DTI GROUP LTD — Capital/Financing Update 2018

May 13, 2018

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DTI GROUP LTD

Capital Raising Presentation 7 for 10 Non-renounceable Accelerated Entitlements Offer

14 May 2018

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DTI GROUP LTD
2017 Interim Results Presentation
[_] February 2017
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Broker to the Offer:

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Disclaimer

• This investor presentation has been prepared by DTI Group Ltd, ACN 069 791 091 (DTI or Company), and is dated 14 May 2018. This presentation has been prepared in relation to the pro rata non-renounceable entitlement offer and institutional placement of new shares to be made under sections 708A and 708AA of the Corporations Act 2001 (Cth) (Corporations Act) as modified by the Australian Securities & Investments Commission (ASIC). The entitlement offer will be made to eligible shareholders.

• Summary of information: This presentation contains summary information about DTI and its activities which is current as at the date of this presentation. The information in this presentation is of a general nature and does not purport to be complete, nor does it contain all the information which a prospective investor may require in evaluating a possible investment in DTI or that would be required in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act. DTI’s historical information in this presentation is or has been based upon information that has been released to the Australian Securities Exchange (ASX). This presentation should be read in conjunction with DTI’s other periodic and continuous announcements lodged with ASX, which are available at www.asx.com.au The information in this presentation is based on DTI’s own information and estimates and has not been independently verified. DTI is not responsible for providing updated information and does not assume any responsibility to do so. In attending this presentation or by viewing this document, you agree to be bound by the following terms and conditions.

• Not financial product advice: This presentation is not a financial product, or investment advice or a recommendation to acquire DTI securities and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs; and seek legal, taxation and financial advice appropriate to their jurisdiction and circumstances. DTI is not licensed to provide financial product advice in regard to its securities or any other financial products. Cooling off rights do not apply to the acquisition of DTI securities.

• Disclaimer: Each of DTI and its related bodies corporate and its directors, agents, officers, employees and advisors expressly disclaim to the maximum extent permitted by law, all liabilities (howsoever caused including negligence) in respect of, make no representations regarding and do not take any responsibility for, any part of this presentation and make no representation or warranty as to the accuracy, reliability or completeness of any information, statements, opinions, conclusions or representations contained in this presentation. In particular, this presentation does not constitute and shall be relied upon as a promise, representation, warranty or guarantee as to the past, present or the future performance of DTI.

• Not an offer: This presentation is not a prospectus, product disclosure document or other offering document under Australian law (and will not be lodged with ASIC) or any other law. This presentation is for information purposes only and should not be considered as an offer or an invitation to acquire shares in DTI or any other financial products and neither this document nor any of its contents will form the basis of any contract or commitment. The offer booklet for the Entitlement Offer will be available following its lodgement with ASX. Any eligible shareholder who wishes to participate in the Entitlement Offer should consider the offer booklet in deciding whether to apply under that offer. Anyone who wishes to apply for new shares under the Entitlement Offer will need to apply in accordance with the instructions contained in the offer booklet and the entitlement and acceptance form.

• Past and future performance: Past performance information is given for illustrative purposes only and is not, and should not be relied upon as, an indication of future performance. This presentation also contains certain forward-looking statements with respect to the financial condition, results of operations, projects, contracts and business of DTI and certain plans and objectives of the management of DTI. These forward-looking statements involve known and unknown risks, uncertainties and other factors which are subject to change without notice. Forward-looking statements are provided as a general guide only and there can be no assurance that actual outcomes will not differ materially from these statements. Neither DTI nor any other person gives any representation, warranty, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statement will actually occur. In particular, such forward-looking statements are subject to significant uncertainties and contingencies, many of which are outside the control of DTI. Further, none of DTI, its officers, agents or employees, except to the extent permitted by law, accept responsibility for any loss, claim, damages, costs or expenses arising out of or in connection with the information contained in this presentation. Investors should independently satisfy themselves as to the accuracy of all information contained herein.

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• Monetary values: All dollar values are in Australian dollars ($ or A$) unless stated otherwise.

