MIRA INFORM REPORT

Report Date :

20.10.2014

IDENTIFICATION DETAILS

Name :	COATES GROUP PTY LIMITED
Formerly Known As :	THE NED GROUP HOLDINGS PTY LIMITED
Registered Office :	Level 6, 241 O'Riordan Street, Mascot, New South Wales, 2020
Country :	Australia
Financials (as on) :	30.06.2012
Date of Incorporation :	26.07.2007
Com. Reg. No.:	126739240
Legal Form :	Australian Proprietary Company, Limited by Shares
Line of Business :	Subject is an investment holding company and through its subsidiaries engages in providing equipment hire services with operation
No of Employees :	2,850 (Subject and subsidiaries)

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 – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
Australia	A1	A1

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

AUSTRALIA - ECONOMIC OVERVIEW

The Australian economy has experienced continuous growth and features low unemployment, contained inflation, very low public debt, and a strong and stable financial system. By 2012, Australia had experienced more than 20 years of continued economic growth, averaging 3.5% a year. Demand for resources and energy from Asia and especially China has grown rapidly, creating a channel for resources investments and growth in commodity exports. The high Australian dollar has hurt the manufacturing sector, while the services sector is the largest part of the Australian economy, accounting for about 70% of GDP and 75% of jobs. Australia was comparatively unaffected by the global financial crisis as the banking system has remained strong and inflation is under control. Australia has benefited from a dramatic surge in its terms of trade in recent years, stemming from rising global commodity prices. Australia is a significant exporter of natural resources, energy, and food. Australia's abundant and diverse natural resources attract high levels of foreign investment and include extensive reserves of coal, iron, copper, gold, natural gas, uranium, and renewable energy sources. A series of major investments, such as the US$40 billion Gorgon Liquid Natural Gas project, will significantly expand the resources sector. Australia is an open market with minimal restrictions on imports of goods and services. The process of opening up has increased productivity, stimulated growth, and made the economy more flexible and dynamic. Australia plays an active role in the World Trade Organization, APEC, the G20, and other trade forums. Australia has bilateral free trade agreements (FTAs) with Chile, Malaysia, New Zealand, Singapore, Thailand, and the US, has a regional FTA with ASEAN and New Zealand, is negotiating agreements with China, India, Indonesia, Japan, and the Republic of Korea, as well as with its Pacific neighbors and the Gulf Cooperation Council countries, and is also working on the Trans-Pacific Partnership Agreement with Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the US, and Vietnam.

Source : CIA

CORPORATE DETAILS

Verified Address

Subject name COATES GROUP PTY LIMITED Business address Level 6, 241 O'Riordan Street Town Mascot Province New South Wales Zip / Postal code 2020 Country Australia Telephone +61 2 97013300 Fax +61 2 97013395 Website www.coateshire.com.au

Registered address Level 6, 241 O'Riordan Street Town Mascot Province New South Wales Zip / Postal code 2020 Country Australia

SUMMARY DETAILS

Report Summary

Date registered 26/07/2007 Legal form Australian Proprietary Company, Limited by Shares Key personnel Leigh Ainsworth Line of business The Subject is an investment holding company and through its subsidiaries engages in providing equipment hire services with operation in Australia, Indonesia and United Kingdom. Staff employed 2,850 employees (Subject and subsidiaries)

Paid-up capital AUD 1.00 Sales turnover / Revenue / Income AUD 1,292,825,000.00 (Consolidated 12 months, 30/06/2012) Net income / loss AUD 139,946,000.00 (Consolidated 12 months, 30/06/2012) Total assets AUD 3,109,028,000.00 (Consolidated 12 months, 30/06/2012) Share equity AUD 210,728,000.00 (Consolidated 12 months, 30/06/2012)

CREDIT RISK OUTLOOK

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 good

Organisation structure Organisational structure is stable Detrimental No detrimental found Payment history No payment delays noted

STATUTORY DETAILS

Registry Information

Date registered 26/07/2007 Legal form Australian Proprietary Company, Limited by Shares Registration number Australian Company Number: 126739240 Registered authority Australian Securities and Investments Commission Tax / VAT number Australian Business Number: 89126739240

Statutory status Active Previous name NED GROUP HOLDINGS PTY LIMITED (initial) Change of legal form None reported.

