Annual Information Form

NEW FLYER INDUSTRIES INC . AND NEW FLYER INDUSTRIES CANADA ULC Annual Information Form March 30, 2012 TABLE OF CONTENTS GENERAL ................................................................................................................................................... 1 CORPORATE STRUCTURE ..................................................................................................................... 3 The Issuer ........................................................................................................................................ 3 New Flyer Holdings, Inc., Transit Holdings, Inc. and New Flyer of America Inc. ........................ 3 Ownership Structure ....................................................................................................................... 4 GENERAL DEVELOPMENT OF THE BUSINESS .................................................................................. 4 Recent Developments ..................................................................................................................... 4 DESCRIPTION OF THE BUSINESS ......................................................................................................... 7 Business of the Company................................................................................................................ 7 Industry Overview .......................................................................................................................... 7 Company Overview ........................................................................................................................ 9 Business Strengths .......................................................................................................................... 9 Corporate Strategy ........................................................................................................................ 12 Product Lifecycle Management .................................................................................................... 14 Company History .......................................................................................................................... 15 Products and Services ................................................................................................................... 16 Bus Manufacturing Operations ..................................................................................................... 17 Product Development and Innovation .......................................................................................... 18 Aftermarket Parts and Support Services ....................................................................................... 19 Customers ..................................................................................................................................... 23 Forward Visibility of Orders and Backlog .................................................................................... 24 Sales and Marketing ...................................................................................................................... 26 Facilities and Manufacturing Process ........................................................................................... 29 Product Warranty and other Contractual Provisions ..................................................................... 31 Bonding Requirements.................................................................................................................. 32 Materials and Suppliers for Production ........................................................................................ 33 Capital Expenditures ..................................................................................................................... 34 People and Labour Relations ........................................................................................................ 34 Terms of Long-Term Collective Bargaining Agreements ............................................................ 36 Pensions ........................................................................................................................................ 37 Competition .................................................................................................................................. 37 Legal and Regulatory Matters ....................................................................................................... 38 DESCRIPTION OF CAPITAL STRUCTURE ......................................................................................... 43 Share Capital of NFI ..................................................................................................................... 43 Shareholder Rights Plan ................................................................................................................ 43 - i - TABLE OF CONTENTS (continued) Share Capital of NFI ULC ............................................................................................................ 43 Description of IDSs....................................................................................................................... 44 Book-Entry Settlement and Clearance .......................................................................................... 45 Description of Subordinated Notes ............................................................................................... 47 Dividend and Distribution Policy ................................................................................................. 49 Credit Facility ............................................................................................................................... 51 DIRECTORS, OFFICERS AND MANAGEMENT ................................................................................. 52 The Issuer ...................................................................................................................................... 52 Long-Term Incentive Plans ........................................................................................................... 60 Insurance Coverage for the Company and Indemnification ......................................................... 60 AUDIT COMMITTEE AND AUDITOR’S FEES .................................................................................... 61 Relevant Education and Experience of Audit Committee Members ............................................ 61 Non-Audit Services ....................................................................................................................... 61 External Auditor Service Fees ...................................................................................................... 62 Audit Committee Oversight .......................................................................................................... 62 Risk Management ......................................................................................................................... 62 RISK FACTORS ....................................................................................................................................... 63 Risks Related to the Business of the Company ............................................................................. 63 Risks Related to the Capital Structure .......................................................................................... 74 MARKET FOR SECURITIES .................................................................................................................. 86 Common Shares ............................................................................................................................ 86 Income Deposit Securities ............................................................................................................ 87 AUDITORS, TRANSFER AGENT, REGISTRAR AND TRUSTEE ...................................................... 87 MATERIAL CONTRACTS ...................................................................................................................... 88 LEGAL PROCEEDINGS .......................................................................................................................... 88 INTERESTS OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ...................... 88 INTERESTS OF EXPERTS ...................................................................................................................... 89 ADDITIONAL INFORMATION .............................................................................................................. 89 APPENDIX “A” ........................................................................................................................................ 90 - ii - NEW FLYER INDUSTRIES INC . AND NEW FLYER INDUSTRIES CANADA ULC GENERAL The information, including any financial information, disclosed in this Annual Information Form is stated as at January 1, 2012 or for the year ended January 1, 2012, as applicable, unless otherwise indicated. Unless otherwise indicated, all dollar amounts are expressed in U.S. dollars and references to “$”, “US$” and “U.S. dollars” are to the lawful currency of the United States. References to C$ are to the lawful currency of Canada. References in this Annual Information Form to “we”, “us” “our”, “New Flyer” or the “Company” refer to New Flyer Industries Inc. (“NFI”) and all of its direct or indirect subsidiaries and references to the “Issuer” refer to New Flyer Industries Inc. and New Flyer Industries

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