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Contents

• Transaction structure

• Business overview

• Order book and opportunity pipeline

• Strategy and outlook

• Key risks

• Other key information

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3

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TRANSACTION STRUCTURE

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Capital Raising Summary

• A 7 for 10 non-renounceable entitlement offer to raise approximately $6.2 million via the issue of approximately 88.7 million New Shares at an offer price of $0.07 per New Share by way of:

Entitlements Offer

• an Institutional Entitlements Offer to raise approximately $2.05 million via the issue of approximately 29.2 million New Shares to the Underwriters at an offer price of $0.07 per New Share

• a Retail Entitlements Offer to raise approximately $4.16 million via the issue of approximately 59.5 million New Shares at an offer price of $0.07 per New Share

• The Offer price of $0.07 per New Share is a discount of:

Offer Price

  - 3.80% to the 15 day VWAP¹

  - 6.59% cent to the 30 day VWAP¹

• The Entitlements Offer is fully underwritten by Finico Pty Ltd ( Finico ) and UIL Limited and its related entity Allectus Capital Limited ( UIL )

• Underwriting

• An underwriting fee of 1.0% is payable on the Underwriting Agreements

• The New Shares will be issued on a fully paid basis and will rank pari passu in all

• Ranking respects with the existing Shares on issue

• 1 VWAP means the volume-weighted average price calculated by reference to the average price recorded for the trading days on which trades were recorded of DTI’s shares up until 11 May 2018, being the last trading day prior to the announcement of the Entitlement Offer.

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Timetable

Event	Date
Announcement of Entitlement Offer	Monday 14 May 2018
Company conducts Institutional Entitlement Offer	Tuesday 15 May 2018
Announcement of results of Institutional Entitlement Offer. Trading halt lifted and Shares trade on ex-entitlement basis	Wednesday 16 May 2018
Record Date for the Retail Entitlement Offer (7.00pm AEDT)	Wednesday 16 May 2018
Offer Booklet and Entitlement and Acceptance Form despatched to Eligible Shareholders	Monday 21 May 2018
Retail Entitlement Offer opens	Monday 21 May 2018
Retail Entitlement Offer closes (5.00pm AEDT)	Wednesday 30 May 2018
Announcement of results of the Retail Entitlement Offer	Monday 4 June 2018
Retail Entitlement Offer shares issued	Wednesday 6 June 2018
Commencement of trading of New Shares issued under the Retail Entitlement Offer	Thursday 7 June 2018

Note: Dates and times are indicative only and subject to change. DTI, in consultation with the Underwriter(s), reserves the right to extend these dates without prior notice subject to the Corporations Act, ASX Listing Rules and other applicable laws.

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6

Use of Proceeds

• DTI has successfully grown its contracted[1 ] order book from $17.4 million at December 2016 to $48 million (inclusive of work where DTI has been advised that it is the preferred tenderer) as at March 2018. An increase of 176% over the past 15 months

• The majority of this additional work has been secured as a direct result of the significant research and development spend undertaken throughout FY16 and FY17 to develop new surveillance and passenger information system products

• Proceeds from this issue are required to provide the necessary working capital to complete these projects over the next 24 months which are primarily in the rail sector which is typically more working capital intensive than bus/tram

• The funding will be used to accelerate growth, maximise revenue streams and drive profitability via the fully underwritten $6.2 million accelerated Entitlement Offer

Use of Proceeds	$000
Secure existing bank facilities	625
Project working capital requirements²	4,500
General working capital and liquidity	887
Costs of the Offer	195
Total use of proceeds	6,207

Pro forma Capital Structure (Shares)	Number
Shares currently on issue	126,671,579
Institutional and Retail Entitlement Offer – New Shares	88,670,105
Post Offer Shares on issue 215,341,684
Market capitalisation (at $0.07 per share) $15,073,918

1 Includes Letters of Authorisation ( LOA ) or Letters of Intent ( LOI ) and preferred tenderer status. 2 Includes project bonding

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Balance Sheet

			Pro-forma
	Interim	Entitlement	Interim
$m	Dec 2017	Offer	Dec 2017
Cash	1.2	5.4	6.6
Trade receivables	7.0		7.0
Other receivables	–		–
Inventory	6.7		6.7
Property, plant & equipment	1.3		1.3
Other receivables (bank guarantees)	–	0.6	0.6
Intangible assets	4.6		4.6
Other assets	0.4		0.4
Total Assets	21.2	6.0	27.2
Trade payables	3.9		3.9
Financial liabilities	0.3		0.3
Provisions	1.1		1.1
Total Liabilities	5.3	–	5.3
Total Equity	15.9	6.0	21.9
Net cash/(debt)	0.9	5.4	6.3
Net trade working capital	9.7	–	9.7

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Underwriting and Potential Effects on Control

• Finico (and its associates) hold approximately 19.4% and UIL and its associates hold approximately 14.1% of the issued capital in DTI prior to the Entitlement Offer. Finico is a related entity of former Company Director, Chris Morris

