08a 20150305 Information Memorandum Final Compact

GHD | Information Memorandum 5 March 2015

GHD Information Memorandum 5 March 2015


Corporate directory GHD Board

Directors Company Secretary

R J Board Chairman L M Elbourne

I D Shepherd CEO

M A Hynes

R G Knott

D M Lundquist

M Muntisov

Y M Ngui

E S Roberts

W H Traves

R N Wankmuller

P C Wasow

A J Wright

Registered Office 133 Castlereagh Street SYDNEY NSW 2000

Share Registry

The Company Secretary Level 15 133 Castlereagh Street SYDNEY NSW 2000


Table of contents Chairmans letter ................................................................................................................. 1

1. Important information ................................................................................................ 2 1.1 Nature of this Information Memorandum ........................................................ 2 1.2 IM not lodged or registered with securities authorities ................................... 2 1.3 Professional advice ........................................................................................ 2 1.4 Disclaimer ....................................................................................................... 2 1.5 Authorised material ......................................................................................... 2 1.6 Contact particulars .......................................................................................... 2

2. Overview of GHD ...................................................................................................... 3 2.1 Operations ...................................................................................................... 3 2.2 Market sectors ................................................................................................ 5 2.3 Merger with Conestoga-Rovers & Associates ................................................ 8 2.4 Board of Directors ........................................................................................... 8 2.5 Executive Management Group ..................................................................... 12 2.6 GHD Group structure .................................................................................... 12

3. Offer timetable ........................................................................................................ 13

4. Offer overview ......................................................................................................... 14 4.1 GHD Shares and Exchangeable Shares ...................................................... 14 4.2 Offer outline .................................................................................................. 15 4.3 Details of the Offer ........................................................................................ 15 4.4 Purpose of the Offer and use of funds ......................................................... 15 4.5 Ranking of Shares ........................................................................................ 15

5. How to apply for Shares.......................................................................................... 16 5.1 Accepting the Offer ....................................................................................... 16 5.2 Closing date and cut-off for applications ...................................................... 16 5.3 Transfers and allotments .............................................................................. 16 5.4 Fees .............................................................................................................. 16

6. Risk factors ............................................................................................................. 17 6.1 Strategic risks ............................................................................................... 17 6.2 Organisational business risks ....................................................................... 18 6.3 Project risks .................................................................................................. 19 6.4 Other risks .................................................................................................... 21

7. Shareholders ........................................................................................................... 22 7.1 Access to Investor Information ..................................................................... 22 7.2 Ownership of GHD Shares ........................................................................... 22 7.3 Constitution and rights attaching to Shares .................................................. 22 7.4 Shareholder Deed......................................................................................... 23


7.5 Dividends ...................................................................................................... 24 7.6 Share transfer price ...................................................................................... 25 7.7 Information to Shareholders ......................................................................... 25 7.8 Company details ........................................................................................... 25

8. Taxation .................................................................................................................. 26 8.1 Overview ....................................................................................................... 26 8.2 Australian Resident Tax considerations ....................................................... 26 8.3 Not an Australian resident for tax purposes ................................................. 26 8.4 United States Federal Income Tax considerations ....................................... 27 8.5 Canadian Federal Income Tax considerations ............................................. 28 8.6 United Kingdom Tax considerations ............................................................. 31 8.7 New Zealand Tax considerations ................................................................. 31

9. Financial information ............................................................................................... 34 9.1 Financial performance .................................................................................. 34 9.2 Financial position .......................................................................................... 35 9.3 Dividend and valuation history ...................................................................... 37 9.4 Supporting financial statements ................................................................... 37

10. Additional information ............................................................................................. 38 10.1 Disclosure of interests .................................................................................. 38 10.2 Related party transactions ............................................................................ 38

11. Glossary .................................................................................................................. 39

Appendices Appendix A Financial Statements of GHD Group for the half year ended

31 December 2014

Appendix B Financial Statements of GHD Canada for the half year ended 31 December 2014

Appendix C Financial Statements of GHD Group for the years ended 30 June 2013 and 30 June 2014

Appendix D Financial Statements of GHD Canada for the years ended 30 June 2013 and 30 June 2014

Appendix E Financial Statements of CRA Holdings Inc. for the 12 months to 30 September 2013, and for the 9 months to 1 July 2014

GHD | Information Memorandum 5 March 2015 | 1

Chairmans letter

5 March 2015

Dear GHD Colleague

Offer to subscribe for Shares in GHD

One of the valued features of our organisation is that GHD Group Pty Ltd (GHD) together with its affiliated or controlled companies (GHD Group) is wholly owned by its most valued assets, our people.

Broad based employee ownership ensures that as shareholders, our people influence the future direction of GHD and share directly in the firms value creation through capital growth and distribution of our profits

The Board especially invites those who contribute most strongly to acquire shares in GHD. Our people may subscribe for shares directly in GHD (GHD Shares), or alternatively shares in GHD Holdings (Canada) Inc (GHD Canada), which mirror the economic and legal rights of a GHD Share and are exchangeable for GHD shares (Exchangeable Shares).

As with any financial investment, shareholding in GHD carries risk. The GHD Board strives to increase shareholder value and provide a strong dividend yield.

The GHD Board, on behalf of the Company, is pleased to offer to you GHD Shares or Exchangeable Shares (Shares) on the terms set out in this Information Memorandum. Please take time to carefully read this document in its entirety before deciding whether to invest. You should obtain independent professional advice before deciding whether to make this investment.

If you have any queries, please do not hesitate to contact me.

Yours sincerely

Russell Board

Chairman


1. Important information1.1 Nature of this Information Memorandum

This Information Memorandum (IM) is not a prospectus and contains a lower level of disclosure than that required for a prospectus.

1.2 IM not lodged or registered with securities authorities

This IM has not been lodged with the Australian Securities and Investments Commission or any other regulatory authority. It does not contain all information and disclosures which would have been required if the IM was a disclosure document lodged under the Australian Corporations Act 2001.

In the US, Canada, UK and Chile, Shares are offered under a Share Purchase Plan for Employees (Plan) pursuant to exemptions from registration requirements in each of those countries. Further detailed information regarding the offer of shares in those countries is set out in the individual Plans for each country which will be provided to shareholders residing in those countries as applicable.

1.3 Professional advice

This IM is not, and should not be construed as a recommendation to the recipient to purchase any Shares. A recipient of this IM should undertake his or her own enquiries and seek advice from a financial or other professional adviser before acquiring Shares.

1.4 Disclaimer

No representation, warranty or guarantee is given in relation to future performance, budgets, forecasts, industry or market developments whether or not reference is made to these matters in this IM.

No person named in this IM, nor any other person, guarantees the performance of the GHD Group, the repayment of capital or the payment of a return on any Shares.

Before deciding to apply for Shares the subject of the Offer (Offered Shares) pursuant to this IM, prospective investors should read the entire IM and consider the risk factors that could affect the financial and operating performance of GHD.

You should carefully consider whether Shares are an appropriate investment for you. Refer to section 6 for commentary relating to investment risks.

1.5 Authorised material

No person has been authorised to give any information or to make any representation in connection with the Offer which is not contained in, or not consistent with this IM. Any information or representation not so contained may not be relied on as having been authorised by GHD or the GHD Board.

1.6 Contact particulars

Further details in relation to Share ownership generally are available from the GHD Chairman or GHD Company Secretary.


2. Overview of GHD 2.1 Operations

GHD provides leading global engineering, architecture, environmental, and construction services to private and public sector clients. Its people deliver innovative solutions by combining technical skill and experience with an understanding of its clients objectives and aspirations. GHD is wholly owned by its employees.

GHD was established in Australia in 1928 and today is ranked amongst the worlds largest employee-owned professional services companies. GHD primarily serves the global market sectors of water, energy and resources, environment, property and buildings, and transportation.

Today, GHD employs approximately 7,500 people in a network of 203 offices with a major presence in Australia, New Zealand and North America, and with offices in Asia, the Middle East, UK and South America.

