e limite d b y the lo ss o f ke y o p e ra ting p e rso nne l, the ina b ility to a ttra c t ne w suita b ly q ua lifie d p e rso nne l o r b y inc re a se s in c o mp e nsa tio n c o sts a sso c ia te d with a ttra c ting a nd re ta ining p e rso nne l. Do wne r is de p e nde nt o n the a va ila b ility o f suita b ly skille d la b o ur to pro vide its se rvic e s a nd the re fo re , a c c e ss to la b o ur re p re se nt a n o ng o ing risk to the b usine ss.

K e y Risk F a c to rs (Co nt)

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

9

Busine ss Spe c ific Risks (Co nt)

E nvironme nta l risk a nd re g ula tion

Do wne r a nd the industrie s in whic h it o p e ra te s a re sub je c t to a b ro a d ra ng e o f e nviro nme nta l la ws, re g ula tio ns a nd sta nd a rds (inc luding c e rta in lic e nsing re q uire me nts). T his re sults in sig nific a nt c o mplia nc e c o sts a nd c o uld e xpo se Do wne r to le g a l lia b ilitie s o r pla c e limita tio ns o n the d e ve lo pme nt o f its o p e ra tio ns. I n a d ditio n the re is a risk tha t pro p e rty utilise d b y Do wne r fro m time to time ma y b e c o nta mina te d b y ma te ria ls ha rmful to huma n he a lth (suc h a s a sb e sto s a nd o the r ha za rdo us ma te ria ls). I n the se situa tio ns Do wne r ma y b e re q uire d to und e rta ke re me d ia l wo rks o n c o nta mina te d site s a nd ma y b e e xpo se d to third p a rty c o mp e nsa tio n c la ims a nd o the r e nviro nme nta l lia b ilitie s.

Produc t a nd se rvic e s liability

T he re is a risk tha t Do wne r ma y fa il to fulfil its sta tuto ry a nd c o ntra c tua l o b lig a tio ns in re la tio n to the q ua lity o f its se rvic e s, whic h c o uld g ive rise to c o ntra c tua l da ma g e s o r sta tuto ry p e na ltie s.

F uture divide nds a nd fra nking c a pa c ity

Give n tha t Do wne r is ra ising c a pita l fro m sha re ho ld e rs a nd ha s no a va ila b le fra nking c re dits to distrib ute , the Bo a rd ha s d e c id e d no t to d e c la re a n inte rim divid e nd with re sp e c t to the ha lf ye a r e nd e d 31 De c e mb e r 2011. Do wne r’ s und e rlying c a sh flo ws re ma in ro b ust a nd Do wne r e xp e c ts to re sume pa ying divid e nds a t the full ye a r, sub je c t to the d e c isio n o f the Bo a rd a t tha t time . Any future divid e nds a nd the le ve l o f fra nking will b e d e te rmine d b y the Bo a rd o f Do wne r ha ving re g a rd to a ra ng e o f fa c to rs inc luding the Gro up , the a va ila b ility o f c a sh, c a pita l re q uire me nts o f the b usine ss a nd o b lig a tio ns und e r d e b t instrume nts. T he re is no g ua ra nte e tha t a ny divide nd will b e p a id b y Do wne r o r, if pa id , tha t the y will b e p a id a t pre vio us le ve ls, o r with the sa me le ve l o f fra nking .

Infor ma tion te c hnology

Do wne r’ s b usine ss is de p e nde nt o n the e ffic ie nt o p e ra tio n o f info rma tio n te c hno lo g y syste ms. F a ilure o f suc h syste ms c o uld re sult in b usine ss inte rrup tio n, the lo ss o f c usto me rs, d a ma g e d re puta tio n a nd a we a ke ning o f its c o mp e titive po sitio n, p a rtic ula rly whe re sub stitute te c hno lo g y syste ms a re no t a va ila b le o n a c c e p ta b le te rms. Additio na lly, the use b y c o mp e tito rs o f a lte rna tive , sup e rio r te c hno lo g ie s ma y po se a thre a t to Do wne r’ s pro fita b ility a nd ma rke t sha re .

De sig n lia bility a nd de fe c t r e c tific ation

So me e ntitie s in the Do wne r Gro up a re sub je c t to no rma l d e sig n lia b ility in re la tio n to c o mple te d d e sig n a nd c o nstruc tio n pro je c ts whe re tha t e ntity ha s ha d de sig n re spo nsib ility a nd in so me c a se s a lso c o nstruc tio n re sp o nsib ility. T he lia b ility ma y inc lude c la ims, dispute s a nd/ o r litig a tio n a g a inst Do wne r Gro up c o mpa nie s a nd/ o r jo int ve nture a rra ng e me nts in whic h the Do wne r Gro up ha s a n inte re st. I t ma y a lso inc lud e a n o b lig a tio n o n Do wne r to re c tify the d e sig n d e fe c ts a t its o wn c o st. T he dire c to rs a re o f the o pinio n tha t the re is a d e q ua te insura nc e to c o ve r the se p o te ntia l lia b ilitie s a nd a c c o rding ly, no a mo unts a re re c o g nise d in the fina nc ia l sta te me nts.

Pa rtne rships a nd joint ve nture s

Co ntro lle d e ntitie s ha ve e nte re d into va rio us pa rtne rships a nd jo int ve nture s und e r whic h the c o ntro lle d e ntity c o uld ultima te ly b e jo intly a nd se ve ra lly lia b le fo r the

• b lig a tio ns o f the p a rtne rship o r jo int ve nture .

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

K e y Risk F a c to rs (Co nt)

10

K e y Risk F a c to rs (Co nt)

Busine ss Spe c ific Risks (Co nt)

Asse t impa irme nt

As a c o nse q ue nc e o f the g lo b a l fina nc ia l c risis, the Austra lia n Se c uritie s a nd I nve stme nts Co mmissio n ha s sp e c ific a lly ide ntifie d impa irme nt o f a sse ts a s a n issue fo r Austra lia n c o mpa nie s. T he Do wne r Bo a rd re g ula rly mo nito rs impa irme nt risk. Co nsiste nt with a c c o unting sta nd a rds, Do wne r is p e rio dic a lly re q uire d to a sse ss the c a rrying va lue s o f its a sse ts. Whe re the va lue o f a n a sse t is to b e le ss tha n its c a rrying va lue , Do wne r is o b lig e d to re c o g nise a n imp a irme nt c ha rg e in its pro fit a nd lo ss a c c o unt. I mpa irme nt c ha rg e s c a n b e sig nific a nt a nd o p e ra te to re duc e the le ve l o f a c o mpa ny’ s pro fits a nd p o te ntia lly, its c a p a c ity to pa y divid e nds. I mpa irme nt c ha rg e s a re a no n-c a sh ite m.

Gua ra nte e s a nd inde mnitie s

Do wne r a nd c e rta in o f its c o ntro lle d e ntitie s a re c a lle d upo n to g ive g ua ra nte e s a nd ind e mnitie s in re sp e c t o f the p e rfo rma nc e b y c o unte rpa rtie s, inc luding c o ntro lle d e ntitie s a nd re la te d pa rtie s, o f the ir c o ntra c tua l a nd fina nc ia l o b lig a tio ns. T he se g ua ra nte e s a nd ind e mnitie s a re g e ne ra lly inde te rmina b le in a mo unt.

