#1Capital Raising Presentation 17 December 2013 austinengineering LTD#2Important: Information and Disclaimer This document has been prepared by Austin Engineering Limited (ABN 54 009 435 250) (Austin). No party other than Austin has authorised or caused the issue of this document, or takes responsibility for, or makes any statements, representations or undertakings in this document. Argonaut Capital Limited (ABN 18 099 761 547) (Argonaut) and Bell Potter Securities Limited (ABN 25 006 390 772) (Bell Potter, and together with Argonaut the JLMs) and their related bodies corporate, directors, employees, servants or agents (Affiliates) make no representation or warranty, expressed or implied, as to the accuracy or completeness of this document. Except for any liability that cannot be excluded by law, Austin and the JLMS and each of their Affiliates, disclaim and accept no responsibility or liability (including liability for negligence) for any expenses, losses, damages or costs incurred by you as a result of your participation in any offer referred to in this document or the information in this document being inaccurate or due to information being omitted from this document. Austin, the JLMs and each of their Affiliates, make no recommendation as to whether you or your related entities or persons should participate in any offer referred to in this document nor do any of them make any representations or warranties to you concerning any such offer or in relation to securities in Austin. Presentation of general background: This document contains general background information about Austin's activities current as at the date of this presentation, 17 December 2013. It is information in a summary form only and does not contain all the information necessary to fully evaluate any transaction or investment. It should be read in conjunction with Austin's other periodic and continuous disclosure announcements including the financial results for the full year ended 30 June 2013 lodged with the Australian Securities Exchange (ASX) on 22 August 2013, the Austin 2013 Annual Report lodged with ASX on 21 October 2013 and announcements to the ASX available at www.asx.com.au. All dollar values in this document are in Australian dollars (A$) unless stated otherwise. Not a prospectus: This document is not a prospectus or a product disclosure statement under the Corporations Act 2001 (Cth) and has not been lodged with the Australian Securities and Investment Commission (ASIC). The offer of Austin ordinary shares (New Shares) to which this presentation relates either complies (in respect of the share purchase plan) with the requirements of ASIC Class Order [CO 09/425], or will (in respect of the placement) only be made to persons to whom offers can be made without a prospectus in accordance with Chapter 6D.2 of the Corporations Act 2001 (Cth). Not investment advice: The information provided in this presentation is not intended to be relied upon as advice to investors or potential investors and has been prepared without taking into account the recipient's investment objectives, financial circumstances or particular needs. Any investment decision should be made based solely upon appropriate due diligence and, if applicable, upon receipt and careful review of relevant offering documents. Recipients of this presentation are advised to consult their own professional advisers. An investment in any listed company, including Austin, is subject to significant risks of loss of income and capital. Cooling-off rights do not apply to an investment in any New Shares. The recipient cannot, in most circumstances, withdraw an application once it has been accepted. Future performance: This presentation contains certain forward-looking statements. The words 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'could', 'may', 'target', 'plan' and other similar expressions. are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Austin, and its officers, employees, agents and associates, that may cause actual results to differ materially from those expressed or implied in such statements. Actual results, performance or outcomes may differ materially from any projections and forward-looking statements and the assumptions on which those assumptions are based. You should not place undue reliance on forward-looking statements and neither Austin nor any of its directors, employees, servants, advisers or agents assume any obligation to update such information. Risks: An investment in New Shares is subject to investment and other known and unknown risks, some of which are beyond the control of Austin and Austin's directors, employees, servants, advisers or agents. Austin does not guarantee any particular rate of return or the performance of Austin nor does it guarantee the repayment of capital from Austin or any particular tax treatment. You should have regard to the 'Key Risks' section of this presentation that outlines some of these risks. Not an offer in other jurisdictions: This presentation is not an offer to sell or a solicitation of an offer to subscribe or purchase of any securities, and may not be distributed, in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. No action has been taken or will be taken that would permit a public offering of the of the New Shares in any jurisdiction outside Australia and New Zealand, except as expressly stipulated by the Company and the JLMs. Recipients of this document should inform themselves of the restrictions that apply in their own jurisdiction, including as set forth in this documents under the section captioned "Foreign Selling Restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. Acceptance: By attending an investor presentation or briefing, or otherwise accepting, assessing or reviewing this document you acknowledge and agree to the above. Investor Presentation austinengineering LTD#3Overview >>> The Company is undertaking a capital raising of $35 million at an offer price of between A$3.00 and A$3.20 per share to existing and new shareholders via a placement and share purchase plan (together the "Capital Raising") » Austin is undertaking the Capital Raising to: >>> - Finance the residual 50% purchase payment for the Servigrut acquisition; - New manufacturing facility in Peru; and - Potential acquisitions in Brazil Significant contract expected to be awarded in Brazil shortly for the supply of mining products The Company is expecting FY14 EBITDA to between A$40 to A$50 million with 80% of the full year result being achieved in the second