• Finico and UIL (and its associates) have each agreed to subscribe for their full Entitlement, valued at $1.17 million and $0.88 million respectively under the selected Institutional Entitlement Offer to raise approximately $2.05 million

• Finico and Allectus Capital Limited ( ACL ) (an associate of UIL) have then agreed to underwrite the Retail Entitlement Offer by entering into Underwriting Agreements with the Company to each underwrite up to 50% of the Offer (or approximately $2.08 million each after deducting their existing Entitlements)

• For entering into the Underwriting Agreements for their Entitlement commitment and underwriting, Finico, UIL and ACL will each be paid an underwriting fee of 1.0% of the Entitlement commitment and underwriting under the Underwriting Agreement

• The effect on control of the Company and the voting power that may be held by the major Shareholders under the Entitlements Offer under several scenarios are set out in the table below

Underwriting Effect on Control Finico & Associates) UIL & Associates	Balance of Shareholders
Shares held at date of the Offer 24,549,506 17,879,726 Voting power at date of the Offer 19.4% 14.1% Completion of Entitlement Offer: Fully subscribed (Entitlement received only) 19.4% 14.1% 75% taken up by other Shareholders 22.6% 17.6% 50% taken up by other Shareholders 26.1% 21.0% 25% taken up by other Shareholders 29.5% 24.5% Nil taken up by other Shareholders 33.0% 27.9%	83,882,347
	66.5%
	66.5%
	59.8%
	52.9%
	46.0%
	39.1%

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BUSINESS OVERVIEW

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Executive Summary

DTI Overview

DTI is an ASX listed developer and manufacturer of world-leading surveillance, video analytics and passenger communication solutions and services to the global mass transit industry

A 7 for 10 non-renounceable entitlement offer to raise approximately $6.2 million Equity Raising via the issue of approximately 88.7 million New Shares at an offer price of $0.07 per New Share

Underwritten Entitlement

The Entitlements Issue is fully underwritten by Finico (50%) and ACL (an associate of UIL) (50%)

Order Book & Pipeline

Current contracts on hand of $33.8 million with a further $14.3 million under negotiation as preferred tenderer. Within the opportunity pipeline of $410 million, DTI has identified open tenders of which $39 million are anticipated to be awarded over the next six months. Long-term pipeline is in excess of $410 million identified.

Expected FY2018 revenue of $19–20 million, an increase of ~18–19% on FY2017. Guidance Return to EBITDA profitability in 2nd half of FY2018 (FY2017 H2 EBITDA loss of $0.7 million)

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Company Snapshot

Share Price

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$0.60 6
$0.50 5
$0.40 4
$0.30 3
$0.20 2
$0.10 1
$0.00 0
Share Price
Volume (M's)
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Major Shareholders

Chris Morris (& Associates) 19.4% UIL Limited (& Associates) 14.1% Board & Management 9.7% Other Institutional 17.9%

Corporate Details

Corporate Details
ASX Code	DTI
Closing Share Price (11 May 2018)	$0. 061
Current Market Capitalisation	$7.73 million
Issued Shares	126,671,579
New Shares to be issued	88,670,105
Post Offer Issued Shares	215,341,684

Board and Management

Neil Goodey Chairperson Peter Tazewell Managing Director Richard Johnson Executive Director Glyn Denison Non-Executive Director Jeremy King Non-Executive Director

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DTI’s Business

• Our business: DTI designs, develops and installs world-leading surveillance, video analytics and passenger information solutions and services to the global mass transit industry

• Our target markets: Rail, bus, taxi, law enforcement, high-value freight

• Our products and services:

Proprietary Supplementary Proprietary Managed Data Recording Hardware Software Services Hardware

Our Customers

Our Major Markets

• Bus mobile • CCTV cameras • Fleet manager digital recorders • GPS tracking • Vehicle •

• (MDR) Passenger monitoring

• • Train data counting • CCTV managed recorder unit • Driver displays systems (TDR) • Passenger • Route

• • Hybrid MDRs for information adherence other target systems • Remote live markets • Network view switches • Video analytics (eg Pantograph)

• Full service bureau offering

• Maintenance

• Municipal Our major Authorities markets:

• Rail and bus OEMs (original equipment manufacturers)

• United States

• Australia

• European Union

• United Kingdom

• South Africa

• Private transit operators

DTI seeks to leverage its engineering capabilities to provide customers with increased functionality, products and services

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DTI’s Business Case

Mass Public Mass Public Mass Transit Mass Transit Transportation Transpo tation Operator Sector Challenges Challenges Sector

