AVA RISK GROUP LIMITED — AGM Information 2015

Nov 11, 2015

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Future Fibre Technologies Ltd 10 Hartnett Close, Mulgrave Victoria 3170, Australia www.fftsecurity.com ABN 67 064 089 318 P +61 3 9590 3100

2015 Annual General Meeting Thursday, 12 November 2015 CHIEF EXECTUIVE OFFICER’S ADDRESS – Mr Robert Broomfield

Thank you Arlene

As the Chairman mentioned, FY2015 has been a significant year for FFT.

For more than a decade, FFT has been developing and manufacturing fibre based intrusion detection systems. We are very proud of our global achievements as an Australian based technology innovator. From somewhat humble beginnings, FFT is now recognised as the market leader for fence mounted sensors and has received numerous awards, both in Australian and the USA.

We count as our customers some of the most well respected commercial, oil & gas, military and government organisations in the world. FFT is a customer-focussed company. Whether our end user is the US Department of Homeland Security, ExxonMobil or Credit Suisse, our focus is always on delivering the end user a high quality product and exceptional interactions with our team of dedicated employees.

Throughout the year, FFT continued to expand its global footprint – growing its customer facing sales resources in key geographies and securing a number of perimeter and pipeline contracts in the United States, Middle East, Mexico and Australia.

FFT reported an increase in revenue to $19.5 million, while net profit after tax (NPAT) increased to $2.2 million. As at 30 June 2015, FFT’s cash balance was $17.6 million. Our balance sheet contains no debt and we have a healthy $29.8 million of net assets.

Our strong balance sheet provides the company with the opportunity to take on large projects that have project payment terms and require the supplier to have a balance sheet commensurate with the size and value of the project. FFT is now well positioned to bid and complete these large projects.

Compared against the prior year:

• Revenue grew by 48% to $19.5 million

• Gross profit increased by 28% to $12.3 million

• EBITDA grew 34% to $2.7 million, and

• NPAT was $2.2 million – a 32% increase.

Other highlight include:

• The opening of new regional offices in The Netherlands and Turkey

• Expansion of the sales team in the United States, United Kingdom and Europe

• Continued development of FFT’s existing systems and capabilities including new release Secure Point and Aura controllers – and a CAMS software update to support integration with an even wider range of third party security management systems.

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FFT also achieved an important milestone during the course of the year – shipping its 1,000[th] product and deploying the 5,000[th] kilometre of intrusion sensing fibre.

Earlier I spoke about our focus on customers. This focus has contributed to an increase in the amount of revenue that we generate from our land and expand strategy. In FY2015 approximately 55% of ordinary revenue was generated from customers that had already deployed FFT’s products. Some of these end-users are using our products to upgrade their security at additional sites, some of these end users are increasing their security by upgrading their intrusion detection technology to our latest generation solution. Whatever the need, the reason they continue to choose FFT is clear. They trust us and trust our products.

Our manufacturing capability and supply chain is well placed to delivery on anticipated increased demand for our products. On a box basis, the number of FFT locating systems (Secure Fence, Secure Pipe, Secure Link and Aura) sold in FY2015 increased by 44%, while sales of our zone based systems was up 82% - driven by market acceptance of the new Secure Point solutions. In terms of increased sales by region, FFT experienced growth in Asia Pacific and Americas.

In the past year, FFT invested in growth. The company’s operating expenses were $9.6 million – up from $7.4 million in FY14 - due in part to investment in HQ capability, but primarily from targeted sales headcount increases to address new markets as well as ongoing investment in new product development. We now have 14 dedicated global sales resources contributing to the company’s revenue growth. We expect this number to increase to 19 by the year-end.

Today, FFT’s intrusion detection solutions are installed in 57 countries and our company is the market leader in fence mounted perimeter security.

This is due in part to our solution being promoted on the key benefits of FFT’s fibre optic intrusion detection technology which include:

• High reliability of fibre optic based sensors and electronics

• Immunity to electromagnetic radiation including lightening strikes

• The ability to work on virtually any fence type

• Capability to detect intrusions in buried applications and

• Unique Intellectual Property to mitigate nuisance alarms.

While FFT continues to pursue growth opportunities in the perimeter and pipeline intrusion detection markets – supported by a growing global sales team – the company is also focused on expanding its presence in the Physical Network Security.

With growing global concerns around cyber security, we are actively progressing programs to raise the profile of our technology in the network infrastructure protection market. We believe this to be a significant growth opportunity for FFT.

According to Gartner’s latest forecast, worldwide spending on information security will reach $75.4 billion in 2015, an increase of 4.7 percent over 2014. The increase in spending is being driven by government initiatives, increased legislation and high-profile data breaches.

Imagine if your confidential data was flowing through a fibre optic cable in the street out the front of this hotel. Imagine if the man you passed when walking into this meeting room put on a high-vis vest, donned a hard hat and jumped into the man hole giving him physical access to the data cables. Imagine if he could install a small tapping device to read and record your data. Imagine if that device could be installed un-detected. Imagine no longer, this is a modern day reality.

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FFT has already successfully completed testing and acceptance by a number of military establishments in the United States. Our solutions also incorporate a number of features not offered by traditional network security and encryption systems, in particular the advance warning capability which enables a response before any data is stolen or compromised.

In addition, FFT solutions overlay easily on top of existing IT networks without “seeing” operational data and provide advanced warning and precise location of intrusion events. A single FFT system can also monitor hundreds of fibres.

During FY2015, FFT continued to focus on enhancing our intrusion detection technology.

The latest release Secure Fence offers enhanced detection for perimeter intrusion detection while Aura offers industry leading covert (or buried cable) intrusion detection to address the growing need of intelligence agencies and high security military installations.

The most recent Central Alarm Monitoring Software (CAMS) release supports integration with an even wider range of third party security management systems as well as a new multi sensor integrated analysis capability.

Finally, we have expanded the Secure Point product solution to address the light commercial and remote location, small perimeter security market that includes sites such as car yards and gated communities. Secure Point has proven to be an excellent fit for the small site perimeter market. We have also released a version that can be used to provide intrusion detection for shorter run physical data network applications. Most importantly it is also easy to install (plug and play) and ideal for distribution partners.

We will continue to pursue profitable growth opportunities in FY2016 as the company focuses on delivering our key strategic.

Finally, I would like to thank the FFT team for their ongoing hard work and commitment to maintaining FFT’s product leadership position and reputation for delivering outstanding customer support.

I will now hand the meeting back to the Chairman.

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