L itig a tion

Do wne r is sub je c t to the usua l b usine ss risk tha t dispute s o r litig a tio n ma y a rise fro m time to time in the c o urse o f its b usine ss a c tivitie s. Do wne r is c urre ntly invo lve d in a numb e r o f litig a tio n pro c e sse s, whic h if d e c id e d unfa vo ura b ly fo r Do wne r wo uld ha ve a fina nc ia l c o st fo r Do wne r. T his le ve l o f litig a tio n is no t unusua l in the c o nte xt o f Do wne r’ s b usine ss o r inc o nsiste nt with the p a st e xp e rie nc e o f the Do wne r Gro up . T he Do wne r Gro up is c urre ntly ma na g ing a numb e r o f c la ims/ dispute s in re la tio n to c o ntra c ts, the mo st sig nific a nt o f whic h a re se t o ut b e lo w. a ) A c la im o f a p pro xima te ly SGD85 millio n b y SP Po we rAsse ts L td in re la tio n to the c o nstruc tio n o f a n e le c tric a l se rvic e s tunne l in Sing a po re . T he suc c e ss o f Do wne r’ s d e fe nc e d e p e nds up o n the d e te rmina tio n o f c o mple x le g a l a nd fa c tua l ma tte rs. T he ma tte r will b e c lo se ly mo nito re d a s furthe r info rma tio n b e c o me s a va ila b le a s the a rb itra tio n pro c e e ds. b ) A c la im b y Sie me ns L td in re la tio n to re me dia tio n wo rks o n the e xha ust syste m o f the L a ve rto n Po we r Sta tio n in Vic to ria . Do wne r ha s sub mitte d a c la im o f $14.2 millio n a nd Sie me ns ha ve ma de a c o unte rc la im o f $17.5 millio n. Do wne r do e s no t e xp e c t tha t this c la im will re sult in a ma te ria l lia b ility. c ) I n De c e mb e r 2009, Pa tric k Ste ve do re Op e ra tio ns Pty L imite d a djo ine d E mo le um Ro a d Se rvic e s Pty L imite d a nd E mo le um Ro a ds Gro up Pty L imite d (a c q uire d b y Do wne r o n 28 F e b rua ry 2006) a s fifth a nd sixth d e fe nd a nts in a ma tte r re la te d to its Po rt Bo ta ny T e rmina l in Sydne y. Do wne r do e s no t e xp e c t tha t this c la im will re sult in a ma te ria l lia b ility. d ) An unq ua ntifie d c la im b y Se mb a wa ng E ng ine e rs a nd Co nstruc to rs Pte L td in re la tio n to the d e sig n o f te mpo ra ry wo rk o n a c o nstruc tio n pro je c t. An a rb itra tio n is sc he dule d to c o mme nc e in July 2011. e ) I MF (Austra lia ) L td ha s a nno unc e d to the ASX tha t it pro po se s to fund c la ims o f c e rta in c urre nt a nd fo rme r Do wne r sha re ho ld e rs a g a inst Do wne r. T he c la im re la te s to Do wne r’ s $190 millio n imp a irme nt to its Wa ra ta h ro lling sto c k ma nufa c turing c o ntra c t a nno unc e d o n 1 June 2010. Do wne r d o e s no t c urre ntly ha ve suffic ie nt info rma tio n to ma ke a ny me a ning ful a sse ssme nt o f the po te ntia l c la ims. No pro visio n ha s b e e n ma d e in the fina nc ia l sta te me nts in re sp e c t o f this.

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11

F ina nc ia l Risks

Continue d ac c e ss to c apita l ma r ke ts

Do wne r’ s a b ility to se rvic e its e xisting d e b t will d e p e nd o n its future p e rfo rma nc e a nd c a sh flo ws, whic h in turn will b e a ffe c te d b y va rio us fa c to rs, c e rta in o f whic h a re

• utsid e o f its c o ntro l (suc h a s c ha ng e s in inte re st a nd fo re ig n e xc ha ng e ra te s, a nd g e ne ra l e c o no mic c o nditio ns). Any ina b ility to se rvic e its e xisting d e b t ma y ha ve a

ma te ria l a dve rse e ffe c t o n Do wne r. F urthe r, to the e xte nt tha t a d ditio na l e q uity o r d e b t funding is no t a va ila b le fro m time to time o n a c c e p ta b le te rms, Do wne r ma y no t b e a b le to ta ke a dva nta g e o f a c q uisitio n a nd o the r g ro wth o p po rtunitie s, d e ve lo p ne w b usine ss o r re spo nd to c o mp e titive pre ssure s.

Re fina nc ing re quir e me nts

Whe re e xisting lo a ns e ithe r a p pro a c h o r re a c h ma turity, Do wne r ma y se e k to re -ne g o tia te with e xisting a nd ne w le nd e rs to e xte nd the ma turity d a te o f tho se lo a ns. Do wne r’ s e a rning s pro file , c re dit ra ting , sta te o f the e c o no my, a nd o the r fa c to rs ma y influe nc e the o utc o me o f tho se ne g o tia tio ns. Whe re re fina nc ing o c c urs a t a hig he r c o st, this ma y imp a c t the a b ility o f Do wne r to win ne w wo rk a nd the p ro fita b ility o f its o p e ra tio ns.

Bre a c h of c ove na nts

Do wne r ha s va rio us c o ve na nts in re la tio n to its b a nking fa c ilitie s. F a c to rs suc h a s inc re a se s in b a se ra te s, inc re a se d b o rro wing s a nd we a k o p e ra tio na l p e rfo rma nc e c o uld le a d to Do wne r b re a c hing its d e b t c o ve na nts. I n c e rta in c irc umsta nc e s, le nd e rs ma y re q uire tha t suc h b a nking fa c ilitie s b e re pa id imme dia te ly. Und e r suc h a sc e na rio , the re is no g ua ra nte e tha t Do wne r will b e a b le to se c ure a lte rna tive fina nc ing o n c o mme rc ia lly a c c e p ta b le te rms o r a t a ll.

Cre dit ra ting s

Cha ng e s to Do wne r’ s c re dit ra ting b y F itc h ma y impa c t the a b ility o f Do wne r to win ne w wo rk a s we ll a s the c o st o f funding . Whe re the c re dit ra ting is re duc e d, o r pla c e d o n ne g a tive wa tc h, c usto me rs a nd supplie rs ma y b e le ss willing to c o ntra c t with Do wne r a s Do wne r ma y b e c o nsid e re d to b e hig he r c o unte rp a rty risk. Ba nks a nd o the r le nding institutio ns ma y d e ma nd a hig he r inte re st ra te o n funds p ro vide d to Do wne r to re fle c t the hig he r risk o f le nd ing . I n suc h c irc umsta nc e s, b o th the re ve nue a nd pro fita b ility o f Do wne r ma y b e re duc e d .

Impa c t of inte r e st r a te move me nts

While Do wne r ta ke s re a so na b le ste p s to pro te c t itse lf thro ug h the use o f he dg e s, rising inte re st ra te s ma y no ne the le ss a dve rse ly impa c t Do wne r’ s inte re st pa yme nts

• n its flo a ting ra te b o rro wing s a nd infla tio n in und e rlying input c o sts ma y a lso a dve rse ly impa c t the a ntic ipa te d re turne d fro m c lie nt o p e ra tio ns.

Impa c t of for e ig n e xc ha ng e move me nts

Do wne r o p e ra te s inte rna tio na lly a nd fa c e s fo re ig n e xc ha ng e ra te risks a sso c ia te d with fo re ig n c urre nc y d e no mina te d d e b t, input c o sts a nd o ffsho re e a rning s.

K e y Risk F a c to rs (Co nt)

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

12

K e y Risk F a c to rs (Co nt)

Suc c e ssful c omple tion of te sting

Do wne r is c urre ntly c o mple ting te sting o f the first Wa ra ta h T ra in to b e pre se nte d to Ra ilCo rp fo r a c c e p ta nc e . I ssue s id e ntifie d in c o mple tio n o f this te sting c o uld furthe r de la y de live ry o f tra ins to Ra ilCo rp a nd re sult in a dditio na l c o st b e ing inc urre d b y Do wne r.

Ra ilCorp a c c e pta nc e

Do wne r’ s re vise d pro duc tio n sc he dule is sub je c t to Ra ilCo rp’ s a c c e p ta nc e o f the tra ins fo r p ra c tic a l c o mple tio n. Any de c isio n b y Ra ilCo rp no t to a c c e p t a tra in o r tra ins pre se nte d b y Do wne r fo r pra c tic a l c o mple tio n c o uld re sult in furthe r d e la ys to the pro je c t d e live ry sc he dule a nd re sult in a dditio na l c o sts b e ing inc urre d b y Do wne r.