BOARD OF MANAGEMENT

Key Personnel

Name Leigh Ainsworth Designation Managing Director

BOARD OF DIRECTORS

Appointments

Name James Harley Wallace Welch Title Director Appointment date 14/10/09 Address Unit 14, 93-95 Coogee Bay Road Coogee, NSW 2034 Australia Biography Born on 25-10-1973 in Brisbane, Queensland, Australia. Name Leigh Ainsworth Title Director Appointment date 25/11/08 Address Level 6, 241 O'Riordan Street Mascot, NSW 2020 Australia Biography Born on 26-04-1953 in Sydney, New South Wales, Australia. Name Andrew Vlachos Title Company Secretary Appointment date 17/06/08 Address 38 Illiliwa Street Cremorne, NSW 2090 Australia Biography Born on 06-05-1964 in Sydney, New South Wales, Australia.

Staff employed 2,850 employees (Subject and subsidiaries)

Other Appointments

Auditor PRICEWATERHOUSECOOPERS Level 1, 201 Sussex Street Sydney, NSW 2000 Australia

SHARE CAPITAL

Composition

Authorized capital AUD1.00 Number / Type of shares 1 Ordinary Share Share par value AUD1.00 Issued capital AUD1.00

Paid-up capital AUD1.00

OWNERSHIP / SHAREHOLDERS

Composition

Shareholder name COATES GROUP HOLDINGS PTY LIMITED Address Level 6, 241 O’Riordan Street Mascot, NSW 2020 Australia Number / Type of shares 1 Ordinary Share Percentage (%) of shares 100%

CORPORATE AFFILIATIONS AND RELATED COMPANIES

Structure

Company name NATIONAL HIRE GROUP LIMITED Affiliation type Ultimate Holding Company Country of business 12 Hoskins Road Landsdale Perth, WA 6065 Australia Comments National Hire Group Limited engages in the manufacture, assembly, and sale of Allight mobile lighting, power generation, air compressors, and Sykes dewatering equipment primarily in Australia. The company also distributes Perkins engines, and FG Wilson power generation sets and parts. The company was founded in 1988 and is based in Landsdale, Australia. Company name COATES GROUP HOLDINGS PTY LIMITED Affiliation type Parent Company Country of business Level 6, 241 O’Riordan Street Mascot, NSW 2020 Australia Comments Coates Group Holdings Pty Limited provides equipment hiring services in Australia. It engages in the hire of general equipment, access equipment, temporary site accommodation, toilets, mobile lighting equipment, power generation and dewatering pumps. The company was formerly known as Ned Group Holdings Pty Ltd. Coates Group Holdings Pty Limited was incorporated in 2007 and is based in Mascot, Australia. Company name COATES HIRE OPERATIONS INVESTMENTS PTY LIMITED Affiliation type Wholly-owned Subsidiary Country of business Australia Company name COATES HIRE OPERATIONS PTY LIMITED Affiliation type Wholly-owned Subsidiary Country of business Australia Company name NATIONAL HIRE EQUIPMENT PTY EQUIPMENT Affiliation type Wholly-owned Subsidiary Country of business Australia

Remarks on corporate affiliations and related companies Other companies of the National Hire Group group should be considered affiliates of the Subject.