half of FY14 Investor Presentation austinengineering LTD#4Earnings Guidance >>> The Company is expecting FY14 EBITDA to between A$40 to A$50 million with 80% of the full year result being achieved in the second half of FY14 >>> FY14 second half earnings significantly up on first half due to: - existing and expected orders - full six months from the Servigrut acquisition and new contracts recently announced in Chile - anticipated contribution from Brazil >>> Recent award of key contracts in Chile - Codelco: Five year heavy equipment lifting and support services. Base value of $14.5 million with additional 'spot' services estimated at between $2.5 million and $4.0 million - Codelco: Four year contract for maintenance and repair of dump truck bodies, buckets and ancillary mobile equipment. Base value of $5.0 million in first 3 years and $2.3 million in fourth year - Codelco: Three year repair and maintenance contract Investor Presentation austinengineering LTD#5Brazil Contract >>> Significant contract expected to be awarded in Brazil shortly for the supply of mining products - Previous contract was worth $200m over three years - Contract will be split but Austin is expected to receive the majority of works - Contract does not include all of Austin's products, opportunities for increased revenue and maintenance contracts in Brazil - Significant opportunities from other clients in Brazil - Purchase of 2 businesses in Belo Horizonte and Belem will further increase revenue Investor Presentation austinengineering LTD#6Indicative Proposal from Bradken Limited >>> Austin has received an unsolicited confidential indicative, non binding and highly conditional proposal from Bradken Limited ("Bradken"), an existing 21.5% >>> shareholder, for all of the shares in the Company which it does not own for Bradken shares at a fixed exchange ratio of 0.75 Bradken shares for every one Austin share ("Proposal") Based on Bradken's last closing price of A$5.50 per share values Austin at A$4.13 per share The Proposal represents a 31.8% premium to Austin's last closing price of A$3.13 per share - The Proposal represents a 32.9% premium to Austin's 5 day VWAP of A$3.105 The Austin Board's initial view is that there is potentially benefit in combining the companies but the Proposal undervalues Austin The Austin Board has indicated a willingness to engage in discussions with Bradken in relation to its proposal Shareholders should note that there is no certainty that these explanatory discussions will progress to any further meaningful discussions or due diligence or that any agreement or transaction will eventuate from the current or any future discussions or due diligence enquiries Investor Presentation austinengineering LTD#7Capital Raising: Key Details Offer Size and Structure Bookbuild Capital raising of up to approximately $35.0 million to existing and new shareholders consisting of: • A$30 million placement to institutional and sophisticated investors ("Placement”); and A$5 million share purchase plan to eligible shareholders ("SPP") A$3.00 A$3.20 per fully paid ordinary share • Price Range • 4.2% discount - 2.2% premium to last closing price of $3.13 per share² 3.4% discount - 3.1% premium to 5 day VWAP Timetable Placement . Placement component will settle Monday 30 December 2013 New Shares will commence trading Tuesday 31 December 2013 Share Purchase Plan Participation Joint Lead Managers • SPP record date is Monday 16 December 2013 • SPP is intended to commence in January 2014 • Austin Directors intend to take their full entitlement under the SPP Argonaut Securities Pty Ltd and Bell Potter Securities Limited are acting as Joint Lead Managers to the Capital Raising 'All dates are 2013 and times refer to Sydney time. Dates and times are indicative only and are subject to change ² Calculated with reference to Austin's last closing price of $3.13 on Tuesday 17 December 2013 Investor Presentation austinengineering.LTD#8Capital Raising: Indicative Timetable Key Dates - Institutional Placement and SPP Company lodges trading halt After market Tuesday 17 December, 2013 Friday 20 December, 2013 ASX Announcement Austin shares re-commence trading Institutional Placement DvP Settlement New Institutional Placement shares commence trading Record date for determining entitlement to participate in SPP Company intends to conduct SPP Note: All dates are indicative and are subject to change. Any material changes will be announced to the ASX Friday 20 December, 2013 Monday 30 December, 2013 Tuesday 31 December. 2013 Monday 16 December, 2013 January 2014 Investor Presentation austinengineering LTD#9Foreign Selling Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") in Austin in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Australia except to the extent permitted below. United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended (FSMA)) has been published or is intended to be published in respect of the New Shares. This document is issued on a confidential basis to "qualified investors" (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the New Shares may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom. Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the New Shares has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to Austin. In the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (FPO), (ii) who fall within the categories of persons referred to in Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise be lawfully communicated (together "relevant persons"). The investments to which this document relates are available only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies Ordinance (Cap. 32) of Hong Kong (Companies Ordinance), nor has it been authorised by the Securities and Futures Commission in Hong Kong pursuant to the Securities and Futures Ordinance (Cap. 571) of the Laws of Hong Kong (SFO). No action has been taken in Hong Kong to authorise or register this document or to permit the distribution of this document or any documents issued in connection with it. Accordingly, the New Shares have not been and will not be offered or sold in Hong Kong other than (i) to "professional investors" (as defined in the SFO) or (ii) in other circumstances that do not result in this document being a "prospectus" (as defined in the Companies Ordinance) or that do not constitute an offer to the public within the meaning of that ordinance. No advertisement, invitation or document relating to the New Shares has been or will be issued, or has been or will be