Pe r for ma nc e of tr a ins in se r vic e

Onc e tra ins ha ve b e e n d e live re d a nd a c c e pte d b y Ra ilCo rp a nd e nte re d p a sse ng e r se rvic e , the tra ins must me e t c e rta in p e rfo rma nc e thre sho lds. F a ilure o f the tra ins to me e t the re q uire d b e nc hma rks is like ly to re sults in a dditio na l c o sts b e ing inc urre d b y Do wne r.

Produc tion qua lity

I f Do wne r a nd its pro duc tio n p a rtne r CRC a re no t a b le to ma nufa c ture tra ins to the q ua lity sta nd a rd re q uire d , Do wne r ma y inc ur a dd itio na l c o sts in und e rta king re wo rk

• n tho se ve hic le s tha t ma y e xc e e d a mo unts c urre ntly pro vide d fo r.

Spe e d of produc tion a nd a c c e pta nc e ra te

I f Do wne r is no t a b le to ma nufa c ture tra ins a t the ra te re q uire d to me e t its re vise d pro duc tio n sc he dule o r it is no t a b le to a g re e a d e live ry time ta b le with Ra ilCo rp in line with its re vise d pro d uc tio n ra te , the n a dditio na l c o sts ma y b e inc urre d b y Do wne r a b o ve tho se c urre ntly pro vide d fo r.

Re c r uitme nt of ke y pe r sonne l

Do wne r ha s id e ntifie d a ne e d to re c ruit a numb e r o f a dditio na l se nio r p e rso nne l to a ssist with the Wa ra ta h Pro je c t. I f Do wne r is no t a b le to re c ruit a ppro pria te ly e xp e rie nc e d p e rso nne l within a re a so na b le time fra me this ma y impa c t o n Do wne r’ s a b ility to d e live r the Wa ra ta h T ra ins in line with its re vise d pro duc tio n sc he dule .

T hroug h L ife Support (T L S) c ontra c t

Do wne r ha s a c o ntra c t with Ra ilCo rp fo r T hro ug h L ife Sup po rt ma inte na nc e o f the Wa ra ta h fle e t fo r a 30 ye a r p e rio d to c o mme nc e fro m the d a te o f pra c tic a l c o mple tio n o f the first tra in. Sho uld the Wa ra ta h tra ins no t me e t the p e rfo rma nc e le ve ls re q uire d in the c o ntra c t, Do wne r will no t g e ne ra te the e xp e c te d pro fit o n the c o ntra c t, o r in the c a se o f sig nific a nt und e rp e rfo rma nc e c o uld inc ur lo sse s.

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

Wa ra ta h Co ntra c t Risks

T he Wa ra ta h T ra in c o ntra c t is a Ro lling Sto c k De sig n a nd Ma nufa c ture c o ntra c t with Re lia nc e Ra il fo r a to ta l o f 78 pa sse ng e r tra in se ts fo r use o n the Ne w So uth Wa le s ra il ne two rk. T he c o ntra c t is la rg e sc a le , is c o mple x in sp e c ific a tio n a nd invo lve s de sig n a nd ma nufa c turing in b o th Austra lia a nd China . I n o rde r to me e t the re vise d pro duc tio n pla n a nd a vo id a ny ma te ria l furthe r inc re a se s to the fo re c a st c o sts to c o mple tio n, a numb e r o f impro ve me nt pro c e sse s ne e d to b e imple me nte d inc luding re c ruitme nt drive s a nd pro duc tio n fa c ility re o rg a nisa tio n. De ta ils o f the pla ne d impro ve me nt pro c e sse s a re se t o ut in the Wa ra ta h Up d a te Pre se nta tio n lo dg e d with ASX o n 28 F e b rua ry 2011. Do wne r ha s a pa re nt c o mpa ny g ua ra nte e in re la tio n to the Ro lling Sto c k De sig n a nd Ma nufa c ture c o ntra c t with Re lia nc e Ra il o f A$1.2 b illio n.

13

K e y Risk F a c to rs (Co nt)

Wa ra ta h Co ntra c t I ndire c t Risks

Re lia nc e Ra il’ s funding a rra ng e me nts a re o n a no n-re c o urse b a sis to Do wne r, a nd Do wne r is no t o b lig e d to pro vide furthe r e q uity to Re lia nc e Ra il. Additio na lly, in the e ve nt tha t Re lia nc e Ra il’ s fina nc ing wa s to fa il, the c o ntra c ting a rra ng e me nts fo r the pro je c t g ive Ra ilCo rp (o r le nd e rs) the o p tio n o f ste p p ing into the pla c e o f Re lia nc e Ra il to e na b le Do wne r to c o ntinue d e live ry o f the tra in se ts und e r its c o ntra c t. I f this did no t o c c ur, ho we ve r, a nd Re lia nc e Ra il d e fa ulte d und e r the c o ntra c t, Do wne r is like ly to inc ur c o sts re la ting to e xisting c o mmitme nts to sup plie rs a nd sub c o ntra c to rs. T he issue s tha t ma y a ffe c t the via b ility o f Re lia nc e Ra il inc lude the fo llo wing .

Pote ntia l de fa ult by monoline insure rs

Re lia nc e Ra il c urre ntly ha s a $357 millio n b a nk c o nstruc tio n lo a n fa c ility whic h is g ua ra nte e d b y two sp e c ia list fina nc ia l g ua ra nto rs, F GI C (UK) L td a nd Sync o ra Gua ra nte e I nc (“mo no line insure rs”), ho we ve r this fa c ility ma y b e withdra wn und e r c e rta in c irc umsta nc e s prio r to the sc he d ule d dra wd o wn d a te c o mme nc ing in F e b rua ry 2012. T he fa c ility c o nta ins a te rmina tio n pro visio n tha t in the e ve nt o f the inso lve nc y o f b o th mo no line insure rs, the b a nks ha ve a rig ht to te rmina te a ny undra wn c o mmitme nts. Sinc e 2009, the mo no line insure rs ha ve b e e n a dve rse ly a ffe c te d b y the g lo b a l fina nc ia l c risis a nd the fina nc ia l po sitio n o f b o th mo no line insure rs re ma in unc e rta in, a ltho ug h the y a re still o p e ra ting . I f b o th the mo no line insure rs d e fa ult, the $357 millio n undra wn fa c ility c o uld b e c a nc e lle d b y the b a nking syndic a te if thre e o f the fo ur b a nks re so lve to do so .

Curre nt Re lia nc e Ra il fina nc ing

On the o c c urre nc e o f a pre sc rib e d e ve nt o f d e fa ult, it is po ssib le tha t the le nd e rs pro viding fina nc ing to Re lia nc e Ra il ma y se e k to c a nc e l a ny e xisting fa c ilitie s a nd/ o r no t ma ke a va ila b le a ny un-dra wn fa c ilitie s.

Re lia nc e Ra il r e fina nc ing

Whe re e xisting fina nc ing a rra ng e me nts a ppro a c h o r re a c h ma turity, Re lia nc e Ra il ma y se e k to e ng a g e with e xisting a nd ne w fina nc e pro vide rs to re fina nc e the se a rra ng e me nts. Re lia nc e Ra il will b e sub je c t to the risk o f no t b e ing a b le to a c c e ss c re dit ma rke ts o n the sa me lo a n te rms, inc luding the risk o f hig he r inte re st ra te s.

Re lia nc e Ra il r e str uc tur ing

I t is po ssib le tha t a re struc ture o f Re lia nc e Ra il’ s fina nc e s will b e ne c e ssa ry in the future to sup po rt the lo ng te rm via b ility o f Re lia nc e Ra il a nd sup po rt lo ng te rm via b ility a nd re fina nc ing pro sp e c ts.

Re lia nc e Ra il c re dit r a ting

A c ha ng e in Re lia nc e Ra il’ s c re dit ra ting c a n a ffe c t Re lia nc e Ra il’ s a b ility to , a nd c o st o f, re fina nc e .

