MIRA INFORM REPORT

Report Date :

26.06.2014

IDENTIFICATION DETAILS

Name :	CARTER HOLT HARVEY PULP & PAPER LIMITED
Registered Office :	173 Captain Springs Road Onehunga Auckland 1061
Country :	New Zealand
Date of Incorporation :	23.05.2013
Com. Reg. No.:	1308173
Legal Form :	New Zealand Limited Company
Line of Business :	Subject is a producer of kraft linerboard and hardwood pulp.
No. of Employees	1,100

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31, 2014

Country Name	Previous Rating (31.12.2013)	Current Rating (31.03.2014)
New Zealand	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderate Low Risk	B1
Moderate Risk	B2
Moderate High Risk	C1
High Risk	C2
Very High Risk	D

NEW ZEALAND ECONOMIC OVERVIEW

Over the past 20 years the government has transformed New Zealand from an agrarian economy dependent on concessionary British market access to a more industrialized, free market economy that can compete globally. This dynamic growth has boosted real incomes - but left behind some at the bottom of the ladder - and broadened and deepened the technological capabilities of the industrial sector. Per capita income rose for ten consecutive years until 2007 in purchasing power parity terms, but fell in 2008-09. Debt-driven consumer spending drove robust growth in the first half of the decade, helping fuel a large balance of payments deficit that posed a challenge for economic managers. Inflationary pressures caused the central bank to raise its key rate steadily from January 2004 until it was among the highest in the OECD in 2007-08; international capital inflows attracted to the high rates further strengthened the currency and housing market, however, aggravating the current account deficit. The economy fell into recession before the start of the global financial crisis and contracted for five consecutive quarters in 2008-09. In line with global peers, the central bank cut interest rates aggressively and the government developed fiscal stimulus measures. The economy pulled out of recession late in 2009, and achieved 2-3% per year growth in 2010-13. Nevertheless, key trade sectors remain vulnerable to weak external demand. The government plans to raise productivity growth and develop infrastructure, while reining in government spending

Source : CIA

Company name and address

Verified Address

Subject name CARTER HOLT HARVEY PULP & PAPER LIMITED Business address State Highway 1 Town Tokoroa Province Waikato Zip / Postal code 3491 Country New Zealand Telephone +64 7 8855999 Fax +64 7 8855614 Website www.chhpulpandpaper.com

Registered address 173 Captain Springs Road Town Onehunga Province Auckland Zip / Postal code 1061 Country New Zealand Postal address Private Bag 6 Town Tokoroa Province Waikato Zip / Postal code 3444 Country New Zealand

SUMMARY DETAILS

Report Summary	Date registered 23/05/2003 Legal form New Zealand Limited Company Key personnel D. Jon Ryder Line of business The Subject is a producer of kraft linerboard and hardwood pulp. Staff employed 1,100 employees	Paid-up capital USD474,444,843.00 Sales turnover / Revenue / Income NZD1,147,000,000.00 (Non-Consolidated 12 months, 31/12/2013)
Subject’s Credit Risk Analysis	Country risk Country risk is minimal Operation trend Operational trend is steady Management experience Management is adequately experienced Financial performance Financial performance is very good Remarks Larger credit can still be considered as the Subject's is well positioned in the market and the financial stability of the group is positive.	Organisation structure Organisational structure is stable Detrimental No detrimental found Payment history No payment delays noted Credit amount requested Not described.

STATUTORY DETAILS

Registry Information

Date registered 23/05/2003 Legal form New Zealand Limited Company Registration number 1308173 Registered authority The Companies Office Tax / VAT number 9429035963813

Statutory status Active Previous name None reported. Change of legal form None reported.

BOARD OF MANAGEMENT

Key Personnel

Name D. Jon Ryder Designation Chief Executive Officer Name Karl Klinge Designation Chief Financial Officer

BOARD OF DIRECTORS

Appointments

Name Gregory Alan Cole Title Director Appointment date 25/06/09 Address 18 Tarata Street Mount Eden, Auckland 1024 New Zealand Name Allen Philip Hugli Title Director Appointment date 25/06/09 Address 1 Hay Place Epsom, Auckland 1023 New Zealand Name Bryce McCheyne Murray Title Director Appointment date 23/12/09 Address 14 Siota Crescent Kohimarama, Auckland 1071 New Zealand