GHD Global Footprint

Note: Estimate only based on results for the 6 months to 31 December 2014

While much of GHDs growth has been organic, GHD has also engaged in a number of strategic mergers and acquisitions to develop its market presence and service offerings across regions and disciplines, the most notable being the recent merger with North American based Conestoga-Rovers & Associates (CRA or CRA Holdings Inc.). The merger with CRA now provides the merged group with a scale platform across Canada and the United States, and significantly augments GHDs environmental and water consulting capabilities.


Since 2002, GHDs business has grown organically, with significant and measured expansion of international and market sector capability. During this period strategically targeted mergers and acquisitions have complemented this organic growth by providing immediate momentum in support of step-up strategies. Since this time, GHD has undertaken projects in more than 90 countries across the globe. As a result, GHD now offers global capabilities and reach across each of its five market sectors.

GHDs revenue base has historically reflected its strong market position and origins in the Australian and New Zealand (NZ) markets. The merger with CRA has rebalanced GHDs revenue composition and currency exposure, with approximately 50% of revenues now being generated from GHDs North American activities, and just over 40% of revenues being derived from Australia.

Gross Revenue by Region

Source: Compiled from Company reports

GHD has maintained the values that have sustained the company since inception Teamwork, Respect and Integrity.

Central to its clients prosperity and GHDs success are forward-thinking architects, engineers, drafters, planners, scientists, project managers, management consultants, economists and other professionals.

GHD is committed to its clients and their stakeholders, being a responsible corporate citizen and providing lasting community benefit around the globe.

The GHD website (www.ghd.com) contains publicly available information on GHD, its markets and services.

51% 41%

5%

3%

Americas Australia Asia Pacific Europe/Middle East


2.2 Market sectors

GHDs business composition comprises a balanced portfolio across its five major market sectors.

Gross Revenue by Market Sector

Source: Compiled from Company reports..

Environment Our Environment team has earned a reputation for excellence by offering integrated, practical and innovative solutions to our clients. Our community of scientists, engineers and planners work closely with our clients to provide professional and technical solutions in the areas of contaminated land and remediation assessment, air and noise management, community and stakeholder engagement, assessment planning and permitting, environment impact assessments, forestry and natural resources management, water sciences, environmental management systems and audit, spatial science and waste management.

Contaminated Land Assessment & Remediation

Air and Noise EIA & Approvals Natural Resources

Contamination assessments, management and remediation

Statutory and due diligence audits

Soil and groundwater contamination solutions

Remediation options and action plans

Human health and ecological risk assessment

Soil and water contaminant transport modelling

Expert witness and third party independent review

Acid sulfate soil investigations and assessments

Hazardous materials

Emissions inventories & monitoring

Atmospheric dispersion modelling

Ambient air quality monitoring Environmental Impact

Assessment (Air and Noise) Air quality policy Emissions reduction Industrial and mining noise

assessment Noise mitigation strategies Building acoustic services Transportation acoustic

assessment

Impact Assessment and approval considering:

Heritage and archaeology Flora and fauna Air and Water quality Noise and vibration Geology and soils Energy resources Waste management Transportation Project management

Terrestrial and aquatic ecological survey, monitoring, analysis and assessment

Flora and fauna impact assessments

Development of biodiversity and environmental offsets

Ecological risk assessments

Agricultural impact assessment

Catchment management Policy management and

evaluation

15%

12%

18% 19%

27%

6%

3%

Transportation Energy & Resources Property & Buildings

Water Environment Construction

Other


Spatial Sciences Planning & Stakeholder Engagement

EMS & Audits Waste Management

Spatial data presentation and cartography

Constraints and multiple criteria analyses

Site and corridor selection Data capture, processing

and management Environmental modelling Visibility analysis 3D modelling Utility and transport

network analysis Remote sensing and image

analysis Database design and

system development

Statutory planning Urban economics City and urban planning Sustainability consulting Stakeholder and community

engagement Social planning and research Social impact assessment Strategic communication Facilitation Community development

Auditing and development of HSE management systems

Dangerous goods auditing Statutory asbestos surveys and

registers Comprehensive hazardous

materials consulting services Developing project HSE

management plans Integrating health and safety

systems with existing quality and environmental systems

Crisis and emergency management training

Detailed and conceptual design for landfills, transfer stations, resources recovery facilities, containment cells

Strategic planning for siting, resource and waste management, financial modelling and recycling or resource recovery

Alternative waste technologies assessment, selection, concept, design, feasibility and options

Transport

Within the Transport sector, services are provided in a number of specialist areas including: policy & economics, roads and highways, rail maritime and coastal and aviation. The majority of projects are performed in relation to urban and regional roads, rail, ports and airports.

Policy

&Economics Roads and

highways Rail Maritime & coastal Aviation

Transport demand, traffic pattern and patronage studies

Transport safety reviews

Strategic route planning investigations

Industry and community impact assessments

Logistics Policy advisory

services

Transport, traffic and strategic route planning

Concept design Detailed design

and structural advice for bridges, tunnels, tollways, signals etc.

Risk and tender management

Asset and life cycle management

Advisory services Intermodal

terminal/freight village layout

Concept and detailed design for all rail systems and passenger and rollingstock facilities

Route alignment Signals,

communications and structures

Power supply and overhead traction

Vehicle operations and network logistics

Conceptual through to detailed design and documentation of maritime and coastal structures

Offshore metocean studies

Dredging, reclamation and beach nourishment advice

Coastal management planning

Coastal impact and associated environmental assessments

Aeronautical studies

Aircraft noise studies

Airport technical and safety inspections

Aircraft support facilities

Airside and landside planning

Feasibility studies and business cases

Concept and detailed design for airfields and terminals, both passenger and freight

Energy & Resources

GHD provides professional services to clients involved in all different phases of the energy and resources sectors (from exploration to closure/decommissioning). GHD clients include a number of global mining and energy companies.

Mining Oil & gas Power

Exploration and assessment Feasibility studies Geotechnical services Mine plan and design Mine support infrastructure (port, rail,

power, water and aviation etc.) Mine closure and rehabilitation Environmental assessments &

approvals

Production, processing, refining and delivery

Pumps and compressors stations Integrated pipeline systems (onshore

and offshore) Water management

Strategic engineering advice Thermal generation (coal, gas, oil,

gasification) Renewables Option & feasibility studies Project implementation Transmission & distribution network

engineering Major industrial applications Water and ash management


Water

GHD is recognised globally for the provision of water and wastewater consulting services. GHD provides sustainable water solutions, covering every element of the water cycle for urban, rural and industrial water applications. Major clients in the water sector include water utility companies, various government bodies, mining, energy, food and beverage companies.

Drinking water systems Wastewater systems Environmental Industry-wide

Catchment management

Safety monitoring and planning for Dams

Water quality & treatment Desalination Dams, trunk and

reticulation system planning and design

Collection and treatment

Pump stations & pipelines

Resource recovery Renewable energy

sources Biosolids management

Waterways & coastal

Surface & groundwater management

Flood management & mitigation

Environmental audits & impact assessments

Water sciences

Climate variability & risk analysis

Irrigation Industrial water &

wastewater management and recycling

Asset & facilities management

Property & Buildings

Property & Buildings has integrated teams delivering services across the entire asset life cycle for the following sectors: city and community development, defence and national security, resources and industrial facilities, social infrastructure, transport facilities, health, workplace and leisure.

Planning & investigation Design & engineering Maintenance & construction

Stakeholder engagement Planning services Urban economics City and urban planning Sustainability consulting Spatial services

Architecture, landscape architecture and interior design

Structural engineering Civil engineering and land development Geotechnical engineering Electrical, mechanical, geotechnical

hydraulic and fire engineering

Integrated logistics support Project, asset & facility management Maintenance engineering analysis Construction management

Other

Other revenue is derived from business lines outside of conventional services including construction, landfill operations, materials laboratories and data centre activities in North America.