RSM subc ontra c t a nd a nc illa ry doc ume nts

As pa rt o f the p ro je c t’ s fina nc ing struc ture , Re lia nc e Ra il, Do wne r a nd its sub sidia ry Do wne r E DI Ra il Pty L td e nte re d into a numb e r o f a nc illa ry a g re e me nts with a se c urity truste e (a c ting o n b e ha lf o f the le nd e rs). T his is a typic a l a rra ng e me nt fo r PPP style pro je c ts. Ho we ve r, if Re lia nc e Ra il, Do wne r o r Do wne r E DI Ra il is in se rio us b re a c h o f a ny o f the se a g re e me nts, this ma y a mo unt to a n e ve nt o f d e fa ult a nd ma y e ntitle the le nd e rs to c a nc e l the ir fa c ilitie s to Re lia nc e Ra il. Do wne r d o e s no t b e lie ve tha t suc h b re a c he s pre se ntly e xist.

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14

K e y Risk F a c to rs (Co nt)

Ge ne ra l Risks

Ge ne ra l e quity ma rke t a nd inve stme nt risk

T he pric e o f Do wne r sha re s will fluc tua te due to va rio us fa c to rs inc luding mo ve me nts in Austra lia n e q uity ma rke ts, re c o mme nda tio ns b y b ro ke r a nd a na lysts, inte re st ra te s, infla tio n, Austra lia n a nd inte rna tio na l e c o no mic c o nditio ns, c ha ng e s in g o ve rnme nt, fisc a l, mo ne ta ry a nd re g ula to ry po lic ie s, g lo b a l a nd g e o -p o litic a l e ve nts a nd ho stilitie s a nd a c ts o f te rro rism, inve sto r p e rc e p tio ns a nd o the r fa c to rs tha t ma y a ffe c t Do wne r’ s fina nc ia l po sitio n a nd e a rning s.

Gove rnme nt polic ie s a nd le g isla tion

Do wne r’ s b usine ss is a ffe c te d b y a ra ng e o f ind ustry sp e c ific a nd g e ne ra l le g a l a nd re g ula to ry c o ntro ls. Cha ng e s in the se typ e s o f c o ntro ls c a n ha ve a n a dve rse e ffe c t o n Do wne r’ s fina nc ia l p e rfo rma nc e . F urthe r, a ny ma jo r shift in re g ula to ry po lic y ma y impa c t o n the pro fita b ility o f Do wne r a nd its c usto me rs. I n pa rtic ula r, the Austra lia n F e d e ra l Go ve rnme nt is in the pro c e ss o f ne g o tia ting le g isla tio n in re la tio n to the Mining Re so urc e Re nt T a x (‘ MRRT ’ ) fo r c e rta in c o a l a nd iro n o re pro je c ts. T he unc e rta inty re la ting to g o ve rnme nt le g isla tio n, suc h a s ta xe s, c a rb o n tra ding sc he me s a nd re g ula tio n o f re so urc e pro je c ts c o uld le a d to d e la ys a nd pro je c t a b a ndo nme nt, whic h wo uld a dve rse ly a ffe c t the ma rke t fo r se rvic e s whic h Do wne r pro vide s. I nfra struc ture pro je c ts, whic h a re a ke y so urc e o f re ve nue fo r Do wne r, re ma in sub je c t to sig nific a nt disc re tio n b y g o ve rnme nt d e pa rtme nts a nd ministe rs.

T a xa tion risk

F uture c ha ng e s in Austra lia n a nd Ne w Ze a la nd ta xa tio n la w, inc luding c ha ng e s in inte rpre ta tio n o r a pplic a tio n o f the la w b y c o urts o r ta xa tio n a utho ritie s in Austra lia a nd Ne w Ze a la nd , ma y a ffe c t ta xa tio n tre a tme nt o f a n inve stme nt in Do wne r sha re s o r the ho lding a nd d isp o sa l o f tho se sha re s. F urthe r, c ha ng e s in ta x la w, o r c ha ng e s in the wa y ta x la w is e xp e c te d to b e inte rpre te d in the va rio us jurisdic tio ns in whic h Do wne r o p e ra te s ma y imp a c t the future ta x lia b ilitie s o f Do wne r.

Cha ng e s in a c c ounting polic y

Cha ng e s to Austra lia n Ac c o unting Sta nd a rd c o uld a ffe c t Do wne r’ s re p o rte d e a rning s a nd its fina nc ia l po sitio n fro m time to time .

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

I nte rna tio na l se lling re stric tio ns

Unite d Sta te s of Ame ric a

T his pre se nta tio n, inc luding the info rma tio n c o nta ine d in this disc la ime r, is no t a pro sp e c tus a nd do e s no t fo rm p a rt o f a ny o ffe r, invita tio n o r re c o mme nd a tio n in re spe c t

• f se c uritie s, o r a n o ffe r, invita tio n o r re c o mme nd a tio n to se ll, o r a so lic ita tio n o f a n o ffe r to b uy, se c uritie s in the Unite d Sta te s o r to a ny p e rso n tha t is, o r is a c ting fo r the

a c c o unt o r b e ne fit o f, a “U.S. pe rso n” (a s d e fine d in Re g ula tio n S und e r the Unite d Sta te s Se c uritie s Ac t o f 1933 (Se c uritie s Ac t)) (U.S. Pe rso n), o r in a ny o the r jurisdic tio n in whic h suc h a n o ffe r wo uld b e ille g a l. T he se c uritie s re fe rre d to he re in ma y no t b e o ffe re d o r so ld in the Unite d Sta te s, o r to o r fo r the a c c o unt o r b e ne fit o f, a ny U.S. Pe rso n, unle ss the se c uritie s ha ve b e e n re g iste re d unde r the Se c uritie s Ac t o r a n e xe mptio n fro m the re g istra tio n re q uire me nts unde r the Se c uritie s Ac t is a va ila b le . T he o ffe r o r sa le o f the se c uritie s re fe rre d to he re in ha ve no t b e e n a nd will no t b e re g iste re d und e r the Se c uritie s Ac t. T his pre se nta tio n ma y no t b e se nt to a ny inve sto rs in the Unite d Sta te s o r to a U.S. Pe rso n (o r to a ny p e rso n a c ting fo r the a c c o unt o r b e ne fit o f a U.S. Pe rso n). By a c c e p ting this pre se nta tio n, yo u a g re e to b e b o und b y the fo re g o ing limita tio ns. Ne w Ze a la nd T he Ne w Sha re s b e ing o ffe re d und e r this d o c ume nt a re b e ing o ffe re d to e lig ib le sha re ho ld e rs with re g iste re d a ddre sse s in Ne w Ze a la nd p ursua nt to the Se c uritie s Ac t (Ove rse a s Co mpa nie s) E xe mp tio n No tic e 2002 (Ne w Ze a la nd ). T his d o c ume nt ha s no t b e e n re g iste re d with, file d with o r a p pro ve d b y a ny Ne w Ze a la nd re g ula to ry a utho rity o r und e r o r in a c c o rda nc e with the Se c uritie s Ac t 1978 (Ne w Ze a la nd ). Und e r the e ntitle me nt o ffe r, no se c uritie s ma y b e o ffe re d o r so ld to the p ub lic within Ne w Ze a la nd a nd no me mb e r o f the pub lic in Ne w Ze a la nd ma y a c c e p t the e ntitle me nt o ffe r, o the r tha n p e rso ns, b e ing e xisting ho ld e rs o f sha re s in Do wne r, to who m it is p e rmissib le fo r the e ntitle me nt o ffe r to b e ma d e to in re lia nc e o n the Se c uritie s Ac t (Ove rse a s Co mpa nie s) E xe mp tio n No tic e 2002. Unite d King dom No tic e to re sid e nts o f the Unite d K ing d o m T his do c ume nt a nd the e ntitle me nt o ffe r a re o nly a ddre sse d to a nd dire c te d a t p e rso ns in the Unite d K ing do m who a re “q ua lifie d inve sto rs” within the me a ning o f se c tio n 86 o f the F ina nc ia l Se rvic e s a nd Ma rke ts Ac t 2000 o f the Unite d K ing do m (the F SMA) (Qua lifie d I nve sto rs). Ne w Sha re s ma y no t b e o ffe re d o r so ld e xc e p t in c irc umsta nc e s whic h ha ve no t re sulte d a nd will no t re sult in a n o ffe r to the p ub lic in c o ntra ve ntio n o f se c tio n 85 o f the F SMA in the Unite d K ing do m. I n a dditio n this do c ume nt is b e ing distrib ute d in the Unite d K ing d o m o nly to , a nd is d ire c te d o nly a t, Qua lifie d I nve sto rs (i) who ha ve pro fe ssio na l e xp e rie nc e in ma tte rs re la ting to inve stme nts fa lling within Artic le 19(5) o f the F ina nc ia l Se rvic e s a nd Ma rke ts Ac t 2000 (F ina nc ia l Pro mo tio n) Ord e r 2005, a s a me nd e d (the Ord e r), a nd/ o r (ii) who a re hig h ne t-wo rth e ntitie s fa lling within Artic le 49(2)(a ) to (d ) o f the Ord e r, a nd o the r p e rso ns to who m it ma y o the rwise la wfully b e c o mmunic a te d (a ll suc h p e rso ns b e ing re fe rre d to a s “re le va nt p e rso ns”). T his do c ume nt must no t b e a c te d o n o r re lie d o n in the Unite d K ing d o m, b y p e rso ns who a re no t re le va nt p e rso ns. Any inve stme nt o r inve stme nt a c tivity to whic h this do c ume nt re la te s is a va ila b le o nly in the Unite d K ing d o m to re le va nt p e rso ns a nd will b e e ng a g e d in o nly with suc h p e rso ns.