Sector to continue to Sector to continue to grow throughout the world: grow throughout the

Mass transit operators face Mass transit operators wide range of challenges face wide range of including: challenges including:

• world: significant investment planned in bus, rail and • major investment light rail in major cities in planned in rail and the world light rail in major cities in the world

• acts of terrorism

• acts of terrorism

• crime

• • crime

• public disturbance

• •• public disturbance safety •• safety liability

• customer service

• passenger load

• service reliability

• Improved passenger experience

Mass Transit Mass Transit Surveillance Surve lance Solutions Solutions

Mass transit operators Mass transit operators require surveillance require surveillance solutions which are: solutions which are:

• high quality

• high quality

• reliable

• • reliable

• •• easily recoverable easily recoverable

Technology Technology Advances Advances

Technology advances Technology advances continue to improve continue to improve surveillance and services: surveillance:

• Intelligent Transportation

• • quality Systems

• •• reliability Next Bus • recoverability

• Smart City

• Anomaly detection systems

• Machine learning and artificial intelligence

• • Predictive fault management

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DTI’s Business Model

Opportunity for exponential growth driven by on-ground contracted positioning and recurring revenue

Solution Business Development Development (R&D) & Marketing

Prospects

Contracts

Recurring Revenue

Maintain marketleading position by continued investment in product development and product expansion, eg passenger communication solutions, pantograph with leading software solutions

Product development supported by committed investment in business development and marketing

Grow prospects by investing in business development and marketing

Prospects converted to contracts by offering customised advanced surveillance solutions

Ongoing orders from customers for new vehicle procurements; maintenance agreements; DTI solutions specified in long-term procurements; framework agreements with major suppliers

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Revenue

Revenue Growth

Revenue Categories

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25.0 20.0
20.0 16.0
15.0 12.0
10.0 8.0
5.0 4.0
0.0 -
FY15 FY16 FY17 FY18 FY19 Maintenance Recurring Project
FY15 FY16 FY17 FY18 FY19
H1 H2
$ million $ million
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• FY19 forecast revenue based on Company estimates and known contract work at the date of the Offer

• Strong revenue increase from prior corresponding periods

• Weighting to second half (H2) expected to continue

• Contracted revenue for FY19 of $17 million, being approximately 85% of FY18 forecast revenue

• Increased revenue across all categories

• Strong increase in recurring revenue driven by US bus sales

• Project revenue continues to drive overall growth

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Technology and R&D Spend

• DTI has invested in R&D to create industry-leading product solutions for the global mass transit market

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8 DTI has invested in R&D to create
7 industry-leading product solutions for the
6 global mass transit market
5
• R&D cycle peaked in FY17 with the
4
3 development of new products to meet
2 the standards of the rail sector
1 • Contracted order book [1] has grown by
0 176% (to $48 million) over the past
2013 2014 2015 2016 2017 2018 15 months
Recurring
R&D Marketing Prospects Contracts
Revenue
Year 0–1 Year 0–1 Years 0–2 Years 1–3 Years 5+
$ million
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DTI is focused on building recurring revenue from contracted work and on-ground positioning with clients

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1 Includes LOA or LOI and preferred tenderer status

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Key Drivers

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R&D R&D investment has allowed DTI to grow its contracted order book[1] by 176% Investment from $17.4 million to $48 million over the past 15 months

Strengthen relationships with OEMs to allow DTI to participate in the design and implementation phase of project tenders

Relationship with OEMs

Increased awareness of public safety by all stakeholders as terrorism remains a critical global threat

Public Safety

Mass transit operators seeking efficiencies from operations to drive bottom line profitability and improvements in passenger experience

Operator Efficiencies

Build on ground strategic relationships with global integrators to allow DTI to develop and service maintenance and recurring revenue streams

Maintenance & Support

Expand revenue streams from existing customers by leveraging DTI’s technology and support from existing contracted transit locations

Growing Global Demand

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1 Includes LOA or LOI and preferred tenderer status

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Key Milestones Achieved

• Strategic focus on major rail projects has resulted in continued revenue growth

• Significant R&D investment of $19 million over past five years has created industry leading product solutions for the global mass transit market

• Future monetisation of the R&D investment to be derived from executing DTI’s contracted order book[1] of $48 million

• Increased maintenance and recurring revenue by 23% in FY18 to $7.5 million (from $6.1 million in FY17)

• Strong validation of product suite through increased level of contracts awarded

• Unique product offering covering:

• complete mass transit solutions combining hardware and software

• tailored product offerings for customers delivering full turn key solutions

• Operating cost base restructured

• Focus on project execution and margin management

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1 Includes LOA or LOI and preferred tenderer status

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Global Project Execution

Map Key

Complete In Progress Key Prospect

• DTI has a successfully demonstrated its ability to secure and execute projects globally

• Strong validation of world-class product suite by spread of global project success

• Ability to roll-out product on a global scale

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Operational Update

Americas		EMEA		Australasia
• Sales of $3.5 million, up 46.7% from $2.4 million in prior period¹ • Continues to enjoy strong support from the US transit market with key transit operators, including SEPTA, SFMTA, SamTrans, Long Beach Transit and Broward County • Awarded contract installation of CCTV solution on 115 LRVs for Dallas Area Rapid Transit (options 1–4) • Completing deliveries to Siemens for SFMTA of first rail rated CCTV solution using TDR6 • Successfully commissioned equipment trial for a major US transit authority • Pipeline of $107 million identified, weighted 89% to rail		• Sales of $2.2 million, up 19.4% from $1.9 million in prior period¹ • Successfully completed the major multi-party live look-in CCTV solution for UK rail • Continues to work with key partners in UK • Continued revenue growth from bus and tram market in Poland and France • Commenced solution design for key PRASA contract • Completed delivery of first 68 vehicles for Oman Bus Contract • Pipeline of $233 million identified, weighted 77% to rail • Opportunities in new countries identified in Oman, Tanzania, Denmark, Bulgaria and Spain		• Sales of $8.9 million, up 86.1% from $4.8 million in prior period¹ • Maintained strong market position with sales to wide range of customers, across bus and rail • Ongoing deliveries to Sydney Metro project which are on schedule • Commenced preliminary design for major rail refurbishment in Melbourne • Bus and rail contracts in Perth, Brisbane, Sydney, Melbourne and Adelaide • Ongoing maintenance opportunities to leverage off DTI’s existing resources and facilities • Pipeline of $77 million identified, weighted 96% to rail • Opportunities in new markets identified in Singapore and India

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1 Sales across all regions represent actuals for the nine months to 31 March 2018

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Key Customers

OEMs

Municipal Authorities Transit Operators Integrators

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ORDER BOOK OPPORTUNITY PIPELINE

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Order Book

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Bus Rail Preferred
Order Book by Category
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
-
30-Jun-14 31-Dec-14 30-Jun-15 31-Dec-15 30-Jun-16 31-Dec-16 30-Jun-17 31-Dec-17 31-Mar-18
$ million
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• Order book growing in line with increased marketing effort

• Strong growth in rail sector with strong interest in DTI Passenger Information Systems (60% weighting for opportunities identified)

• Order book does not include anticipated recurring work until purchase order is issued

• Pipeline includes open tenders, including $39 million which are expected to be awarded over the next six months

• Order book includes uncontracted work where DTI has received an LOI/LOA or has been advised it is the preferred tenderer and is in final contract negotiations.

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Opportunity Pipeline

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18.5%
25.6%
55.9%
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• Significant identified long term pipeline in excess of $410 million

• EMEA presenting strongest opportunities for new growth

• Americas includes significant Latin American opportunities for expansion

• Australia provides DTI with the ability to leverage its local technical knowledge and on-ground maintenance support networks

Australasia EMEA Americas

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2.1%
14.2%
83.7%
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• Market continues to be dominated by rail which generally has higher specifications, engineering effort and capital intensity

• Growth drivers include legislation/evidence standards, public infrastructure spending and potential to reduce insurance and maintenance costs

• Operators investing in improved passenger journey experiences

Bus Rail Law Enforcement

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Addressable Market

• DTI’s addressable market comprises:

• Passenger Information Systems consisting of displays, audio communications and entertainment systems

• Mobile Surveillance Systems, consisting of recorders, cameras and ancillary equipment

• FY18 revenue and order book weighted towards Passenger Information Systems

• Mobile Surveillance market is forecast to grow by 12.1% to over US$1.6 billion by 2021[1 ]

• Passenger Information Systems forecast to exceed US$21.4 billion by 2022[2 ]

• 1 IHS Research – 24 Feb 2017 2 Market Research Future – July 2017

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Mobile Surveillance

• Global market for mobile video surveillance equipment forecast to grow at CAGR of 12.1% to 2021

• DTI is a significant player in mass transit sector (trains, trams and transit buses) which constitutes 56.6% of the market

• The Americas is the largest market for mobile video surveillance equipment while EMEA is the fastest growing market