Construction

Construction work is mainly undertaken in Ontario, Canada and Texas, Arizona and Michigan, in the US. Construction activities include small scale co-generation plants, pipelines, relatively minor earthworks for oil and gas companies and soil remediation works. In almost all cases, GHD takes on construction contracts only at the request of clients who are seeking a design and build outcome from one organisation.

Landfill

CRA has a contract to operate Torontos largest landfill site which they designed.


Materials laboratories

Inspec-Sol owns and operates one large and two smaller materials testing laboratories in Montreal. The laboratories have a full suite of soil, concrete and steel tests. GHD also operates material testing and water science laboratories in Australia.

Data centre

CRA operate a small data centre in Waterloo, Ontario hosting data services for a number of corporate clients and municipalities.

2.3 Merger with Conestoga-Rovers & Associates

In July 2014, GHD completed a merger with CRA, a largely employee owned North American consulting environmental and engineering firm. Following the merger all ongoing employee shareholders in CRA became shareholders of GHD.

Under the terms of the merger, GHD Group acquired all the outstanding shares in CRA for a total purchase consideration of CAD270 million paid in cash and GHD Exchangeable Shares.

In order to encourage further equity participation in GHD by employees of CRA, GHD is obliged to make available up to CAD13.8 million of Exchangeable Shares in GHD Canada for a period of up to 24 months to these employees, as recommended by the North American Executive Committee (NAEC). The financial assistance to these employees is made available under a shareholder loan and repayment agreement funded by CRA shareholders who agreed to loan up to CAD13.8 million to GHD for this purpose.

At the time of the merger, CRA employed approximately 3,000 people located across 106 offices primarily in the US and Canada.

CRAs focus has primarily been in the provision of engineering and environmental consulting services. In addition to conventional engineering services, CRA also provided construction, landfill operations, materials laboratories and data centre services.

Its diversified client base spanned such sectors as oil and gas, chemicals, manufacturing, automotive, insurance, transportation, food and beverage and government.

2.4 Board of Directors

The GHD Board is responsible for overall corporate governance of GHD. The Board comprises 12 directors, drawn mainly from experienced GHD employees, augmented by two non-executive directors with complementary corporate leadership and management disciplines.

Profiles of the GHD Board of Directors are provided below.


Director profiles

Russell Board Chairman

A Director of GHD since 1999, Russell was appointed Chairman in 2011. A civil engineer with more than 30 years experience, Russell has held executive responsibility for GHDs business in Australia, New Zealand, South East Asia, and South America. During his career, he managed a broad range of infrastructure projects, particularly in remote areas. Russell has completed programs at the Mt Eliza School of Management and Harvard Business School. He is a Fellow of the Australian Institute of Company Directors and the Institution of Engineers, Australia.

Ian Shepherd Chief Executive Officer

Ian joined GHD in 1985 and has been an Executive Director since 1999. He was the General Manager for Australia and the Middle East for five years from 2003. In 2008 he was appointed Chief Executive Officer.

Ian qualified as a Professional Engineer in 1978 and has worked in the disciplines of civil and structural engineering, together with project management. His project experience extends across Asia, Canada, the Middle East and Australia. He completed post graduate studies in business and completed the Harvard Advanced Management Program in 2006. He is a member of the Australian Institute of Company Directors and Fellow of the Institution of Engineers Australia.

Ian is responsible for strategic oversight, company performance and implementing the company's next development phase. Outside of his commitments to GHD, Ian is a Director of the Princess Margaret Childrens Hospital Foundation in Western Australia.

Mary Ann Hynes Non-Executive Director

Mary Ann is a governance and compliance professional with more than 20 years experience in Fortune 500 Boardrooms. Mary Ann is currently Senior Counsel at Dentons, an international law firm located on most continents. Prior to this, she was Senior Vice President, Counsel to the Chairman and Chief Compliance Officer at Ingredion Inc. where she led legal and environmental teams in a variety of global industries. She has extensive international mergers and acquisitions, dispute resolution as well as integration experience and brings an understanding of the North American business environment and the protection of intellectual property to GHD.

Rob Knott Executive Director

Rob is responsible for managing GHDs operations in New Zealand, Philippines, China and Asia, and leads the group Technical Services portfolio. With more than 28 years experience, Rob has been responsible for project management and design of major infrastructure, defence, and property & buildings projects. He is chair of GHDs Acquisition and Integration Advisory Group which has provided governance of more than 18 transactions in Australia, United States, Canada and the United Kingdom. An executive director of GHD since 2009, Rob is past chair of the board risk committee. He completed the Harvard Business School Advanced Management Program in 2011 and is a member of the Australian Institute of Company Directors and a Fellow of the Institution of Engineers Australia..


Director profiles

Diane Lundquist Executive Director

Diane is a principal of CRA and has been a Director of CRA Holdings since 2012. She has over 29 years of experience in engineering, environmental compliance, and remediation for the oil and gas industry. Dianes experience includes all aspects of assessment and remediation of petroleum hydrocarbons in soil and groundwater. She manages a North American environmental portfolio for a major oil company with an annual turnover of over USD30 million. As part of this engagement, she has developed an extensive understanding of the behaviour based safety expertise and programs required to work in the oil and gas industry.

Diane was the President and Chief Executive Officer of Cambria Environmental Technology, acquired by CRA in 2007. She holds a B.S. degree in Civil Engineering from Valparaiso University in Valparaiso, Indiana. She is a registered professional engineer in six US states.

Michael Muntisov Executive Director

Michael has more than 30 years of water industry experience, including more than 10 years in senior management roles. Michael joined GHD in 1983. His particular focus is in water treatment and he has played a key role in the technical development of GHD's practice in the water quality and treatment discipline. He is experienced in high level business leadership, incorporating client, financial and team management.

May Ngui Executive Director

May currently manages our Western Sydney operations based in Parramatta but continues to be active in technical delivery and client-facing roles for the company. May joined GHD in 1991. A chartered professional electrical engineer, Fellow of Engineers Australia and Graduate Member of the Australian Institute of Company Directors, she has 28 years' experience in the design and commissioning of electrical and computer-based control systems for industrial plants and infrastructure both in Australia and overseas, spending time in exotic locations such as an oil rig on the South China Sea and in a cement factory in pre-1989 rural China. May is passionate about technical leadership and development of female leaders in the industry and is a mentor to a number of young engineers both within and outside GHD.

Edward Roberts Executive Director

Ed has been a Principal and Director with CRA since 1994 and has more than 29 years of experience in environmental engineering and project management. Ed was appointed as CRA's President in 2000 and its' Chairman in 2009. Since 2000, CRA grew from 1,000 employees to 3,000 employees via both organic growth and acquisition with operations across North America and in the UK. Ed also played a significant role in defining CRA's safety culture from 2007 through 2012 when he was the Principal-In-Charge of Safety across the company. From 2000 through 2007 and commencing again in 2012 to the present, Ed has been the Principal-In-Charge of Human Resources for CRA and will continue to serve in this role as the Regional People Manager for GHD in the Americas.


Director profiles

Warren Traves Executive Director

Warren joined GHD in 1988 and has worked with the company in Brisbane, Cairns and Manila across a variety of disciplines. He is currently focused on client relationships in our South Queensland Operations, a part of our business he led from 2010 to June 2014. Prior to this, he was our Global Market Leader for Water. Warren served on GHDs Strategy Committee from 2004 2009. He is a Graduate Member of the Australian Institute of Company Directors.

Richard Wankmuller Executive Director

Richard has more than 30 years of experience running organisations throughout the United States, Europe, Middle East, Asia and Australia. As General Manager for the Americas, Richard is charged with the overall leadership and growth of GHD's presence in North and South America. Under his leadership, GHD Americas has already tripled its revenue and staff size through mergers and acquisition and organic growth initiatives. Prior to joining GHD, Richard was President of Parsons Corporation's global water and infrastructure business and President/Managing Director for Europe, Middle East, Africa and India for MWH as well as a member of their Board of Directors. Throughout his career, Rich's focus has always been on client-centred development and in creating new value propositions in the marketplace.