15

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

I nte rna tio na l se lling re stric tio ns (Co nt)

Hong Kong

T he c o nte nts o f this do c ume nt ha ve no t b e e n re vie we d o r a p pro ve d b y a ny re g ula to ry a utho rity in Ho ng K

• ng . I

n pa rtic ula r, this d o c ume nt ha s no t b e e n, a nd will no t b e , re g iste re d a s a “pro sp e c tus” in Ho ng K

• ng und e r the Co mpa nie s Ordina nc e (Ca p 32) (“CO”) no r ha s it b e e n a utho rise d b y the Se c uritie s a nd F

uture s Co mmissio n (“SF C”) in Ho ng K

• ng pursua nt to the Se c uritie s a nd F

uture s Ordina nc e (Ca p 571) (“SF O”). Re c ipie nts a re a dvise d to e xe rc ise c a utio n in re la tio n to the e ntitle me nt o ffe r. I f re c ipie nts a re in a ny d o ub t a b o ut a ny o f the c o nte nts o f this d o c ume nt, the y sho uld o b ta in ind e p e nd e nt p ro fe ssio na l a dvic e . T his do c ume nt do e s no t c o nstitute a n o ffe r o r invita tio n to the pub lic in Ho ng K

• ng to a c q uire a ny Ne w Sha re s no r a n a dve rtise me nt o f Ne w Sha re s in Ho ng Ko ng . T

his do c ume nt must no t b e issue d , c irc ula te d o r distrib ute d in Ho ng Ko ng o the r tha n: (a ) to “pro fe ssio na l inve sto rs” within the me a ning o f the SF O a nd a ny rule s ma de unde r tha t o rdina nc e (“Pro fe ssio na l I nve sto rs”); o r (b ) in o the r c irc umsta nc e s whic h d o no t re sult in this d o c ume nt b e ing a pro spe c tus a s d e fine d in the CO no r c o nstitute a n o ffe r to the pub lic whic h re q uire s a utho risa tio n b y the SF C pursua nt to the SF O. Unle ss p e rmitte d b y the se c uritie s la ws o f Ho ng Ko ng , no p e rso n ma y issue o r ha ve in its p o sse ssio n fo r issue , whe the r in Ho ng Ko ng o r e lse whe re , a ny a dve rtise me nt, invita tio n o r d o c ume nt re la ting to the Ne w Sha re s, whic h is dire c te d a t, o r the c o nte nt o f whic h is like ly to b e a c c e sse d o r re a d b y, the p ub lic o f Ho ng Ko ng o the r tha n with re sp e c t to the Ne w Sha re s whic h a re o r a re inte nd e d to b e dispo se d o f o nly to p e rso ns o utsid e Ho ng K

• ng o r o nly to Pro fe ssio na l I

nve sto rs. Any o ffe r o f the Ne w Sha re s will b e p e rso na l to the p e rso n to who m re le va nt o ffe r do c ume nts a re d e live re d , a nd a sub sc rip tio n fo r the Ne w Sha re s will o nly b e a c c e p te d fro m suc h p e rso n. No p e rso n who ha s re c e ive d a c o py o f this do c ume nt ma y issue , c irc ula te o r distrib ute this do c ume nt in Ho ng Ko ng o r ma ke o r g ive a c o py o f this do c ume nt to a ny o the r p e rso n. No p e rso n a llo tte d Ne w Sha re s ma y se ll, o r o ffe r to se ll, suc h Ne w Sha re s to the pub lic in Ho ng K

• ng within six mo nths fo llo wing the da te
• f issue o f suc h Ne w Sha re s.

Sing a pore

T his do c ume nt ha s no t b e e n re g iste re d a s a pro sp e c tus with the Mo ne ta ry Autho rity o f Sing a po re a nd ma y no t b e c irc ula te d o r d istrib ute d in Sing a p o re no r ma y a ny o f the Ne w Sha re s b e o ffe re d fo r sub sc rip tio n, dire c tly o r indire c tly, no r ma y a ny invita tio n to sub sc rib e fo r a ny o f the Ne w Sha re s b e ma d e , in Sing a po re e xc e p t in c irc umsta nc e s in whic h suc h o ffe r o r sa le is ma de p ursua nt to , a nd in a c c o rd a nc e with the c o nd itio ns o f, a n e xe mptio n invo ke d unde r Sub divisio n (4), Divisio n I

• f Pa rt XI

I I

• f the Se c uritie s a nd F

uture s Ac t, Cha p te r 289 o f Sing a po re , a nd to p e rso ns to who m the Ne w Sha re s ma y b e o ffe re d o r so ld und e r suc h e xe mp tio n. By a c c e p ting this do c ume nt, the re c ipie nt he re o f re pre se nts a nd wa rra nts tha t he is e ntitle d to re c e ive it in a c c o rda nc e with the re stric tio ns se t fo rth a b o ve a nd a g re e s to b e b o und b y limita tio ns c o nta ine d he re in. Any fa ilure to c o mply with the se limita tio ns ma y c o nstitute a vio la tio n o f la w.

16

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

I nte rna tio na l se lling re stric tio ns (Cont)

Ja pa n

T he filing o f a se c uritie s re g istra tio n sta te me nt und e r Artic le 4, Pa ra g ra ph 1 o f the F ina nc ia l I nstrume nts a nd E xc ha ng e L a w o f Ja pa n (a s a me nd e d , the “F I E L ”) with re sp e c t to the so lic ita tio n o f a n o ffe r to a c q uire the Ne w Sha re s ha ve no t b e e n, a nd will no t b e ma d e , pursua nt to a n e xe mp tio n und e r Artic le 2, Pa ra g ra ph 3, I te m 2, Sub -I te m A o f the F I E L . No tra nsfe r o f the Ne w Sha re s ma y b e ma d e e xc e p t fo r a tra nsfe r b y a n a c q uire r to a q ua lifie d institutio na l inve sto r (T E K I K AKU-K I K AN-T OSHI K A) a s d e fine d in Artic le 2, Pa ra g ra ph 3, I te m 1 o f the F I E L a nd Artic le 10 o f the Ca b ine t Offic e Ordina nc e o n De finitio ns Pro vide d in Artic le 2 o f the F ina nc ia l I nstrume nts a nd E xc ha ng e L a w. T he ho ld e rs o f the Ne w Sha re s a g re e no t to tra nsfe r the Ne w Sha re s e xc e p t to a no the r q ua lifie d institutio na l inve sto r. Whe n a ho ld e r o f the Ne w Sha re s tra nsfe rs the Ne w Sha re s to a no the r q ua lifie d institutio na l inve sto r, it must pro vide writte n no tic e to suc h q ua lifie d institutio na l inve sto r sta ting the sa me he re in prio r to o r simulta ne o usly with suc h tra nsfe r.