Mobile Video Surveillance Equipment – Region

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800
600
400
200
0
EMEA Asia Americas
2016 2021
$ million
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Source: IHS Research – 24 Feb 2017

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Passenger Information Systems

• Market forecast for Passenger Information Systems (excluding CCTV) to be US$21.4 billion by 2022, growing at CAGR of 23%[1 ]

• These products comprise approximately 60% of the current $48 million order book

Global Passenger Information System Market

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7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Others Emergency Pass Mobile Infotainment Info Display
Comms Apps Announcement Systems
2016 2017 2022
US$ billion
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1 Compound Annual Growth rate. Market Research Future – July 2017

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STRATEGY AND OUTLOOK

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Strategies Short-term

Grow Revenue Base	Production Cost Efficiencies	Cost Down Strategy	Overhead Reduction
• Increased order book by 176% in 15 months • Conversion of opportunity pipeline • R&D cycle complete providing new leading edge product solutions	• Product design finished leading to stable production runs • Migrate production to lower cost manufacturer	• Review supply chain to reduce component costs • Implement design efficiencies • Target margin improvements via competitive product sourcing	• Tight control of costs and working capital • Improved inventory management processes established • Focus on project execution and margin management

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Strategies Medium and Long-term

Medium-term		Long-term
• Demonstrate continued profitability • Ongoing monetisation of past R&D investment • Target continued increased in maintenance and recurring revenue to underpin revenue growth • Staging of contracted revenue provides support for future revenue growth • Product suite developed drives leading turnkey solutions		• Continue to leverage R&D investment in new market-leading technology platform • Develop DTI hardware as platform for multiple technology applications • Expand strong OEM relationships to create stronger maintenance and recurring revenue and position DTI as preferred technology provider • Build contracted footprint globally to position DTI in all major markets

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31 31

Outlook

• Continued growth in contracted order book[1] to $48 million

• Opportunity pipeline of $410 million with $39 million identified as likely to be awarded within six months

• Strong technical reputation for developing leading edge products and solutions

• Global demand for mobile surveillance and passenger information system equipment continues to be strong

• Increased awareness for public safety and security from transit operators and municipal authorities

• Transit operators seeking to increase efficiencies from their networks, driving demand for equipment monitoring solutions

• Continued improvements to passenger journey experience by increased technology integration

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1 Includes LOA or LOI and preferred tenderer status

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KEY RISKS

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Key Specific Risks (1)

Risk	Summary	Summary	Summary
Failure to retain existing customers or attract new customers	As a usual part of its business, DTI’s customer contracts and projects are subject to tender, variations, additions or reductions. DTI’s ability to renew contracts with existing customers and win new contracts with existing and new customers is fundamental to its business, growth and profitability. DTI could lose one or more key customers or significant contracts or projects due to a range of events. Any loss of key customers, or loss of funding or a reduction in government budget allocations to key customers, significant contracts or projects, may materially and adversely affect DTI’s revenue and financial performance.
Competition	DTI operates in a competitive industry. DTI competes with some companies that are larger and more financially secure, as well as with some companies that benefit from local experience and relationships with customers. Increased competition could result in price reductions, underutilisation of personnel, reduced operating margins and loss of customers or market share. Any of these occurrences in any region in which DTI may operate could adversely affect its operating and financial performance.
Software and technology risks	Technology is the key enabler of DTI’s products and services and is dependent on the effective performance and reliability of DTI’s hardware, software and support services. DTI may not be able to provide the required level of support and services to clients, or fail to successfully achieve the required development of its technology and systems to meet clients’ needs, match competitors or meet regulatory requirements, which may, in turn, adversely affect its operations, technology development and could adversely affect its operating and financial performance. Further, DTI’s hardware and software may be exposed to damage, malware or interruption from unforeseen events which may cause the systems to be unavailable from time to time which may in turn affect DTI’s ability to meet customer expectations and deliver consistent, quality services to its clients.
Technology obsolescence	The technology in the mass transit industry is constantly evolving. There is no guarantee that DTI can keep up with technological developments within the industry and a failure to do so may have a negative effect on the Company’s business and its ability to compete effectively within its target markets. Accordingly, there is a risk that new entrants will develop technology that is superior to DTI’s solutions which could result in DTI’s technology becoming obsolete.
Failure to monetise return on investment	The technology that DTI has developed for the mass transit industry is complex, industry specific and often involves an extended period of time to achieve a final product and subsequently a return on investment for the development. An important part DTI’s business and growth strategy is to continue to make investments in innovation and related product opportunities to improve the technology and product solutions to maintain DTI’s industry leading competitive position.