Peter Wasow Non-Executive Director

Peter is a non-executive director. He is currently Chief Executive Officer of Alumina Limited, an ASX top 100 Australian based global alumina producer. Prior to this, Peter was Executive Vice President and Chief Financial Officer, Santos Ltd, an ASX top-20 Australian-based international oil and gas company. Peter has direct international experience in working with subsidiaries, customers, partners, lenders, governments, suppliers and people in many countries including the USA, Indonesia, Canada, South America, Japan, Korea, the UK, and Germany.

Ashley Wright Executive Director

Ashley has more than 20 years' experience in major civil infrastructure, transportation and traffic engineering projects, including the iconic Perth to Bunbury Highway. In July 2014 Ashley was appointed as the General Manager United Kingdom/Middle East. This role also includes the portfolio responsibilities for Marketing and Communications, Innovation and Strategy. Previously Ashley was the Operating Centre Manager for WA from February 2010 and was responsible for leading our business in that state. In November 2013 Ashley was appointed a director of GHD. Since 2003, Ashley has been an Executive Member of Consult Australia WA Division and represents the group on the Managing Director of Mains Roads WA Construction and Maintenance Industry Advisory Group. From 2006-2013, Ashley was a founding Director of the ROADS Foundation, a not-for-profit organisation.

Lisa Elbourne is the Company Secretary of GHD.


2.5 Executive Management Group

The Executive Management Group (EMG) consists of a team of senior executives empowered by the Board of GHD to plan, manage and lead the GHD business. The EMG is led by the Chief Executive Officer and is tasked with developing and implementing the strategy. It also manages the Companys operations with the support of the leadership team.

Executive Management Group

I D Shepherd Chief Executive Officer

P A Duthie General Manager Australia

R N Wankmuller General Manager Americas

R G Knott General Manager Asia Pacific/Services

A J Wright General Manager UK/ME

A C Ying General Manager Integration

P A Bradley General Manager Finance

D M Beech Jones General Manager People

2.6 GHD Group structure

The diagram below provides an extract of the current legal structure of the GHD Group.

Extract of GHD Company Structure


3. Offer timetable Set out below is an indicative timetable for the offer and issue or transfer of the Shares.

Action Timing

Formal Offers Distributed 5 March 2015

Closing Date 30 March 2015

Issue or Transfer of Shares Shares will be issued or transferred during the period 30 March 2015 to 1 April 2015

These dates are indicative only and may change. The GHD Board reserves the right to vary the above timetable at its discretion without prior notice.


4. Offer overview 4.1 GHD Shares and Exchangeable Shares

GHD has six classes of Shares on issue at 31 December 2014 as set out below:

Class of Share Shares on Issue

GHD Shares 154,718,733

Exchangeable Shares 2,030,850

Class A Exchangeable Shares 35,409,715

Class B Exchangeable Shares 864,000

Class C Exchangeable Shares 22,952,140

Class D Exchangeable Shares 2,391,344

Total Shares on issue 218,366,782

GHD Shares

GHD Shares are ordinary shares held in the ultimate holding company of the GHD Group, GHD Group Pty Ltd (GHD). GHD is an Australian unlisted disclosing entity.

The majority of shares issued by the GHD Group are GHD Shares.

Exchangeable Shares

Canadian and some US employees are eligible to hold Exchangeable Shares.

Five classes of Exchangeable Shares are held in GHD Holdings (Canada) Inc (GHD Canada), which is a Canadian subsidiary of GHD.

Exchangeable Shares are substantively equivalent to GHD Shares in relation to key rights such as voting rights, dividend entitlements and entitlements on liquidation of GHD. Exchangeable Shares are also exchangeable at any time for GHD Shares.

Exchangeable Shares are non-voting shares in GHD Canada. However, holders of Exchangeable Shares are able to direct a trustee to cast a vote in GHD on their behalf for each Exchangeable Share held, to mirror the voting rights of a GHD Share.

Each class of Exchangeable Shareholder may direct their respective trustee (either GHD Trustee (Canada) Inc, GHD Trustee (Canada) A Inc., GHD Trustee (Canada) B Inc., GHD Trustee (Canada) C Inc. or GHD Trustee (Canada) D Inc.) as trustees (Trustees) of the voting trust held for the benefit of that Exchangeable Shareholder class.

Each Trustee in turn holds a voting redeemable preference share in GHD enabling the Trustee to vote an equivalent number of votes for each class of Exchangeable Share on issue. The redeemable voting preference shares entitle the Trustees to certain voting rights at general meetings of members of GHD but not to any dividends.

The rights and conditions of the Exchangeable Shares are contained in the articles of GHD (Canada) the details of which are contained in the documents applicable to each class of shares entitled Exchangeable Share Provisions.


4.2 Offer outline

The proposed Offer is an offer to you to purchase the number of Shares specified in your personalised Offer Letter which accompanies this IM at a price of AUD3.12 per Share. No brokerage, commission or other fees are payable by Shareholders, or deductible from application monies remitted in response to this IM.

The Offered Shares are currently held by one or more existing Shareholders of GHD or GHD Canada who are either required, or permitted, to transfer the Shares in accordance with the Constitution or Share Provisions (in respect of Exchangeable Shares) as applicable (Selling Shareholders), or alternatively, the Offered Shares will be newly issued Shares.

4.3 Details of the Offer

Shares are being offered to selected employees of the GHD Group. The actual number of Offered Shares to be issued or transferred to you under this IM will depend on the number of Offered Shares applied for by you in response to the Offer (such Shares being the Accepted Shares).

This Offer is personal to you and not transferable. The purchase price in relation to the Accepted Shares of AUD3.12 per Share is payable by you in accordance with section 5.1.

4.4 Purpose of the Offer and use of funds

Available Existing Shares

The proceeds of the Offer for the Accepted Shares will be used to acquire shares from Selling Shareholders as such sales arise from time to time.

New Shares

The purpose of the Offer of Shares is to incentivise the employees of the GHD Group and to have them be invested in the long term success of the GHD Group. The proceeds generated from the issuances of Shares will be available for the general working capital needs of the GHD Group, and could also be utilised for the purchase of capital equipment, debt retirement, or potential acquisitions of complementary businesses, among other potential uses.

The actual use of the proceeds of the Offer may vary depending on factors including:

proceeds from the sales under the IM; Management appraisal of prevailing economic conditions.

4.5 Ranking of Shares

The Offered Shares are fully paid ordinary Shares of GHD or fully paid Exchangeable Shares of GHD Canada as applicable. All Shares issued have the right to participate fully in any dividends declared and paid by GHD after their date of issue or transfer in accordance with the Constitution or Share Provisions (in respect of Exchangeable Shares) as applicable and the GHD Boards dividend policy (which may change from time to time).


5. How to apply for Shares 5.1 Accepting the Offer

It is important that you consider the Offer carefully. If you decide to accept the Offer, you must do so in accordance with the instructions set out in the letter of Offer. If you are in doubt as to the course of action you should follow, you should consult your professional adviser.

You may accept the Offer of Shares made to you in whole or in part, as set out in your personalised Offer Letter which accompanies this IM.

You are required to pay for the Accepted Shares before the closing date set out in the Offer Letter accompanying this IM. If payment is not received by such date, the Offer will lapse unless the GHD Board in its absolute discretion determines otherwise.

5.2 Closing date and cut-off for applications

The Closing Date of the Offer is 30 March 2015, unless otherwise altered by the Board of GHD in its absolute discretion. All applications must be received in a complete form and payment for the full amount accepted must be received, either by cheque or electronic transfer in accordance with the instructions set out in the letter of Offer, by the Closing Date unless the GHD Board in its absolute discretion determines otherwise.