China

T he sub sc rip tio ns to Ne w Sha re s b y the PRC inve sto rs a re in c o mplia nc e with, a nd will c o ntinue to c o mply with, a ll re q uire me nts o f a p plic a b le la ws a nd re g ula tio ns o f the PRC, inc luding witho ut limita tio n, a pplic a b le fo re ig n e xc ha ng e re g ula tio ns a nd a ll rule s, re g ula tio ns a nd inte rpre ta tio ns o f a ny re g ula to ry a utho rity to whic h the PRC inve sto rs a re sub je c t inso fa r a s the y a re a pplic a b le to the a c tivitie s c o nte mpla te d b y the sub sc rip tio ns to Ne w Sha re s.

Ca na da

Any o ffe r do c ume nts in c o nne c tio n with the Ne w Sha re s c o nstitute a n o ffe ring o f the se c uritie s d e sc rib e d he re in o nly in tho se jurisdic tio ns o f Ca na da a nd to tho se p e rso ns whe re a nd to who m the y ma y b e la wfully distrib ute d in Ca na da , a nd the re in o nly b y a utho rize d p e rso ns. T he o ffe r do c ume nts a re no t, a nd und e r no c irc umsta nc e s a re to b e c o nstrue d a s, a n a dve rtise me nt o r a pub lic o ffe ring o f the se c uritie s re fe rre d to in this do c ume nt in Ca na d a . T he o ffe r do c ume nts must o nly b e distrib ute d in Ca na d a to pe rso ns tha t a re “a c c re dite d inve sto rs” within the me a ning o f Na tio na l I nstrume nt 45-106 - Pro sp e c tus a nd Re g istra tio n E xe mp tio ns (“NI 45-106”). No se c uritie s c o mmissio n o r simila r a utho rity in Ca na da ha s re vie we d o r in a ny wa y p a sse d upo n the o ffe r do c ume nts o r the o ffe ring o f the Ne w Sha re s in the Offe r o r the me rits o f the Ne w Sha re s d e sc rib e d he re in a nd a ny re pre se nta tio n to the c o ntra ry is a n o ffe nc e . No pro spe c tus ha s b e e n o r will be file d in Ca na da with re sp e c t to the

• ffe ring o f the Ne w Sha re s in the e ntitle me nt o ffe r o r with re sp e c t to the re sa le o f suc h Ne w Sha re s. As suc h, a ny p e rso n in Ca na da la wfully pa rtic ipa ting in the

e ntitle me nt o ffe r will no t re c e ive the info rma tio n, le g a l rig hts a nd pro te c tio ns tha t wo uld b e a ffo rd e d to suc h p e rso ns ha d a pro sp e c tus b e e n file d a nd re c e ip te d b y the a p plic a b le se c uritie s c o mmissio n o r simila r a utho rity in Ca na da . Any re sa le o f the Ne w Sha re s must b e ma de in a c c o rda nc e with a p plic a b le Ca na dia n se c uritie s la ws.

17

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

I nte rna tio na l se lling re stric tio ns (Co nt)

Ita ly

T he o ffe ring o f the Ne w Sha re s ha s no t b e e n re g iste re d with the Co mmissio ne Na zio na le p e r le So c ie tà e la Bo rsa (“CONSOB”) p ursua nt to I ta lia n se c uritie s le g isla tio n a nd , a c c o rding ly, no Ne w Sha re s will b e o ffe re d , so ld o r d e live re d , no r c o py o f this do c ume nt o r a ny o the r o ffe r do c ume nt re la ting to the Ne w Sha re s will b e distrib ute d in the Re p ub lic o f I ta ly (“I ta ly”) e xc e p t: (a ) to q ua lifie d inve sto rs (inve stito ri q ua lific a ti), a s de fine d pursua nt to Artic le 100 o f the o f L e g isla tive De c re e No . 58 o f 24 F e b rua ry 1998, a s a me nd e d (the “F ina nc ia l Se rvic e s Ac t”) a s a me nd e d a nd Artic le 34-te r, p a ra g ra ph 1, le tte r b ), o f CONSOB Re g ula tio n No . 11971 o f 14 Ma y 1999, a s a me nd e d (“Re g ula tio n 11971”); o r (b ) in c irc umsta nc e s whic h a re e xe mp te d fro m c o mplia nc e with the re stric tio ns o n o ffe rs to the pub lic , a s pro vid e d und e r Artic le 100 o f the F ina nc ia l Se rvic e s Ac t o r Artic le 34-te r o f Re g ula tio n 11971. Mo re o ve r, a nd sub je c t to the fo re g o ing , a ny o ffe r, sa le o r d e live ry o f the Ne w Sha re s o r d istrib utio n o f c o pie s o f this d o c ume nt o r a ny o the r do c ume nt re la ting to the Ne w Sha re s in I ta ly und e r p a ra g ra p hs (a ) o r (b ) a b o ve must b e : (i) ma d e b y a n inve stme nt firm, b a nk o r fina nc ia l inte rme dia ry p e rmitte d to c o nduc t suc h a c tivitie s in I ta ly in a c c o rda nc e with the F ina nc ia l Se rvic e s Ac t, L e g isla tive De c re e No . 385 o f 1 Se p te mb e r 1993, CONSOB Re g ula tio n No . 16190 o f 29 Oc to b e r 2007, a ll a s a me nd e d ; a nd (ii) in c o mplia nc e with a ny o the r a p plic a b le la ws a nd re g ula tio ns, inc luding a ll re le va nt I ta lia n se c uritie s, ta x a nd e xc ha ng e c o ntro ls la ws a nd re g ula tio ns a nd a ny limita tio n o r re q uire me nt whic h ma y b e imp o se d fro m time to time b y CONSOB, the Ba nk o f I ta ly o r a ny o the r I ta lia n a utho rity. Artic le 100-b is o f the F ina nc ia l Se rvic e s Ac t a ffe c ts the tra nsfe ra b ility o f the Ne w Sha re s in I ta ly to the e xte nt tha t a ny pla c ing o f the Ne w Sha re s is ma d e so le ly with q ua lifie d inve sto rs a nd suc h Ne w Sha re s a re the n syste ma tic a lly re so ld to no n-q ua lifie d inve sto rs o n the se c o nd a ry ma rke t a t a ny time in the 12 mo nths fo llo wing suc h pla c ing . Whe re this o c c urs, if a pro sp e c tus c o mplia nt with the Pro sp e c tus Dire c tive ha s no t b e e n pub lishe d , purc ha se rs o f Ne w Sha re s who a re a c ting o utsid e o f the c o urse o f the ir b usine ss o r pro fe ssio n ma y in c e rta in c irc umsta nc e s b e e ntitle d to de c la re suc h purc ha se vo id a nd to c la im da ma g e s fro m a ny a utho rise d pe rso n a t who se pre mise s the Ne w Sha re s we re purc ha se d , unle ss a n e xe mptio n pro vid e d fo r und e r the F ina nc ia l Se rvic e s Ac t a pplie s.”

18

NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO US PERSONS

I nte rna tio na l se lling re stric tio ns (Cont)

Norwa y

T he o ffe ring o f Ne w Sha re s fa lls o utsid e the sc o p e o f the pub lic o ffe r rule s unde r the No rwe g ia n Se c uritie s T ra ding Ac t. Ac c o rding ly, the c o nte nts o f this d o c ume nt ha ve no t b e e n a p pro ve d b y no r re g iste re d with the F ina nc ia l Adviso ry Autho rity o f No rwa y o r a ny o the r No rwe g ia n pub lic a utho rity. T his do c ume nt sho uld no t in a ny wa y b e c o pie d o r o the rwise distrib ute d b y the re c ipie nt.

Switze rla nd

T he Ne w Sha re s ma y no t b e pub lic ly o ffe re d in o r fro m Switze rla nd a nd ne ithe r this do c ume nt no r a ny o the r o ffe ring ma te ria ls re la ting to the Ne w Sha re s ma y b e ma d e a va ila b le thro ug h a pub lic o ffe ring in o r fro m Switze rla nd. E a c h c o py o f a ny o f tho se do c ume nts is a ddre sse d to a sp e c ific a lly na me d re c ipie nt a nd ma y no t b e pa sse d

• n to third pa rtie s. T

he Ne w Sha re s ma y o nly b e o ffe re d a nd this do c ume nt ma y o nly b e distrib ute d to a limite d c irc le o f inve sto rs (a s d e fine d b y the Swiss Co d e o f Ob lig a tio ns).