Staff employed 1,100 employees

SHARE CAPITAL

Composition

Authorized capital USD474,444,843.00 Number / Type of shares 474,444,843 Ordinary Shares Share par value USD1.00 Issued capital USD474,444,843.00

Paid-up capital USD474,444,843.00

OWNERSHIP / SHAREHOLDERS

Composition

How listed Full list Shareholder name CARTER HOLT HARVEY LIMITED Address 173 Captain Springs Road Onehunga, Auckland 1061 New Zealand Number / Type of shares 474,444,843 Ordinary Shares Percentage (%) of shares 100%

CORPORATE AFFILIATIONS AND RELATED COMPANIES

Structure

Company name RANK GROUP LIMITED Affiliation type Ultimate Holding Company Country of business Level 9, 148 Quay Street Auckland Central, Auckland 1010 New Zealand Comments The company is a privately held investment company in Auckland, New Zealand. The company acquisition includes companies from the packaging, consumer goods, building supplies, and automotive aftermarket industries. The company is 100% owned by Mr. Graeme Hart which is New Zealand richest man with a net worth of USD 7 billion as of Jun 2014. Company name FERNBROOK INVESTMENTS LIMITED Affiliation type Holding Company Country of business Level 9, 148 Quay Street Auckland Central, Auckland 1010 New Zealand Comments Investment holding company. Company name RANK GROUP INVESTMENTS LIMITED Affiliation type Intermediate Holding Company Country of business Level 9, 148 Quay Street Auckland Central, Auckland 1010 New Zealand Comments Investment holding company. Company name CARTER HOLT HARVEY LIMITED Affiliation type Parent Company Country of business 173 Captain Springs Road Onehunga, Auckland 1061 New Zealand Comments Carter Holt Harvey Ltd., a forest products company, provides wood products, pulp, and paper and packaging products. It offers paper bags and montage graphics. The company was formerly known as Carter Holt Holdings Ltd. and changed its name to Carter Holt Harvey Ltd. in the year 1985. Carter Holt Harvey Ltd. was founded in 1859 and is headquartered in Auckland, New Zealand. Company name PPP OPERATIONS (NZ) LIMITED Affiliation type Wholly-owned Subsidiary Country of business 173 Captain Springs Road Onehunga, Auckland 1061 New Zealand

BANK AND MORTGAGES

Bank Details

Name of bank Bank of New Zealand Address New Zealand

Comments It is generally not the policy of local banks to provide credit status information to non related parties, however interested parties would be advised to consult first with the Subject if banker's references are required.

Mortgages

None reported.

Legal Filings

Bankruptcy filings None reported. Court judgements None reported.

Tax liens None reported. Others None reported.

FINANCIAL STATISTICS

Description

Financial statement source External Sources Financial statement date 31/12/13 Style of financial statement Estimated key figures

Currency of financial statement New Zealand, Dollar (NZD) Exchange rate 1 USD = NZD 1.15 as of 25-06-2014

Concise Financial Data	Consolidation style	Non Consolidated
	Currency	New Zealand, Dollar (NZD)
	Date of financial year end	31/12/13
	Length of financial accounts	12 months
	Sales turnover / Revenue / Income	1,147,000,000.00

Remarks

Private Companies in New Zealand are not required to file accounts unless classified as "Large", which at the moment means that two out of the following three conditions are met: - The company has a sales turnover of over NZD 20,000,000; - The company has total assets of over NZD 10,000,000; - The company employs 50 people or more. The Subject meets the criteria of being a large Private Company however is exempted from filling their financial information.

BUSINESS DETAILS

Operational Details

Main activities The Subject engages as producer of kraft linerboard, hardwood pulp, corrugated cardboard etc. The Subject operates from four mills located in Kinleith, Tasman, Whakatane, and Penrose. Products and services Bleached softwood market pulp Kraft linerboard, medium Fibre cement pulp Recycled medium liner

Purchases

Local The Subject sources its product(s) / material(s) locally.

International The Subject sources its product(s) / material(s) from countries in Asia, Europe and United States.

Sales

Local The Subject sells its product(s) locally.

International The Subject exports its product(s) to countries in Asia, Australia.