5.3 Transfers and allotments

The Accepted Shares will be transferred or allotted to you as soon as practicable after the Closing Date. If the application process is not completed correctly, or if the accompanying payment of the application monies is for the wrong amount, it may still be treated by the GHD Board (in its absolute discretion) as a valid application. The GHD Boards decision whether to treat the application as valid and how to construe, amend or complete the application form is final.

5.4 Fees

The purchase price for the Offered Shares is AUD3.12 per Share. No other fees, commissions or charges are payable in respect of the Shares.


6. Risk factors All financial investment carries some risk. While GHD has a stable history and has been in business in various forms since 1928, there is always risk associated with investing in any commercial enterprise. It is your responsibility to assess the risks, as is the case with any investment you make. A number of the strategic, organisational, business and project risks are described in the following sections.

6.1 Strategic risks

GHD faces a number of strategic risks, including the following:

General political, economic and business conditions

GHD conducts business through numerous operating companies and branch offices registered in Australia, New Zealand, Papua New Guinea, Philippines, China, USA, Canada, Chile, United Kingdom, Qatar and United Arab Emirates as well as extending operations into other jurisdictions to develop specific strategic business and project opportunities.

The legal systems of some of the countries in which GHD and our clients operate may not operate in the manner to which GHD or its shareholders are accustomed or might expect. This may impact on or expose us to conditions where contract payment is at risk of there could be an adverse litigation imbalance due to those legal systems.

Changes in economic and business conditions or the policies of any governments may impact the fundamentals upon which the business of GHD relies. The performance of GHD may be affected by changes in matters such as:

economic and sovereign conditions generally;

government and consumer spending levels;

global commodity prices;

employment rates;

interest rates;

currency exchange rates;

levels of inflation;

government policies (including fiscal, monetary and regulatory policies);

changes in government legislation or government intervention on projects;

natural disasters, social upheaval and war;

These and many other matters are outside GHDs control and may impact on the timing or direction of GHDs business strategy which in turn may result in material adverse impacts on the business or its operating results.

Foreign Exchange Risk

GHD generally uses local currency in each of its operations. It is exposed to foreign exchange rate changes when it is paid in a currency that is different from the currency in which it incurs expenses, or when expressing its financial performance in its reporting currency, the Australian Dollar (AUD). Changes in, and volatility of, foreign exchange rates may affect earnings, dividends payable and share price when expressed in a particular currency.


Taxation and regulatory risks

Changes to or non-compliance with (or both) relevant tax, legal and administrative regimes, government and government policies, or accounting standards may adversely affect the financial performance of GHD. Any change to the current rate of company income tax in jurisdictions where GHD operates will impact on returns to Shareholders.

Third party risks

The business of GHD will require involvement with a number of third parties, including sub-contractors, contractors, suppliers and clients. Financial failure, default or contractual non-compliance on the part of such third parties may materially affect the performance of GHD.

6.2 Organisational business risks

A number of the major business risks associated with an investment in GHD are discussed below. This is not a comprehensive statement of all relevant business risks.

Professional Services risks

GHD is typical of many professional service firms in that the forward workload at any point in time typically represents less than 6 months revenue. This very short revenue position contrasts with the long term commitments that GHD must enter into, for example, for property leases which are typically for 5 or more years. Thus, the future performance of GHD is highly dependent on the continued winning and subsequent satisfactory completion of profitable new work and receiving payment for that work.

Increased competition could result in underutilisation of people, reduced profitability and loss of market share. Ineffective job management and increased rework could also have a significant impact on business performance.

Attraction and retention of key people

A professional services business is reliant on the talents and experience of key management, technical and professional people, for whom there may be limited succession or recruitment options. Any unplanned departure of key people, or inability to attract replacements could impact GHDs ability to complete or win key projects.

Information services risks

GHD is dependent upon its information services and other systems to derive its income. Unforseen costs or failure of its systems, including the premises in which they are located, could significantly impact on profitability. In addition cyber-attack threats to those systems could result in disruption to business operations or allow unauthorised access to our clients confidential or security classified information. Such events could cause damage to GHDs reputation and have a material effect on the operations and costs of the business.


Acquisitions, transitions and organic growth

The ability to acquire and integrate complementary businesses, adapt existing business to market conditions and/or to invest in organic growth opportunities are an important aspect of GHDs strategy. Limited opportunities for growth, unforeseen costs, or difficulties in the adaption or transition of businesses to new processes could have an impact on GHDs performance. Significant under budget performance of GHD arising from the acquisition of businesses may have an impact on shareholder returns.

Additionally, the acquisition of businesses normally gives rise to goodwill on GHDs balance sheet. The under-performance of the relevant part of GHDs business following an acquisition may require goodwill to be written down, in some circumstances having a material impact on GHDs earnings.

Severe weather, natural disasters and accidents

GHD has an exposure to seasonal weather variations. Unplanned incidents such as severe weather conditions, natural disasters, accidents and other external business disruptions can impact on operations. The consequences of such events may require evacuation of people, cause delays to project schedules, and are likely to have a significant demand on management in the response to the incident.

Finance risks

As an employee owned professional services company, GHDs source of share capital is limited to that which can be raised through the issue of Shares to its employees. GHDs performance may also be impacted by any adverse change in its ability to raise capital, collect timely payment for services or to borrow funds.

Commercial/Legal liability

The Directors and Officers of GHD can be held accountable for the company debts, financial performance, commercial viability, taxation compliance and business conduct. Legislation in all jurisdictions in which GHD operates covers many aspects of these responsibilities and references to the legislation in Australia are available from the Australian Securities and Investments Commission (ASIC), the Australian Securities Exchange (ASX), the Australian Competition and Consumer Commission (ACCC), the Australian Taxation Office (ATO), other government agencies or on government websites. Equivalent legislation operates in all countries in which GHD operates. GHD is a proprietary (private) company and this limits the liability of individual Shareholders in their capacities as such (see section 7 of this IM).

6.3 Project risks

GHD provides a broad range of services across the asset value chain. These include consulting, laboratory, information management, and operations and construction services. While this is not a comprehensive statement of all relevant project risks, GHD faces a significant number of project risks, including at least the following:

Professional Indemnity/Liability

Professional services liability is an area of major concern for a professional services firm such as GHD. Members companies of GHD can be found liable for claimed negligence, error or omission or for professional services that do not meet


our contracted obligations. This may also include liability under relevant Consumer or Competition legislation in all jurisdictions in which GHD operates.

Annual or project-specific professional indemnity insurance is maintained to provide cover for negligence claims arising from professional practice, but GHD is still liable for the self-insured retention (otherwise known as the excess) and some other costs under the policy, and there is potential for some claims to not be covered by insurance. GHD may also be held responsible well beyond its actual proportion of fault for simply being involved in a project or due to unfavourable contractual terms.

Alliances and Joint Ventures

Member companies of GHD routinely enters into Alliance and Joint Venture agreements for major projects where a part of its financial return is dependent on the performance of the alliance and joint venture partners. GHD will often not be the controlling party in such arrangements and business performance may be materially impacted by the inadequate leadership, financial control, or risk management of the other parties.

Construction services

Member companies of GHD will be responsible for certain construction services where project performance may be adversely impacted by construction risks which could include but not be limited to cost escalations, unforeseen site conditions, scope creep, impacts of environmental damage, weather, industrial action, safety performance of GHD and our construction sub-contractors and the quality of work and performance of construction sub-contractors.

Operations services contracts

In some circumstances, member companies of GHD will be responsible for operations services contracts for water and waste water treatment plants or landfill sites where the project is subject to operational risks which could include but not be limited to impacts of environmental damage, weather, industrial action, cost escalations, volume variations, GHDs and our sub-contractors safety performance, impacts of environmental damage and the quality of work and performance of sub-contractors.

Data services

GHD provides specialist data services and limited data centre hosting facilities to selected clients. The data services business is subject to business information services risks including liability to clients for a failure of its software and systems, including systems in the premises in which they are located, and loss of services due to cyber-attack threats.