Ire la nd

T his do c ume nt ha s no t b e e n a ppro ve d b y the F ina nc ia l Re g ula to r in I re la nd fo r the p urpo se s o f the Pro sp e c tus (Dire c tive 2003/ 71/ E C) Re g ula tio ns 2005 o f I re la nd . I f yo u a re in a ny d o ub t a b o ut the c o nte nts o f this d o c ume nt o r a s to the a c tio n yo u sho uld ta ke , yo u sho uld if re sid e nt in I re la nd se e k ind e pe nd e nt fina nc ia l a dvic e fro m a sto c kb ro ke r, b a nk ma na g e r, so lic ito r, a c c o unta nt o r o the r ind e pe nd e nt fina nc ia l a dvise r who is d uly a utho rise d o r e xe mpte d und e r the E uro pe a n Co mmunitie s (Ma rke ts in F ina nc ia l I nstrume nts) Re g ula tio ns 2007 (a s a me nde d ).

T he Ne the rla nds

T he Ne w Sha re s will no t b e o ffe re d to the pub lic in the Ne the rla nds o the r tha n (a ) to le g a l e ntitie s whic h a re a utho rise d o r re g ula te d to o p e ra te in the fina nc ia l ma rke ts o r, if no t so a utho rise d o r re g ula te d , who se c o rp o ra te purpo se is so le ly to inve st in se c uritie s; (b ) to a ny le g a l e ntity whic h ha s two o r mo re o f (i) a n a ve ra g e o f a t le a st 250 e mplo ye e s d uring the la st fina nc ia l ye a r; (ii) a to ta l b a la nc e she e t o f mo re tha n €43,000,000; a nd (iii) a n a nnua l turno ve r o f mo re tha n €50,000,000, a s sho wn in its la st a nnua l o r c o nso lida te d a c c o unts. F

• r the purp o se o f this pro visio n the e xpre ssio n o f a n “o ffe r o f Ne w Sha re s to the pub lic ” in the Ne the rla nds me a ns the c o mmunic a tio n in a ny fo rm a nd b y a ny me a ns o f

suffic ie nt info rma tio n o n the te rms o f the Offe r a nd the Ne w Sha re s to b e o ffe re d so a s to e na b le a n inve sto r to d e c id e to purc ha se o r sub sc rib e fo r the Ne w Sha re s. T his do c ume nt a nd a ny o the r ma te ria ls in c o nne c tio n with the Offe r ma y o nly b e se nt o r o the rwise distrib ute d in the Ne the rla nd s to inve sto rs who me e t the c rite ria se t o ut a b o ve .

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I nte rna tio na l se lling re stric tio ns (Cont)

Ge rma ny

T he Ne w Sha re s a re ne ithe r re g iste re d fo r pub lic distrib utio n with the F e d e ra l F ina nc ia l Sup e rviso ry Autho rity (Bund e sa nsta lt für F ina nzdie nstle istung sa ufsic ht - "Ba F in") a c c o rding to the Ge rma n I nve stme nt Ac t (I nve stme ntg e se tz) no r liste d o n a Ge rma n e xc ha ng e . No sa le s pro spe c tus pursua nt to the Ge rma n Sa le s Pro sp e c tus Ac t (Ve rka ufspro sp e ktg e se tz) a s we ll a s the Ge rma n Se c uritie s Pro sp e c tus Ac t (We rtp a pie rpro sp e ktg e se tz) ha s b e e n file d with Ba F

• in. Co nse q ue ntly, the Ne w Sha re s ma y no t

b e distrib ute d within Ge rma ny b y wa y o f a p ub lic o ffe r, p ub lic a dve rtise me nt o r in a ny simila r ma nne r, a nd this do c ume nt a nd a ny o the r do c ume nt re la ting to the Ne w Sha re s, a s we ll a s info rma tio n o r sta te me nts c o nta ine d the re in, ma y no t b e sup plie d to the pub lic in Ge rma ny o r use d in c o nne c tio n with a ny o ffe r fo r sub sc rip tio n o f the Ne w Sha re s to the pub lic in Ge rma ny o r a ny o the r me a ns o f pub lic ma rke ting . Any re sa le o f the Ne w Sha re s in Ge rma ny ma y o nly b e ma d e in a c c o rda nc e with (i) the Ge rma n I nve stme nt Ac t, (ii) the Ge rma n Se c uritie s Pro sp e c tus Ac t o r the Ge rma n Sa le s Pro sp e c tus Ac t, a nd (iii) a ny o the r a p plic a b le la ws in Ge rma ny g o ve rning the sa le a nd o ffe ring o f se c uritie s. No vie w o n ta xa tio n is e xpre sse d . Pro sp e c tive inve sto rs in Ge rma ny a re urg e d to c o nsult the ir o wn ta x a dvise rs a s to the ta x c o nse q ue nc e s tha t ma y a rise fro m a n inve stme nt in the Ne w Sha re s.” As re g a rds a ny inve sto r re pre se nta tio ns a nd wa rra ntie s, ple a se no te tha t a ltho ug h it is no t re q uire d b y la w, it c o uld b e re c o mme nd a b le to a sk fo r a re pre se nta tio n o r wa rra nty in c a se the Co mpa ny inte nds to re ly o n a priva te pla c e me nt e xe mp tio n whic h re fe rs to a sp e c ific q ua lific a tio n o f the inve sto r, suc h a s the q ua lific a tio n a s “Qua lifie d I nve sto r” within the me a ning o f the Wp PG.

UAE

T his do c ume nt is stric tly priva te a nd c o nfid e ntia l a nd is b e ing distrib ute d to a limite d numb e r o f inve sto rs a nd must no t b e pro vide d to a ny p e rso n o the r tha n the o rig ina l re c ipie nt, a nd ma y no t b e re p ro duc e d o r use d fo r a ny o the r purp o se .

F ra nc e

T he Ne w Sha re s ma y o nly b e o ffe re d o r so ld , dire c tly o r indire c tly in the Re p ub lic o f F ra nc e , to (i) p e rso ns pro viding inve stme nt se rvic e s re la ting to po rtfo lio ma na g e me nt fo r the a c c o unt o f third pa rtie s (p e rso nne s fo urnissa nt le se rvic e d'inve stisse me nt d e g e stio n d e p o rte fe uille po ur c o mp te d e tie rs) a nd / o r (ii) q ua lifie d inve sto rs (inve stisse urs q ua lifié s) a c ting fo r the ir o wn a c c o unt, a ll a s d e fine d in, a nd in a c c o rda nc e with, a rtic le s L . 411-1, L . 411-2, D. 411-1 to D. 411-3, D. 744-1, D. 754-1 a nd D. 764-1

• f the F

re nc h Co d e mo né ta ire e t fina nc ie r (Mo ne ta ry a nd F ina nc ia l Co d e ); ne ithe r this do c ume nt, no r a ny info rma tio n c o nta ine d the re in o r a ny o ffe ring ma te ria l re la ting to Ne w Sha re s, ma y b e distrib ute d o r c a use d to b e distrib ute d to the pub lic in F ra nc e . T his do c ume nt ha s no t b e e n sub mitte d to the c le a ra nc e pro c e dure o f the Auto rité d e s ma rc hé s fina nc ie rs. I n the e ve nt tha t the Ne w Sha re s, thus purc ha se d o r sub sc rib e d to b y suc h inve sto rs liste d a b o ve , a re o ffe re d o r re so ld , dire c tly o r indire c tly, to the pub lic in F ra nc e , the c o nd itio ns re la ting to p ub lic o ffe ring s se t fo rth in Artic le s L . 411-1, L .411-2, L .412-1 a nd L . 621-8 to L .621-8-3 o f the Mo ne ta ry a nd F ina nc ia l Co de a nd a p plic a b le re g ula tio ns the re und e r sha ll b e c o mplie d with.Switze rla nd T he Ne w Sha re s ma y no t b e pub lic ly o ffe re d in o r fro m Switze rla nd a nd ne ithe r this do c ume nt no r a ny o the r o ffe ring ma te ria ls re la ting to the Ne w Sha re s ma y b e ma d e a va ila b le thro ug h a pub lic o ffe ring in o r fro m Switze rla nd. E a c h c o py o f a ny o f tho se do c ume nts is a ddre sse d to a sp e c ific a lly na me d re c ipie nt a nd ma y no t b e pa sse d

• n to third pa rtie s. T

he Ne w Sha re s ma y o nly b e o ffe re d a nd this do c ume nt ma y o nly b e distrib ute d to a limite d c irc le o f inve sto rs (a s d e fine d b y the Swiss Co d e o f Ob lig a tio ns).