BANK AND MORTGAGES

Bank Details

Name of bank The Australia and New Zealand Banking Group Limited Address Australia

Comments It is generally not the policy of local banks to provide credit status information to non-related parties. However, interested parties are advised to first consult 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 Commercial Registry Filings Financial statement date 30/06/12 Style of financial statement Full audited

Currency of financial statement Australia Dollar (AUD) Exchange rate 1 USD = AUD 1.14 as of 16-10-2014

Concise Financial Data	Consolidation style	Non Consolidated	Non Consolidated
	Currency	Australia Dollar (AUD)	Australia Dollar (AUD)
	Date of financial year end	30/06/12	30/06/11
	Length of financial accounts	12 months	12 months
	Sales turnover / Revenue / Income	1,292,825,000.00	1,063,866,000.00
	Profit / Loss before tax	173,741,000.00	73,234,000.00
	Net income / loss	139,946,000.00	48,017,000.00
	Non-current assets	2,749,608,000.00	2,496,036,000.00
	Property, plant and equipment	1,350,692,000.00	1,114,285,000.00
	Current assets	359,420,000.00	383,922,000.00
	Inventories	6,879,000.00	6,086,000.00
	Cash and cash equivalents	97,366,000.00	161,174,000.00
	Accounts receivable	254,627,000.00	216,662,000.00
	Total assets	3,109,028,000.00	2,879,958,000.00
	Current liabilities	299,612,000.00	288,858,000.00
	Non-current liabilities	2,598,688,000.00	2,510,574,000.00
	Accounts payable	1,373,000.00	2,620,000.00
	Total liabilities	2,898,300,000.00	2,799,432,000.00
	Share equity	210,728,000.00	80,526,000.00
	Retained earnings	240,376,000.00	100,430,000.00

Remarks

The Subject has not filed its latest financial with Australian Securities and Investments Commission.

BUSINESS DETAILS

Operational Details

Main activities The Subject is an investment holding company and through its subsidiaries engages in providing equipment hire services with operation in Australia, Indonesia and United Kingdom. Products and services Earthmoving equipment Traffic equipment Access equipment Temporary site accommodation Mobile lighting equipment Power generation Dewatering pumps General equipment

Purchases

International The Subject sources its product(s) / material(s) from countries worldwide.

Sales

Local The Subject sells its product(s) locally.

International The Subject exports its product(s) to countries such as Indonesia and United Kingdom.

Key events
3 October, 2007
Coates accepts $1.7b takeover offer

AUSTRALIAN equipment hire firm Coates Hire has accepted a $1.7 billion takeover bid from rival National Hire and global private equity group Carlyle.

The offer of $6.59 per share, or $6.70 taking into account Coates' 11c final dividend being paid on October 3, was recommended to shareholders by the Coates board yesterday.

Coates said the offer valued the company at about $2.2 billion on an enterprise basis.

This is the third takeover offer by the National Hire/Carlyle Group consortium, which initially offered $1.5 billion, or $6.20 per share.

Last month Coates rejected a revised offer of $1.6 billion, or $6.29 per share, saying it continued to undervalue the company and was again not at a level that justified recommendation to shareholders.
However, Coates said yesterday this latest offer was sufficiently high to warrant the board committee's recommendation.

National Hire and the Carlyle Group have formed a new company, Ned Group Holdings, for the acquisition of the rental operations of Coates Hire and National Hire.

The two companies will each hold a 50% voting interest in the Ned Group.
The merged rental operations will be the leading equipment hire business in Australia, the companies said.

It is expected to generate annual hire revenues of about $990 million and earnings before interest and tax of about $202 million based on the fiscal 2007 performance of Coates and National Hire.

National Hire executive chairman Ray Romano said National Hire would remain a listed company in its own right.

"Its major assets will comprise our capital sales business, a 47 percent economic interest in the merged Coates/National Hire rental business and net cash of approximately $40 million," he said.

The acquisition is subject to a number of conditions, including approval by Coates shareholders who will be asked to vote on the proposal at a meeting in mid-December.

Business Facilities and Assets

Premises The Subject operates from the verified heading address consisting of an administrative office.