Reputation

GHDs reputation could be damaged as a result of the inappropriate actions by our employees, subcontractors and associates and clients in real or perceived matters of professional conduct, technical performance or integrity.

Occupational Safety and Health

Member companies of GHD may be found liable for claimed negligence in the event of an industrial incident or accident, or claimed breach of occupational safety


and health law causing injury or death to employees or damage to property. This applies equally in GHDs workplaces or at worksites for which it is partly or wholly responsible in all jurisdictions in which GHD operates. GHD safety performance is also a critical metric that many clients assess to determine whether or not GHD is eligible to be selected as a contractor or continue to perform as a selected contractor. As such, a slippage in safety and health performance represents a commercial business risk.

Public Liability

Member companies of GHD can also be found responsible for claims arising from death or injury and loss or damage to property in respect of a third party who is not a party to the agreement for professional services. Annual public liability insurance is maintained to provide cover for public liability claims.

Environmental regulations

Member companies of GHD may also be found liable for a claimed breach of environmental regulations causing damage to the environment. This applies equally in GHDs workplaces or at worksites for which GHD is partly or wholly responsible in all jurisdictions in which GHD operates. GHD provides environmental and construction services in projects dealing with hazardous waste and contaminated land remediation in jurisdictions where strict liability could result in member companies of GHD being held responsible for consequential environmental damage.

6.4 Other risks

As a Shareholder, you are subject to a number of restrictions as to the transfer of your Shares including the obligation to sell and transfer your Shares at any time that the GHD Board determine. See section 7 of this IM.

In addition to the risks outlined in this IM, other risks may materially affect the future performance of GHD. Accordingly, GHD gives no assurances or guarantees of future performance, profitability, distributions, payment of dividends, nor return of capital.


7. Shareholders 7.1 Access to Investor Information

GHD provides shareholder information via two portals, MyShares and the GHD Investor Website. All information pertaining to this share offer is available in both portals, including the latest Information Memorandum, Employee Share Plans and information about the various loan products available to finance the purchase of shares, along with copies of the various shareholder documents such as the shareholder deed, acceptance form and shareholding guidelines.

GHD Investor Website

Access to the GHD Investor Website is available via the following link: http://www.ghd.com/system-pages/useful-links/contact-us/Shareholderoffer/ The username and password required to access the website have been included in your Offer Letter.

Once you have accessed the website select the link applicable to access your country specific information.

MyShares

Access to MyShares is available via the following link to the GHD MIS Home Web page: http://mis1.ghd.com.au

In addition to the offer information, MyShares allows Shareholders to access most of the relevant information regarding their shareholding on a secure site through a password protected application.

Via MyShares shareholders can access all shareholder announcements, details regarding their shareholding and dividend history, the Constitution and Annual Reports.

7.2 Ownership of GHD Shares

Under the Constitution, only employees of the GHD Group may become registered as Shareholders, subject to some very limited exceptions.

GHD has flexible employment policies, and employees (both part-time and full-time) may be invited to become Shareholders.

A summary of the other principal rights and obligations of Shareholders is set out below.

7.3 Constitution and rights attaching to Shares

The principal rights, liabilities and obligations of Shareholders contained in the Constitution are summarised below. It is not intended to be an exhaustive summary of the rights and obligations of Shareholders contained in the Constitution.

Voting

GHD Shares

Shareholders are entitled to receive notice of and to attend and vote at general meetings. Subject to any Shares which may in the future be issued with special or


preferential rights, each Shareholder present in person or by proxy, attorney or representative has one vote on a show of hands, and on a poll, one vote for each fully paid Share.

Exchangeable Shares

As outlined in section 4.1 Exchangeable Shares are non-voting shares. However, holders of Exchangeable Shares are able to direct their respective trustee to cast a vote on their behalf for each Exchangeable Share held, to mirror the voting right of a GHD Share.

Dividends

Subject to the Constitution, Share Provisions and the Australian Corporations Act, the profits of the Company which the GHD Board may from time to time determine to distribute by way of dividend, are payable equally on all Shares. Further information is set out in section 7.5.

Transfer of Shares

Subject to the Constitution and Share Provisions, a Shareholder may transfer all or any of their Shares by transfer instrument in writing or in any other form that the GHD Board approves. The GHD Board has absolute discretion as to whether it approves a transfer. The GHD Board will not approve a transfer to a person who is not an existing Shareholder nor an employee of the GHD Group, unless the transfer is approved by a special resolution of the members of GHD in a general meeting.

The GHD Board may at any time require a Shareholder to sell and transfer some or all of the Shares held by them to such person or persons as the GHD Board may determine. The Shares must be sold and transferred at a price that the GHD Board determine.

Rights on Winding Up

If the Company is wound up, any assets available for distribution to Shareholders will, subject to the rights of the holders of shares issued on special terms and conditions (if any), the Constitution, Share Provisions and the Australian Corporations Act, be distributed amongst Shareholders to return paid up capital on their Shares and distribute any surplus in proportion to the number of Shares held by Shareholders. The liquidator may, with the authority of a special resolution, divide among Shareholders in kind the whole or any part of the property of the Company and may, for that purpose, set such value as the liquidator considers fair upon the property and determine how the division is to be carried out between members or different classes of members.

Issue of Shares

Subject to the Constitution, Share Provisions and the Australian Corporations Act, the GHD Board may issue further Shares or other securities as the GHD Board sees fit.

7.4 Shareholder Deed

If you decide to accept Shares pursuant to the Offer, you will be required to sign a Shareholder Deed which will form a contractual agreement between you and GHD and will impose restrictions on you in relation to the Accepted Shares.


In addition to the terms of the Constitution and Share Provisions the key terms of the Shareholder Deed are summarised below. A copy of the Shareholder Deed is on MyShares.

If the GHD Board requires Shares to be transferred, the Shares will be transferred at the market value determined by the GHD Board, which will be the greater of

a. The net assets of GHD; and

b. The market value of GHD derived by using an earnings based method involving the application of a price earnings multiple as determined by the GHD Board from time to time;

in both instances, divided by the number of issued Shares at the relevant time.

Shareholders irrevocably appoint each member of the GHD Board as its attorney in relation to any proposed sale process and each member of the GHD Board will be authorised to execute any documents to deal with the Shares for the purpose of giving effect to the transfer.

Shareholders must not encumber the Shares, nor transfer them to a third party without the written consent of the GHD Board and on the conditions set by the GHD Board in respect to the encumbrance or transfer to a third party.

7.5 Dividends

GHD has a stable history of distributing a high percentage of its profit by way of dividends on a quarterly basis (in Australian currency), the balance being retained for corporate development. The GHD Board regularly reviews GHDs dividend policy.

There can be no assurance that any dividends will be paid in respect of a relevant quarter, as this will depend on the general business and financial conditions, working capital requirements of the GHD Group, the operating performance and taxation position of the GHD Group, future capital expenditure commitments and any other circumstances the GHD Board may consider relevant.

Under the current dividend policy (which may be changed by the GHD Board in its discretion subject to the requirements of the Constitution, Share Provisions and the Australian Corporations Act):

a Shareholder who holds Shares at the record date close to the end of a calendar quarter will be entitled to receive a dividend in respect of that quarter for which a dividend is payable; and

if a Shareholder held Shares during the quarter, but ceased to hold those shares at the record date around the end of the quarter, they will not be entitled to receive a dividend in respect of that quarter for which a dividend is payable.

The GHD Board may determine that a dividend is payable wholly or partly by the distribution of specific assets, including further Shares issued by GHD. Cash dividends will be paid by electronic funds transfer into your nominated bank account.


7.6 Share transfer price

The share transfer price of GHD Shares is determined by GHDs Board on 1 October and 1 April each year following receipt and consideration of independent professional advice on the market value of GHD Shares. Factors that are taken into consideration in assessing the market value of GHD shares include GHDs net assets, earnings performance, shares on issue, gearing, trading values of GHDs industry peers, and restrictions placed on GHD share ownership and transfer.