in the possession of any person for the purpose of issue, in Hong Kong or elsewhere that is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares that are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors (as defined in the SFO and any rules made under that ordinance). No person allotted New Shares may sell, or offer to sell, such shares in circumstances that amount to an offer to the public in Hong Kong within six months following the date of issue of such shares. The contents of this document have not been reviewed by any Hong Kong regulatory authority. You are advised to exercise caution in relation to the offer. If you are in doubt about any contents of this document, you should obtain independent professional advice. Investor Presentation austinengineering.LTD#10Foreign Selling Restrictions New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Securities Act 1978 (New Zealand). The New Shares in the entitlement offer are not being offered to the public in New Zealand other than to existing shareholders of Austin with registered addresses in New Zealand to whom the offer of New Shares is being made in reliance on the Securities Act (Overseas Companies) Exemption Notice 2002 (New Zealand). Other than in the entitlement offer, New Shares may be offered and sold in New Zealand only to: persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money; or persons who are each required to (i) pay a minimum subscription price of at least NZ$500,000 for the securities before allotment or (ii) have previously paid a minimum subscription price of at least NZ$500,000 for securities of Austin ("initial securities") in a single transaction before the allotment of such initial securities and such allotment was not more than 18 months prior to the date of this document. Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in connection with the offer or sale, or invitation for subscription or purchase, of New Shares, may not be issued, circulated or distributed, nor may the New Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore except pursuant to and in accordance with exemptions in Subdivision (4) Division 1, Part XIII of the Securities and Futures Act, Chapter 289 of Singapore (SFA), or as otherwise pursuant to, and in accordance with the conditions of any other applicable provisions of the SFA. This document has been given to you on the basis that you are (i) an existing holder of Austin shares, (ii) an "institutional investor" (as defined in the SFA) or (iii) a "relevant person" (as defined in section 275(2) of the SFA). In the event that you are not an investor falling within any of the categories set out above, please return this document immediately. You may not forward or circulate this document to any other person in Singapore. Any offer is not made to you with a view to the New Shares being subsequently offered for sale to any other party. There are on-sale restrictions in Singapore that may be applicable to investors who acquire New Shares. As such, investors are advised to acquaint themselves with the SFA provisions relating to resale restrictions in Singapore and comply accordingly. United States This document may not be released or distributed in the United States. This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Any securities described in this document have not been, and will not be, registered under the US Securities Act of 1933 and may not be offered or sold in the United States except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws. Norway If You (or any person for whom You are acquiring the Securities) are in Norway, You (and any such person) are a "professional investor" as defined in Norwegian Securities Regulation of 29 June 2007 no. 876. Investor Presentation austinengineering.LTD#11Key Risks There are a number of factors, both specific to Austin and of a general nature, which may affect the future operating and financial performance of Austin, its investment returns and the value of its shares. Many of the circumstances giving rise to these risks are beyond the control of Austin. This section describes certain specific areas that are believed to be the major risks associated with an investment in Austin. Each of the risks described below could, if they eventuate, have a material adverse effect on Austin's operating and financial performance. You should note that the risks in this section are not exhaustive of the risks faced by a potential investor in Austin. You should consider carefully the risks described in this section, as well as other information in this presentation, and consult your financial or other professional adviser before making an investment decision. Operational risks: Austin derives the majority (approximately 70%) of its revenue from the sale of products manufactured primarily at its facilities in Australia, Indonesia and South America. Austin's ability to generate profits is reliant on its ability to maintain sufficient operating capacity and production output at these facilities.. Austin's reliance on its manufacturing and service facilities means that Austin could be significantly and adversely affected by a major operational failure at a facility, or any circumstance that reduces a facility's operational and production capacity, which could also lead to negative impacts on the Company's other operations. The manufacturing processes at Austin's facilities are dependent on equipment and such equipment may incur downtime as a result of planned outages, unanticipated plant outages or equipment failures or other events, such as fires, loss of external energy supply or other required manufacturing inputs and services or industrial action. Production could also be adversely impacted by transportation or raw material disruptions, poor quality of raw materials, adverse weather conditions and interruptions in the supply of essential services. Downturn in the mining industry: Austin derives most of its revenue from the provision of products and services to the resources industry and in relation mining activities. Accordingly, Austin's revenues and earnings are significantly dependent on the level of exploration, development and production activity in those industries. Any significant or extended decline in the level of that activity may adversely impact Austin's operating and financial performance. Any significant or extended decline in mineral or metal prices may reduce the level of exploration, development and production activities and thereby may adversely impact Austin's operating and