bull in the china shop

A bull in the China shop?Urbanisation Rate (%)3

China Australia

100%90%80%70%60%50%40%30%20%10%0%

19802011

Relative Performance of Capital Markets4

Dec09

Mar 10

Jun10

Sep10

Dec10

Mar11

Jun11

Sep11

Dec11

Mar12

Jun12

Sep12

USAAustraliaChina

Exchange Rates (Yuan against AUD & USD)4

8.58.07.57.06.56.05.55.04.54.0

USAAustraliaChina

Nov 2003

Nov2004

Nov2005

Nov 2006

Nov 2007

Nov 2008

Nov 2009

Nov 2010

Nov 2011

Nov 2012

Nov 2002

The China shop scenarios5

Scenario 1: Slowdown due to property market melt-down or financial disturbance, China GDP down 6%.

Scenario 2: Recession in the advanced economies (global GDP forecast at 3 ppts below baseline). In this scenario, commodity prices would fall by 25%. Australian GDP 2.5 ppts below baseline by end of second year at which point Australia would be in technical recession.

LuckAs JFK said in 1964, luck is the collision of opportunity and preparation.

If you haven’t already positioned your business to access the potential of Chinese growth (directly or indirectly) now is the time to consider your strategy and model the potential impact.

If your business is already exposed to Chinese trade, do you have plans in place to accommodate short term reductions in volumes?

Market Capitalisation ($Trillion)4

China $13.6 USA $12.7 Australia $1.2

Sources: 1) IMF; 2) DFAT China factsheet; 3) World Bank Database; 4) Bloomberg; 5) NAB

China’s significance to Australia1

Total exports globally: $313.3B

Total exports to China: $76.8B Resources $57.2 Services $5.7 Education $4.0 Personal Travel $0.7 Other $9.2

Iron ore exports to China: $43.4B

Capital investment in China: $17B

Australia’s significance to China (GDP $Trillion)1

1 - USA $15.12 - China $7.33 - Japan $5.94 - Germany $3.6

12 - Australia $1.5

Capital investment in Australia: $19B1

PER 14X

PER 17X

PER 11X

Tax & Indirect Tax ValuationsValuations for income tax purposes covering issues including; » transfer pricing » goodwill » consolidations » TARP » Division 149 » loss utilisation » capital losses » minority interest valuations » cost base valuations

Valuations of assets under the land-rich and landholder regimes for stamp duty purposes including; » goodwill » information » copyright » customer databases » contracts

» Great Southern Plantations MIS scheme valuation dispute support

» Pharmacy group minority shareholding valuation dispute support

» Sydney Light Rail project compulsory acquisition dispute support

» Timbercorp MIS scheme valuation dispute support

» ‘Big 4’ negligence claim valuation dispute support

» Minority shareholding dispute valuation support and ‘hot tubbing’

» Centro dispute valuation report

» Valuation of equity options held by CEO

Commercial Disputes Discount RatesFrom high level assessments for; » impairment testing » purchase price allocations » project evaluations

To detailed, component-specific build-ups for; » regulatory submissions » mark-to-market valuations

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