This valuation also applies to compulsory sales of GHD Shares.

7.7 Information to Shareholders

Shareholders will receive half yearly accounts as well as a copy of the annual audited financial reports of GHD. Other relevant information, including distribution statements, is placed on the Shareholder intranet portal MyShares to which you will be given access once you become a Shareholder.

In cases where shareholders are unable to access MyShares all shareholder correspondence will be provided via email.

7.8 Company details

A copy of the Constitution of GHD is available on MyShares. Should you have any questions regarding the Constitution you should contact the GHD Chairman in the first instance.

In cases where shareholders are unable to access MyShares a copy can be provided on request.


8. Taxation 8.1 Overview

It is not possible to make definitive statements about taxation matters as the law constantly changes in the various countries of operation and Shareholders should bear this in mind when assessing the impact of taxes on their Shareholding. This statement does not constitute tax advice. The comments are general in nature. Shareholders are advised to consult their own taxation advisors to determine how taxation laws will apply to their investment in Shares.

In many jurisdictions, including Australia, taxation authorities are concerned that shares may be issued to employees at a discount to market value, and will seek to tax those shareholders on that discount, being the difference between the price paid and market value of the Shares. The GHD Board do not believe that the Shares are issued or transferred to Shareholders at a discount.

8.2 Australian Resident Tax considerations

Holding the Shares

Shareholders are liable for income tax on the dividends paid by GHD. GHD pays company tax on the profits from which dividends are paid and the dividends paid to Shareholders will therefore normally be franked. As the dividends paid by GHD are franked, the Shareholder is required to include the amount of the franked dividend and the franking credit in his or her assessable income. The Shareholder may be entitled to claim the amount of the franking credit as a tax offset to the amount of his or her income tax payable. This means that the income tax payable by or refundable to Shareholders on dividends paid by GHD will be the difference between the company tax rate and the Shareholders tax rate.

Any interest costs incurred by a Shareholder on funds borrowed to buy Shares may be an allowable deduction to the Shareholder.

Disposal of the Shares

It is expected that Shareholders will hold Shares on capital account (not income account). Therefore, on the sale of Shares, Capital Gains Tax should apply. You should consult your own taxation advisor to assist with the calculation of any capital gain or capital loss you derive on sale of your Shares.

8.3 Not an Australian resident for tax purposes

If the Shareholder, holding GHD Shares is not an Australian resident for tax purposes, the tax implications will depend on their country of residency and/or citizenship and the terms of the tax legislation in that country.

As Australian tax legislation is currently enacted, no Australian Withholding Tax will apply to GHD dividends remitted outside Australia as long as those dividends are fully franked. However, you may be required to pay tax in your country of residency and/or citizenship on this dividend.

GHD will require your confirmation that you are not an Australian resident for tax purposes.


When the Shares are sold as Australian law is currently enacted no Australian capital gains tax should be payable by non-residents on the sale of GHD Shares. However, there may be tax in your country of residency and/or citizenship. You will need to seek independent tax advice on this.

A brief summary of the tax implications for shareholders in the US, Canada and UK are set out below, however it is not possible to make definitive statements about taxation matters as the law constantly changes and Shareholders should bear this in mind when assessing the impact of taxes on their Shareholding. This statement does not constitute tax advice. The comments are general in nature. Shareholders are advised to consult their own taxation advisors to determine how taxation laws will apply to their investment in Shares.

Shareholders in the US, Canada, the UK and Chile will acquire Shares in accordance with the employee share purchase plan (Plan) currently in effect in each of those jurisdictions.

Shareholders are advised to review the taxation section in the relevant disclosure document (each a GHD Disclosure Document) that accompanies the relevant Plan in their jurisdiction for a summary of certain of the principal income tax considerations applicable to shareholders who acquire GHD Shares. The following summaries are subject to the qualifications and limitations set out in the relevant GHD Disclosure Documents and should be read in conjunction with the detailed summary of the tax considerations contained in those documents. A copy of the relevant Plan and GHD Disclosure Document accompanies this IM where applicable.

8.4 United States Federal Income Tax considerations

The following summary describes certain U.S. federal income tax consequences of purchasing, owning, and disposing of GHD Shares or Exchangeable Shares as capital assets. GHD believes that for U.S. federal income tax purposes the Exchangeable Shares should be treated as stock of GHD, rather than as stock of GHD Canada.

Purchase of Exchangeable Shares Pursuant to the Plan

An employee who purchases GHD Shares or Exchangeable Shares pursuant to the Plan would be required to recognise ordinary income to the extent the fair market value of the Shares exceeds their purchase price. GHD believes that the valuation methodology described in Section 7.4 of the Information Memorandum operates to ensure that the purchase price of Shares transferred under the Plan will equal the fair market value of such Exchangeable Shares at the time of transfer, but there is no assurance that the U.S. Internal Revenue Service would not seek to take a contrary position.

The relevant GHD Group company may be required to withhold, and remit to the U.S. federal and states tax authorities, an amount on account of the employees United States income tax liability equal to a portion of any taxable benefit received by the holder as a consequence of the acquisition of Shares.

Taxation of distributions

Subject to the passive foreign investment company rules described below, distributions with respect to the Shares will be treated as dividends. Subject to applicable limitations, under current law, dividends paid by GHD to employees


should be classified as "qualified dividends" taxed at a maximum rate of 20%, provided certain holding period and other requirements are satisfied. The amount of any dividend received will be treated as foreign source dividend income, and the Australian or Canadian dividend withholding tax (if any) payable with respect to such dividends may be creditable against the recipient's U.S. federal income tax liability. For further information with respect to Canadian dividend withholding tax on dividends on Exchangeable Shares, see Canadian Federal Income Tax Considerations - Non-Residents of Canada Holding Exchangeable Shares, below.

To the extent that the amount of any distribution exceeds GHD's current and accumulated earnings and profits for a taxable year (as determined under U.S. federal income tax principles), the distribution will first be treated as a tax-free return of capital, causing a reduction in the adjusted basis of the recipient's Shares, and the balance in excess of adjusted basis will be taxed as capital gain.

Sales and other dispositions of Shares

For U.S. federal income tax purposes, the gain or loss recognised on the taxable sale or other disposition of Shares will be a capital gain or loss. You should consult your own taxation advisor to assist with the calculation of any capital gain or capital loss you derive on sale of your Shares.

The exchange by an employee of Exchangeable Shares for equivalent GHD Shares as a result of the exercise by GHD Share Transfers (Canada) Inc. of the Retraction Call Right, or as a result of the exercise by an employee of the Retraction Request, should be treated as a non-taxable exchange made in connection with a recapitalisation of GHD.

Passive Foreign Investment Company Rules

In general, a non-U.S. corporation such as GHD may be classified as a "passive foreign investment company" (or "PFIC") for U.S. federal income tax purposes in any taxable year after applying certain look-through rules. Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities, foreign currency and securities transactions. GHD does not believe that it will be considered a PFIC for its current taxable year, and does not anticipate becoming a PFIC in the future. However, no assurance can be given that GHD will not be considered a PFIC for any taxable year.

8.5 Canadian Federal Income Tax considerations

The following is a summary, based upon the current provisions of the Income Tax Act (Canada) (the Tax Act), of certain of the principal Canadian federal income tax considerations generally applicable to individuals (other than trusts) that are employees of GHD or a subsidiary of GHD and who purchase Exchangeable Shares or GHD Shares (as the case may be) and who, are deemed to be residents of Canada (except where indicated), deal at arms length with GHD and GHD Canada, are not affiliated with GHD or GHD Canada and hold or will hold the Exchangeable Shares and any GHD Shares as capital property and for whom GHD is not a foreign affiliate and GHD Shares will not be offshore investment fund property, for the purposes of the Tax Act (each, a Canadian Shareholder).

The following summary is subject to the qualifications and limitations set out in the relevant GHD Disclosure Documents and should be read in conjunction with the detailed summary of the Canadian federal income tax considerations contained in those documents.