financial performance. The level of activity in the resources industry can be cyclical and sensitive to a number of factors beyond the control of Austin and may be adversely affected by continuing concerns about global economic growth and turmoil in global credit markets. Reliance on key customer relationships and cancellation or deferral of customer orders and contracts: Austin has established and will continue to establish important customer relationships. The loss of one or more key customers is likely to adversely affect the operating results of Austin. Deterioration in key customer relationships can result in a loss of market share, while the early termination or deferral of customer contracts can result in less than the full value of contracts being realised or revenue from those contracts being deferred to later financial periods. If a key customer terminates the relationship, defers or defaults on its contracts or orders or fails to renew its contracts or orders with Austin, including as a result of financial difficulty or insolvency encountered by a key customer, this may have a material adverse effect on Austin's revenues and profitability. Share price risk: There are general risks associated with an investment in the share market. As such, the value of New Shares may rise above or fall below the Offer Price, depending on the financial position and operating performance of Austin. Further, broader market factors affecting the price of Austin shares are unpredictable and may be unrelated or disproportionate to the financial or operating performance of Austin. Such factors may include the economic conditions in Australia and overseas, investor sentiment in the local and international stock markets, consumer sentiment, changes in fiscal, monetary, regulatory and other government policies, national and international political and economic instability or the instability of national and international financial markets, interest and inflation rates and foreign exchange rates. Recent turmoil in global credit markets has negatively affected economies across the globe and led to increased volatility in stock markets, including ASX. Continued volatility in global markets could negatively impact the value of Austin shares. Competition risk: Austin's products and services compete with products and services provided by competitors and may compete with services and products that may be used as substitutes for Austin's products and services that are introduced by competitors in future. Improvements in the technology, production, pricing or acceptance of these competitive products and services relative to Austin's products and services could result in a significant loss of Austin's market shares or margins and hence reduce Austin's cash flow and profitability. Foreign exchange: A number of Austin's contracts are or may be expressed in terms of foreign currency. To the extent that such exposures are not hedged, fluctuations in the exchange rate between the contract currency and the Australian dollar may adversely affect Austin's revenue in Australian dollar terms. In particular, Austin operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, Chilean Peso, Indonesian Rupiah, Colombian Peso and Peruvian Nuevo Soles as a result of its operations in the Americas and Indonesia. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities that are denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting. The Australian dollar is the functional currency for a large part of the group's entities and business activities. Investor Presentation austinengineering LTD#12Key Risks Strategy: Austin is pursuing a number of strategies to grow revenues and reduce costs, which include seeking further opportunities under the Vale Contract and other opportunities in Brazil and South America generally to increase the diversification of its earnings. Whilst Austin is targeting future growth, there is a risk that these strategies will not be successful or may incur higher than anticipated costs. Litigation, claims and liabilities: In the course of its operations, Austin may be involved in disputes and possible litigation and incur liabilities. There is a risk that any material or costly dispute or litigation could adversely affect the value of the assets or future financial performance of Austin. Regulatory issues and government regulation: Austin's operations, and the operations of the industries in which its customers operate, are subject to laws, regulatory restrictions and certain government directives, recommendations and guidelines relating to, amongst other things, occupational safety, the use and handling of hazardous materials, prevention of illness and injury and environmental protection. Future legislation may impose further regulation, which could impact adversely on the assets, operations and, ultimately, the operating and financial performance of Austin. Products derived from Austin's research and development may be subject to numerous government regulatory approvals and controls throughout the world. Apart from those territories where regulatory approval has been granted, these will affect both the timing and the cost of bringing Austin's products to the market. Delays or failures in obtaining regulatory approval for a product may have an adverse effect on the operational and financial performance of Austin. Cost and availability of key inputs: The cost and availability of key inputs such as skilled labour and critical raw materials will influence Austin's production capacity and profitability. In the event that the cost of such inputs increases, the profitability of Austin may be adversely affected. Further, in the event that there is a shortage of these inputs, the output capability of Austin, and the financial performance of Austin, may be adversely affected. Product liability and insurance: Austin's business exposes it to potential product liability risks that are inherent in the research and development, manufacturing, marketing and use of its products. It will be necessary for Austin to secure sufficient levels of insurance to cover various product liability risks in the course of maintaining its business. However, there can be no assurance that adequate or necessary insurance coverage will be available at an acceptable cost or in sufficient amounts, if at all, or that product liability or other claims would not materially and adversely affect the business or financial condition of Austin. Investor Presentation austinengineering LTD#13www.austineng.com.au