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Key Specific Risks (2)

Risk	Summary
Retention of Key Personnel	DTI depends on the talent and experience of its employees. Whilst every effort is made to retain key employees and contractors and to recruit new personnel as the need arises, loss of a number of key personnel may adversely affect DTI’s earnings or growth prospects. In addition, strong demand for skilled personnel may limit DTI’s growth and profitability caused by scarcity of professional personnel or by potential increases in compensation costs associated with attracting or retaining such personnel.
Failure to execute projects	DTI’s financial performance is dependent on its ability to deliver contracts and projects in accordance with contractual obligations. Contractual obligations may include set dates for delivery. If delivery is delayed the customer may seek to claim damages from DTI. Disputes which arise in relation to contractual obligations may result in significant losses and acute pressure on DTI’s cash flow.
Delays with the commencement of new contracts or dependence on third parties	Where DTI wins a contract, commencement of the contract can be delayed past the expected commencement date. DTI is also a party to a number of contracts where the Company’s ability to perform its obligations and commence earning revenue is dependent on third parties performing their own contractual arrangements in a timely manner. DTI may not have any contractual protection against such delays. Any delay in the commencement of a contract may result in a delay in DTI receiving revenue or may cause DTI to incur additional costs, and therefore could have an adverse impact on the Company’s financial performance, including its ability to achieve management’s forecasts for the business.
Working capital requirements	DTI requires capital in order to finance the manufacture and installation of its technology products as well as provide bank guarantees or insurance bonds to support contract arrangements. The Company’s precise capital requirements depend on numerous factors. Depending on the DTI’s ability to generate income from its operations, the Company may require further financing in addition to amounts raised under the Entitlement Offer. Any additional equity financing will dilute shareholdings, and debt financing, if available, may involve restrictions on financing and operating activities. If DTI is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations and scale back its expansion and development programmes as the case may be.

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Key Specific Risks (3)

Risk	Summary
Reliance on growth strategy	DTI’s future success relies heavily on the successful implementation of its strategy of being a provider of integrated video surveillance, passenger communication and fleet management solutions for the global mass transit industry. Successful execution of this strategy will require DTI to successfully apply its core competencies in the development or modification of its products and software. No assurance can be given that DTI will be successful in the ongoing implementation of this strategy. DTI’s growth strategy relies heavily on market acceptance of its products and services. There is a risk that market acceptance of DTI’s products and services will not be as high as DTI expects or that market acceptance may take longer than expected to materialise.
Regional specific risks/unfamiliar markets	DTI operates in markets globally. As the Company continues to expand its presence in new international jurisdictions, DTI remains subject to risks associated with doing business in regions that may have political, legal and economic instability or less sophisticated legal and regulatory systems and frameworks.
Foreign exchange risk	Some of the components used in the manufacture of DTI’s products are acquired in foreign currencies. Also, some of DTI’s receivables, payables, intercompany transfers and expenses are incurred in foreign currencies and some of DTI’s sales occur in foreign currencies. Adverse movements in exchange rates for either of DTI’s revenue, expenditure, receivables, payables or intercompany transfers, or cash holdings in foreign currency may adversely affect the financial performance of DTI.
Increased costs risk	DTI’s manufacturing and outsourced manufacturing operations are dependent upon the delivery of materials and components by outside suppliers. While DTI utilise components that are standard items and available from a number of suppliers where possible, others are manufactured to DTI’s specifications. The failure of the Company to source and supply its materials and components at acceptable costs and in the quantities and specifications required by DTI, could have an adverse impact on the profitability of contracts entered into and the sales and financial performance of DTI.
Regulatory risks	Some aspects of the industry in which DTI operates are impacted by government legislation and regulations in respect to collection of data, privacy, data protection, freedom of information and other matters. The industry may undergo regulatory or legislative change which may create opportunities or adversely impact the activities and operations of DTI.