Purchase of GHD Shares or Exchangeable Shares pursuant to the Plan

Provided the purchase price of GHD Shares or Exchangeable Shares (as the case may be) is no less than the fair market value of such shares, a Canadian Shareholder should not recognize any income at the time the Shares are offered pursuant to the Plan. When the Shares are subsequently acquired, a Canadian Shareholder may be deemed, for Canadian income tax purposes, to have received a taxable benefit from his or her employment in the year in which such acquisition occurs. The amount of the benefit (if any), will be the amount by which the fair market value of the relevant Shares at the time of acquisition exceeds the amount paid as consideration for such shares. The amount of the benefit (if any) is included in computing the Canadian Shareholders income for tax purposes as employment income in the year in which the Shares are acquired.

GHD believes that the valuation methodology described in Section 7.4 of the Information Memorandum operates to ensure that the purchase price of Shares transferred under the Plan will equal the fair market value of such Exchangeable Shares at the time of transfer, but there is no assurance that the Canada Revenue Agency would not seek to take a contrary position.

Dividends

A Canadian Shareholder will be required to include, in computing their income for a taxation year, the amount of dividends, if any, received, or deemed to be received, on Exchangeable Shares. Such dividends should be subject to the gross-up and dividend tax credit rules normally applicable to taxable dividends received from taxable Canadian corporations, subject to the detailed provisions of the Tax Act. Dividends received or deemed to be received on GHD Shares will be included in computing the Canadian Shareholders income for purposes of the Tax Act and will not be subject to the gross-up and dividend tax credit rules normally applicable to dividends received from taxable Canadian corporations.

Redemption of Exchangeable Shares

On the redemption (including a retraction) of an Exchangeable Share held by a Canadian Shareholder, the Canadian Shareholder will be deemed to have received a dividend equal to the amount, if any, by which the redemption proceeds exceed the paid-up capital (as defined for the purposes of the Tax Act) in respect of the Exchangeable Share at the time immediately before the Exchangeable Share is redeemed. The amount of such deemed dividend generally will be subject to the same tax treatment accorded to dividends on the Exchangeable Shares. See Dividends above.

The Holder of the Exchangeable Share will also be considered to have disposed of the Exchangeable Share for proceeds of disposition equal to the fair market value of the redemption proceeds (less the amount of any deemed dividend). The Holder will realise a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition of the Exchangeable Share, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base to the Holder of the Exchangeable Share immediately before the exchange. See Taxation of Capital Gains and Capital Losses below.


Disposition of Exchangeable Shares (other than by way of Redemption or Retraction) or of GHD Shares

A disposition of Exchangeable Shares by a Holder, other than on the redemption or retraction of the shares (as described above), or a disposition of GHD Shares, will generally result in a capital gain (or a capital loss) to the Canadian Shareholder to the extent that the proceeds of disposition, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base to the Holder of the Exchangeable Shares or the GHD Shares (as the case may be) immediately before the disposition.

Taxation of Capital Gains and Capital Losses

A Canadian Shareholder will be required to include one-half of the amount of any capital gain (a taxable capital gain) resulting from the disposition of Exchangeable Shares or GHD Shares in computing income, and will be entitled to deduct one-half of the amount of any capital loss (an allowable capital loss) resulting from the disposition of Exchangeable Shares or GHD Shares against taxable capital gains realised by the Canadian Shareholder in the year of disposition. Allowable capital losses not deducted in the taxation year in which they arise may generally be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against taxable capital gains realised in such years, to the extent and under the circumstances specified in the Tax Act. A capital gain realised by a Shareholder may give rise to alternative minimum tax.

Non-Residents of Canada Holding Exchangeable Shares

The following portion of this summary is applicable to a shareholder who (i) is not, and will not be, a resident or deemed to be resident in Canada for purposes of the Tax Act or any applicable tax treaty, (ii) does not and will not use or hold, and is not and will not be deemed to use or hold Exchangeable Shares in connection with, or in the course of, carrying on a business in Canada, and (iii) is not employed in Canada (a Non-Canadian Shareholder).

Dividends paid or credited on Exchangeable Shares to a Non-Canadian Shareholder will generally be subject to Canadian non-resident withholding tax under Part XIII of the Tax Act at a rate of 25% of the gross amount of the dividend, unless the applicable rate is reduced under the provisions of an applicable tax treaty.

Non-Canadian Shareholders who dispose of their Exchangeable Shares should not be subject to tax under Part I of the Tax Act in respect of any gain realized on the disposition, provided that the Exchangeable Shares do not constitute taxable Canadian property (as defined in the Tax Act) at the time of the exchange. Non-Canadian Shareholders should consult their own tax advisors to determine whether their shares constitute taxable Canadian property at any given time. Provided the Exchangeable Shares are not taxable Canadian property at the time of disposition, the reporting and withholding obligations under section 116 of the Tax Act should not apply.


8.6 United Kingdom Tax considerations

The following summary describes the UK income tax and capital gains tax consequences of purchasing, owning and disposing of Shares. This summary applies only to employees who are considered to be resident in the UK for the purposes of UK taxation and who will hold Shares as capital assets.

Purchase of Shares pursuant to the Plan

An employee who purchases Shares under the Plan will be liable to income tax to the extent that the market value of the Shares exceeds their purchase price. The Company believes that the valuation methodology described in Section 7.4 of the Information Memorandum operates to ensure that the purchase price of Shares that employees acquire under the Plan will be equal to the market value of such Shares at the time of acquisition, but there is no guarantee that HM Revenue & Customs will not take a different view. If in the opinion of HM Revenue & Customs the market value is greater than the purchase price of Shares acquired under the Plan, then employees will be liable to income tax on the undervalue payable by 31 January following the tax year when they acquire the shares. Employees will need to report this income tax liability on their personal tax returns. The Company will in any case make an annual report to HM Revenue & Customs on all acquisitions of Shares by employees.

Taxation of distributions

Distributions paid by the Company on the Shares will be taxed as dividends for UK income tax purposes. Provided the employee holds less than 10% of the issued share capital of the Company, the employee will be entitled to a tax credit for UK tax purposes of 1/9 of the net dividend. If the employee has a UK income tax liability on dividends, the income tax will be payable with the employees annual self-assessment.

Sales and other disposals of Shares

A gain or loss realised on the sale or other disposal of Shares will be dealt with for the purposes of UK tax as a capital gain or loss. The amount of the employees gain or loss will be equal to the difference between the market value on acquisition and the amount realised on the disposal. An employees gains and losses for the year are aggregated and, after deduction of the annual exemption, any net gain will be taxed at 18% or 28% depending on an employees total taxable income and capital gains for the year.

8.7 New Zealand Tax considerations

The following summary describes the New Zealand income tax and capital gains tax consequences of purchasing, owning and disposing of Shares. This summary applies only to employees who are considered to be resident in the New Zealand for the purposes of New Zealand taxation and who will hold Shares as capital assets.

Tax treatment on acquisition

As New Zealand tax legislation is currently enacted, there should be no tax payable by Shareholders when they purchase GHD shares at market value.


Holding the Shares

For a New Zealand resident, the taxation of foreign shares is determined by the Foreign Investment Fund (FIF) rules to the extent the investment is not a controlled foreign company (CFC) and an exemption from the FIF rules is not available. There are various exemptions including interests in some Australian listed companies, individuals who acquire shares under an employee share scheme and some taxpayers with FIFs costing less than $50,000 (see further below).

An exemption from the FIF rules could apply for natural person shareholders (or some very limited trusts e.g. deceased estates) if the total cost of all FIF securities held by the shareholder amount to less than NZD50,000 at all times during an income year (generally 1 April to 31 March for natural persons) and the shareholder has not elected out of the exemption in the past 4 years. Alternatively, individuals acquiring shares in a foreign company under a share purchase scheme and that me

08a 20150305 Information Memorandum Final Compact

Documents

Transcript of 08a 20150305 Information Memorandum Final Compact