Key events
Apr. 25, 2014
Acquisition of Carter Holt Harvey Limited’s Pulp, Paper and Packaging Businesses

Oji Holdings is pleased to announce that our board of directors today resolved to jointly acquire the pulp & paper business of Carter Holt Harvey Limited (“CHH”), Carter Holt Harvey Pulp & Paper Limited (“CHHPP”) and certain related companies (collectively “CHHPP Group”) with Innovation Network Corporation of Japan (“INCJ”) and executed a share purchase agreement for the transaction. CHHPP Group manufactures pulp, paper and packaging products in New Zealand and Australia. CHHPP Group is ultimately owned by Rank Group Limited. The transaction is subject to, among others, relevant regulatory approvals.

1. Transaction Background
In recent years, we have been aggressively expanding our overseas businesses, particularly in Southeast Asia and other emerging markets where strong growth for pulp & paper market is expected. We position paperboards and packaging products as our core products and have either acquired or built a total of 21 plants/facilities (including on-going green-field projects) in Southeast Asia and India over the past few years.
Further, we have been focusing on the forest resources business. We have been operating Pan Pac (plantation forests, lumber-processing and pulp business in New Zealand), CENIBRA (plantation forests and pulp business in Brazil) and a number of other plantation assets in Southeast Asia and Oceania, with an aim to further expand the business in Japan and globally in the near future.
CHHPP Group’s 3 main businesses:

Pulp Business: Benefitting from its regional advantage with access to abundant softwood supplies, CHHPP manufactures bleached/unbleached softwood kraft pulp products such as NBKP and NUKP. The acquisition of CHHPP will allow us to offer broader products and solutions to our customers adding to our Pan Pac's BCTMP and CENIBRA's LBKP.

Paperboard Business: Using its softwood kraft pulp as the key raw material, CHHPP manufactures paperboard products which are known to be more intense and stronger than recycled paperboard products that are provided by its competitors in Asia. As the market in Asia continues to expand, we seek to market CHHPP’s outstanding products to various customers to meet their needs for durability, while using CHHPP’s paperboards as raw material for our own packaging products going forward.

Packaging Business: CHHPP Group manufactures packaging products in 5 facilities in New Zealand and Australia, in addition to its paper bag and paper cup businesses. As we expect that the trade volume among Asia Pacific Rim countries continues to increase, we believe that the business will grow in parallel with robust demand in the region.

Other important points is that the acquisition of CHHPP Group would also provide us with access to softwood resources, whereby expanding Oji Group's wood product business in the region and allowing us to develop and market its advanced materials as well as new materials made from woods.
Our co-investing partner, INCJ is a corporation incorporated in 2009 under the Industrial Competitiveness Enhancement Act. Jointly funded by the Japanese government and 26 Japanese private enterprises, INCJ aims to provide financial, technological and management support to promote the creation of next-generation businesses through “open innovation” achieved by increasing the flow of technology and expertise beyond the boundaries of existing organizational structures. INCJ fully appreciates and understands the importance of Oji Group's global expansion strategy, and seeks to support us so as to strengthen Japanese presence in global forestry sector and potentially create further expansion opportunities for other Japanese corporations.

2．Overview of CHHPP Group
Name of Company: Carter Holt Harvey Pulp & Paper Limited
Location: Auckland, New Zealand
Representative : D. Jon Ryder, Chief Executive
Business Description: Manufactures and markets softwood kraft pulp, paperboards and packaging products
Foundation: May 23, 2003 (*1)
Major Shareholder of CHHPP: Carter Holt Harvey Limited (100%)
Financials (NZD million) (*2): Fiscal Year: December 31, 2013
Turnover: 1,147 (approx. JPY102.1bn)
EBITDA (*3): 113 (approx. JPY10.0bn)
(*1) The key operations of the business originally started in the 1940's
(*2) Total figures of CHHPP Group
(*3) Earnings Before Interest, Taxation, Depreciation and Amortization (adjusted to remove abnormal items)

3. Overview of the Seller
Name of Company: Carter Holt Harvey Limited
Location: Auckland, New Zealand
Representative : Bryce Murray, Chief Executive Officer
Business Description: Manufactures and markets wood products and pulp, paper & packaging products
Foundation: August 26, 1971
Major Ultimate Shareholder: Rank Group Limited (100%)

4. Overview of the Acquiring Entity, Number of Shares and Transaction Value
Direct acquiring entity: Oji Oceania Management (NZ) Limited.（”NZSPC”）and
Oji Oceania Management (AUS) Pty. Ltd (“AUSPC”).(*4)
Number of shares to acquire: All of the CHHPP shares
Transaction value: NZ$1,037 million (on a 100% basis) (Approx. JPY92.3 billion)
(*4) NZSPC and AUSPC are both subsidiaries of Oji Oceania Management Co., Ltd. which are to be owned by Oji and INCJ with voting rights split of 60% and 40% respectively upon completion of this transaction. The abovementioned number of shares as well as transaction value is on a 100% basis.