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Key Specific Risks (4)

Risk	Summary
Litigation	The Company may be subject to litigation and other claims and disputes in the course of its business, including contractual disputes with suppliers or clients, employment disputes, indemnity claims, and occupational and other claims. There is a risk that such litigation, claims and disputes could materially and adversely affect DTI’s operating and financial performance due to the cost of settling such claims, and affect the Company’s reputation. At the date of this Presentation, DTI is not currently engaged in any litigation.
Force majeure risks	Events may occur within the markets that DTI operates that could impact upon the Australian or global economies that DTI or its clients operate within. These events could impact the operations of DTI and the price of DTI’s Shares. The events include but are not limited to acts of terrorism, an outbreak of international hostilities, fires, floods, earthquakes, labour strikes, civil wars, natural disasters, outbreaks of disease or other natural or man-made events or occurrences that can have an adverse effect on the demand for DTI’s products and services and its ability to conduct business. DTI has only a limited ability to insure against some of these risks.
Concentration of shareholding	At the date of this Presentation Finico (and its associates) and UIL (and its associates) are each major shareholders of the Company. Finico and UIL have a combined controlling relevant interest of 33.5% of the DTI shares on issue. Furthermore, both Finico and UIL (or their associates) have each agreed to underwrite the Offer. The Underwriters, if they act together, may have the capacity to control the election of Directors, the approval of significant corporate transactions and the success of a takeover or similar offer for the Shares. The interests of these Finico and UIL (or their associates) may differ from the interests of the Company and the interests of Shareholders who purchase New Shares under the Offer. The market value of DTI’s shares quoted on the ASX may go up or down for a variety of reasons, including changes in the pricing of comparable stocks, shifts in demand for listed equities and changes to general economic conditions. The change in the market capitalisation may result in a risk that there will not be an active market for DTI’s Shares and there may be periods where there is little or no liquidity. The deterioration of the market capitalisation may also adversely impact the Company's financial reputation when tendering for major contracts against more financially stable competitors.
Share price movements

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General Investment Risks

Risk	Summary
Factors outside DTI’s control	In addition to the specific risks summarised above, a number of factors outside DTI’s control may significantly impact on DTI, its performance and the price of DTI Shares. These factors include: • economic conditions in both Australia and internationally • relative changes in foreign exchange rates • investor sentiment and local and international share market conditions • changes to government policy, legislation or regulation • changes in fiscal, monetary and regulatory policies • the nature of competition in the industries in which DTI operates • interest rates and inflation rates • the introduction of taxation reform.
Impact on DTI’s revenue, expenses and cash flows	Investors should recognise that DTI’s revenues, expenses and cash flows could be negatively affected by any of the above factors which, in turn, may affect the price or value of DTI Shares.
Market fluctuations	The share prices for many companies can be subject to wide fluctuations which, in many cases, may reflect a diverse range of non-specific influences such as global hostilities and tensions, acts of terrorism and the general state of the economy. Such market fluctuations may materially adversely affect the market price of DTI Shares.

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OTHER KEY INFORMATION

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International Selling Restrictions

Offer Jurisdictions

No offer will be made to any shareholder with a registered address outside Australia, New Zealand or Belgium. The offer of New Shares to shareholders with a registered address in Belgium is made pursuant to an exemption under the Directive 2003/71/EC as outlined in the Offer Booklet dated 14 May 2018. The distribution of this presentation in jurisdictions outside Australia may be restricted by law and any such restrictions should be observed. Any failure to comply with such restrictions may constitute a violation of applicable securities laws.

United States

This presentation does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither this presentation nor anything contained in it shall form the basis of any contract or commitment. In particular, this presentation does not constitute an offer to sell, or solicitation of an offer to buy securities in the United States or to any “US Person" as defined in Regulations under the Securities Act of 1933 , as amended (the “US Securities Act"). This presentation may not be distributed or released in the United States or to, or for the account or benefit of, any US Person.

The shares in the proposed offering have not been and will not be registered under the US Securities Act, or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the shares in the proposed offering may not be offered, or sold, directly or indirectly, within the United States or to, or for the account or benefit of US Persons, except in a transaction exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws.

In attending this presentation, or by viewing this document, you agree to be bound by the foregoing limitations.

New Zealand

The shares in the proposed offering are not being offered or sold to the public within New Zealand other than to existing shareholders with addresses in New Zealand to whom the offer of New Shares is being made in reliance on the transitional provisions of the Financial Market Conduct Act 2013 (New Zealand) and the Securities Act (Overseas Companies) Exemption Notice 2013 (New Zealand).

This presentation does not constitute a prospectus or investment statement and has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Market Conduct Act 2013 (New Zealand). This presentation is not an investment statement or prospectus under New Zealand law and is not required to, and may not, contain all the information that an investment statement or prospectus under New Zealand law is required to contain.

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Contact Details

PETER TAZEWELL

Chief Executive Officer DTI Group Ltd

T: +61 8 9479 1195 E: peter.tazewell@dti.com.au

WEBSITE

www.dti.com.au

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