Branches In addition, the Subject through its subsidiaries operates from various office branches located in Indonesia, Australia and United Kingdom.

SUMMARIZED COUNTRY RISK

Gross Domestic Products (GDP) and Economic Overview

Central bank Reserve Bank of Australia Reserve of foreign exchange and gold US$ 46.714 billion Gross domestic product (GDP) US$ 1.586 trillion Purchasing power parity (GPP) 954.296 billion of International dollars GDP per capita (current prices) US$ 68,916 GDP composition by sector agriculture: 4% industry: 25.6% services: 70.4% Inflation 2010: 2.8% 2011: 3.4% 2012: 2.7% Unemployment rate 2010: 5.2% 2011: 5.1% 2012: 5.2%

Public debt (general Government gross debt as percentage (%) of GDP) 2010: 20.4% 2011: 22.9% 2012: 24% Government bond ratings Standard & Poor's: AAA Moody's rating: Aaa Moody's outlook: STA Market value of publicly traded shares US$1.198 trillion

Trade and Competitiveness Overview

Total exports US$263.9 billion Export commodities Coal, iron ore, gold, meat, wool, alumina, wheat, machinery and transport equipment Total imports US$239.7 billion Import commodities Machinery and transport equipment, computers and office machines, telecommunication equipment and parts; crude oil and petroleum products Best countries for doing business 10 out of 185 countries Global competitiveness ranking 20 (ranking by country on a basis of 144, the first is the best)

Major export partners China 27.4%, Japan 19.2%, South Korea 8.9%, India 5.8% Major import partners China 18.5%, US 11.4%, Japan 7.9%, Singapore 6.3%, Germany 4.7% FDI inflows 2009: US$26,554 million 2010: US$35,556 million 2011: US$41,317 million FDI outflows 2009: US$16,693 million 2010: US$12,791 million 2011: US$19,999 million

Country and Population Overview

Total population 22.68 million Total area 7,692,024 km2 Capital Canberra

Currency Australian dollars (AUD) Internet users as percentage (%) of total population 79%

PAYMENT OUTLOOK

Purchases Term

International L/C, Telegraphic transfer, D/P, Credit 30-90 days

Sales Term

Local Prepayment, Bank transfer, D/P, Credit 30-90 days

International L/C, Telegraphic transfer, D/P, Credit 30-90 days

Trade Reference / Payment Behaviour

Comments Due to local and international trade references not being supplied, the Subject''s payment track record history cannot be appropriately determined. However, 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

Attachments

Attachments Financial statements

KEY FINANCIAL RATIOS

For financial year end	30/06/12	30/06/11	.
Profitability	.	.	.
Pre-tax profit (loss) margin (%)	13.44	6.88
Net profit (loss) margin (%)	10.82	4.51
Return on Invested Capital	.	.	.
Return on assets (%)	4.50	1.67
Return on equity (%)	66.41	59.63
Liquidity	.	.	.
Current ratio	1.20	1.33
Quick ratio	1.18	1.31
Cash ratio	0.27	0.42
Accounts receivable turnover ratio (times)	5.08	4.91
Accounts payable turnover ratio (times)	941.61	406.06
Collection period (days)	71.89	74.33
Payment period (days)	0.39	0.90
Inventory turnover ratio (times)	187.94	174.81
Inventory conversion period (days)	1.94	2.09
Asset Management	.	.	.
Fixed asset turnover ratio (times)	0.96	0.95
Asset turnover ratio (times)	0.42	0.37
Capital Structure and Solvency	.	.	.
Total debt to asset ratio (%)	93.22	97.20
Total debt to equity ratio (%)	1,375.37	3,476.43
Non-current debt to equity ratio (%)	1,233.20	3,117.72

ATTACHMENT

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.62
UK Pound	1	Rs.99.12
Euro	1	Rs.78.89

INFORMATION DETAILS

Analysis Done by :	SUB
Report Prepared by :	SMN

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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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.