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I nte rna tio na l se lling re stric tio ns (Cont)

Be lg ium

T he Ne w Sha re s ma y no t b e distrib ute d in Be lg ium b y wa y o f a n o ffe r o f se c uritie s to the pub lic , a s d e fine d in Artic le 3 §1 o f the Be lg ia n L a w o f 16 June 2006 o n p ub lic

• ffe ring s o f inve stme nt instrume nts a nd the a dmissio n o f inve stme nt instrume nts to tra ding o n re g ula te d ma rke ts (the “Pro sp e c tus L

a w”), sa ve in tho se c irc umsta nc e s se t

• ut in Artic le 3 §2 o f the Pro sp e c tus L

a w. T he Offe r is e xc lusive ly c o nduc te d und e r a p plic a b le priva te pla c e me nt e xe mp tio ns a nd the re fo re it ha s no t b e e n a nd will no t b e no tifie d to , a nd the Offe r Do c ume nts o r a ny o the r o ffe ring ma te ria l re la ting to the Ne w Sha re s ha s no t b e e n a nd will no t b e a p pro ve d b y, the Be lg ia n Ba nking , F ina nc e a nd I nsura nc e Co mmissio n (“Co mmissio n b a nc a ire , fina nc iè re e t de s a ssura nc e s/ Co mmissie vo o r he t Ba nk-, F ina nc ie - e n Assura ntie we ze n”). Ac c o rding ly, the Offe r ma y no t b e a dve rtise d a nd e a c h o f the Ma na g e rs/ De a le rsha s re pre se nte d , wa rra nte d a nd a g re e d tha t it ha s no t o ffe re d , so ld o r re so ld , tra nsfe rre d o r d e live re d , a nd will no t o ffe r, se ll, re se ll, tra nsfe r o r d e live r, the Ne w Sha re s, a nd tha t it ha s no t distrib ute d , a nd will no t distrib ute , a ny me mo ra ndum, info rma tio n c irc ula r, b ro c hure o r a ny simila r d o c ume nts, dire c tly o r indire c tly, to a ny individua l o r le g a l e ntity in Be lg ium o the r tha n q ua lifie d inve sto rs, a s d e fine d in Artic le 10 o f the Pro sp e c tus L a w a nd in a ny o the r c irc umsta nc e s se t o ut in Artic le 3 §2 o f the Pro sp e c tus L a w. T his do c ume nt ha s b e e n issue d o nly fo r the p e rso na l use o f the a b o ve q ua lifie d inve sto rs a nd e xc lusive ly fo r the p urpo se o f the Offe r. Ac c o rding ly, the info rma tio n c o nta ine d he re in ma y no t b e use d fo r a ny o the r purpo se no r disc lo se d to a ny o the r pe rso n in Be lg ium. Swe de n I n re la tio n to e a c h Me mb e r Sta te o f the E uro p e a n E c o no mic Are a whic h ha s imple me nte d the Pro sp e c tus Dire c tive (e a c h, a Re le va nt Me mb e r Sta te ), Do wne r ha s re pre se nte d a nd a g re e d tha t with e ffe c t fro m a nd inc luding the d a te o n whic h the Pro sp e c tus Dire c tive is imple me nte d in tha t Re le va nt Me mb e r Sta te (the Re le va nt I mple me nta tio n Da te ) it ha s no t ma d e a nd will no t ma ke a n o ffe r o f Ne w Sha re s to the pub lic in tha t Re le va nt Me mb e r Sta te prio r to the pub lic a tio n o f a pro sp e c tus in re la tio n to the Ne w Sha re s whic h ha s b e e n a ppro ve d b y the c o mp e te nt a utho rity in tha t Re le va nt Me mb e r Sta te o r, whe re a p pro pria te , a p pro ve d in a no the r Re le va nt Me mb e r Sta te a nd no tifie d to the c o mp e te nt a utho rity in tha t Re le va nt Me mb e r Sta te , a ll in a c c o rd a nc e with the Pro sp e c tus Dire c tive , e xc e p t tha t it ma y, with e ffe c t fro m a nd inc luding the Re le va nt I mple me nta tio n Da te , ma ke a n o ffe r o f Ne w Sha re s to the pub lic in tha t Re le va nt Me mb e r Sta te a t a ny time : (a ) to le g a l e ntitie s whic h a re a utho rise d o r re g ula te d to o p e ra te in the fina nc ia l ma rke ts o r, if no t so a utho rise d o r re g ula te d , who se c o rp o ra te purpo se is so le ly to inve st in se c uritie s; (b ) to a ny le g a l e ntity whic h ha s two o r mo re o f (1) a n a ve ra g e o f a t le a st 250 e mplo ye e s during the la st fina nc ia l ye a r; (2) a to ta l b a la nc e she e t o f mo re tha n E UR43,000,000; a nd (3) a n a nnua l ne t turno ve r o f mo re tha n EUR50,000,000, a s sho wn in its la st two a nnua l o r c o nso lid a te d a c c o unts; o r (c ) in a ny o the r c irc umsta nc e s whic h do no t re q uire the p ub lic a tio n b y the I ssue r o f a pro sp e c tus p ursua nt to Artic le 3 o f the Pro sp e c tus Dire c tive . F

• r the purp o se s o f this pro visio n, the e xpre ssio n a n “o ffe r o f Ne w Sha re s to the pub lic ” in re la tio n to a ny Ne w Sha re s in a ny Re le va nt Me mb e r Sta te me a ns the

c o mmunic a tio n in a ny fo rm a nd b y a ny me a ns o f suffic ie nt info rma tio n o n the te rms o f the o ffe r a nd the Ne w Sha re s to b e o ffe re d so a s to e na b le a n inve sto r to de c ide to purc ha se o r sub sc rib e the Ne w Sha re s, a s the sa me ma y b e va rie d in tha t Me mb e r Sta te b y a ny me a sure imple me nting the Pro sp e c tus Dire c tive in tha t Me mb e r Sta te a nd the e xpre ssio n Pro sp e c tus Dire c tive me a ns Dire c tive 2003/ 71/ E C a nd inc lude s a ny re le va nt imple me nting me a sure in e a c h Re le va nt Me mb e r Sta te .

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I nte rna tio na l se lling re stric tio ns (Cont)

Ba ha ma s

F OR I NVE ST ORS I N T HE BAHAMAS T he sha re s de sc rib e d in this do c ume nt a re b e ing o ffe re d o nly to p e rso ns a nd / o r e ntitie s who (i) a re “a c c re d ite d inve sto rs” (a s d e fine d in re g ula tio n 90 o f the Se c uritie s I ndustry Re g ula tio ns, 2000 o f T he Ba ha ma s) a nd (ii) (a ) ha ve o b ta ine d the a p pro va l o f the Ce ntra l Ba nk o f T he Ba ha ma s to purc ha se a nd ho ld suc h sha re s, o r (b ) ha ve b e e n d e sig na te d a s “no n re sid e nt” und e r the E xc ha ng e Co ntro l Re g ula tio ns o r (c ) a re o the rwise d e e me d to b e “no n-re sid e nt” und e r the sa id Re g ula tio ns. Co nse q ue ntly, this do c ume nt is e xe mp t fro m the re q uire me nt to b e re g iste re d with the Se c uritie s Co mmissio n o f T he Ba ha ma s in a c c o rda nc e with the pro visio ns o f the Se c uritie s I ndustry Ac t, 2000.

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