Business Facilities and Assets

Premises The Subject operates from the verified heading address consisting of a production mill, warehouse and an administrative office. This production facility is also known as the Kinleith Mill. Kinleith Mill is located near Tokoroa in New Zealand's Central North Island Region. Kinleith is the largest mill, producing bleached and unbleached softwood kraft pulp and a range of linerboards and medium used in packaging.

Branches In addition, the Subject operates from 3 other production mills located at Tasman, Whakatane, and Penrose. Tasman Mill is located in the Bay of Plenty Region of New Zealand near Kawerau. Here the Subject manufactures a range of specialty pulp products used by manufacturers of high quality paper, tissue and building products. Whakatane Mill is also located in the Bay of Plenty Region of New Zealand near the Whakatane township. Here the Subject manufactures a range of coated cartonboards used to package FMCG products. Penrose Mill is located in Auckland, close to a ready supply of waste paper from New Zealand's largest population centre and to two of the country's largest producers of corrugated packaging.

SUMMARIZED COUNTRY RISK

Gross Domestic Products (GDP) and Economic Overview

Central bank Reserve Bank of New Zealand Reserve of foreign exchange and gold US$ 20.562 billion Gross domestic product (GDP) US$ 180.548 billion Purchasing power parity (GPP) 126.628 billion of International dollars GDP per capita (current prices) US$ 40,454 GDP composition by sector agriculture: 4.7% industry: 24% services: 71.3% Inflation 2009: 2.1% 2010: 2.3% 2011: 4% Unemployment rate 2009: 6.1% 2010: 6.5% 2011: 6.5%

Public debt (general Government gross debt as percentage (%) of GDP) 2009: 26.1% 2010: 32.3% 2011: 37% Government bond ratings Standard & Poor's: AA+/Stable/A-1+ Moody's rating: Aaa Moody's outlook: STA Market value of publicly traded shares US$67.061 billion Largest companies Westpac Limited, Transpower, Fletcher Building Limited, National Bank of New Zealand, Fonterra Co-Operative Group Ltd, Air New Zealand Limited, The Warehouse Group Limited, Progressive Enterprises Ltd.

Trade and Competitiveness Overview

Total exports US$33.24 billion Export commodities Dairy products, meat, wood and wood products, fish, machinery Total imports US$31.11 billion Import commodities Machinery and equipment, vehicles and aircraft, petroleum, electronics, textiles, plastics Best countries for doing business 3 out of 183 countries Global competitiveness ranking 25 (ranking by country on a basis of 142, the first is the best)

Major export partners Australia 22%, US 11.5%, Japan 9.2%, China 5.3%, UK 4.6% Major import partners Australia 20.7%, China 13.4%, US 9.7%, Japan 9.5%, Singapore 4.9%, Germany 4.7% FDI inflows 2008: US$4,598 million 2009: US$-1,293 million 2010: US$561 million FDI outflows 2008: US$462 million 2009: US$-308 million 2010: US$589 million

Country and Population Overview

Total population 4.37 million Total area 270,467 km2 Capital Wellington

Currency New Zealand dollars (NZD) Internet users as percentage (%) of total population 83%

PAYMENT OUTLOOK

Purchases Term

Local Prepayment, Bank transfer, Credit up to 150 days

International L/C, Telegraphic transfer, Credit up to 150 days

Sales Term

Local Prepayment, Bank transfer, Credit up to 150 days

International L/C, Telegraphic transfer, Credit up to 150 days

Trade Reference / Payment Behaviour

Comments As local and international trade references were not supplied, the Subject's payment track record history cannot be appropriately determined but based on our research, payments are believed to be met without delay.

Investigation Note

Sources Interviews and material provided by the Subject Other official and local business sources

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.28
UK Pound	1	Rs.102.28
Euro	1	Rs.82.05

INFORMATION DETAILS

Analysis Done by :	SUB
Report Prepared by :	NIS

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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